The Gray Ferrari
- Pages: 10
- Word count: 2415
- Category: Economics
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Global proceedings and rivalry affects nearly all modern businesses and organizations are progressively more facing confrontations as a result of the ever changing external and internal surroundings. The economic and political connections involving the relocation of money, products, and people within and outside national boundaries together with ideas and values have increased the pace of transformation, vagueness, indecisions, and unpredictability. For firms to remain competitive in the market companies need to develop new products which are of quality and at the same time affordable to the consumers. Firms strive to remain market leaders within their industries and these businesses are faced with many challenges in their current business undertakings and there is a need for them to fight for their survival that result from global events and competition which affects them either positively or negatively. (Cullen and Parboteeah, 2005)
Therefore Ferraris’ control over its business should base on market structure of its products; a market structure is therefore defined as nature of a particular market with reverence to rivalry within that industry. Here we find that there are various types of market structures this include; perfect competition whereby there are many sellers who specialize in the production of homogenous goods and services, monopolistic competition which takes the form of big number of autonomous businesses with undersized percentage of the market share in the industry, oligopoly which involves many small businesses who are recorded to possess around 45% of the overall market share within a particular industry, oligopsony which involves numerous sellers and less number of buyers in a given market., monopoly which take the form of single seller of the goods, and monopsony which takes the feature of only a single buyer in whole market.
The auto industry nearly throughout the world takes the form of perfect competition market and the Ferrari Company is not exceptional from this because there a number of automobile companies who deal with the production of the same mode of vehicles. Since perfect competition translates to too many sellers and many buyers in the market place, competition is stiff and sometimes such businesses practice unfair competition in order to gain a larger market share in the market place. For example motor industry will strive to increase there sales of the automobiles and thus for a business to succeed it must employ good competitive strategies that will foster growth and ultimately the success of the business. (Kotler, Armstrong, Saunders, and Wong, 1999)
In perfect competition the market forces determines the prices of the products and services therefore private business engaged in the importation of a number of automobile modes will have to come up with strategies that will conform to the this market structure. Under this the forces of supply and demand takes the centre stage and prices are determined at equilibrium point. In this case we find that the Ferrari automobiles should therefore adhere to the rules set by the regulations set by the office of vehicle safety compliance which is found to be a unit of the National Highway Traffic Safety Administration in the department of transportation which states that any vehicle that that is brought from outside the United States should therefore report to the office of safety of vehicle safety by the importers who are surely registered. (Joseph, 1999)
Where the cars imported are nonconforming then the registered importers will have to issue a petition that gives an explanation on the replacement of the overseas parts with that are made in the United States. In this case we find that there have been an increased number of the nonconforming automobiles from the Gray Ferrari markets, whereby, these products are termed as goods that are manufactured and imported from overseas following the consent put by the holders of the trademark. It is therefore reported that in the year 1997 to the year 2002 the Gray Ferrari was in interested in this market since its value for the dollar was high and the number allowed to be imported was low.
The importation regulations in the Gray market include; any automobile to be imported must follow the standards of the particular country, the importers must have the form HS-7 filed from the ports which indicates that the vehicle indented to be imported complies with the applications at the Department Of Transportation, after which the registered importers will certify that the particular vehicle has the requirement for the importation and in the cases where the vehicles to be imported do not comply with the requirement then they will require to be modified in a manner that will enable them to comply to the rules of the federal motor vehicle safety standards it is always argued that the cost for modifying such vehicles is always higher than the purchasing cost thus making it hard for the consumers of the Ferrari products to wait for the vehicles that conform to the regulations and this has ed them to buy more cheaper and easily available products. This is clearly indicated in the case of Ferrari Company which is reported to be influencing the demand of the product in view of supporting the inflated income margins. (Coyle, Bardi, and Novack, 2000)
Ferrari have to clearly understand the requirements of this form of market and these requirements are; atomicity which means that there are numerous small manufacturers and customers that exist in the marketplace and there activities have no major force on the entire market participants and businesses are considered to be what is referred to as price takers because the ultimate prices of products are determined by the forces of both supply and demand. Another requirement is that of homogeneity of products meaning in the market goods and services are not so much different that is, the products are termed as perfect or ideal substitutes. For example all Ferrari manufactures sell same type of vehicle models to there customers. There is also the aspect of complete and full information to both the businesses and customers involved. For example customers of a particular Ferrari automobile model will know the prices of such model and they can choose to buy from any Ferrari manufactures. There are also aspects of free entry and exit to the market that is producers of the vehicles will not have any restriction regarding to either entering or exiting the business; this aspect gives the opportunity the producers to go international through utilization of globalization concept and try to explore new markets for its products. (Robert and Allan, 1981)
Another dimension is that of equivalent access opportunities to utilize any new technologies and resources in order to increase there productivity; under this the Ferrari should utilize the advancement of technology to enhance the quality of its products in order to attract large number of customers. However, for the company to succeed it must take in to consideration the two assumptions of customer’s intention to capitalize on utility and manufacturers endeavour to make best use of profits in order to fully understand how perfect competition structure operates. It is also worth noting that the violation of the above requirements can be experienced and may affect the success of the company. It is therefore found that for the Gray Ferrari to succeed it should work hand in hand with the National Highway Safety Administration comes as a result of, its character for fairness and care. In this case we find that the assignment of the National Highway Safety Administration is to, recognize and converse the lessons learned from investigation of the transportation sectors in the states, this investigation is normally watchful, experienced and self-regulating in order to prevent the loss of possessions, individual injuries, loss of life and also the environmental harm. Apart from safety measures, the board also carries out the coordination of tragedy backing for, victims and families affected by the transportation factors hindering the importation of a particular mode of vehicles needed by individuals; it this services are used to maintain the reputation that the transportation system of America as the safest in the world. (Blythe, 2001)
Therefore the national board of safety have set plans to have a careful use of the resources by maintaining a motivated, experienced, well trained, equipped and supported workforce which will enable it accomplish its mission this motivation is to be done through intellectual selection of attempt and masterful implementation of objective; this goes hand in hand with the contribution of the private and public sector partners, who are always cooperative and supportive, the communication of these recommendations for change in the directive and functions of the services of transportation is also considered.
The goals set by the transportation safety board in conjunction with its mission include: importation investigation, under this the board has been maintaining its reaction competence of the mode of vehicles being imported in the country and has also increased the examination of occurrence and other negative issues that are predicted to be of consequences in the improvement of public transportation protection. The NHTSA approaches to such cases faced by Gray Ferrari involve the enhancing of the organizational capacities and investment of the resources to enable the board to recognize and analyze the incidents which will further identify the origin of the importation business in transportation sector. (Besanko, David and Mark, 1996)
The second goal of the administration is the support and Outreach this, its objective is to enhance the presence of the national highway safety administration in the transportation system whereby, leadership and technical support is used as a factor in giving support to the safety issues in transportation, thus promoting the safety recommendations of the board, this is normally done by, advancing the technical understanding and awareness of the safety issues which reflects the leadership role in the workforce performance. The board also expands and performs procedures that always support the safety recommendations. The body also carries out the reviewing and analyzing the results of the recommendations, whereby the board chooses what measure is proved to be better. While playing its role of leadership the board usually solicit the support of external agencies which may be industries or the government, that assist in the bringing of the transportation issue to the awareness of the transportation society.
This unit also ensures that, its workforce maintains its knowledge by giving them a chance to play the leadership role with the board and other agencies locally and internationally. The board seeks to improve the productivity of the employees and their satisfaction through a vigilant recruitment, performance compensation, having an interest on their personal needs. It also maintains a working environment that facilitates the performance and the fulfilment of the boards’ workforce. To deal with financial frauds, the NHTSA through the DOT has come up with a resource management system, whereby it evaluates expenditures and fiscal commitments, so as to have an efficient asset management, to enable it have its mission accomplished, this course of management involves the budget implementation as a factor of performance for all stages of the transportation management. (Coyle, Bardi, and Novack, 2000)
The reviewing of all actions and costs is carried out whereby; the Administrations’ members expect the body to finish its mission at a considerable time and with the use of limited resources therefore the national safety administration is expected to carry out more investigations on financial issues in shorter time and with fewer resources. The cost accounting tools and methods is normally provided by the agency to the program officers so that they can manage resources more effectively. Its performance is usually evaluated by the office of the management and supplemented by its annual financial audit. The national highway transportation safety administration provides a room for safety studies that is termed as an assessment of the effectiveness of rules, curriculum, program management and operational regulations and other government agency actions that are implemented to reduce the transportation losses; these studies result in the issuance of a narrative report on the information, conclusions and any valid recommendations on the safety of the buyers. They are normally scheduled irregularly about six weeks after a board meeting is carried out covering the same subject. The schedules for such meetings are usually presented under news and events on the boards’ website, and announced via a press release.
Since the board is basically an investigative agency, it carries out a special investigation that is divided into two segments, whereby the first one is defined as an effort of gathering any information concerning the programmed focus selected in support of safety studies under this a report is usually issued, but a file is usually preserved, this file normally contains details, circumstances, and conclusions but will not include the possible cause of the particular issue like the Gray Ferrari . While the second one is an examination of the mechanical issues and safety problems recognized in one or more accident investigations, under this a detailed narrative report is usually developed and approved by the administration, it contains the details, circumstances , conclusions and safety recommendations if necessary. All these records are always available from the boards’ records management division. In conclusion we find that in the year 2002 the administration announced that the 360 and the 550 Ferrari model cars which were not originally manufactured in the United States but were easy to be altered to conform to the safety standards were found to be qualified to be imported and sold in the in the United States. (Transportation Research Board, 2000)
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