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Market Model Patterns of Change - Research Paper Example

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Market Model Patterns of Change Name Institution Date Market Model Patterns of Change in Automobile industry The oligopoly nature of the automobile industry has made it experience changes that are affecting the oligopolistic market model. The pattern of change is evident in its production, international trade changes, and supply chain as well as pricing…
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Download file to see previous pages The business expansion that has characterized many companies in the industry has led the expansion in the size of large companies and eventual attainment of a competitive advantage over smaller companies. Currently, the industry is experiencing enormous changes as a result of changing customer needs, emerging markets, and entrance of new competitors, technological advancement, and the strict environment regulations due to substance emissions (Blum, 2009). The changes have affected the demand, value chains and markets that characterize the industry. This has led to the transformation of the market into a more mobile model that is more competitive. The industry players and the new entrants have been forced to apply new competitive strategies that will enable sustainable success in the competitive industry. Pattern of Change Both the emerging and mature markets in the automobile industry are characterized by risk and opportunities. The global automobile industries have engaged in price wars crating frequent capacity overlap and rivalry. Therefore, the oligopolistic market model has been transformed into a competitive model. The competitive pattern of change is evident in its production, international trade changes, and supply chain and pricing. ...
However, the lowering of the trade barriers and advancements in globalization has changed the tradition whereby the production location decisions are influenced by the international competitiveness. The international competitiveness is a product of the level of different tasks within the industry due to the vertical disintegration of global production. This is a change from the traditional business norms whereby the global competitiveness was determined by the level of the industry. Variation in Production Table 1: Top 20 Motor Vehicle Producing Countries  China 18,418,876 United States 8,653,560  Japan 8,398,654  Germany 6,311,318  South Korea 4,657,094  India 3,936,448  Brazil 3,406,150  Mexico 2,680,037  Spain 2,353,682  France 2,294,889  Canada 2,134,893  Russia 1,988,036   Iran 1,648,505  Thailand 1,478,460  UK 1,463,999  Czech Republic 1,199,834 Turkey 1,189,131  Indonesia 837,948 Poland 837,132 Argentina 828,771  Italy 790,348 Source: http://oica.net/category/production-statistics/ Table 2: Annual Change in Production in Automobile Industry Year Production Change 1997 54,434,000   1998 52,987,000 -2.7% 1999 56,258,892 6.2% 2000 58,374,162 3.8% 2001 56,304,925 -3.5% 2002 58,994,318 4.8% 2003 60,663,225 2.8% 2004 64,496,220 6.3% 2005 66,482,439 3.1% 2006 69,222,975 4.1% 2007 73,266,061 5.8% 2008 70,520,493 -3.7% 2009 61,791,868 -12.4% 2010 77,857,705 26.0% Source: http://oica.net/category/production-statistics/1999-statistics/ International Trade The international trade is characterized by the dominance from a small number of companies. However, the industry faces segmentation that has made it more regional than global. The industry is also characterized by cost pressures, overcapacity and low profitability ...Download file to see next pagesRead More
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