UNIVERSITY OF MELBOURNE
ECON90015 MANAGERIAL ECONOMICS
SEMESTER 2, 2012
This assignment contributes to 20% of the final assessment
This assignment should be no longer than 2000 words (excluding tables, footnotes and appendix). Please keep within the word limit as marks may be deducted if the assignment is too long.
Make sure you put a cover sheet on your assignment identifying student names and ID numbers, your tutor and tutorial times. Also put the word count for the assignment on the cover sheet.
8 October 2012, 4.00 pm.
Instructions for Assignment
The assignment will involve group work. Students will be ...view middle of the document...
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Undertake a market analysis of an industry. Use Michael Porter’s ‘Five Forces Competitive Framework’ as the basis of your analysis. Clearly indicate in your analysis whether any of the forces pose a threat to industry profits or provide an opportunity to increase profitability. Your analysis should be based on the economic principles outlined in the course.
You can select any industry you like. Some suggestions include:
* Toiletries and cosmetics
* Banking and finance
* Automotive assembly
About the assignment:
In this course we will examine the economics of competition and how market and product characteristics, such as concentration, entry barriers and differentiation can affect the profits of individual firms and entire industries. Because we will introduce so many important concepts, it is easy to lose track of the key insights. ’Industry analysis frameworks such as Michael Porter’s Five Forces and Adam Brandenburger and Barry Nalebuff’s Value Net, provide structures that enables us to systematically work through these wide ranging and often complex issues.’ [Besanko et. al. p312]
This assignment requires you to undertake a competitive analysis of an industry/product market. Use Michael Porter’s five forces competitive framework as the basis of your analysis. You can select any industry/product market and any country/region for your analysis. Clearly indicate in your analysis whether any of the forces poses a threat to industry profits or provides an opportunity to earn greater profits. Your analysis should be based on the economic principles outlined in this course. As a guide to setting out your assignment refer to the case studies in the attached reading material.
Some background references and databases:
1. Two basic references relating to Michael Porter’s industry analysis framework are attached:
a) Besanko, D., Dranove, D. Shanley, M. and Schaefer, S. (2007), Economics of Strategy, (4th edition), Chapter 10, John Wiley and Sons.
b) Brandenburger, A.M. and Nalebuff, B.J., (1998) Co-opetition, NY: Doubleday
c) Porter M., (1981), ‘The Contribution of industrial organisation to Strategic Management’, Academy of Management Review 6, pp 609 – 620
d) Porter M. (1980), Competitive Strategy, New York, Free Press
e) A set of supplementary slides has also been provided as background information and further case studies
2. Some databases that may be useful in providing basic industry information:
a) Basic industry statistics relating to industry concentration ratios can be accessed on the link below. These statistics are Australia Bureau of Statistics, Industry Concentration Statistics, 8140.0.55.001, released 6/12/2002, Canberra.