Game Theory Analysis of Coles and Woolworths Management Essay

Question :
Predict the outcome of this game. (Do you expect a mutual growth of sales in both Coles and Woolworths, because of the sale-promoting strategies, collectibles, they are using? Why or why not?)
This essay is to analyze the game theory between Coles and Woolworths.
I prefer to define their sale-promoting strategies are repeated games and want YOU to extend them. Use the Prisoners' Dilemma to think about outcomes and prediction, and the outcome not only following this sale-promoting strategy but also means the outcome of their sale-promoting strategies persistent in the future. And also I want you to use an advertising strategy to analyze and predict outcomes. You have to use data, at least 2 academic references(not newspaper ) and diagrams that necessary to strengthen your outcome.
There are 3 articles about the essay and please carefully to read:
https://www(dot)canstar(dot)com(dot)au/online-trading/coles-fy19-result-shows-little-shop-worked/
https://www(dot)adnews(dot)com(dot)au/news/lion-king-ooshies-helped-sales-spike-at-woolworths
https://www(dot)canstarblue(dot)com(dot)au/groceries/coles-little-shop-lion-king-ooshies-change-shop

The profits that a firm can achieve depend on the demand curve for its product, which in turn depends on the preferences of consumers and competition from other firms. But the firm may be able to move the demand curve to increase profits by changing its selection of products, or through advertising. ©When deciding what goods to produce, the firm would ideally like to find a product that is both attractive to consumers and has different characteristics from the products sold by other firms. In this case demand would be high (many consumers would wish to buy it at each price) and the elasticity low. Of course, this is not likely to be easy. A firm wishing to make a new breakfast cereal, or type of car, knows that there arc already many brands on the market. But technological innovation may provide opportunities to get ahead of competitors. After Toyota developed the first mass-produced hybrid car, the Prius, in 1997, there were for some years very few comparable cars available. Toyota effectively monopolized the hybrid market. By 2013 there were several competing brands, but the Prius remained the market leader, with more than 50% of hvbrid sales.Parker Brothers first marketed a property-trading board game under the name Monopoly in 1935. In a series of court cases in the 1970s, Parker Brothers attempted to prevent Ralph Anspach, an economics professor, from selling a game called Anti-Monopoly. Anspach claimed that Parker Brothers did not have exclusive rights to sell Monopoly, since the company had not originally invented it.
After the court ruled in favour of Anspach, many competing versions of Monopoly appeared on the market.
After a change in the law, Parker Brothers established the right to the Monopoly trademark in 1984, so Monopoly is now a monopoly again.

If a firm has invented or crcatcd a new product, it may be able to prevent competition altogether by claiming exclusive rights to produce it, using patent or copyright laws. Ironically, in the 1970s a company called Parker Brothers spent years fighting in court to protect a monopoly that they had on a profitable board game called Monopoly. This kind of legal protection of monopoly may help to provide incentives for research and development of new products, but at the same time limits the gains from trade. In Unit 21, we analyse intellectual property rights in more detail.
Advertising is another strategy that firms can use to influence demand. It is widely used by both car manufacturers and breakfast cereal producers. When products arc differentiated, the firm can use advertising to inform consumers about the existence and characteristics of its product, attract them away from its competitors, and create brand loyalty.
According to Schonfeld and Associates, a firm of market analysts, advertising on breakfast cereals in the US is about 5.5% of total sales revenue—about 3.5 times higher than the average for manufactured products. The data in Figure 7.21 is for the highest-selling 35 breakfast cereal brands sold in the Chicago area in 1991 and 1992. The graph shows the relationship between market share and quarterly expenditure on advertising. If you investigated the breakfast cereals market more closely, you would sec that market share is not closely related to price. But it is clear from Figure 7.21 that the brands with the highest share arc also the ones that spend the most on advertising. Matthew Shum, an economist, analysed cereal purchases in Chicago using this dataset, and showed that advertising was more effective than price discounts in stimulating demand for a brand. Since the most well-known brands were also the ones spending most on advertising, he concluded that its main function was not to inform consumers about the product, but rather to increase brand loyalty, and encourage consumers of other cereals to switch. ©