Premium Essay

Trends in the Car Industry That Changed Radically from the Beginning of the 80s

In: Business and Management

Submitted By jaimeyjlee
Words 1280
Pages 6
INTRODUCTION
The aim of this paper is to show the trends in the car industry that changed radically from the beginning of the 80s. We examine the impacts of improvements in technology, the effects of externalities which will lead to the increase in cost, price discriminations and competitive structures. We discuss about car industry which is an oligopoly structure, and the recent environment of economic. Besides that, we also concert about the effect of externalities, on the other hand, the effect of the technological advancement and price discrimination. Finally, in conclusion, we conclude our views of the structure of oligopoly industry and how it’s changing competitive environment that will affect the market and consumers.

CURRENT ECONOMICS ENVIRONMENT
Global rescission influences most of the automobile manufacturing companies to cease production due to the short demand in the market. Microeconomic market factors have lowered demand and increase elasticity of demand in the car industry. For example, in Figure 1, it demonstrates the demand for the sales of cars [D1] has decreased and also become more elastic [D2]. It becomes flatter, showing the higher price change responsiveness. This is represented by a decrease in price from [P1] (at [E1]) to [P2] (at [E2]). Oligopoly industry will reduce supply when it is motivated by changes in demand. FIGURE 1

EFFECTS OF EXTERNALITIES

- GOVERNMENT POLICY OPTION
In 20 years time, there has been a dramatic fall of economy in the car industry. Government introduced an aviation tax on cars to control the environment damage which is relatively increasing the car price because the supplier’s cost of production had increased. FIGURE 2
Figure 2 show that when government implies tax on supplier, the car industry will reduce its supply to reduce cost. The supply curve [S] will shifts upward and become [S1]. The

Similar Documents

Premium Essay

Mercury Motor Company: Rebel Without A Cause

...you ever seen the movie “Rebel Without a Cause” starring James Dean and wonder what the cool car he drove was? It was a customized Mercury Eight, which was known for its performance, and its powerful engine, which was all made just for that movie. I didn’t even know about the movie or the Model Eight until I researched this project. I had the opportunity to watch the movie online, and it was very good. The name Mercury brings many things to mind because it’s an American icon, illustrated by its role in the American automobile history, its recognizable design, and it’s great reputation. In the 72 years that Mercury was in business, they made a...

Words: 2215 - Pages: 9

Premium Essay

Blah

...competition successfully Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. It was established with the objectives of - modernizing the Indian automobile industry, producing fuel efficient vehicles to conserve scarce resources and producing indigenous utility cars for the growing needs of the Indian population. A license and a Joint Venture agreement were signed with the Suzuki Motor Company of Japan in Oct 1983, by which Suzuki acquired 26% of the equity and agreed to provide the latest technology as well as Japanese management practices. Suzuki was preferred for the joint venture because of its track record in manufacturing and selling small cars all over the world. There was an option in the agreement to raise Suzuki’s equity to 40%, which it exercised in 1987. Five years later, in 1992, Suzuki further increased its equity to 50% turning Maruti into a non-government organization managed on the lines of Japanese management practices. Maruti created history by going into production in a record 13 months. Maruti is the highest volume car manufacturer in Asia, outside Japan and Korea, having produced over 5 million vehicles by May 2005. Maruti is one of the most successful automobile joint ventures, and has made profits every year since inception till 2000-01. In 2000-01, although Maruti generated operating profits on an income of Rs...

Words: 8533 - Pages: 35

Free Essay

Ywf Brazil Fin Paper

...Introduction: Biofuel is one of the newest and largest trends sweeping the world. Gaining interest in countries and economies, governments have announced strong commitments to biofuel programs in order to reduce greenhouse gas emissions and diversify energy sources. Although these programs are new to many countries, Brazil has years of experience with sugarcane-based ethanol, creating a success story for others to reference. Currently, Brazil is the largest biofuel market with the United States ringing in a close second. However, Brazil’s ethanol is created from sugarcane while the U.S. uses corn to produce their ethanol. Not only is Brazil’s sugarcane-based ethanol the first renewable fuel to be cost-competitive with transportation fuel, but it is also the most economical compared to its competitors. The ethanol’s efficiency is due to the power of the sugarcane compared to corn as an ethanol feedstock, a perfect climate for sugarcane harvesting, and the large, unskilled, inexpensive labor force in Brazil. In addition, the U.S. uses almost double the amount of land to farm corn to produce ethanol as Brazil uses to harvest sugarcane to produce almost the same volume as ethanol. What is Ethanol? Ethanol is an alcohol fuel distilled from plant materials, such as corn and sugar. Ethanol is the main biofuel for transportation and Brazil is the greatest exporter globally of bioethanol. The sugar and ethanol industry in Brazil make up 2.3% of the Domestic Gross Product, generating...

Words: 3462 - Pages: 14

Free Essay

Ib 403 Brazil Ethanol Final Paper

...Introduction: Biofuel is one of the newest and largest trends sweeping the world. Gaining interest in countries and economies, governments have announced strong commitments to biofuel programs in order to reduce greenhouse gas emissions and diversify energy sources. Although these programs are new to many countries, Brazil has years of experience with sugarcane-based ethanol, creating a success story for others to reference. Currently, Brazil is the largest biofuel market with the United States ringing in a close second. However, Brazil’s ethanol is created from sugarcane while the U.S. uses corn to produce their ethanol. Not only is Brazil’s sugarcane-based ethanol the first renewable fuel to be cost-competitive with transportation fuel, but it is also the most economical compared to its competitors. The ethanol’s efficiency is due to the power of the sugarcane compared to corn as an ethanol feedstock, a perfect climate for sugarcane harvesting, and the large, unskilled, inexpensive labor force in Brazil. In addition, the U.S. uses almost double the amount of land to farm corn to produce ethanol as Brazil uses to harvest sugarcane to produce almost the same volume as ethanol. What is Ethanol? Ethanol is an alcohol fuel distilled from plant materials, such as corn and sugar. Ethanol is the main biofuel for transportation and Brazil is the greatest exporter globally of bioethanol. The sugar and ethanol industry in Brazil make up 2.3% of the Domestic Gross Product, generating...

Words: 3462 - Pages: 14

Premium Essay

Student

...excellence. Under Minoli, Ducati had enjoyed explosive growth and profitability. Revenues had quadrupled since 1996; EBITDA had grown from 33.4 million Euros in 1997 to around 60.0 million Euros in 2000; the market share had gone from 5.1% in the sport bikes segment in 1997 to 6.7% in 2000 (see Exhibit 1). Despite this success, Minoli was concerned with the future of the company. He knew that Ducati could not grow indefinitely, and was struggling with what strategy might overtake these bounds. Minoli and the rest of Ducati’s top management team were considering different alternatives. One alternative was to attack Harley Davidson’s niche with a Ducati interpretation of a cruiser. Was this broadening of Ducati’s traditional niche the right move to sustain the profitable growth of the company? The Market for Motorcycles in 2001 The roots of the motorcycle industry date back to 1868, when Louis Perraux installed a steam engine on a rudimentary bicycle. In 1894, the Hildebrand brothers and Alois Wolfmüller produced the first motorcycle with an internal-combustion, two-cylinder gasoline engine. The motorcycle quickly became a cultural icon. As T. Krens, the curator of “The Art of the Motorcycle” exhibition at the Guggenheim Museum in New York, observed: The motorcycle is a perfect metaphor for the twentieth century. Invented at the beginning of...

Words: 9920 - Pages: 40

Premium Essay

Ducati

...technical excellence. Under Minoli, Ducati had enjoyed explosive growth and profitability. Revenues had quadrupled since 1996; EBITDA had grown from 33.4 million Euros in 1997 to around 60.0 million Euros in 2000; the market share had gone from 5.1% in the sport bikes segment in 1997 to 6.7% in 2000 (see Exhibit 1). Despite this success, Minoli was concerned with the future of the company. He knew that Ducati could not grow indefinitely, and was struggling with what strategy might overtake these bounds. Minoli and the rest of Ducati’s top management team were considering different alternatives. One alternative was to attack Harley Davidson’s niche with a Ducati interpretation of a cruiser. Was this broadening of Ducati’s traditional niche the right move to sustain the profitable growth of the company? The Market for Motorcycles in 2001 The roots of the motorcycle industry date back to 1868, when Louis Perraux installed a steam engine on a rudimentary bicycle. In 1894, the Hildebrand brothers and Alois Wolfmüller produced the first motorcycle with an internal-combustion, two-cylinder gasoline engine. The motorcycle quickly became a cultural icon. As T. Krens, the curator of “The Art of the Motorcycle” exhibition at the Guggenheim Museum in New York, observed: The motorcycle is a perfect metaphor for the twentieth century. Invented at the beginning of the industrial age, its evolution tracks the main currents of...

Words: 10151 - Pages: 41

Premium Essay

Domino's Marketing Plan

...Natural Nicole Phillips MKG310 – Introduction to Marketing Colorado State University – Global Campus Professor Michael Aubry October 25, 2015 Executive Summary The pizza industry is a mature and highly competitive market, while the organic/natural and vegetarian market is one that is seldom addressed, yet consumers are increasingly showing their interests in such foods. Domino’s Pizza has the opportunity to be an innovator in this groundbreaking field, and by only seeing a slight increase in costs of sales and advertisement, creating and releasing menu items that are organic/natural based or vegetarian will help Domino’s dominate the competition, while gaining three new market segments and positive PR. The following market plan will show in detail the opportunities Domino’s has on the horizon that they can utilize their competitively low prices for, and the steps and tactics they will need to implement in order to achieve success in this new field. Company Overview In 1960, brothers Tom and James Monaghan borrowed nine hundred dollars to purchase “DomiNick’s”, a pizzeria in Ypsilanti, Michigan (History, n.d). After growing bored of the pizza business, James traded Tom his half of the company for a Volkswagen Beetle, making Tom the sole owner of the company (History, n.d). Monaghan changed the company name to the one we know and love today, Domino’s, in 1965 with a mission to sell more pizza, and have more fun (Domino's Vision, Mission and Value, n.d.; History, n.d...

Words: 4675 - Pages: 19

Premium Essay

Wireless Electricity

...Wireless Electricity Devry University Tech, Society, and Culture Professor February 24, 2013 Table of Contents I. Wireless Electricity: Explanation and History 3 II. Political and Legal Influences 10 III. Economic Questions and Considerations 16 IV. Wireless Technology with Today’s Culture 20 V. Ethical Implications of Wireless Power 26 VI. Environmental Impact 30 VII. Bibliography 33 ABSTRACT: Wireless electricity is not a new idea, but it has recently become revitalized. This paper looks at the different facets of this invigorated technology. First, it talks about what wireless electricity is and the different approaches of producing it. The paper also talks about the history of wireless electricity and what social factors have motivated it to become invigorated. Next, the government involvement and political issues are talked about. Wireless electricity will also affect the economy so its economic impact is also a topic that is discussed. The psychological and sociological effects of wireless electricity will also be well-thought-out in the next section. The cultural background of this technology is studied and highlighted in American culture. Every technology needs to be examined in detail for its effect on the environment and wireless electricity is no different. The last section of this paper talks about the moral and ethical...

Words: 14468 - Pages: 58

Premium Essay

Emerging Cybersecurity Policies in the Federal Government

...in the Federal Government One of the largest and most important enterprises there is to protect in the cyber security realm are the various networks that make up the federal government. This massive undertaking to secure the systems, networks, and data of the various governmental agencies is a never ending uphill battle. The requirements of the federal government enterprise to be globally far reaching, as well as user friendly, scalable, and multi-functional lie in direct contrast with the additional requirements for the data the federal government enterprise harbors to be secure with extremely high availability, integrity and confidentiality. This balancing act of usability versus security is common among all enterprises, but it is radically highlighted within the federal government sector due to...

Words: 6354 - Pages: 26

Free Essay

Assignment Artemis

...3 Global challenges, need for R&I and economic dimensions of Digital Technology AUTUMN 2013 Copyright © ARTEMIS Industry Association & ITEA Office Association Permission to reproduce any text from this publication for non-commercial purposes is granted, provided that the source is credited. First edition, autumn 2013 www.artemis-ia.eu & www.itea2.org ISBN: 978-90-817213-2-5 5 Preamble This updated document1 is the joint result of the industry represented in the ARTEMIS Industry Association and ITEA and expresses the common industry ambition. Its creation was initiated by the ARTEMIS ITEA Cooperation Committee (AICC). The main goal of this update of the ITEA-ARTEMIS high-level vision 2030, version 2012 is to add a quantitative description of the impact of software innovation on revenues and labour. There are also other aspects of the impact of software innovation, like eco-systems, community building and standardisation. However these are not the focus of this year’s update. Disclaimer The trends and predictions presented in this document are based on publicly available sources. We rely on these sources, without independent verification of the information presented. The nature of this document is for a large part rather a compilation of existing material, than a reinvention of insights. The statements made by Roland Berger Strategy Consultants are based on assumptions held to be accurate on the basis of the information available. However, Roland Berger Strategy...

Words: 19271 - Pages: 78

Premium Essay

Toyota Motor Corporation Swot Analysis

...yale.edu April 2000 SOFTWARE AS A TOOL OF COMPETITIVE ADVANTAGE: AUTOMOBILE INDUSTRY 1 2 3 4 5 Introduction: Objectives of this Benchmarking Study……………………….…….3 Approach: Methodology and Questions…………………………………………....9 Introduction to Case…………………………………………………………….…10 The Industry Context: The Japanese and Global Automobile Industries………….10 Toyota’s Multi-faceted Global Strategy………………………………….………..21 Smart Production (scheduling, buffer stocks, interactive controls) Smart Design IT and Management of Supplier Networks Smart Marketing Responding to Demand Changes Through Smart Production & Design 6 Smart Car…………………………………………………………………….……...42 Environmentally Smart Cars Intelligent Transportation System (ITS) 7 8 Information Technology Infrastructure and Project Selection………………………60 Summary - Controlling the Future…………………………………………………..68 Exhibit 1 - Promotion Plan for Intelligent Transportation System………………………78 Exhibit 2 - Toyota’s ITS Businesses and R&D………………………………………….79 Exhibit 3 - ITS Evolutionary Development……………………………………………..80 Appendix I Summary Answers to Questions for Toyota - Auto Strategy & Operations..81 Appendix II - Some Industry and Firm Data…………………………………………….88 Bibliography and References……………………………………………………………96 2 Introduction: Objectives of this Benchmarking Study This automobile study for Toyota Motor Corporation (TMC) was completed under a three-year research grant from the Sloan Foundation. The project’s overall purpose has been to examine in...

Words: 31150 - Pages: 125

Premium Essay

Blue Ocean Strategy

...TLFeBOOK Blue Ocean Strategy Blue Ocean Strategy How to Create Uncontested Market Space and Make the Competition Irrelevant H A R VA R D B U S I N E S S S C H O O L P R E S S BOSTON, MASSACHUSETTS ( ) ( ) ( ) ( ) ( W. Chan Kim Renée Mauborgne Copyright 2005 Harvard Business School Publishing Corporation All rights reserved Printed in the United States of America 09 08 07 06 05 5 4 3 2 1 No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. Library of Congress Cataloging-in-Publication Data Kim, W. Chan. Blue ocean strategy: how to create uncontested market space and make the competition irrelevant / W. Chan Kim, Renée Mauborgne. p. cm. Includes bibliographical references and index. ISBN 1-59139-619-0 (hardcover: alk. paper) 1. New products. 2. Market segmentation. I. Mauborgne, Renée. II. Title. HF5415.153.K53 2005 658.8 02—dc22 2004020857 The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Publications and Documents in Libraries and Archives Z39.48–1992 To friendship and to our families, who make our worlds...

Words: 72695 - Pages: 291

Premium Essay

Ijvsanfvuisdnv

...emerging economic landscape 4. Can the new social economy respond? 5. Social innovation and the crisis of policy Bibliography Weblinks Endnotes 2 DANGER AND OPPORTUNITY CRISIS AND THE NEW SOCIAL ECONOMY 1 THE ARGUMENT The rise of the new social economy This pamphlet argues that the early years of the 21st century are witnessing the emergence of a new kind of economy that has profound implications for the future of public services as well as for the daily life of citizens. This emerging economy can be seen in many fields, including the environment, care, education, welfare, food and energy. It combines some old elements and many new ones. I describe it as a ‘social economy’ because it melds features which are very different from economies based on the production and consumption of commodities. Its key features include: • The intensive use of distributed networks to sustain and manage relationships, helped by broadband, mobile and other means of communication. Blurred boundaries between production and consumption. An emphasis on collaboration and on repeated interactions, care and...

Words: 22113 - Pages: 89

Premium Essay

Innovator Dillema

...reserved The Library of Congress has catalogued the hardcover edition of this title as follows: Christensen, Clayton M. The innovator’s dilemma : when new technologies cause great firms to fail / Clayton M. Christensen. p. cm. — (The management of innovation and change series) Includes index. ISBN 0-87584-585-1 (alk. paper) 1. Creative ability in business. 2. Industrial management. 3. Customer services. 4. Success in business. I. Title. II. Series. HD53.C49 1997 658—DC20 96-10894 CIP ISBN 0-87584-585-1 (Microsoft Reader edition) 3 Contents In Gratitude Introduction PART ONE: WHY GREAT COMPANIES CAN FAIL 1 How Can Great Firms Fail? Insights from the Hard Disk Drive Industry 2 Value Networks and the Impetus to Innovate 3 Disruptive Technological Change in the Mechanical Excavator Industry 4 What Goes Up, Can’t Go Down PART TWO: MANAGING DISRUPTIVE TECHNOLOGICAL CHANGE 5 Give Responsibility for Disruptive Technologies to Organizations Whose Customers Need Them 6 Match the Size of the Organization to the Size of the Market 7 Discovering New and Emerging Markets 8 How to Appraise Your Organization’s Capabilities and Disabilities 9 Performance Provided, Market Demand, and the Product Life Cycle 10 Managing Disruptive Technological Change: A Case Study 11 The Dilemmas of Innovation: A Summary The Innovator’s Dilemma Book Group Guide About the Author 4 In Gratitude Although this book lists only one author, in reality the ideas it molds together...

Words: 82673 - Pages: 331

Premium Essay

Think Strtegically

...PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978–0–230–28487–6 hardback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is...

Words: 79436 - Pages: 318