Consumer and Firm Behaviour
Assignment Due Date: 1 November 2020, 23:59 Assignment Weight: 30%
The purpose of this INDIVIDUAL report is to analyse a company. For large companies that operate in multiple industries you should focus on a single market that the company is operating in. You should use the concepts and tools learned in the course to successfully complete this task. The assessment must be submitted in pdf format via the Turn-it-in folder on the course Blackboard site.
The report should be organized in a coherent manner and must have a title, an abstract (max. 200 words), a short introduction, main analysis and a short conclusion. The essay is limited to 3,500 words (excluding references, figures).
In the introduction you should define the specific market that you are analysing (e.g. WestBank in the Australian home loan market) and justify why chose to define the market so narrowly/broadly.
In the main analysis you need to answer the following questions:
• What is the market structure of the industry that the firm is operating in? How many firms are there in the market? Are there any barriers to entry?
• Do competition authorities regulate this market? Have there been reports of anti-competitive
behaviour by any firm in the industry?
• What is the cost structure of the company? What are the main factors of production? Are there
economies of scale and scope?
• Does the firm use price discrimination methods?
• What is the informational structure of the market? Can buyers easily observe price and quality?
What specific strategies does the firm employ to solve or take advantage of asymmetric information problems?
• How intensive is the usage of advertising? What form of advertising is used by this company?
• Is the market multi-sided? Are there any direct or indirect network effects?
• Are consumers in this industry perfectly rational? What strategies does the firm employ to take
advantage of the bounded rationality of consumers?
You should discuss other important questions in your essay if they are crucial to the understanding of
the firm. In your analysis you should make use of quantitative data (costs, market share, profitability, advertising expenditure etc.) in answering the above questions. Usage of graphs and tables is highly appreciated.