Assignment 1

From my assumption, Whatsit industry refers to automobile industry which has 5 companies in the
market.

Table 1. The global automobile industry sales from year 2004-2009

Year Total Industry Sales Growth %

2004 4190
2005 4550 9%
2006 4770 5%
2007 5210 9%
2008 5960 14%
2009 6600 11%

ACAG 10%

Graph 1. Global Automobile Sales

The automobile industry has been increased significantly from 4190 to 6600 which the industry’s
growth rate has increased approximately 37% over 2004-09, and the affected by the global economic
downturn, it slightly decreased in value in 2009.

Graph 2. Comparing companies’ revenues from year 2004-2009

Growth
Company 2004 2005 2006 2007 2008 2009 %
Alpha 1400 1500 1590 1640 1700 1750 20%
Beta 1450 1550 1630 1670 1770 1860 22%
Gamma 400 500 630 840 1380 1850 78%
Delta 800 850 750 850 880 860 8%
Zeta 140 150 170 210 230 280 50%
Beta Company has been the leading player based on revenues in the market industry from 2004-2007,
followed Alpha, Gamma, Delta and Zeta. However, Gamma Company has significantly increased in
sales from 840-1850 from 2007-2009, this leads Gamma has the highest growth rate at 78% from year
04-09, followed by Zata (50%), beta (22%), Alpha (20%)

Graph 3. Comparing the companies’ profit from year 2004-2009

Table. Comparing the average sales and profits for all market.

2004 2005 2006 2007 2008 2009

Average Sales 838 910 954 1042 1192 1320
Average Profit 152 142 77 133 181 209

Beta Company has the highest profit from 2006-2009 and followed by Gamma, Alpha, Zeta and
Delta. The average profit in the market is 152, this demonstrates that Beta and Alpha have increased
the profit more than the market.

According to the graph above, Gamma had the lowest profit in 2008 and then significantly increased.
In the year 2009, Gamma was ranked as the second largest profit after Beta. This can be seen that
Gamma has used the growth strategy in terms of R&D and also invested heavily in new technology to
produce the new model of cars from 2005-2007.
Graph 4. Comparing the companies’ profit margin from year 2004-2009

2004 2005 2006 2007 2008 2009

Gamma 20 -7 -29 -4 12 12
Zeta 44 40 38 36 35 34

The table and graph shows the companies profit margin, it can be seen that Zeta has the highest profit
margin comparing with every companies. For Gamma company, its profit margin tended to
significantly decreased from year 2004 to 2006 and rapidly increased onward till year 2009. These
could have been the results from investing heavily on R&D and technologies into the company.

Graph 5. Comparing companies’ market share from year 2004-2009

Companies 2004 2005 2006 2007 2008 2009

Alpha 33 33 33 31 29 27
Beta 35 34 34 32 30 28
Gamma 10 11 13 16 23 28
Delta 19 19 16 16 15 13
 Zeta 3 3 3 4 4 4

In term of companies market share, the graph illustrates that Beta has the largest market share ranking
, followed by Alpha. However, Zata has constant market share as the lowest which is approximately
3-4%. As comparing all the companies, it shows that Zeta has the lowest market share with the
highest profit margin. It can be applies that Zeta company is producing luxury automobile because the
total car selling is relative less than the largest automobile companies like Beta and Alpha, but the
price per car can be more expensive than other companies.

For Gamma, after putting heavy investment in R&D and technologies, it assisted to improve
significantly in revenues and profit margin and also can capture more market share from other
competitors.

From my opinion, the future trend for sales and profits in year 2010 will be increased by using data in
year 2009.

Growth of the total industry Sales in the year

2009 : 1750 + 1860 + 1850 + 860 + 280 = 6600

2008 : 1700 + 1770 + 1380 + 880 + 230 = 5960
Average growth : 6600/5960 = 1.1
Sales in the year 2010 : 6600 * 1.1 = 7260

Growth of the total industry Profits in the year

2009 : 221 + 413 + 223 + 90 + 96 = 1043
2008 : 220 + 335 + 170 + 100 + 80 = 905
Average growth : 1043/905 = 1.15
Profits in the year 2010: 1043 * 1.15 = 1200