Ford is a very large corporation in a market structure that mostly resembles that of monopolistic competition in the market for cars in the United States. Three of its cars, the Ford Edge, the Ford Fusion, and the Ford F-150, all embody this market structure and reflect the principles of monopolistic competitive markets. This means that Ford is not the sole producer of cars in the market, and that it has competitors in that market that sell similar, but slightly different products than it and are price takers, meaning that they do not set prices on their own, rather they take the price that the market allows them to. This specifically applies in the sub-market of pickup trucks, as Ford and its Ford F-150 are in constant competition with other similar truck companies, such as Chevrolet, Toyota, Dodge, and even Nissan. All of these companies produce pickup trucks that are similar to the F-150, and as a result are highly competitive in the market for pickup trucks. To account for this extreme competition, Ford in particular uses many different types of advertisements to make an attempt in hoarding more of its own loyal followers and gain an edge in the market. This includes website popups, articles in major vehicle magazines such as “Motor Trend” or “Diesel Power Magazine”, and the famed slogan in all Ford TV commercials: “Ford, built tough”. Additionally, according to multiple sources, Ford participates in price discrimination, a method of changing price based on status of customer to try to gain more support and attract more of the targeted market. Veterans Advantage, a service that helps veterans identify discounts from a plethora of organizations, mentions a Ford as a, “Mainstay of the American automotive industry”, and also suggests that Veterans should look for discounts from Ford when in the market for a car or truck (Veterans Advantage 2012). Furthermore, Ford offers discounts to students as a part of their “Ford Drives U” program, providing discounts to full time and part-time college students. Through these program discounts, Ford can achieve and advantage over the competition and hold more prominence as the leader in the car and truck market. However, despite these efforts made by Ford to increase their profits, new companies are entering the market that could potentially jeopardize the success of Ford. The new Jeep truck was recently released in the US, and has received a lot of speculation. This may cause problems for Ford because of the popularity of Jeep in the car market. In a recent article, the LA times stated, “America loves Jeeps and America loves trucks, so why not a Jeep truck?” (Fleming 2019). This new truck will likely cause a change in the customer base of each company within the monopolistic competitive market because of the brands popularity, and the successful advertising that Jeep currently employs. No major companies are presently leaving the market, which maintains the level of consistent competition that is active today.
Works Cited
Fleming, Charles. “The 2020 Jeep Gladiator is a Beastly Pickup Truck That’s Built to Be Battered”, Los Angeles Times, 2019.
“Ford Honors VetRewards Members” Veterans Advantage, 2012.
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