IJC_H2_ECONS_Case1_SuggestedSolutions

Answer all questions. Question 1 London Olympics 2012 Table 1: Visitors to London 2008 2009 2010 2011 2012 Total Visits (000s) 14,753 14,211 14,706 15,289 15,461 Total Nights (000s) 90,815 85,686 90,318 91,498 94,300 Total Expenditure ( £) 8,126 8,238 8,741 9,411 10,075 Source: Office for National Statistics Table 2: Price of Tennis Olympics Tickets All values in £ Category 1 Category 2 Category 3 Category 4 Preliminary 85 65 55 40 Quarter-Final 115 75 65 45 Semi-Final 115 75 65 45 Final 225 150 110 95 Source: www.ticketslondon2012.com Extract 1: The battle of the Sportswear market It is not only the athletes that will be competing for first place at next summer's Olympic Games. Adidas, the German sportswear brand, plans to use the games as a springboard to overtake its arch rival Nike as the biggest sportswear company in the UK. Nike is currently market leader in the UK with an 18 percent share of the ultra-competitive £4.3bn sportswear market. Adidas is in second place with a 15 percent share, but hopes that its status as official sportswear partner of the Games will help it achieve its goal of overtaking Nike by 2015 at the latest. As well as kitting out the athletes in 25 of the 26 Olympic sports – equestrianism requires very specialised equipment – Adidas will dress the 70,000 Olympic volunteers, provide the outfits for the pre-games torch relay and create clothing for the athletes to wear in the Olympic Village. Adidas is also the Games' official clothing licensee, and will sell Olympic-themed and branded clothes through its own stores and third-party retailers, such as Tesco and Asda. On top of this, it has appointed Stella McCartney, the designer and daughter of Sir Paul, as the creative director of Team GB. She will prov ide the team with garments such as their signature tracksuits and has also designed more fashionable "capsule" ranges that will be available on the high street. There will be a big sustainable and environmentally-friendly

element to the clothing, Adidas said. It is not in conceivable that some of the athletes' kit will be at least partially made from recycled plastic drinks bottles. Adidas has invested around £100m in the 2012 Olympics. This figure is split between the cost of becoming an official partner, the cost of manufacturing the clothes for the athletes, the volunteers and the retailers and the cost of marketing the ranges and the company. Even if the company achieves its desired top line sales of £100m, it will only go some way to paying off the £100m bottom-line investment. Mr Hainer admitted that if looked at purely on a profit and loss basis, the investment is a "big loss". However, he said that the positive benefits to Adidas's brand and standing in the UK are manifold. Source: The Telegraph, 29 May 2011 Extract 2: Olympic Tickets The International Olympic Committee has launched an inquiry into allegations that