Lotus Rental Car wants to reduce expenses and increase their consumer base by adding new fuel efficient and alternative fuel vehicles to the Lotus fleet if these measures would be profitable. Key problems With the high demand for car rentals, and having more ecologically aware consumers, keeping alternative fuel vehicles in stock has been difficult. Hertz Rental Car Corporation has 4,000 hybrids throughout the United States, rents the hybrids for more money and still has a higher demand than supply. The demand for the hybrids has jumped 40% in the last year. Because of high consumer demand, auto manufacturers do not offer big discounts to commercial accounts.
This allows customers from middle and lower class income earners, to benefit from their product. The company offers a wide range of products ranging from the smallest through to the luxury cars which makes it to capture a large market segment. In addition, the company has the largest revenue in India's automotive industry which gives it the strength to expand and implement its growth strategies. Furthermore, it has strength in its huge markets coupled with international growth strategies which are propelling the company to greater competitiveness. b) Weakness The automotive industries makes a lot of profit by selling luxury vehicles thus making Tata Motors to miss on the profit since most of its sales are of low cost vehicles which are either commercial or passenger.
Explain why economies of scale are important to companies such as McDonald’s and GBK. Economies of scale gives big companies access to a larger market by allowing them to operate with greater geographical reach. Often, large firms in industries with high fixed costs can take advantage of savings that smaller firms cannot. Economies of scale characterizes a production process in which an increase in the scale of the firm causes a decrease in the long run average cost per unit. Economies of scale can be enjoyed by any size firm expanding its scale of operation.
For example, the first cars were so expensive that only rich people could afford to buy them but cars became cheaper when Ford invented the moving assembly line and the work went faster. But there were also some bad effects of the advanced technology in the factory. The industrial workers became mere wage earners as the machinery was too expensive. Some worker had to face unemployment as the machines made the work faster than before and it required fewer workers at some point. This system made the working condition dangerous as many industrial workers face the possibility of fatal
This was caused partly by the high self-confidence of the top management which was too ensured that the position of GM is everlasting. This assumption was proven as incorrect. The market position of General Motors before 2009 was dominant in many, but after 2000 GM’s vehicle production was stagnating globally. Together with the fact that the automotive market was stably growing it implies that General Motors was losing its positions on all important markets relatively to other automakers. In U.S., traditionally known as the core market, GM was selling less and less cars even since 2000 (The New York Times, 2009) and lost one third of its position, covering 28,1% share in 2000 and only 19,8% in 2009 (figures for cars and light trucks sales in U.S., Canis et al.
Mass production along with advancements in technology proved to be greatly Ford’s advantage; this strategy gave Ford the ability to make automobiles in large quantities and make them affordable to many. Ford did not view the production of his automobiles as a luxury item that would be off limits or unaffordable to many he envision for the company Ford to be an affordable item that many could enjoy. This was done easily through mass production and allowed Ford to grow into a large and profitable company. The success of Ford Motor Company was because its’ strategy encompassed a new way of manufacturing called mass production, advancements in technology, the supply chain and most of all changes in lifestyle. By the 1920’s Ford had 50% market share and
(The automobile industry, 1920-1980) This was very big not only for the new invention of the first production car but it also offered many new jobs for factory workers needed to produce the mass number of cars that were in high demand. After Henry Ford realized he needed to make these cars faster and more efficiently due to increasing demand, he made the first assembly line for workers, this allowed production to move much faster and more efficiently. With an assembly line each worker does one simple job on every product that comes down the line, over and over. By the time the product is at the end of the assembly line and everyone has done his or her part, the car is completely assembled! As with most things, as soon as others saw the success that Henry Ford was experiencing, they set out to copy him and make their own versions of his original product.
The first stage is the introduction stage; this stage is the most expensive to businesses because it is the launch of the new product. The product is new to the market, therefore the sales are low. Coca-cola expects this to happen as it does with all new products. Coca-cola is a family, well trusted brand that has been around for many generations. Merging the coca-cola product with an alcoholic beverage is brand new to the company and will require many different advertisements and promotions to get this product in the public eye.
While PepsiCo have diversified into healthier products and snack food business, Coca Cola have fell in marketing investments (advertising and marketing research) to maintain short term profit. As PepsiCo initiated the acquisition of Tropicana for $3.3Billion in 1998 (New York Times,1998)3, it have set itself up as the largest producer of branded juices for the health conscious in the USA. Subsequent acquisitions of Quaker Oats, Gatorade, Lay’s and Aquafina have also contributed positioned PepsiCo as the world’s 4th largest Food & Beverage (F&B) company with sales of US$22,000Million. The reluctance to diversify was evident when Coca-Cola decided against acquiring South Beach Beverage Company after negotiating for two years while Pepsi made an offer and in weeks acquired the SoBe brand New Age juice company, which gave Pepsi access to a market completely bypassed by soda
In the US for example, due to the exchange rate, the Hyundai cars are far cheaper than US of European brands. * Demanding nature of Korean; an interesting natural advantage for Hyundai is the demanding nature of the Korean, which pushes the company to keep on pushing for improvement and innovation. By fulfilling the needs of their home consumers, who are believed to be among the most demanding consumers worldwide, Hyundai automatically meets and even exceeds the needs of the global consumer. * Cost-effective labor; Korea has an abundance of highly skilled workers