The Global Bearing Market For Automotive Bearings

There are many models of market structure in the field of economics. They include perfect competition on one end, monopoly on the other end, and competitive monopoly and oligopoly somewhere in the middle. In this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market. Although oligopolies can also be global, we will focus strictly on the United States here. We will define oligopoly, give key characteristics important to the oligopoly structure, explain why oligopolies form, then give an example of an oligopoly in today’s economy. Finally, we will discuss the benefits and costs in this type of market structure.

The global machinery market had revenues of $243.8B in 2012, an 8.1% increase over the previous year and compound annual growth rate of 4.6% from 2008-2012. Asia-Pacific accounts for 38.9% of the global machinery market with total revenues of $94.8B, while the Americas make up 36.4%. The US alone makes up 22% with $54.1B virtually equivalent to Europe’s $54.2B.

The Internal Market of the European Union (EU) is one of Europe’s significant achievements and its greatest resource in times of modern globalisation. Since its creation in 1993, the Internal Market has opened itself more to competition, created jobs and reduced many trade barriers. It is the principal instrument for building a stronger and fairer economy in the EU. It assures the free movement of people, services, goods and capital, and by doing so, creates fresh opportunities for businesses and consumers. The Treaty on the Functioning of the European Union adopts measures with the aim of combining national markets in a single market with the characteristics of a domestic market. The vision is that it should be as easy to trade between London and Madrid as it is between London and Manchester.

Natural monopolies are cases in which production costs, infrastructure, and demand structure lead to a single monopolizing firm producing the good at lower cost than any other arrangement. Under such situations, firms will tend to over-charge and under-supply, causing a reduction in social surplus and an inefficient distribution of goods. A lack of competition is a fundamental violation of the idealized market assumptions. Little or no competition leads to inefficiencies of production and operation (Weimer and Vining p. 102). Furthermore, natural monopolies give an unfair and non-competitive advantage to firms that have entered the industry first. In cases of natural monopolies, government must typically regulate private industry in an attempt to maximize surplus, or, alternatively, government may provide the good or service publicly.

As a multinational corporation, the implication of the scandal determines the fate of numerous stakeholders both internal and external. Internal stakeholders comprise of the board, managers and employees while external stakeholders subsume shareholders, customers and suppliers. The economic, political and social impacts of the dishonest practices would shape the fate of Volkswagen and affect the future prospects of the automotive industry. Common shareholders whilst not involved in the day to day running of the business placed faith and belief in the firm by providing capital had suffered severe economic loss as share prices (get something for stat). Despite the callous deception in advertising the defeat device displayed no signs of disturbing vehicle performance, however, customers of Volkswagen and its subsidiary vehicles suffer from lower resale value. In addition, even though the scandal was global, European consumers were the most affected with diesel cars accounting for 41% of all European cars (Fontaras, 2016). This high percentage in respect to other nations is a result of incentives provided by the European Union for the purchase of diesel vehicles such as subsidies towards the production process resulting in lower premiums compared to petrol counterparts (Vidal, 2015) In additional with sales falling suppliers of Volkswagen would likely lose future contracts or have current contracts downgraded as less parts are required. Thus, this loss of future

In both developed and underdeveloped economies, there is a need to put regulations which ensure that profits are not abnormally earned at the expense of the innocent clients. It is therefore the mandate of the territorial authorities to put in place measures that introduce checks and balances in all trades. The respective companies or business must also follow the same suit lest they find themselves in the crossroads of law. However,

As part of our efforts to manage IT investments for Unique Bearings our Information Technology Department will be made up of 2 team members; the first is the IT Systems Manager, and the second is The IT Tech Support Lead. As the IT Systems Manager, I will be responsible for personnel management of IT site administrator, ensuring IT services are provided at Unique Bearings. This position ensures IT site administrator is providing services including maintenance of files, print servers, and other application servers as well as PCs and pertinent IT equipment at our manufacturing facility. This role will work with IT Tech Support, The Marketing/Sales Manager, The Accounting/Finance Manager, The Operations/Production Manager, The Human Resources

When companies are making decisions, the companies do not worry about how the rivals will react, in part to each company’s actions are unlikely to affect its rivals to a great extent hence they are independent. In addition, there is perfect knowledge in the market hence new companies have the freedom to enter into the industry. The companies are also profit maximizers, producing output where marginal revenue equals marginal cost; the profit maximising condition. Companies in a

•Oligopoly: This is an industry with very little firms in the market. If they conspire, they weaken output and raise profits the way a monopoly would and should do. For example the mobile phone industry is an oligopoly what with so many companies for example Apple, LG and Samsung all competing together. Supermarkets are oligopoly’s as they make supernormal profits as well.

Has the economy ever thought about direct impact from monopoly and oligopoly industries? The structure of a monopoly based industry exemplifies one seller in the entire market. On the other hand, the concept of an oligopoly industry illustrates few sellers that have the potential of making a direct impact in one single industry idea. The economy has depended on the market share of a monopoly and an oligopoly trade. However, a monopoly industry differs from an oligopoly industry due to a monopoly competitor dominates a majority of the market share of many industries and an oligopoly competitor contains few sellers who dominate a market share based on one single industry idea.

With the effect of the Single European Act on 1st July 1987, the emergence of European Union (EU) as a common market has essentially been created. The benefits of this act are substantial to European firms, economies, and workers. It eliminates conflicting national regulations and trade barriers, as well as offering firms opportunity to sell their goods to all other EU members (Griffin & Pustay 2005).

electricity and gas across national borders will be improved, increasing competition. The road toward the creation of a single EU energy market, however, has been anything but easy. Many national markets are dominated by a single enterprise, often a former state owned utility. Electricitie de France, for example, has an 87 percent share of

The car industry in Europe is a very competitive environment. Even though some analysts argue that it is a saturated market where no significant growth will take place anymore, the growth figure of 11.2% from 2009 to 2010 in terms of market value implies that there is still significant

Such a form of operations is especially appropriate for a company that has expanded its activity across the domestic borders within the EU. This structure also allows the company’s management to have greater control over the company’s actions and therefore prevents the issues discussed earlier in the paper. Moreover, it basically reorganizes the company into a much more flexible nature allowing the company’s subsidiaries to take advantage of the occurring opportunities with a greater authority. Yet the flexible nature of the company allows the top management to fully monitor the activities of the subsidiaries

In return these companies might receive either full immunity from fines or a reduction of fines (EC, 2013). The EC also benefits from this provided information, as they receive more inside information about the cartel, which they could perhaps not obtain otherwise. Another advantage of the Leniency Programme is that it creates a situation of distrust and suspicion among cartel members, which has a negative effect on cartel formation (EC, 2013). A company that provides this information to the EC is called a whistle blower, in the case of the bathroom manufacturers cartel also known as the American company Masco. They received full immunity under the leniency policy, but to qualify for this immunity, they needed to meet a couple of requirements. “A company which participated in a cartel must be the first one to inform the Commission of an undetected cartel by providing sufficient information to allow the Commission to launch an inspection at the premises of the companies allegedly involved in the cartel.” (EC, 2013). The EC states further that if it is already in possession of sufficient information to start an inspection itself, the company (i.e. whistle blower) has to provide the required evidence for the EC to prove the cartel infringement. Finally, the company must fully cooperate with the EC throughout the whole procedure and by all means necessary help it to put an end to the cartel (EC,