Nature of the aforementioned product


QUESTION 1 [20 marks = 5 + 15]
(a) What is the main product of the company?
(b) In your view, given the nature of the aforementioned product, how important are transactions costs for the company relative to market prices of factor
inputs? What arguments and/or evidence can you provide in support of your answer?
QUESTION 2 [25 marks = 10 + 15]
(a) Using data from the COMPUSTAT –North America database, comment on the trend in sales growth of the company since 2005 (or earliest post-2005 year
for which data are available), especially in comparison with the sales growth of the median company in the relevant industry. Report the aforementioned
trends for the company of your choice and the industry median using an appropriate graph.
(b) Using the Total Addressable Market (TAM) framework, discuss ONE market-related factor and ONE product-related factor that can explain the
aforementioned trend in sales growth. Is your explanation consistent with the nature of the main product of the company?
QUESTION 3 [30 marks = 20 + 10]
(a) Discuss the business environment in the country of your choice using data from the following sources:
(b) Given the importance of transactions cost to the company, relative to market prices of inputs, would it be sensible for the company to (re)locate production
to this country or, if it already has a production base in the country, expand its production-related operations within the country significantly?
QUESTION 4 [25 marks = 15 + 10]
(a) Using data from COMPUSTAT –North America, discuss the trend in strategic investments (e.g., R&D, design, marketing) made by the company. Discuss,
in particular, the impact of the 2008 financial crisis and the Great Recession that followed on this trend.
(b) Given the trend in strategic investments, discuss whether (or not) the company has invested sufficiently in VRIN resources to retain its competitiveness
in the post-COVID period.

Sample Solution

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