1. Well this is it. You are in the fourth quarter of the year and this is where you make or break it. Tons of new companies have entered the industry and none of them have very much influence in the market. Converse left the industry because they went broke trying to pay for all of the returns of their products. Nike is ticked off at the Rock because he body slammed a fan at a book signing event. The board now wants to lower all of their prices by 10% to attract customers during the Christmas season. Would you support their decision? What kind of market structure is in place?
2. The first half of the year is over. Here’s what is happening now. Even more of your competition has left the industry. You and a handful of others really determine what happens in the market. Nike has just signed Dwayne Johnson (wasn’t he called “The Rock” when he wrestled professionally?) to a three year contract and is paying him like a Bizzilion dollars to endorse their products. You, Nike and Converse now have a huge impact on the market. Converse has just announced that they have lowered their prices by 5% and they are giving a 100% guarantee on all of their products. If the customer is not completely satisfied they will get a refund and an additional $20 to pay for gas to get you to the store. What are the strengths and weaknesses of this strategy? What kind of market is in place?