Paper 3 Flashcards
Factors that affect price
-Component costs / supply
-Labour costs
-Brand power / loyalty
-Features / USP
Micro transactions
Micro transactions becoming more prevalent in the car industry. Higher price for higher spec. Adding costs to consumers.
Consequences of higher car prices
Consumers are buying used cars or looking to lease or finance a car rather than paying for it upfront
Consumer income
2017 - 21, Sales dropped due to Brexit and exchange rates being impacted
2020 - 22, Covid meant people lost jobs, had less money, consumers not buying new cars
Consumer Taste
Models - Taste has shifted from saloon cars to hatchback or Suv over past years
Colour - Recent trends suggest that rare colours are becoming more popular. Satisfies Aesthetic in marketing mix
Electric car sales
Sales have increased rapidly:
-Manufacturers understand the growing concern for environment, PESTLE
-Reduction of emissions from exhausts
-Sales of electric cars beat those of diesel in 2022
-Critics argue that production of electric cars are more than producing petrol
-Gov intervention, Banning or limiting amount of new petrol and diesel cars being produced
Electric cars - factors to consider
-Expensive upfront but cheaper running costs
-Growing awareness for environment
-Changes in income effect new car sales
-Infrastructure, Charging ports being available?
-Price of charging car, having charging pods installed at home etc…
Competitive environment
Porters five forces:
1.Rivalry amongst competitors - increased due to cars becoming more globalised
2.Threat of new entrants - Low threat from start ups due to cost and effort to establish brand. High threat from existing companies branching into electric cars
3.Supplier bargaining powers - manufacturers rely on suppliers, low resources and high demand = high supplier power
4.Threat of substitutes - Many substitutes in car market
5. Buyer bargaining powers - Large amount of options with both brands and dealerships
Resource management
-Generally use lean production to minimise waste
-Toyota production system, reduce waste and pursuit of efficiency. Jidoka, stop production to fix problem. Just in time stock level
Methods of production
-Typically use cell production , leads to worker specialisation
Quality management
-Quality control - Check quality at end of production
-Total Quality management - Where improving quality is embedded into the culture
-Quality assurance - Checking quality throughout production
-Kaizen - Attitude of continuous improvement
Entrepreneurial roles and characteristics
Roles - Create the business, generate ideas, grow business
Characteristics - Risk taking, communication, creativity, vision
Eg. Elon musk, entrepreneur who moved into car business, tesla, brung new and innovative ideas to car market. consumers attracted to this.
Global and external influences on car market
-Cars in different countries have different requirements, sides of steering wheel, size preference
-this increases cost of production
-Manufacturers have to abide by a countries laws when producing
PED and YED
Ped - % change in QD / % change in price
YEd - % change in QD / % change in Income
Decision tree
Used to calculate the best option to take
-Financial effect x probability
