Mid Term

Mid Term

University of The Potomac

Data Analytics (CBSC 520)

Introduction

A company’s market share is estimated as a level of an industry’s total incomes. We can decide an organization’s market share by dividing its total sales or revenues by the industry’s total sales over a fiscal period. Use this measure to get a general idea of the size of a company relative to the industry. Investors look at the overall increases and decreases possible sign of relative competitiveness of a company’s products or services. As the market of an item or administration inside an industry extends, an organization that is keeping up its piece of the overall industry is developing incomes at a similar rate as the all-out market. A company that is growing its market share will be growing its revenues faster than its competitors.

Business Problem

The major problem with General motors and Ford car companies is the decline of their market share with the arrival of new car manufactures to America. According to Stefan Weinman spokesman for General Motors, General Motors spends $5.2 billion on health care for 1.1 million people, equaling $4,727 annually per person. People can buy cheaper cars and get the same value without the health care costs of $1,525 built into every vehicle made. Add another $675 per car for pension costs. Other car companies may have these problems, but not for some time. BMW, Nissan, Toyota, and Mercedes all build cars here in the United States with American employees, but those employees are new and very few have retired (“General Motors – A legacy of problems | DrivingtheNation,” 2018).

For the statistical study and analysis purpose, I chose a case study regarding the market share of different Sport Utility Vehicles (SUVs) from different automobile companies in coming quarter. In this a professional market analysis was done based on the odds of general Motors not being the market leader are 6 to 1 which is against the Toyota and ford which is having the largest market share in the coming quarter which is similarly assessed to be 12 to 5 and 8 to 3 respectively.

This point outs that there is only 1 way in which general motors have the possibility in becoming the market leader and on the other hand there is 6 ways in which it can fail.

• Let us assume that; ‘X’ denotes General Motors which have largest market share for the SUV’s in coming quarter. And the odds against general motors not being in the market leader are 6 to 1.

Therefore Statistically,

P(X) = General Motors can become that market leader

Total number of possibilities

P(X) = 1/1+6

= 1/7

Therefore;

• Let ‘Y’ denotes the possibility of Toyota having the largest market share for SUV’s in the coming quarter. The odds against Toyota to become the Market Leader are 12 to 5, which means out of 17, there are 5 ways in which Toyota can become the market leader and 12 ways it can fail.
• So Statistically,P(Y) = Toyota can become the market leader
• Total number of possibilities
• = 5/12+5
• = 5/17
• Let ‘Z’ denotes the event that ford will have the largest market share for SUV’s in the coming quarter. The odds against ford being the market leader are 8 to 3 which means; there are 3 ways in which ford can become the market leader and 8 ways in which it can fail.
• Thus, it can be expressed as,
• P(Z) = Ford can become the market leader
• Total number of possibilities
• = 3/8+3
• = 3/11

The event that some other automobile manufacture will have the greatest market shares for the SUV’s in coming quarter is calculated using the rule of complements.

So, P(A) = 1-[P(X)+P(Y)+P(Z)]

= 1-

=

=

Recommendations

I would suggest that high market share companies must analyze itself whether profitability will fall with further gain in market share. Another important step is the Risk Analysis, at different levels of market share, a company’s risk also changes. Risk starts to fall with the increase in market share because a company can engage in more market research, operate better information systems, recruit more experienced marketing personnel and spending more on marketing.

Conclusion

To conclude, nowadays the auto industry is transforming from the traditional mass production industry to a knowledge driven, innovative and technology infused industry which provides safety, comfort as well as luxury. In addition to these it is also important to keep a good marketing and financial strategy to become a market share leader. From this study I found out that General Motors which had a low market share possibility later finds a place in market share along with other automobile companies like Toyota and Ford.

Reference

Nickolas, S. (2015, March 30). How do I determine a company’s market share? Retrieved from https://www.investopedia.com/ask/answers/033015/how-do-i-determine-particular-companys-market-share.asp

General Motors – A legacy of problems | DrivingtheNation. (2018, November 26). Retrieved from https://www.drivingthenation.com/general-motors-a-legacy-of-problems/

Strategies for High Market-Share Companies. (1975, November 1). Retrieved from https://hbr.org/1975/11/strategies-for-high-market-share-companies