Essay-Microeconomics

Essay microeconomics

IMPORTANT

I only accept printed copies that are on time bear a name and that are stapled together .

Criteria

I do not grade English writing skills, but I do grade:

1. Logic, understanding and argumentation. Do not jump from one thing to another. Opinions are motivated and your facts referenced. Your arguments are clear. The depth of your arguments is the single most important determinant of your grade. Most of what you will write is open to discussion, so I really need arguments.

2. Completeness : use this page as a checklist!

3. Rewriting effort : To write well, write concisely. To write concisely, rework your text several times and rephrase until you have half the number of words you started with.

The minimum you need to pass: your essay is complete, your arguments are legible and there are no blatant logical errors that conflict with what we have learned in class.

Please follow these guidelines

Use Times New Roman 12pt font with spacing 1.5. Include page numbers centered below. Do not forget to structure your document. If it is to be any good, write then rewrite your text. What you hand in should be less than half the words you started with. Make sure that the text flows. Remember: this is an essay, not a questionnaire! You should include a word count at the end. You need 1000-2000 words, but 500 well-written words are better than 2000 badly written ones. You do not need to waste your time crafting a beautiful cover page, but make sure that your document has a title!

Keep your electronic version , I may ask you to send it to me if I suspect plagiarism.

In the course, we will look at firms and competition in a rather static and dry way. The essay is your chance to apply this stuff in a more dynamic and applied fashion! And you get to spend hours (and hours) using the internet for something useful for a change!

The essay is completely individual, but if you prefer to work with someone else, I recommend that you and your friend pick two competitors. There will be substantial overlap and you can work together on some aspects of the essay. Each students hands in one essay on one firm!

I am willing to "correct" drafts anytime. Just hand them in in class. Allow a week for a response.

Introduction

1. Choose a firm. Any firm.

HINT : Whether it is listed on the stock market or it is your uncle’s business (the latter is often a very interesting option) does not matter. You can pick the place where you work but you will probably not get any useful information unless you are high up on the chain of command.

2. Go to the discussion forum on LEA to reserve your firm. Once a student has reserved a firm, no other student can pick this firm anymore. You should verify this before you reserve.

HINT : Why every student wants Apple is beyond me. Service-oriented businesses are most important in our society. Business-to-business (B2B) firms and/or products constitute about 80% of the total traded goods.

3. When companies become really large, they are best thought of as being composed of a number of businesses, or strategic business units (SBU's). If you picked a large firm, try to identify an SBU within your firm. Usually, an SBU is a set of products that the firm sells to the same market, facing the same competitors. Therefore, each SBU has its own strategy.

HINT : Franchisees do not have their own strategy, so look at the franchisor instead!

4. Briefly describe the firm and SBU you picked. We are first and foremost interested in economics, do not copy and paste! Please do not believe the company website or wikipedia at face value. Try to tell me something that really stinks in this firm, ok! Briefly describe the product/service

Final version

Diligently follow the “structure of the essay” section, outlined below. DO NOT COPY A COMPANY WEBSITE OR WIKIPEDIA. See departmental rules on plagiarism. The structure is in bold. The rest is there to help you.

Structure of the essay

1. Introduction

Copy what you did for part 1 here.

2. Analysis: business environment and market structure

2.1. Demand for the product/service

Here are some questions that will help you

· Evaluate the own price elasticity of demand

· Would a small price change cause big change in the quantity demanded)? Are there many buyers for this product.

· Is the product a necessity?

· Does the consumer think a long time before buying this product? Does he really compare?

· Are there different types (segments) of consumers that buy the product/service?

· Are there any other products that are similar enough so that they can satisfy the same customer?

· Why do people buy this product (and not the product of its competitors?)

· Evaluate the income elasticity of demand?

· Do you think demand will increase in the future? Why?

2.2. Market structure and competition

· How many firms are active on this market and what are there market shares?

· Is the market structure perfect competition, oligopoly, monopoly, monopolistic competition,...

· Is the product very homogenous?

· How do the firm and its competitors position the product in the market (look at marketing campaigns)?

· Do the firms deliver on their promise? What makes them able to do this?

· Is it easy to enter the market? Why?

· How did this market structure arise historically?

· ...

2.3. Porter’s three generic strategies

· Look up what Porter’s three generic strategies are.

· Download a graph

· What strategy do you think your firm uses?

HINT: Porter says firms must choose one of the three strategies, otherwise they are "stuck in the middle" which is not good.

2.4. PEST (also called STEP or PESTEL) analysis

· Look up what PEST analysis means

· Download a graph

· Do the analysis for each letter for your firm. Be creative and think!

2.5. Porter’s five forces model

· Look up what PEST analysis means

· Download a graph

· Do the analysis for each force, for your firm. Be creative and think!

3. Conclusion: effects of market structure

How does this relate to micro-economic theory that we saw in class?

4. References

In this section, you write down all the sources that you actually used in this format:

Written sources: Author (year) Title. Source

Online sources: Author (year) Title. Source. [online] Available at http... accessed on date

If you cannot find the name of the author, use the source twice

Examples

Pawlina, G. & P. Kort (2006) Who benefits from you competitive advantage? CENTRE working paper no.45

Wikipedia (2011) Coca-cola. Wikipedia [online] Available at http://en.wikipedia.org/wiki/Coca_cola Accessed on 28/01/2011