Business Recommendations for Big Drive Auto

2341 Words Oct 1st, 2010 10 Pages
Running head: BUSINESS RECOMMENDATIONS FOR BIG DRIVE AUTO

Business Recommendations for Big Drive Auto
Assignment #4
Learning Team B
ECO/561
October 4, 2010

Business Recommendations for Big Drive Auto
Economic influences play a major role in the success of a company especially when consumers are hesitant on spending or investing their disposable income or have many choices of who they will purchase from. Demand shifts influence profitability, which has a direct effect on the company’s ability to remain successful. Companies must carefully analyze the industry within they fall and understand how economic influences will affect their functions and infrastructure. Big Drive Auto Company is a major player in the market of automobile
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When it comes to pricing Big Drive Auto actually tries to be competitive instead of undermining their competitors because they know that using the profit-maximization strategy is least effective when the market reacts rapidly to changes in the marketing mix.
Big Drive Auto, like other firms, has visions of expanding more however to increase their number of locations the company would have to determine product pricing based on the new location, taxes, mean incomes for consumers, and how many competitors are currently saturated in that particular market area. Big Drive Auto strives to keep their prices reasonable and within the selling market of its competitors to sort of offset any type of a price war between them. One alternative is to band together with other competitors to discuss market strategy options. One of those options could be to “reach an agreement to fix prices, divide up the market, or otherwise restrict competition among themselves” (McConnell, et. al., 2009, p. 236). This option could cease any kind of price war from happening and keep prices competitive with all the oligopoly firms.
Non-pricing Barriers to Entry and Product Differentiation
Non-pricing barriers to entry exist among automobile sales, automobile products as well as automobile deals. The included barriers consist of

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