Assignment title: Management
Scenario AMDB and BBO sell all types of books both online and in stores. Both retailers have been able to acquire a fair share of the market for easy to read science books. Such books have become the second most popular non-fiction books read by Australians over the past decade. While many publishers throughout the world publish such books, the two largest are the British publishers Oxbridge University Press and Camford University Press. BBO in particular sell a large number of Oxbridge University Press books because they consistently sell them at 20% cheaper than any other retailer. Both MDB and BBO acquire their Oxbridge University Press books from MPB, as they are the only importer of books from the two publishers.Recently, MPB have become concerned about BBO's consistent discounting of Oxbridge University Press science books because MPB spend a lot of money in advertising to both retailers and the general public, to get the message across that Oxbridge University Press science books are the best in the world being written by Europe's elite science professors. MPB have consistently requested BBO to cease discounting the books but BBO have refused. So to resolve the situation, in June of 2015, MPB ceased supplying Oxbridge University Press books to BBO. In January 2016 the CEO of MPB realised that since they had ceased the supply to BBO, they had heard no complaints from them except for one email dated July 2015 in which the CEO of BBO said he was very disappointed with the decision. Wondering why BBO took the decision so meekly, the CEO of MPB made a few phone calls to other retailers and discovered that in October 2015, BBO entered into an agreement with MDB where MDB would purchase extra Oxbridge University Press science books from MPB and then on-sell them to BBO. Once the CEO of MPB discovered the arrangement between BBO and MDB he sent a letter (see Letter One) to MDB.On receiving the letter the CEO of MDB rang the CEO of MPB to find out what was going on when the CEO of MPB said, "Bloody Bloomsday's has been loss leading with the Oxbridge science books. We asked them to stop and they did not so we cut their supply. Then we found out that you are supplying them so we have cut your supply as well."Scenario BIn December 2015, LexidJudicium, Australia's largest publisher of state and Commonwealth law reports announced they would be terminating the publication of their 15 different law report series by the middle of 2016. In response, the Queensland Ricochet Government announced, in January of 2016, that the Queensland court reports that were published by LexidJudicium would be up for tender. All tenders needed to be in by the end of February, 2016.The day after the announcement by the Queensland Ricochet Government, the CEO's of BBA and DBB held a phone conversation to discuss the developments. Both CEO's were quick to realise that, between themselves and JB, there was really no other Queensland publisher who was in a position to take on the publishing of the court reports. The CEO of BBA also knew JB were looking at a restructure of their business and had made it known they were very unlikely to pursue new publishing deals over the next 12-24 months. They also knew the Ricochet Government would be loathed to give the publishing rights to an interstate business because one of the platforms that Ricochet took to the last state election was "Queensland Jobs for Queenslanders. Stuff the other states!" The four court reports that were up for tender were the District Court Reports (DCR), the Supreme Court Reports (SCR), the Court of Appeal Reports (COAR) and the Miscellaneous Queensland Courts Reports (MQCR). The Ricochet Government has also decided to no longer publish hard copies of legislation and will instead outsource this service to the private sector. This would be a very lucrative market so instead of a tender process the government has decided to simply spread the work around because there are a number of publishers and printing firms who could manage this type of work. The CEO's of BBA and DBB decided there was no need competing with each other so they came to an understanding (Agreement 1, excerpts of which can be found in Appendix B) that would result in BBA controlling the publication of the DCR and MQCR's, while DBB would control the SCR and COAR's.They also came to an understanding that they should try to minimise the amount of price competition that would exist between them for the publication of Queensland legislation so they came to an understanding regarding this service. This understanding is set out in Clause 4 of Agreement 1 (set out in Appendix B). Two days later, the CEO of DBB sent an email to the CEO of JB, explaining the deal DBB and BBA had regarding the publication of Queensland legislation. He also attached a copy of Agreement 1. The CEO of JB emailed back thanking him for the information and asked if he could be kept up to date with any other agreements DBB and BBA make in the future. The ACCC know this because an officer of JB, who saw the email, sent a copy through to the ACCC. The officer told the ACCC he was concerned his bosses were involved in price signalling. Besides the email from DBB to JB, the ACCC have no other evidence of any relationship between the two parties, including no evidence that JB have set their prices using the formula from Agreement 1.