Submarkets People with middle-class income continue to focus on owning cars as part of increasing their standards of living. However, companies that focus on luxury cars have shifted their market into developing countries in order to gain new market shares as people become wealthier.
Growth and Size
The growth of the middle class in the United States has been steady, which provides fewer opportunities for the luxury brands. Therefore, the growth in luxury brands is declining across the United States. People with disposable incomes across the United States continue to focus on luxury including heated seats, sunroofs and leather seats (Deaton & Muellbauer, n.d.). The major challenge faced by companies that focus on luxury models for specific markets is lack of economic feasibility. These companies are, therefore, required to use global platforms in order to minimize general expenses and increase the market value.
Profitability
Adapting to the continuously changing environment is a major business requirement for automobile companies in the United States. There is increasing competition in the automotive companies with more attention being focused on how to maintain the competitive advantage. Additionally, most of the companies are focusing on maintaining their market shares across the United States and globally (Yazdanifard, 2014). Therefore, advanced technology continues as a major determinant of different produced models. The increasing preferences of customers on green vehicles are shaped by the increasing environmental issues and government policies.
Cost Structure
The costs of different models across the United States are sensitive to the composition of output and scale. For example, the cost structure of ford motors is not dangerous compared to the general motors’ as the recent growth in productivity shows that the company can remain a successful competitor in the domestic market (Yazdanifard, 2014).
Distribution System
In the United States, cars are sold through the elaborate system of in depend franchised dealers. There are no fees associated with franchised dealers. Major companies in the United States usually focus on international distribution, especially to the developing countries (Yazdanifard, 2014).
Trends and Development
Technology continues to influence the type of models produced. Consumers are not looking at innovations when it comes to the choice of cars they purchase. Additionally, most of the consumers are focusing on their safety features when choosing a car model (Yazdanifard, 2014).
Key Success Factors
Key success factors for the effective competition include the quality, luxury, and price of the different models produced by the companies.
- Deaton, A., & Muellbauer, J. (n.d.). The theory of market demand. Economics and consumer behavior, 148-166. doi:10.1017/cbo9780511805653.009
- Yazdanifard, R. (2014). The Growth of the Automobile Industry. Journal of Accounting & Marketing, 03(01). doi:10.4172/2168-9601.1000112
