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Competitive Strategies and Government Policies

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Competitive Strategies and Government Policies
ECO/365
May 1, 2013

Competitive Strategies and Government Policies
The automotive industry is a diverse and ever evolving market. With equally as diverse consumers, products and regulations. However firms often have to overcome new competition in the form of new companies entering the market as well as mergers through the course of a company’s history. Often forming large new competitors from smaller firms. As well as government regulations at the local and international level, from environmental issues to safety standards. Meeting these standards comes at the expense of the firm, though it is an expense that can be passed off to the consumer. All while doing this they must maintain state of the art production plants to keep up with demand and run at highly efficient levels. These plants are consistently the standard to which other manufacturing fields look for as examples of how to operate at a highly efficient manner.
The auto industry has to deal with specific situations some other industries do not have to deal with at least not as consistently as the auto industry does. For example mergers, mergers have long been a part of the automobile industry. It can be at times confusing because one parent company has several brands that some may confuse with being merged but this is not the case. Mergers have happened in the past to brands that perhaps are on a downward spiral of sales such as the Hummer brand when General Motors picked it up. These types of horizontal merger help the industry at times by reviving what would be dying brands of vehicles. It does not affect the competitors as much because of the volume of existing competition as is without one or two brands added. Though the addition of larger brands have not had much of an influence on any one brand. It is not like other markets where one larger merger...

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