INDUSTRY BRIEF 6 Essay Example

  • Category:
    Business
  • Document type:
    Essay
  • Level:
    Undergraduate
  • Page:
    1
  • Words:
    593

Ex Hoon Pty Ltd

Statement of authorship

This is an industry brief of Ex Hoon Pty Ltd. I want to emphasize the fact that I did the work myself. I did not copy any information. However, I have acknowledged all the sources I used in preparing it.

Ex Hoon Pty Ltd

Ex Hoon Pty Ltd, among the world’s largest producers of auto parts, patenting new technologies to ensure the safety of vehicle users. The company supply auto parts across the world. Some of their key customers include Ford Motor Company, Toyota Company and many other leading car manufacturers in the world. The company enjoys a large market share that has enabled it to acquire customers’ loyalty making it to be a market leader. The competition in this market is moderately high but due to the company’s economic of scale, it has been possible for the company to maintain its competitiveness.

Factors influencing the market demand curves

There are various factors that are affecting the market demand curve of the Ex Hoon Pty Ltd. Some of these factors comprised of changes in taste and preferences. It is, therefore, essential for the company to produce products that can meet customers’ expectation.In addition, change in the income of customers can affect their purchasing decision for the company’s products. The company needs to conduct the market research so that they can establish the behavior of the customers in making their decision (Richardson, 2013). 

Factors influencing the market supply curves

There are situations when the supply curve of the Ex Hoon Pty Ltd changes, and some factors influence these changes include changes in the price of inputs. When there are changes in prices of materials used to produce auto parts, the company is likely to change the amount of auto parts produced. This is likely to affect the supply curve of the company. Other factors that can affect the supply curve of the Ex Hoon Pty Ltd are the changes in the prices of the substitute, changes in the technology used and also the price of the auto parts.

Price elasticity of demand

The price elasticity of the demand for auto parts produce by the Ex Hoon Pty Ltd is high because purchasing this item takes a higher proportion of customers’ income. Auto parts are expensive and it usually takes time for customers to make decisions concerning the purchasing.

Ex Hoon Pty Ltd

Income elasticity of demand

The income elasticity of the auto parts produced by the Ex Hoon Pty Ltd is also high because when the income increase, the customers would prefer other classes of vehicles. The reason for this is that the customers want to place themselves in a certain class. This will likely to happen in the long run. It is, therefore, correct to say that auto parts can be categorized as inferior goods (Balassa, 2013). 

Ex Hoon Pty Ltd 1

Effects of Ford closing its Broadmeadows plant

The supply of auto parts is likely to reduce because Ford intends to close down one of its departments. This will affect the sales of the company in the short run. However, Ex Hoon Pty Ltd can look for other companies that requires their and this will solve the problem of reduction in supply (Myers, 2013).The diagram reflects the reduction in supply.

Ex Hoon Pty Ltd 2

The shows the effects of the Ford closing its Broadmeadows plant. The supply will reduce because the company will be supplying few products to other companies.

References

Richardson, H. W. (2013). The new urban economics: and alternatives. Routledge.

Balassa, B. (2013). The Theory of Economic Integration (Routledge Revivals).Routledge.

Myers, D. (2013). Construction economics: A new approach. Routledge.