Choose a public limited company from https://finance.yahoo.com/ 1. 2. Write a ca
ID: 371743 • Letter: C
Question
Choose a public limited company from https://finance.yahoo.com/ 1. 2. Write a case study about the company highlighting the following a. What market structure does the company fall into? b. Make a table with last 3 year's pricing strategy, profit, share price, earnings c. Write one page summary based on the 3 years data from (b) d. Who are the competitors of the company you chose? e. What is their competitive advantage over the competitors f. Give some recommendations to improve company's profit, earningExplanation / Answer
In this problem, two company A and B are involved. Both of them can use strategy 1 or strategy 2. Strategies of A are shown in rows. Strategies of B are shown by two columns. Nash equilibrium is a optimum solution after considering rivals action. The pay off matrix of the table are explained below:
1. For company A strategy 1 is dominating in nature. Note that profit of A in row 1 is [$10 million, $7 million]. It is higher than profits of row 2 i.e. [$9 million, $5 million]. So whatever be the action of company B, A will always select strategy 1.
2. So B will select strategies cosidering that A will always select strategy 1. B will have better profit of $10 million if it adopts strategy 1. From strategy 2 profit is only $7 million.
Thus Nash equilibrium is-
Strategy 1 adopted by both A and B. Their pay-off are [$10,1$0%]. It is ash equilibrium. It is stable as profit is higest possible one for both A and B. So none of them will try to deviate from it.