Economics of Strategy
Paper instructions:
i) Using an appropriate business example BRIEFLY set out its vulnerability and its main
exposures. (1/3 of essay) (i.e. Vulnerability Type I or Type II) ECONOMICS

ii) Identify the key elements of its business strategy and assess its effectiveness in a)
raising profits and b) mediating the impact of macroeconomic exposures. (2/3 of essay)

You have to select a company and a) set out the key elements of its strategy b) explore the impact of the strategy on the fundamental macro and micro economic drivers of its performance especially its ability to make supernormal profits in good and bad macro circumstances. In this task you will need to consider the ways (if any) in which the chosen business manages its ‘cost vulnerability’. The attached paper discusses one such strategy which is ‘variabilisation’.