General Motors Oligopoly Market Structure

Research Analysis for Business It is my responsibility as a Business Consultant officer for General Motors Corp. monitoring all activities of the company and then review them thoroughly to be able to device more cost-effective and profitable business plans for the organization. General Motors is one of the principal auto makers in the United States and across the globe marketing their automobiles and innovative style. According to “General Motors” (2014). During the earlier years General Motors only held Buick Motor Company, several years later the automaker obtains more than 20 companies including Oldsmobile, Cadillac and Oakland, today known as Pontiac.” (History & Heritage). This Research Analysis will examine

State of limited competition, in which a market is shared by a small number of producers or sellers. Meaning the market only has a handful of companies functioning in the same structure. The substitution of a product for another product or one vehicle for another it is completely possible in an Oligopoly market only from one of the few companies in the Oligopoly market structure. In the United States these companies would include Ford, GM, and Chrysler (Grunert n.d.). It is extremely difficult for any new Company wanting to enter into an Oligopoly market structure. One of the main barriers is the initial investment or start-up costs, any person wanting to start a company will either have to be financial stable, or have a collateral to request a loan from a Financial

Variable costs are those that vary with the amount of production. For example, at General Motors, variable costs go up with each car produced. If a Transmission costs $7,000, for each car produced by GM variable cost goes up $7,000. If five cars were assembled the variable cost for the engines would be $49,000. Fixed costs do not fluctuate in reference with the quantity of production. They are called fixed costs since they are fixed regardless of the quantity of manufacture. The costs of facility payment are cover under the fixed cost. Every month is the same regardless of how many cars General Motors produced during that period of time. Elements that can influence variable cost are; supply and demand, task difficulty, location and effectiveness.
Factors Affecting Fixed Costs
Any equipment or technology obtained, specialty built to producing electronically fueled vehicles that can't be modify and utilized for some other new item for generation, is a fixed expense. In manufacturing electronic hybrid vehicles, over the long haul there are no fixed expenses. Be that as it may, in the short run if electronically hybrid vehicles were not popular, the funds spent to buy the equipment utilized exclusively to deliver these vehicles would be an aggregate misfortune. According to, Teisl, Rubin, and Noblet (2006)