5-7 Page Paper Type of Good, Market Failures, Government Involvement Ford Motor

Running head: Ford Motor's Market Structure and Ownership

Ford Motor's Market Structure and Ownership 4

Ford Motor’s Market Structure and Ownership

Amanda McCauley

Rasmussen College

Author Note

This paper is being submitted on March 5, 2017, for Audra Sherwood’s ECO3250 Managerial Economics course.

Ford Motor’s Market Structure and Owndership

Market structure is important when it comes to making decisions in the organization and also helps in understanding trends on consumer’s motivation. The information gotten from the market structure is key in knowing how it affects the big segment of the population and that information will be applied to particular product or company or even marketing situation (Lee, 2013). As an executive to Ford motors, I strive to help marketers and another executive to understand the market structure as this understanding will help in coming up with market structure plan and implement successful marketing strategies. It also paramount when it comes to coming up with effective advertising and another relevant marketing campaign. Proper analysis of Ford Motor and the nature of the market it controlled, it operates under monopolistic competition.

The key characteristics of Monopolistic Competition include:

i. A large number of sellers: in this market structure, many sellers have the full information about the market. In this regard, therefore, there is required to manage our production to fit the demand in the market since more production will lead to surplus which might cause losses in the organization (Blanchard, 2010).

ii. Product differentiations : the market structure allows the firm to exercise some degree of monopoly through product differentiations since the products under this market structure are close to each other but they are not the perfect substitute for each other. For Ford Motor to make more profits, there is need to invest in product differentiations since this is what will attract buyers to our products.

iii. Pricing decision : Monopolistic Competition is neither price-taker nor price marker, and thus Ford Motor has partial control over the price and fully control of prices can be achieved through extensive concentration on product differentiations which will attract many customers and make most of them be loyal to our products (Chamberlin, 2009). In this case, therefore, Ford Motor will have an opportunity to decide the profit they want to make in the market.

In the next five years, Ford Motor will be profitable and more known in the market. The main reason I see the success of the firm is that first, we have the marketers in place who have started strategies on the new marketing plans to be put in place so as to increase the sales of our products. With the support from the firm, then their plan will work and what will result later is the growth in the sales in the market. Revenue will automatically increase since we are increasing our sales using the strategy that best fits the Monopolistic Competition kind of market structure. qAt the end of this process, we will have made the larger profit since we have improved regarding revenues and sales. From the business point of view, for the profit to be made, sales ought to increase, and in this way, the revenue will also improve. So in simple terms, to get more profit and sales then work on the improving the sales.

If the government partly owned the Ford Motor, then its operations will have to change and thus to affect their functioning in the market. The government has laws and regulations laid down for the achieving the protection of interests of the larger population (Wamalwa, 2013). Unlike when the firm stands on its own and only concentrates on profit maximization, the firm will have to work on the conditions that the government sets and this will affect the production and the working of the enterprise. Government performs an important role when it comes to financial support but controlling of operations is what it might undermine the operation of the organization.

References Blanchard, O. J. (2010). Monopolistic competition and the effects of aggregate demand. The American Economic Review. Chamberlin, E. H. (2009). The theory of monopolistic competition. Cambridge, MA: Harvard University Press. Lee, T. &. (2013). Market structure and innovation: a reformulation. The Quarterly Journal of Economics. Wamalwa, E. N. (2013). Factors Influencing Investment Decisions in the Parastatals, in Kenya (Doctoral dissertation).