Current Market Conditions Competitive Analysis

Principles of Microeconomics
ECO 365
David Norcross
April 13, 2015

Current Market Conditions Competitive Analysis
In this paper, Team A is participating in a strategic planning group creating a new product at General Motors. The following is a competitive market analysis on the potential of our new 2016 Chevy Volt’s success. We will be focusing on our competitor Toyota and their Prius lineup. Additionally, we will summarize our target consumer and current market conditions. Then we will cover variables that weigh on supply, demand, and equilibrium prices. Next, we will consider the pros and cons our firm faces while identifying the effect on our competitiveness and long-term profitability. Then, we will evaluate factors that influence fixed and variable costs. Lastly, we will provide recommendations on how GM can grow their profits and increase their competiveness.
The Product
The Chevy Volt was a concept designed by Bob Lutz Jon Lauckner of General Motors ‘GM’ in 2006 to overcome many of the limitations of pure electric vehicles while retaining many of the beneficial elements. The purpose of this car was to leap-frog the technology of the Prius hybrid. The theory of this concept was a car that would be able to drive on electricity for the first forty miles, and then a generator would run gasoline to extend the range of the car. In 2010, the production version was able to achieve 35 miles on electric and average 37 miles per gallon for an additional 342 miles (King, 2013, p. 1).
This fall the second-generation Volt will go on sale with some notable changes. Most impressive is that the electric range will increase to 50 miles and will achieve 41 mpg on regular unleaded. They also added an additional seat in the back and made the car less distinctive and more main stream. GM was also able to increase the