Introduction: Jaguar Cars was founded by Sir William Lyons in 1922. The main mission of the organisation is to “build beautiful fast cars” (Jaguar, 2008). Jaguar Cars is a major car manufacturer and is based in West Midlands, UK. Jaguar is a brand which has gained a lot of fame in many countries. Recently, Jaguar cars were taken over by Indian major Tata. As per FAME, the organisation has been classified and is stated to engage in “Design, development, manufacture and marketing of high performance luxury saloons and specialist sports cars” (FAME, 2008). In 2007, the organisation registered a significant drop in turnover. From approximately £ 1.4m in 2006 it dropped to £ 1.1m in 2007. Last year the organisation went through turbulent times which affected the organisation in a significant way. It had to undergo major changes in the management structure due to change of ownership. However, considering profits before tax, in 2007 a profit of about £ 250,000 was made which can be considered a lot better than the previous year where it registered a loss of £ 250,000. The loss before tax in 2005 was £ 534,000 which represents that there was a loss for the organisation. The following assignment initially three important factors that affect the demand for the product. Further in this report, elasticity of demand is studied. Factors such as price discrimination are studied and entry barriers to the industry are analysed.
Important factors affecting demand: There are many factors that affect demand for Jaguar cars. There are many external factors that have an influence on the organisation. External factors always have an impact on the organisation and they have direct influence on internal processes and importantly the corporate strategy of the organisation. Corporate strategy plays a vital role in providing a strategic direction of the organisation.
Economic factors: In 2008 many countries declared that they were moving into recession. This had a major impact on many organisations. Many people reduced their spending and their affordability significantly reduced. Economic factors have a great influence on demand. As the external economic factors influenced demand, the production levels with in the organisation dropped. Other car manufacturers have seen a sharp rise in production costs and steep fall in demand prompting them to undertake necessary redundancies of staff members which will allow them to cut internal costs and stay in race through these tough times. Jaguar may soon need to undertake such critical steps to be active in the market. As mentioned before, the organisation has lost significant amount in its turnover.
Competition: Competition from other car manufacturers has always been a major factor that influenced demand for Jaguar cars. Car manufacturers, especially from Far East, have always aimed to developed cars with better efficiency and reliability. One of the important reasons by which Jaguar cars can tackle this ever growing competition is by its brand name. Jaguar cars brand name is renowned the world over and its engine designs are quite unique. Apart from these the production systems used by the organisation are mostly automated and produce one of the best quality products with high reliability and service.
Price: Price is one other factor that influences the demand for an organisation. Price is very fundamental and basic. Rise of price, which is due to other associated factors, influences demand in a great way, while drop in prices again increases demand. Reduction of prices takes place when the internal costs of the organisation reduce in a significant way and the organisation makes a decision stating that reduction of prices doesn’t influence the profitability in any way.
These are the three important factors that influence the demand for Jaguar cars and these factors are closely associated with each other and are influenced by other factors.
Price Demand Elasticity:...