case study

 case study Article

Synopsis: The case addresses the void of significant selling price differentials of same automobiles in Western market, inspite of a high level of economic integration. EU has established itself as an economic and political group leading itself into a single market, but still you will find significant price differences in the merchandise. The case diagnoses the reasons and its future potential customer in the European market. Q& A

Addressing the Inquiries:

Q. one particular: What are the sources of significant price differentials in the EU automobile industry? Despite of good economic integration through EUROPEAN, the concept of one market is continue to not possible in the The european countries. The issue is more highlighted together with the price differentials within the place. As mentioned in the case the major source of price differentials is the restricted free competition among the car dealers in Europe. The ‘block exemption' clause in the EU competition policy enabled the car companies to control the location and terms of transact for the car dealers. For this reason, the car retailers were restricted to carry a totally free and competitive business one of them. Although the manufacture of autos was marketplace driven it is distribution was controlled by the suppliers. As rightly sighted in the case, that if the dealer planned to initiate a company in Belgium, then the firm might restrict the supplier to sell vehicles of other brands or to offer the a unique car to other countries. This control on the retailers segmented industry through manipulated competition which will resulted in such a difference in prices of same automobiles within the Euro market. In addition to this main reason, other factors that might boost the price differences in European industry could be as follows: * Several levels of travel costs in various markets 2. Varying degrees of purchasing power among the market

2. The cost of doing business just like rent, wage expenses, tax level and so forth will in the end affect the charges of the cars in different countries * Your...


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