Case studies Chapter 24

Case study 24.1

1.) Market size is the total level of sales for all businesses within a specific market while the market growth is the pace by which a given market increases or decreases in value.

2.) A car manufacturer obviously wants to sell as many cars as possible so that he can make as high profits as possible. Because China's car industry is growing so rapidly, (about 1 million extra vehicles a year) the car manufacturer selling to China will make huge profits since he can sell so many cars now when they are needed. But if the car market stopped growing the car manufacturer would not be able to sell any cars and he would not make any money anymore. This is why it is important for a car manufacturer selling to china that the car market is growing rapidly.



Case study 24.2

1.) Market A, total value, 2009=162 000. Market A, total value, 2010=187 110.
((187 110-162 000)/162 000)*100=15.5
The percentage increase in the total value of sales for market A between 2009 and 2010 was 15.5 %


2.) Market B, total sales, 2009=10 000. Market B, total sales, 2010=15 000.
((15 000-10 000)/10 000)*100=50
The percentage increase in total sales volume in market B between 2009 and 2010 was 50%



Case study 24.3

1.) (35 000 000 000/100)*31=10 850 000 000
Tesco Lotus's sales in the Thai supermarket industry in 2008 was 10 850 000 000

2.) (12 850 000 000/45 000 000 000)*100=28.56
Tesco Lotus's 2009 market share was 28.56%

3.) Because Tesco Lotus are market leaders and sell more than anybody else, they can afford to have lower prices because they rely on that enough people buy it so that they still make a profit. When you are the market leader you can definitely lower your prices but still make great profits because you sell such a huge amount of things. Having low prices will also attract more costumers. Also because they know that lots of people buy things from them they can start selling more new things too because they already have the costumers trust. When you already have the costumers trust they are more likely to keep buying things from you so then you can make them buy new things too.

4.) Yes, I do think that the Thai government should put some restrictions on Tesco Lotus's future growth. I don't think that the government should ban Tesco or any other foreign store but I do think that it should be controlled how big they can expand and how low prices they can have. The reason why I think so is because I think it would be a shame if a foreign store got all the costumers so that all local businesses would go bankrupt and have to close. I think it's important to keep traditional things available and make sure that they don't disepear. Having an international supermarket as the market leader may also have effects on the Thai food culture for example. If the store has too much foreign things and not enough Thai things the Thai people might start changing their food habits. Also I think its important to keep the locally owned stores and support them.

Chapter 3 Revision activity

1.) Yes, Peugeot Citroen's objectives fit the SMART criteria. The objectives are specific and not broad or unclear in any way. They are for example aiming for "becoming the most competitive car marketer in Europe by 2015". Their goals are also measurable because they have goals set in percentages like, "the profit margin of each car sold is targeted to increase from 2% to 7%". It is very easy to see if this goal is reached or not. Their goals also seem achievable since it feels realistic that they can launch 12 new models in the Chinese market. Their goals are also made to be relevant to all the employees so they have many smaller points that are assign to smaller groups. For example they said the "the human resource department must prepare for up to 8000 job losses" this is mostly relevant if you work in the human resource department. The company also has a time limit for when everything should be done and in this case that is in 2015.

2.) By establishing departmental objectives it becomes easier for the employees to know what is relevant for them to know or to work on. An overall big goal for the business is good because it clarifies what the business wants to accomplish. But a general goal does not tell the employees that much because they still don't know what they should do about it. By setting up goals for each department the employees working there know more specifically how they can contribute to reach the main goal of the business. Also departmental objectives does not seem as overwhelming as the main objective might. They are smaller and therefore they feel more doable.

3.)Yes, I think that  Peugeot Citroen's shareholders would be very pleased with the new objectives of the company because all the objectives are towards making greater profits. The new objectives are about expanding the company and making it bigger so that they can produce and sell more. Also all the objectives that try to cut down on cost in production will benefit the company profit wise. So when cutting the cost of production and selling more than before the profits will be very large. Bigger profits for the company means greater profits for the shareholders as well since they own parts of the company so they will probably not complain.