Market Model Patterns of Change Research Paper Example | Topics and Well Written Essays - 1000 words

Market Model Patterns of Change - Research Paper Example The business expansion that has characterized many companies in the industry has led the expansion in the size of large companies and eventual attainment of a competitive advantage over smaller companies. Currently, the industry is experiencing enormous changes as a result of changing customer needs, emerging markets, and entrance of new competitors, technological advancement, and the strict environment regulations due to substance emissions (Blum, 2009). The changes have affected the demand, value chains and markets that characterize the industry. This has led to the transformation of the market into a more mobile model that is more competitive. The industry players and the new entrants have been forced to apply new competitive strategies that will enable sustainable success in the competitive industry. Pattern of Change Both the emerging and mature markets in the automobile industry are characterized by risk and opportunities. The global automobile industries have engaged in price wars crating frequent capacity overlap and rivalry. Therefore, the oligopolistic market model has been transformed into a competitive model. The competitive pattern of change is evident in its production, international trade changes, and supply chain and pricing. ... However, the lowering of the trade barriers and advancements in globalization has changed the tradition whereby the production location decisions are influenced by the international competitiveness. The international competitiveness is a product of the level of different tasks within the industry due to the vertical disintegration of global production. This is a change from the traditional business norms whereby the global competitiveness was determined by the level of the industry. Variation in Production Table 1: Top 20 Motor Vehicle Producing Countries   China 18,418,876 United States 8,653,560   Japan 8,398,654   Germany 6,311,318   South Korea 4,657,094   India 3,936,448   Brazil 3,406,150   Mexico 2,680,037   Spain 2,353,682   France 2,294,889   Canada 2,134,893   Russia 1,988,036   Ã‚  Iran 1,648,505   Thailand 1,478,460   UK 1,463,999   Czech Republic 1,199,834 Turkey 1,189,131   Indonesia 837,948 Poland 837,132 Argentina 828,771   Italy 790, 348 Source: http://oica.net/category/production-statistics/ Table 2: Annual Change in Production in Automobile Industry Year Production Change 1997 54,434,000    1998 52,987,000 -2.7% 1999 56,258,892 6.2% 2000 58,374,162 3.8% 2001 56,304,925 -3.5% 2002 58,994,318 4.8% 2003 60,663,225 2.8% 2004 64,496,220 6.3% 2005 66,482,439 3.1% 2006 69,222,975 4.1% 2007 73,266,061 5.8% 2008 70,520,493 -3.7% 2009 61,791,868 -12.4% 2010 77,857,705 26.0% Source: http://oica.net/category/production-statistics/1999-statistics/ International Trade The international trade is characterized by the dominance from a small number of companies. However, the industry faces segmentation that has made it more regional than global. The industry is also characterized by cost pressures, overcapacity and low profitability