Question

Competitive Analysis

1) Identify a business, market, or industry (your choice). Describe the overall business environment, identifying the underlying determinants of both supply and demand for the participants involved. What are the elements that shape the market you have chosen? Are there currently any internal or external dynamic changes occurring? Are there surpluses or shortages?

2) Regarding supply, describe the primary fixed and variable costs involved. Which costs most affect production? Is the business experiencing diminishing returns of any kind? Describe how current production relates to overall capacity? Describe how costs relate to the business you have chosen at varying production levels. Regarding demand, how responsive are buyers to price changes in the market, and how elastic or inelastic is the demand for the products involved? Are there different groups of customers with differing demand elasticities? Is the firm able to use price discrimination?

3) What is the nature of competition in the market you have chosen? Describe where your firm fits into the range of market structures and why? What barriers to entry exist? What types of pressures do the firms involved face? Is there price pressure? Is regulation an issue?

4) Create a conclusion or overall assessment of the success of the business in both the short and long term. Is it a winner or loser? Does something fundamentally have to change for the firm to succeed? Why or why not?

Answer 1

Let us take automobile industry. The business environment of automobile industry depend on variuos factors like disposable income of public, credit availability, inflation rate, affordable price, etc. In current times, due to economic slowdown, the demand has fallen. Se there is a gap between the demand and supply. There are other elements also like government incentives, globalised trade, improved infrastructure which shape the market for automobile.

As there is volatility in the fuel prices, increases chances of people shifting to green energy sources which can influnec the industry.

As discussed earlier that demand is low and there is excess supply in the market due to COVID. So there is surplus in the industry.