Big Drive Auto Memo
- Submitted by: DEEDEEMEE
- Views: 1934
- Category: Politics: Economics
- Date Submitted: 04/28/2010 11:15 AM
- Pages: 5
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To: Big Drive Auto Executives
From: Team B
Subject: The Future of Big Drive Auto
Preparation for different economic realities has a large impact on short and long term survival or potential growth within a business. Although the current economic situation appears to be extremely challenging, the following recommendations for Big Drive Auto will prove to be a valuable asset in keeping the company doing what it does best- profiting in the automobile industry.
Big Drive is in a market situation in which a small number of selling firms control the market supply of a good or service and are therefore able to control the market price. In other words, Big Drive can be classified as an oligopoly. Every company in an oligopoly is aware of its own market share of the total market for the product or services it produces. Changes in price or market share by one company can be and in most cases, is reflected in the sales of its competition. There is a tendency that these companies have a high degree of interdependence. (Oligopoly, n.d.) Another impact on companies classified as an oligopoly is non price competition, such as advertising, packaging, and service offerings. (Oligopoly ,n.d.)
After understanding the market base and some ways to differentiate the company, one must analyze Big Drive Auto’s historical data and predict trends. Based on trends derived from the past ten years of Big Drive Auto’s performance as an automotive dealer, the data appears to suggest pinpointing the company’s efforts toward service rather than sales. For example, a table posted below shows that Big Drive Auto recorded significant revenue growth in the area of service activities ranging from 1998-2007 (Big Drive, 2010).
Service Revenue, shown above, is on the rise.
Vehicle sales is fluctuating.
Oil, coolant and tires fluctuated as well.
The above chart paints a clearer picture of the overall trend of rising service revenue and fluctuating revenue from...
From: Team B
Subject: The Future of Big Drive Auto
Preparation for different economic realities has a large impact on short and long term survival or potential growth within a business. Although the current economic situation appears to be extremely challenging, the following recommendations for Big Drive Auto will prove to be a valuable asset in keeping the company doing what it does best- profiting in the automobile industry.
Big Drive is in a market situation in which a small number of selling firms control the market supply of a good or service and are therefore able to control the market price. In other words, Big Drive can be classified as an oligopoly. Every company in an oligopoly is aware of its own market share of the total market for the product or services it produces. Changes in price or market share by one company can be and in most cases, is reflected in the sales of its competition. There is a tendency that these companies have a high degree of interdependence. (Oligopoly, n.d.) Another impact on companies classified as an oligopoly is non price competition, such as advertising, packaging, and service offerings. (Oligopoly ,n.d.)
After understanding the market base and some ways to differentiate the company, one must analyze Big Drive Auto’s historical data and predict trends. Based on trends derived from the past ten years of Big Drive Auto’s performance as an automotive dealer, the data appears to suggest pinpointing the company’s efforts toward service rather than sales. For example, a table posted below shows that Big Drive Auto recorded significant revenue growth in the area of service activities ranging from 1998-2007 (Big Drive, 2010).
Service Revenue, shown above, is on the rise.
Vehicle sales is fluctuating.
Oil, coolant and tires fluctuated as well.
The above chart paints a clearer picture of the overall trend of rising service revenue and fluctuating revenue from...