Management Economics Assessment 2

This report analyses the market structure of Ferrari and suggests government interventions. It covers the company's products, services, and characteristics of the market they operate in.

Management
Economics
Assessment 2

Table of Contents
INTRODUCTION ..........................................................................................................................3
Describe the company.................................................................................................................3
Analyse the market......................................................................................................................4
Different market structure...........................................................................................................5
Suggestions for the company operate in a different market structure and the government
interventions................................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Economics is refer to the study of factors that emphasis on problem solving and certain
taking certain decisions in the various ventures (Orlova, 2020). They are also using certain set of
theories which is related to the principles of micro and macroeconomics. It also assists in
analysing the demand and supply of the large market by which they can have the effective flow
of goods and services in the large marketplace. For this respective report, Ferrari is the chosen
company, this is the premium sports car company which is offering super cars in the large
market. An organisation is established in 1939. It is the leading company which is conducting
their business in major business so that they can have the better consideration to the large market
place. This respective report will cover the analysis of company's product & services & also
evaluate the market structure of the organisation and their characteristics in which they are
operating their business. Furthermore, it will suggest the certain government interventions of the
government is goods for the society or not.
Describe the organisation
Ferrari is the leading company & the headquarter of the organisation is established in
Maranello and Italy. They are basically operating in Sports cars and also offering the high-tech
bicycles, ear- wear, clothing, watches, laptops in wide range in order to attract large group of
customers. They are operating various operations in international boders & meeting the buyer's
demand. They introduced their first Ferrari badged car in 1947 & moreover, they have
introduced wide range of sports in by which they can ensures the proper supply of their cars in
globe
Enzo Ferrari was not having any consideration in the idea of producing roads cars but
with the passage of time it also based of Scuderia Ferrari that means stable & they made further
made the Alfa Romeo Racing car of the drivers. They also introduced first Ferrari 125 S, It is
powered by a 1.5 LV 12 engine & also sell their cars to booast Scuderia Ferrari.
They also got first vehicle that is having small seats & in 1949, they also further moved
to introduce making the organisation’s importance in grand touring road cars in the market.
Further they move to luxury touring road cars in the large market. As of now, the current model
of Ferrari Roma, Ferrari 812, Ferrari F8 Ferrari GTC4 & many more.

Analyse the market
Market is the area in which the large number of buyer & seller come together in order to
exchange the goods and services by giving the monetary values to them (Akbulut and Adaman,
2020). There are various type of market which is also serving large customer base and different
type of product and other aspects. It is vital for the organisations to understand the needs and
wants of the customer so that they can serve them accordingly which is also leading to have the
better approach in the large marketplace. When Enzo was ten years old, he has gone to see the
motor racing circuit with his father and brother. In 1918, worked as the test drivers of car in
small ventures in Turin & Further worked as racing drivers and further they have appointed as
the head of racing division of Alfa Corse. Afterwards the Ferrari has segmented their company
on the basis of demographics and the psycho graphic segmentation certain approaches.
They have introduced their car to the special targeted customers as they do not want that
their car can be owned by anyone. They do the back-group check ad then only sell their car to
them. They generally includes the personalities, celebrities world wide. They also established
their brand as the premium luxury cars which is rightly related to some renowned racing events
in the globe. They are further using positioned strategy by which also give the feeling of owning
the masterpiece as their car.
Various type of market structure
Market structure is defined as the companies that is commonly classified in different
market segment and also having the great influence in the particular market. There are various
types of market structure that are explained as follows:
 Perfect competition: This is the type of market in that the large group of buyer & seller
is having huge choices which is having no control in the customers a&nd their integrated
choices. These type of firs are offering homogeneity in their commodities as they are
some how similar and giving same level of satisfaction. Buyer is purchasing the certain
goods and services as per their needs and wants ans also having the integrated set of
choices according to the satisfaction level and the purchasing ability by which they can
have the advance product in the competitive marketplace. This also leads to have the
product backed with their paying capacity in the large market.

 Monopoly: It is the type of marketplace in which only one firm is selling the goods and
also having the unique products in the market and they are facing no competitors due to
sole seller of the commodity is having no substitute in the market. These types of firms
are the price maker who set the prices as per the marketplace. There is many barrier in the
entry and the exist of barrier of new firms. They can use the prices discrimination as in
order to generate the market which is leading to have the single seller who are operating
with more profits in the marketplace.

 Oligopoly: this is the type of market that is commonly controlled by the other firms and
there are small number of suppliers due to few big firms are sustaining in the market.
There is the major barrier to entrance in the new marketplace and give competition as a
small start-ups company. They are having mutuality as the rivals firms can decreases the
prices by which other firms can respond well & this also leads to have the high market
share as they are giving sports car & having higher dependency on the competitive firms
while fixing their high prices.
Different market structure
In the past time, they are operating their operations with the help of other companies as
there are other firms which are offering better products and designing engines and other sub-
parts from their competitors. They are offering various products do to which they are having
customised demand to their potential customers. A perfect competition market is refers to the
market that is offering homogeneity in their goods & also having the perfect knowledge of the
market. Certain attributes of perfect competition market is explained as follows:
 Large number of buyer and seller: There are large group of buyer & seller who are
offering best goods to the market as it implied in having the overall significance in the
large market place. In this type of market, there is no control in the prices of particular
goods and services and the output of the industry(Ghouri And et. al., 2020). It is related
to the large market where a firm is like the drop of water in the ocean. With the change is
the market scenario of market & the effective use of advance technology. Every firms is

focuses on having the unique products by which it will be easy to understand the demand
of the large customer group in the market.
 Free Entry & Exit of firms: In perfect competition market, there is large number of
buyer due to no barrier in the entry or the exit of the firms as the new star-ups can enter in
the marketplace as per their funds and the nature of the business and also withdraw their
business in the large marketplace. Other firms can face the huge looses then they can
withdraw their business from the market and also have the effective working in the large
market place. This implied in change in change in the nature of the business due to
certain aspects. This also helps in influencing the firms as they are having higher profits
in the large marketplace.
 Perfect Knowledge of market: Large number of buyer & seller is having the perfect
knowledge of the market & they are contributing to the higher growth of the market as
well. The seller also having the good knowledge of their competitor and their advance
technology which is being adopted by them. In consideration to the buyer, there is
changing demand of the customer due to emerging market trends. This make them
sustainable in the market and also having the effective working in the large market for for
long time period.
 Self-directed relationship between buyers & sellers: There are different types of firms
which are large number of buyer & seller. Thus, the needs & wants of the market can be
vary as the time changes. This helps in attracting the buyer in which they can meet the
need and demand of their customer as their purchasing power and the customer is not
having nay implication that they have to purchase goods and services from the single
firms only so they have the independent choice in the large market place.
 Perfect mobility of the aspects of production & goods: It is the aspects that is having
the variability in the market by that they can have the higher profitability & growth in the
target market(Alsawafi, Lemke and Yang, 2021). Factors of production includes land,
labour and employees. Workforce is the aspects which can be move to any of the
organisation where they are getting hike in salary and favourable working environment.
Additionally, they can learn the new set of skills by which they can get career
enhancement. Hence, they become more versatile in working in different job roles.

Company can hire the employees by paying them more from the current salary by which
they can ensure the higher productivity in the business.
 Homogeneity of the goods: It is the major characteristics of this market that they are
serving the goods which are somehow similar by other firms. Consumer cannot analyse
the real and the actual difference in the commodities which is commonly offered by other
ventures. In these aspects, prices is the main factors which is having the major
consideration to the market. In past times, there were various other rival firms of Ferrari
& they are selling supper model of Ferrari.
Suggestions for the orgnisation operate in a various market structure & the government
interventions.
As the different organisation is conducting their operations in the oligopoly market
structure as they are having the large number of competitors that are offering better products
which also give the feeling of pride of the owner. As the organisation is conducting their
business in high class market so they are already having huge production cost so if they want to
enter in the other market such as monopoly which also require more investment and use of more
innovative technology which is also leading to have the better growth in the large market place.
Whereas, if they want to enter in the perfect competition market so it being downfall in their
company's share and also leads major problem in the given methods.
As per the above discussion that they can not stay in various type of market as they are
already incurring higher revenue with the existing market and also having more growth and
revenue. It is recommended to the company to stay in the oligopoly market which also helps
them to preserve the good brand image of their luxurious cars in the large marketplace.
Moreover, the government intervention is defied as the rules and the law which is implied
by the government so that they can ensure the lawful operations in all the business organisation.
In UK, government bodies is trying to eliminate the discrimination at the workplace and they are
also emphasising on giving the subsidiaries so that they can rightly establish the good brand
mage in the marketplace. They are also framing the rules which can establish the fairness and
remove inequalities from the workplace. But on the same side, when there is more government
interference so it leads to increase the taxes on products and services which is gradually leads to
increase the overall cost of the commodity which can effect the budget of the general public and
also leads to have huge looses for the society.

On the same side, there must be the proper consideration to the society and the
government must have the limited interference by which an employees can get the proper salary
and wages when they are paying less taxes to the government by that they can make sure the
higher profits. This also helps in establishing the better living standards of the people and the
government bodies also contributing for the betterment within the nation by having various
policies & the plan for the public.
CONCLUSION
From the above report, it is concluded that macroeconomics is the analysis of the market
as they understand the certain factors which gradually impact the demand of goods & services.
There are certain types of market structure that includes the monopoly, oligopoly, monopolistic
and perfect competition, they are operating their venture in the oligopoly market due to fewer
number of large firms which are existing in the large marketplace. In past times, the company is
conducting their business in perfect competition market as there are competitors who are selling
super model car and they are not so much emphasising on advance technology or the innovation
but course of time, now they are operating their business in oligopoly market structure with the
use of innovative approach in their operations. Further it is suggested to the company to operate
their business in same market and they must be limit interference of the government so that an
organisation can not charge more prices of their products due to high government taxes.

REFERENCES
Books and Journals
Alsawafi, A., Lemke, F. and Yang, Y., 2021. The impacts of internal quality management
relations on the triple bottom line: A dynamic capability perspective. International
Journal of Production Economics, 232, p.107927.
Ghouri, A.M. And et. al., 2020. Enhancing business performance through green human resource
management practices: an empirical evidence from Malaysian manufacturing
industry. International Journal of productivity and Performance management.
Akbulut, B. and Adaman, F., 2020. The ecological economics of economic
democracy. Ecological Economics, 176, p.106750.
Juutinen, A., Tolvanen, A. and Koskela, T., 2020. Forest owners' future intentions for forest
management. Forest Policy and Economics, 118, p.102220.
Massa, N., 2021. FEMA executive MBA students taking entrepreneurship elective with Dr
Massa complete feasibility project and pitch ideas for start-up business concepts.
Orlova, E.V., 2020. Labour productivity management using health factors: Technique and
models. Upravlenets, 11(6), pp.57-69.
Kalkuhl, M., Schwerhoff, G. and Waha, K., 2020. Land tenure, climate and risk
management. Ecological Economics, 171, p.106573.
Ulucak, R. and et. al., 2020. Mitigation pathways toward sustainable development: Is there any
trade‐off between environmental regulation and carbon emissions
reduction?. Sustainable Development, 28(4), pp.813-822.