The markets and competitive environment

Question 1

what is a market

Answer 1

• where buyers and sellers come together to exchange goods and services

Question 2

what is the competitive environment

Answer 2

• the dergree of competition and buying and selling power of the customers and suppliers

Question 3

what are car manufacturers

Answer 3

• businesses in the secondary sector constructing cars

Question 4

what are car dealers

Answer 4

• businesses in the tertiary sector that sell cars to the public or other businesses

Question 5

what are car servicing businesses

Answer 5

• businesses in the tertiary sector that provide car maintenance
  e.g. car MOTs, services, repairs

Question 6

how many of the cars manufactured in the UK are exported

Answer 6

• 8/10 cars to around 130 different markets worldwide

Question 7

the export of cars accounts for __% of all UK exports

Answer 7

• 10% of exports generating around £77 billion of trade

Question 8

how much does automotive-related manufacturing contribute to the Uk economy

Answer 8

• around £14 billion

Question 9

who are the market leaders in the car manufacturing

Answer 9

• Volkswagen
  followed by Audi, BMW and ford

Question 10

what are the trends in production in the UK car manufacturing industry

Answer 10

• the amount of cars being produced has declined in the UK car market since its record peak in 1972

Question 11

what are the factors leading to the decline in production of cars in the UK

Answer 11

• in the 70s the tax on importing foreign manufacturer’s cars was reduced and competitors like America’s Ford and Vauxhall undercut the prices of British-produced cars and

Question 12

how do porters 5 forces relate to the car market

Answer 12

Rivalry among competitors- rivalry has significantly increased as the market has become more globalised
Threat of new entrants- expensive to start up and challenging to build up a brand
Threat of substitutes- substitutes include public transport and electric-powered bikes e.g. lime bikes
Buyer power- customers are likely to shop due to the range of choice giving them more power
Supplier power- manufacturers often heavily rely on suppliers for different parts e.g. shortage of semiconductors

Question 13

car manufacturers are often large multinational corporations. __ car companies own __ different brands.

Answer 13

14, 54

Question 14

car dealers are often franchisees, what does this mean ?

Answer 14

• manufacturers give the dealers the right to sell and distribute their cars

Question 15

what are the characteristics of the car servicing market

Answer 15

• often independently owned small businesses
• competition is often local
• customer loyalty is really important and good customer service and being price competitive will help maintain this