Market Conditions Competition

Overview

As a member of the strategic planning group at my current corporation, Cadillac, we are considering introducing a new product to our inventory line. The marketing director has requested that I gather information on competitors in our industry as well as potential buyer habits to assist with determining the potential success of the new product. The organization is fully aware of the changes in the economy and how they have affected the demand for certain type of economy and energy efficient vehicles. In this discussion, the current market conditions will be evaluated for a competitive analysis to determine how the new product will rate within the changing economy and against our competitors. This discussion will also address this history of Cadillac, factors that affect the market, variable cost, fixed cost, and challenges the organization may face.

History and Products

A competitive analysis is imperative to any organization when a firm is considering launching a new product or doing major alterations to an existing one. Within the Cadillac brand, the organization has been proud to offer a quality, luxury model vehicle for its customers for over 100 years. The Cadillac organization was founded in Detroit, Michigan in 1902. In 1910 Cadillac was the first company to introduce the electric self starter into production, moving vehicles away for the crank start-up. In 1915, the company introduced the first mass produced automobile with a V-type, water cooled, eight-cylinder engine, which is now the signature of the Cadillac brand ("Cadillac History & Heritage", 2013). Cadillac now has an impressive product line of sedans, coupes, wagons, crossovers, Sport Utility Vehicles (SUV), trucks, and hybrids.

One of Cadillac's major competitors in recent years has been Ford. Ford Motor Company has been in existence since 1903 and was first established in Detroit, Michigan. Henry Ford, the founder Ford Motor Company, originally worked for Cadillac Motor Company, but the company did not become known by that name until after his departure and reorganization of the company. They have been known for their durable, yet affordable cards. Ford introduced a new way of mass production methods of automobiles and was responsible for the world's first moving assembly line of cars ("Ford Heritage", 2013).

Market Analysis of Car Sales

There are many factors that affect the demand, supply, and equilibrium prices in the market in which the competing organizations operate in, however; the stability of the economy and the prices of gasoline seem to be the major contributions. When the economy has a general view of good health, spending is up and therefore sales are up. The demand for products is high and in turn there is an increase supply. The prices become equilibrium when the demand of the product and the supply of that product encounter a median or intersect. When the economy is considered in poor condition or health, spending is down due to consumers cutting back on spending and sales generally decline. The demand decreases and the supply will decrease with the decrease in demand. The price of gasoline plays a major factor because when gas prices go up, especially when this increase in steady or maintained at high pricing, consumers' general look for ways to cut back on the price increases. Potential customers generally look for affordable, fuel efficient vehicles that can help them offset the increases in gasoline.

Challenges the Organization Faces

With the constant innovation of technology and the need to appeal to customers wanting to save money, the organization faces challenges in creating a product that the customers