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    Case Study 2 Managerial Economics

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    vandanajkl

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    Case Study 2 Managerial Economics

    Uploaded by

    vandanajkl
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    case study 2 managerial economics

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    8 views5 pages

    Case Study 2 Managerial Economics

    Uploaded by

    vandanajkl

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    SESSION 2024-25

    PGDM103- MANAGERIAL ECONOMICS


    CASE STUDY 2
    HigHway Blues

    suBMiTTeD TO- suBMiTTeD By-


    ONKARNATH SIR Mushkan Parveen
    ENROLLMENT Number-
    ABS/PGDM/24/268

    DATE-: 15/11/24
    COuRse OuTCOMe MaPPeD

    CO1: Recognize and remember the Fundamentals of Managerial


    Economics. (PO1, PO2)
    CO2: Understand and express the Laws related to the Market Forces
    of Demand and Supply
    and make Forecast. (PO1)
    CO3: Apply and integrate the concepts of Economics and Business
    management to formulate
    Strategies for Business. (PO1)
    CO4: Analyse characteristics and consequences of different forms of
    markets and the recent
    developments in the business world in their economic context.
    (PO2)
    CO5: Interpret the impact of macroeconomic concepts on business
    in a global context. (PO2)

    PROgRaM OuTCOMe MaPPeD

    PO1: Apply knowledge of Management Theories and Practices to


    solve Business problems.

    pO2: Foster Analytical and critical thinking abilities for data-based


    decision making.
    SOLUTIONS-:

    Q1: Where has Ratan Sethi gone wrong?

    Ratan Sethi made several mistakes:


    1. Misunderstanding market competition: Ratan
    underestimated the impact of the new stores, especially the one
    closer to his location.
    2. Price reduction without analysis: He permanently reduced
    YSP's price without considering its impact on revenue, profitability,
    and customer behaviour.
    3. Ignoring price elasticity: Ratan assumed that lowering prices
    would increase sales, but he didn't consider the price elasticity of
    demand for YSP.
    4. Failing to differentiate: By reducing prices, Ratan lost his unique
    selling proposition (USP) and became similar to his competitors.
    5. Not considering customer loyalty: Ratan's price reduction
    strategy didn't account for customer loyalty and retention.

    Q2: If he was a managerial economist, how do you think he


    would have handled the situation?

    As a managerial economist, Ratan would have:


    1. Conducted market research: Analysed competitors, customer
    behaviour, and market trends to understand the competitive
    landscape.
    2. Analysed price elasticity: Determined the price elasticity of
    demand for YSP to optimize pricing.
    3. Considered alternative strategies: Explored other options,
    such as:
    - Differentiating products or services.
    - Improving customer experience.
    - Targeted marketing campaigns.
    - Loyalty programs.
    4. Evaluated cost structure: Assessed costs and potential savings
    to determine the feasibility of price reductions.
    5. Monitored and adjusted: Continuously monitored sales and
    adjusted strategies accordingly.

    By applying managerial economics principles, Ratan could have


    made informed decisions to maintain competitiveness and mitigate
    the impact of new entrants.

    References:
    - Microeconomic principles (e.g., price elasticity, market
    competition)
    - Managerial economics concepts (e.g., cost-benefit analysis,
    market research)
    - Strategic management principles (e.g., differentiation, customer
    loyalty)

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