StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

European Car Market - Essay Example

Comments (0) Cite this document
Summary
The European car market is dominated by only a few competitors. The added ratio of these competitors is more than 70% of the total market revenue. For a market to be classified as oligopolistic, the requirement is that the added market share of the big 4 rivals should constitute to 40% of the total market…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.7% of users find it useful
European Car Market
Read TextPreview

Extract of sample "European Car Market"

Download file to see previous pages In the real world, there is no such market as a perfect competition as every firm tries to differentiate its product from others and perfect competition involves perfect homogeneity. Perfect competition occurs where every characteristic of competition is known to the seller and as well as the buyer thus giving all information to the market. Due to the interaction of forces of demand and supply the market price stays for all thus the firms become price-takers and mainly compete on the terms of cost only. This raises the issue of profit maximization and firms in the perfect competition tend to increase their profits by only reducing costs. Further the point that perfect knowledge about the market means that despite of how much a firm produces it will get the same price throughout its production schedule as in a perfect market the average revenue is constant and so is the marginal revenue thus implying that the price elasticity is zero thus a decline or raise in price would bring about no change to the total revenue. In the perfect market, demand tends to stay constant throughout and since the firms are small, increment to the cost will only add up to the loss.
The perfect market is more vulnerable to competition as there are many buyers and sellers. So the effect of entry and exit of a single supplier does not play a major role in upsetting the market whereas in the oligopolistic case, the effect of exit of any one firm plays a vital role in changing the entire market structure.
Product Homogeneity and competition
Product homogeneity is another factor that deters the taxonomy of the car industry as being perfect. In a perfect competition, the products are considered as homogenous thus they share the same attributes as of their rival products. This again reflects the point that this market is more prone to price changes and therefore entry and exit of firms will keep on happening.
Consider that if the car market is to be called as perfect market then there would be many firms wanting to join the industry to reap better profits as it is a growing industry and so addition of new firms would keep on expanding the market thus there would be a time when the supply of cars will exceed the desired demand thereby causing a decline in price making many firms lose out. Thus only short term profits could be achieved and further it is possible that the losing firms may not be able to cover up their costs even.
The point to be raised is that is there a substitute use of the machinery needed to manufacture cars Probably not as the technology required to build car engines would be in appropriate to be applied to Water-filters or cigarettes. In this case if the demand for cars falls so can the producer make a sudden move and go into the cigarette industry Never, it is difficult to shutdown large plants in a short period of time.
Economies of Scale
The point from which the economies of scale start is hard to attain at the momentary run. Economies of scale reflects the efficiency of the firm in the long run and in perfect competitio ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“European Car Market Essay Example | Topics and Well Written Essays - 2000 words”, n.d.)
European Car Market Essay Example | Topics and Well Written Essays - 2000 words. Retrieved from https://studentshare.org/miscellaneous/1506590-european-car-market
(European Car Market Essay Example | Topics and Well Written Essays - 2000 Words)
European Car Market Essay Example | Topics and Well Written Essays - 2000 Words. https://studentshare.org/miscellaneous/1506590-european-car-market.
“European Car Market Essay Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.org/miscellaneous/1506590-european-car-market.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF European Car Market

European Car Manufacturing Sector

...Advanced Critical Writing Inserts His/Her Inserts Grade Inserts 14 April Advanced Critical Writing Cars are manufacture to fill a need. The research focuses on the relationship between car prices and the demand for the cars. The research centers on the analysis of an economics article. Many entities produce huge business profits if the company focuses on making cars that fills the need of the company’s current and prospective clients. The article also entices the article readers to buy car brands that are in high demand. For example, the article states that the demand for there is an increase in the demand for BMW cars within the European Union car market segment. In addition, the demand for tried and tested Mercedes –Benz...
9 Pages(2250 words)Literature review

Clothing Retail Market in General

The industry is оverwhelmed with cоmpetitiоn frоm cоmpаnies which hаve invested in hi-tech mаchinery leаding tо greаter efficiency оr hаve plаced their prоductiоn tо fаctоries in cheаp lаbоur cоst cоuntries tо prоduce their prоducts. Hоwever, mоst pаrt оf the cоmpаnies in this sectоr mаke nоt very high prоfits. Tо increаse the mаrket shаre in this аrenа is nоt аn eаsy tаsk, аnd therefоre it needs а greаt deаl оf endeаvоur, knоwledge, аs well аs energy аnd mоney.
Clоthes retаilers fаll intо twо brоаd cаtegоries: firstly, thоse selling оwn-brаnd clоthing аnd, secоndly, thоse selling third-pаrty weаr. Mаjоr retаilers such аs Mаrks & Spencer аnd the Аrcаdiа Grоup аre gооd exаmples оf the first grоup, аs аre chаin оperаtiоns s...
18 Pages(4500 words)Research Proposal

Market Analysis and Segmentation: JetBlue Airways

It is for this reason that JetBlue management painstakingly handles the services and amenities that the company offers. They present very competitive technology as far as providing comfort to their passengers is concerned. Destination-wise, JetBlue Airways may be considered a specialty carrier that is relegated to a short-haul concentration, taking advantage of similar economies available with advanced technology and updated equipment. A short-haul carrier, JetBlue operates efficiently by consolidating services and economies of scale. Consequently, as a short-haul carrier, JetBlue’s revenues are considerably high compared to other airline companies.

In 2003, JetBlue declared a profit of $ 17.6 M for its first quar...
6 Pages(1500 words)Case Study

Starbucks in Chinese Market

In the year 1996, the coffee giant marked its global presence. Up until 2004, the Chinese government prohibited Starbucks to operate its own stores in China. As a result, the coffee giant enters the Chinese market by joint-venturing with Chinese food and beverage companies and licensing other companies to own and operate its stores--differs from its domestic approach. But the company was able to easily overcome its initial obstacles and marked its presence in China very quickly and successfully with great brand recognition and customer satisfaction. The company also tailors its stores to match the local atmosphere. This is a transnational strategy. “For example, the Starbucks strategy in Shanghai is to attract middle to high...
7 Pages(1750 words)Case Study

The Challenges of Foreign Market

Any multinational company is exposed to risks such as change of foreign currency exchange rate, commodity prices, and interest rates because it denominates its transactions in foreign currencies. That’s why there is also some uncertainty in future earnings, liabilities and assets values.
Therefore, before taking a decision on the country of entry, a profound analysis of its current political and economical situation is to be performed. According to Kotler and Armstrong (351-361), a decision on whether to enter a foreign market should be based on a profound analysis of potential risks and opportunities, as well as the company’s internal resources.
The company is a Limited Liability that exports roasted and gro...
11 Pages(2750 words)Case Study

Oil Prices by OPEC and Market Fundamentals

Market failure is defined as the inefficient allocation of resources by the market, the free market is considered to optimally prices and resources in the production of goods and services, and this is because the price and quantity produced are determined by market forces which include the demand and the supply. The control of prices by a firm or an organization in the market results in market failure, therefore OPEC leads to market failure due to its nature in the market.

OPEC was formed in 1960 by 5 oil-producing countries which include Venezuela, Saudi Arabia, Kuwait, Iran and Iraq, The aim of this organization was to unify petroleum-producing countries in order to realize fair and stable prices of oil .other oil-pro...
6 Pages(1500 words)Report

Segmentation, Target Market, and Positioning of the Fortified Wine

There are some types of fortified wines which carry a rich legacy and ethos of the Australian culture and society. This rich history and distinct flavour can be utilised to penetrate growing markets like China and build a strong brand presence there when the market is relatively immature. Moreover, tweaking of marketing, distribution and pricing strategies would offer greater sales potential for the fortified wine industry itself in Australia.

Among the variety of wines that are available, the Australian wine industry offers an attractive bevvy of the following variants of red wine, white wine, vintage wine, sparkling wine, dessert wine and fortified wines.

The fortified wines are also termed as “liquid...
10 Pages(2500 words)Business Plan

The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market

It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would...
20 Pages(5000 words)Literature review

European Car Industry

...Table of Contents Serial Particulars Page # 1. Introduction 2 2. Company’s Performance 3 3. Financial Results of the Company 3 4. Non-Financial results of the Company 7 5. Present Scenario of the European car market 7 6. Critical reflection on teachings 8 7. Team Performance: critical evaluation of performance of team 13 8. Conclusion 16 9. Appendices 20 Business Simulation Exercise European Car Industry Word Count – 4000 words Introduction: The current European Motor Industry has been chosen for the study. It is the biggest...
16 Pages(4000 words)Case Study

European Union Policy: Turkey

..., a viable market economy and the capacity of the Nation to abide by the policies of the European Union. The Commission screens the suitability of the country in the light of 35”chapters” like food safety, agriculture, energy and transport policies, foreign and security policies etc. Before the negotiations begin, the country may be asked to fulfill certain benchmarks, and the procedure varies depending on the merit of the applying country. The country must indicate a time-line for the implementation of the EU policies and processes. “When all negotiations are complete to the unanimous satisfaction of the member countries, a Draft Accession Treaty is compiled and submitted to the Council, Commission, Parliament and member countries...
9 Pages(2250 words)Case Study

Global Employee Information and Consultation: Replicating the European Model

...Global Employee Information and Consultation: Replicating the European Model INTRODUCTION The only way for the employees and their representatives to reach the level of multinational corporations is to create an effective transnational mechanism that facilitates consultation and information disclosure. The European model (EWC) is an example of an institution that intends to provide employees voice in the transnational arena. The information dissemination and consultation arrangement enable employee representatives to participate in discussing issues that pertains to their employment. However, there is a need to analyze whether EU style of legislating a mechanism shall be effective if replicated globally. The answer in part depends...
9 Pages(2250 words)Coursework

Foreign Market Entry and Diversification

... some of the recent trends have prompted the prediction that consumption of beer will go down in some of European countries like France, Spain and Germany. The threat of such a consequence has forced many companies to focus on the emerging markets like those of Asian countries where people are likely to spend a large sum of money on the consumption of beer and other alcohol. People in Sweden and UK are found to shift their inclination from to wine. Russia might emerge as the biggest market of beer since consumers there are found to accept beer more readily than vodka. It is quite evident from the graph given below that China is likely to see a sharp rise in beer consumption by the end of 2012. Poland, Romania and Ukraine are also expected...
7 Pages(1750 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic European Car Market for FREE!

Contact Us