Bus companies are likely to earn supernormal profits due to majority of the bus routes in the UK being serviced by just one company. Therefore firms wanting to get in the market are unable to due to high barriers to entry and exit, high sunk costs and imperfect knowledge. This makes the market highly uncompetitive as the bus market is able to protect itself in the long run and gain market share. However supernormal profits depend on demand and the revenue earned by the bus market. The extract states that the bus fares don’t cover operating costs, this suggests that demand is low or the fare price has been significantly reduced due to student discounts or due to old persons bus passes which erode into the revenue, and this means that bus companies are unlikely to earn supernormal
lacks solidified connections with firms in emerging markets. For instance, after entering the Chinese market, the firm has not been successful in gaining market share, but instead started losing market share due to many local companies grabbing sales, such as Sany Heavy - the principal rival of CAT in China, hence only contributing 3% to CAT’s worldwide sales. Due to CAT’s objectives, they could be less competitive with prices, as locally produced goods — those by Sany Heavy or Siwei for instance — are less costly and hence cheaper for customers, whilst CAT persist on delivering premium products. Thus, the lack of connections or partnerships and alliances with local companies make it more difficult for CAT to successfully earn revenue. In the United States, CAT is reliant on the real estate housing market to ensure revenues.
Weaknesses The company is so heavily focused on customer service that its online sales don’t always see the same growth as its competitors. The company very rarely has sales, only coupons, so they’re losing out on drawing in customers via in-store or online sales. By being a U.S. only company, the market segment is limited. Profit margins
In this round of competition, it became clear that several of the decisions we made were hurting our results at the end of the year; therefore, team Baldwin did not earning as much profit as the other teams and its market share was not a strong as it would like to see. It is clear that firms should utilize competitive dynamic research to compile data to understand what the consumer deems important in his or her buying decision (Williams, 2007). A firm may fail to understand what the user requires and the amount of competition in today’s competitive global market will cause a loss of market share and loss of revenue potential. Consequently, just as in the real business world, the sales and profit were negligible up to this point in the
In this market, the long run average cost decreases as output increase making it very difficult for new companies to enter the market (textbook). Since the marginal cost per new subscriber is next to nothing, the average cost decreases with every extra subscriber. A new company would have a very difficult time because they would have similar cost, but many less subscribers making their average cost quite high. The two competitors that successfully entered the market after Netflix, did so with the financial backing of firms that were already successful and could absorb the initially high average cost. Another less important barrier is how well known and popular services like Netflix, Amazon Prime, and Hulu Plus already are.
This unfortunate occurrence immediately ceased production of the iPad2. Consequently, Apple couldn’t produce adequate iPads to satisfy the consumers’ demands. This delayed iPad shipments and caused an increase in cost of production, therefore, Apple’s pricing increased for the remaining iPads available in the market. However, Apple was at a competitive disadvantage as many loyal customers resisted purchasing the iPad2 and eventually turned to Apple’s competitors who produced inexpensive tablets. Disruptions in Apple’s supply chain adversely affected its sales subsequently decreasing revenue and overall profits.
If the mark of a political community is to be self-sufficient, then Aristotle would likely not support small businesses because they are not self-sufficient – or at least not as much so as larger businesses. Bruenig supports this idea by saying that our economic system actually aims to keep businesses small. By keeping businesses small, it makes it harder for them to sustain themselves and makes it virtually impossible for them to sustain the entirety of the United States which is why we have so many large
The weaknesses demonstrated by Amazon to acquire Whole Foods for 13.7 Billion are disadvantages where Amazon can improve. Firstly, Amazon has made a considerable financial investment to acquire Whole Foods and will limit their ability to purchase more assets in the future. Second, the acquisition will hurt the corporation’s ability for quality and quantity control. Lastly, since Whole Foods is solely an Organic Food store, there are limited suppliers in the industry and can become a problem if proper precautions are not taken. Overall, with purchasing Whole Foods, the organization will experience a hit financially, quality and quantity control for satisfying their consumers and the limited suppliers of Organic products in the grocery industry.
Other than that, According to most studies in different countries, revealed that TV has the biggest effects on audiences and persuade them to start purchasing processes. Pensonic products are less appearance in television ads, therefore Pensonic Holdings Berhad lack of the influence on consumers’ taste and perception. Also, it fails to reach a large audience in a cost-efficient manner. (Anup Shah, 2012) Moreover, people perceived Pensonic products as low quality appliances and a cheap brand due the price of its products were cheaper than other brand. It’s often perceived for middle and lower class people (Mohamad,