INDIVIDUAL REPORT ON UK CAR INDUSTRY
This report is based on the principle of understanding the economic theory of the business world associated with the UK car industry. This individual report has focused on identifying major competitive companies in the UK share market, types of market structure associated with car companies, major barriers to entry in the market areas and associated economic theory.
Topmost competitive companies of the UK share markets have been analysed in the study in order to identify the associated market operation strategies. Types of the market structure have focused on identifying the market structure of the car industry in the UK. However, major barriers and economic theory have been discussed based on the prices strategy and operational functions.
The UK car industry has significant contributions to the economy of the country. This individual report is going to analyze the major trends and associated consequences of the UK car industry. The major focus area of the study is the understanding of major trends and outlines of UK car companies.
This individual report is going to discuss the process of identifying major competitive companies in the UK share market, types of market structure associated with car companies, major barriers to entry in the market areas and associated economic theory. The aim of the study is to understand major issues and challenges faced by the different car manufacturing industry in the United Kingdom market and its impact on the economy.
There are various car companies that have been participating actively in the UK share market from the last 5 to 10 years. In this study, in order to analyse competition amongst different car manufacturing companies of the United Kingdom, 3 major companies have been identified. The following are the top 3 companies that have dominated the share market of the United Kingdom to a great extent.
Jaguar Land Rover: Jaguar Land Rover Automotive Place is one of the major competitive car companies that have a great contribution to the United Kingdom share markets. The average annual revenue of this company is around 2580 crores GBP and it has its regional headquarters in different countries of the world (Jaguarlandrover.com, 2020).
This company offers different types of car including sports and luxury cars in the European markets. In order to survive in the corporate marketing areas, Jaguar Land Rover has implemented different innovative marketing strategy as well as a technological strategy for completing.
Aston Martin: Aston Martin Lagonda Global Holdings Plc is one of the major competitor car manufacturing companies in the United Kingdom. The stock value of this organization is around 58.95 GBX and its share value is also high. This organisation offers high-quality sports cars and luxury cars today European citizens. Aston Martin is one of the major competitors of Jaguar Land Rover in the car market of the United Kingdom (Astonmartin.com, 2020).
This organisation uses oligopoly market policies and structure in order to give tough competition to its competitors.
Toyota: Toyota is also one of the major organisations that dominate the car manufacturing industry as well as car marketing in the United Kingdom. Toyota has a great contribution to the car Stock Exchange of European markets and it influences the marketing functional areas to a great extent (Global.toyota, 2020).
The type of market structure that exists in the European car companies and share market is the oligopoly market structure. According to the view of Longhi and Keeble, (2017), this major different car manufacturing company has dominated the maximum proportion of the UK share market. The following are the major components of the oligopoly market structure of the European car industry:
Maximum profit: Maximum profit of dominant companies in the UK share market due to the oligopoly market structure. As per the view of Pavelková et al, (2018) oligopoly market structure provided different opportunities to maximize the profit of an organisation and its marketing areas from different perspectives. Oligopoly market structure contributes to the process of creating competition among the existing companies within the United Kingdom’s Stock Exchange.
Oligopolistic price: Oligopolistic price is one of the most significant components of the oligopoly market structure present in the European car industry. According to the view of Pereirinha et al, (2018), opportunities of oligopolistic price in the retail marketing process in the United Kingdom greatly influences buying behaviour of the customers and business performances of different organisations.
Barriers in entry and exit: Oligopoly market structure has major barriers in the process of entering in the market areas and exiting the market areas. As per the view of Dhingra et al (2016), in order to enter in the marketing process, any organisation must adopt product differentiation strategy in order to survive in the oligopoly market structure of the UK car industry. However, market access also has a major challenge and issues faced by different organisations to survive in the functional areas in a long period of time.
Homogeneous product: Most of the industry of the United Kingdom offers different products in the competitive market in order to dominate major functional areas and marketing places. As per the view of van Blokland et al, (2019), implementation of homogeneous product strategy helps organisations to survive in the corporate marketing ideas in a significant manner.
Evidence: The major evidence that supports that the marketing structure of the UK market is oligopoly is the existence of a few numbers of market-dominating car companies that have a major contribution in the exchange market. For example, Toyota, Rover and Aston Martin have dominated most of the marketing functional areas of the United Kingdom.
In order to enter the car market of the United Kingdom which is based on the oligopoly market structure, the major barriers are resources, patents, legal procedures and capitals. According to the view of Rashidirad et al, (2017), the barriers create severe issues and challenges for new emerging companies in order to compete with the existing organisation in the market in functional areas. These barriers can also influence business objectives and corporate structure of a new organisation in the process to enter in UK car markets.
Resource ownerships: Resource ownership is one of the major barriers faced by most areas of the car industries in order to enter the European car market. According to the view of Desyllas et al, (2018), for the process of establishing brand equity in the European markets resource ownership is a significant component.
Copyrights and patents: Getting copyrights and patents permissions from the legal entities is one of the major barriers in performing business in European car markets. According to the view of Amin and Smith, (2017), issues of patents are big challenges for start-ups organizations due to the high competitions in the European market.
Government policies: Different government policies of the country including Brexit and regional laws are also major barriers for different organisations to enter in the European marketing areas. As per the view of Mion, (2018), legal permission in order to enter in the marketing functional areas is one of the major challenges for most of the organization to enter in the UK car markets.
Supply and Demand Theory
Using supply and demand theory of economics can help to understand price and output determination in order to understand vehicle car frames that operate in the UK markets. Price of a product greatly influences the buying behaviour of the customers and affects the supply and demand process in the marketing functional areas. As per the view of Mion, (2018), a reasonable and effective price of a product promises more demand from the customer and it needs more supplies from the organisation to different distributors and marketplace.
Figure 4: Illustration of economic theory
(Source: Desyllas et al, 2018)
The above diagram can be used to understand the demand and supply of specific products based on its prices. The increase in the price of a product can reduce customer demands in the functional areas and can affect organisational performance to a great extent. However, poor quality also plays a great role in determining the price and output of a product. According to the view of Desyllas et al, (2018), the price of the product is determined by its output and greatly influences the typical car firm’s operating process in the international market as well as the market of the United Kingdom.
Figure 5: Supply and demand theory
(Source: Rashidirad et al, 2017)
Basic principles of supply and demand theory are that the demand for a product increases and supply remains constant then it results as a very high equilibrium price and quantity. On the other hand when the demand decreases and supply is constant then it determines the low equilibrium of price in the car firms of the UK.
From the above analysis, it can be concluded that European car industries had a great contribution to the economy of the country. The discussions of major identified competitive companies of the UK Stock Exchange reflect that the future of conferences in the United Kingdom is going to stagnate due to the oligopoly market structure. Oligopoly market structure has numbers of barriers to entry in the functional areas by order organisation. This process can influence the business performances and functional areas of the European stock exchange as well as European car markets from different perspectives. The major discussed areas of the study are major competitor companies in the UK share market, types of the market structure of the European car industry, major barriers to entry in the market and associated economic theory. The discussion of different areas has to understand associated problems and consequences of European stock exchange and industries in an effective way.
Amin, A. and Smith, I., 2017. Vertical integration or disintegration? The case of the UK car parts industry. In Restructuring the global automobile industry (pp. 169-199). Routledge.
Astonmartin.com, 2020, About Us, Available at: https://www.astonmartin.com/welcome [Accessed on: 25th April, 2020]
Desyllas, P., Miozzo, M., Lee, H.F. and Miles, I., 2018. Capturing value from innovation in knowledge‐intensive business service firms: the role of competitive strategy. British Journal of Management, 29(4), pp.769-795.
Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J., 2016. The impact of Brexit on foreign investment in the UK. BREXIT 2016, 24(2).
Global.toyota, 2020, About Us, Available at: https://global.toyota/en/ [Accessed on: 25th April, 2020]
Jaguarlandrover.com, 2020, About Us, Available at: https://www.jaguarlandrover.com/ [Accessed on: 25th April, 2020]
Longhi, C. and Keeble, D., 2017. High-technology clusters and evolutionary trends in the 1990s. In High-technology clusters, networking and collective learning in Europe (pp. 21-56). Routledge.
Mion, G., 2018. Constructing estimates for exports, imports and the valueadded from exports of the car industry and other manufacturing industries in the UK (No. ESCOE-TR-02). Economic Statistics Centre of Excellence (ESCoE).
Pavelková, D., Homolka, L., Vychytilová, J., Ngo, V.M., Bach, L.T. and Dehning, B., 2018. Passenger car sales projections: Measuring the accuracy of a sales forecasting model Ekonomicky Casopis, 66(3), pp.227-249.
Pereirinha, P.G., González, M., Carrilero, I., Anseán, D., Alonso, J. and Viera, J.C., 2018. Main trends and challenges in road transportation electrification. Transportation research procedia, 33, pp.235-242.
Rashidirad, M., Salimian, H., Soltani, E. and Fazeli, Z., 2017. Competitive strategy, dynamic capability, and value creation: Some empirical evidence from UK telecommunications firms. Strategic Change, 26(4), pp.333-342.
van Blokland, W.B., van de Koppel, S., Lodewijks, G. and Breen, W., 2019. Method for performance measurement of car companies from a stability-value leverage perspective. International Journal of Lean Six Sigma.
This report is based on the principle of understanding the economic theory of the business world associated with the UK car industry. This individual report has focused on identifying major competitive companies in the UK share market, types of market structure associated with car companies, major barriers to entry in the market areas and associated economic theory. Topmost competitive companies of the UK share markets have been analysed in the study in order to identify the associated market operation strategies. Types of the market structure have focused on identifying the market structure of the car industry in the UK. However, major barriers and economic theory have been discussed based on the prices strategy and operational functions.