Market Analysis 7MK521 Assignment Sample

• Type Assignment
• Downloads822
• Pages12
• Words2876

Introduction

Get expert guidance on market analysis with Affordable Online Assignment Help Experts for top-quality academic support.

Market analysis is defined as a concept which includes detailed evaluation of the target market of the company and the competitive working within the industry. For the successful working it is very necessary that appropriate market evaluation is conducted so that the changes can be made and accordingly profits can be generated. The current study will outline the market description of the UK Road Transport fuel market. In addition to this the analysis of price and quantity trends over the time will be discussed. Moreover the factors affecting the demand and supply of the road transport fuel wills also be evaluated in the current study. Further calculation relating to the price elasticity of demand will be outlined. Along with this discussion relating to performance issues within the production and retailing of road transport fuel will be examined. In the end, the summary relating to the major issues found within the fuel pricing strategy will be analysed and evaluated.

Section 1

Market description

For the successful working of the company it is very necessary that the effective market analysis is undertaken. The reason underlying the fact is that with help of the effective market research the company can evaluate the latest trends and changes taking place. Thus, it will help the company in taking effective decision within the working and it will help in improving the efficiency of the company. There are different kind of products which are used within the UK Road Transport fuel market which includes use of petrol, diesel, LPG, CNG and many other different kind of Petroleum and bio fuels product. All these different type of products are helpful to the road transportation. In addition to this there are different producers and suppliers relating to the road transportation fuel service (Giudici, Milne and Vinogradov, 2020). These include different companies like BP plc, Vedanta Resources, EnQuest PLC, Centrica PLC and much other different kind of companies dealing in the similar product. There are different kinds of companies dealing in the oil and natural gas business and it helps the business and providing better fuel services to the companies. Market that they must effectively comply with the producers and suppliers so that the balance between both of them can we met easily and there is enough supply on can be used optimally. In addition to this, in the current environment friendly working the people are more focusing on the electric vehicles more. Hence, the use of electric vehicle might result in reduction in demand of the fuels.

Further, the current size of the market includes the increasing prices. This is particularly because of the reason that as the transportation is increasing the prices of gasoline, E85 and CNG are also going up. This is particularly because of the reason that the use of these fuel is increasing and as a result of this the prices of also increasing. Thus, it results in increase in demand of the petrol and diesel and ultimately as a result of this the prices also go up. Hence, it is very necessary for the companies to effectively analyse the regulatory environment of the UK. This is necessary because when the effect of environment will be evaluated then the necessary changes can be implemented and as a result of this the overall working will be improved.

Section 2

Analysis of price quantity trend

For the successful functioning of any market, it is essential to study price and quantity trends over time. Business Assignment Help This helps companies predict future trends effectively (Ngwakwe, 2020). By evaluating past data, businesses can make informed decisions for the future. In the UK fuel market, prices have been rising over the years, yet demand continues to increase due to the growing use of vehicles and higher fuel consumption. Therefore, it is crucial for petroleum companies to analyze past data to accurately predict future sales and plan accordingly.

With the evaluation of the graph it is evident that since 2000 prices of all the fuels are increasing and as a result of this it implies that fuel is an essential commodity and even the prices will increase the people will be using fuel as the commodity.

Section 3

Factors affecting demand supply of the road transport fuels

There are many different types of the factors other than price which impacts the demand of any product. These different factors impact the demand of the product to a great extent. Other than price there is much different kind of factors which are essential to be followed so that proper evaluation can be undertaken. These different factors includes the following-

COVID 19- The first and foremost factor is the covid-19 that is the pandemic which hit the economy. This is the major factor which has impacted the price and the demand of the fuel market (Baek, Mohanty and Glambosky, 2020). This is particularly because of the reason that due to the economic shutdown people were going to their native place. Thus, as a result of this the overall demand of the fuel increased. Also the public transport usage also increased and as a result of this overall demand within the fuel market increased to a great extent.

With the evaluation of the diagram it is evident that due to the covid-19 the demand of the fuel increased and as a result of this the prices were also high. The reason underlying the fact is that when the demand is high then automatically the prices of the product also increases because the supply is less. Thus, with the diagram it is evident that due to covid-19 the demand of fuel increased from D1 to D2 but the supply was the same.

Russia-Ukraine war- In addition to this another major factor which impacts the demand of the fuel market includes the current Russia and Ukraine war (Brigljevi?, Byun and Lim, 2020). Due to the war many people have reduced travelling to the other places and as a result of this the demand of the fuel has reduced in addition to this due to the for the prices in also impacted and as a result of this it affects the demand as well.

By the evaluation of the demand supply diagram it is evident that due to the Russia Ukraine for the demand of the fuel reduced but the supply was increased. Thus, due to this increasing supply and reduction in demand the equilibrium was not met.

Changes in fuel efficiency- In addition to this, the changes within the fuel efficiency also impact the demand and price of the product. This is particularly because of the reason that when the efficiency of the product is reduced then automatically the demand of the product is also reduced. Thus, changes within the efficiency level of fuel also impact the demand of the product. In case the efficiency is reduced then people will not be using the fuel and as a result of the demand will reduce.

Household income- In addition to this another factor impacting the demand of the road transport fuel is the household income. In case the household income of the person will be reduced then they will not be travelling to other places and as a result of this the demand for fuel will reduce. Thus, it is very necessary for the person to manage their household income so that the demand of fuel is not impacted at all.

Tax- Along with this another factor affecting the demand of the road transport fuel is the tax rate. In case the tax rate will be higher than the demand of the fuel will reduce. On the other hand when the text rate will be low then people will be using more fuel as they will have to pay fewer taxes.

Hence, it can be stated that other than price also there are many different kind of factors which affects theme demand of the road transport fuel to a great extent (Tanklevska and et.al, 2020). Thus, it is very necessary for the person to evaluate all the different factors and then decide for the appropriate prices so that it is accessible by each and every person.

With the help of the above diagram it is evident that when the tax rate is reduced then automatically there is an increase in the quantity demanded. This is particularly because of the reason that earlier the person was buying the product till 500 quantity but as the tax rate reduced the number of quantity increased. Ultimately implies that the demand is impacted by the factor other than prices as well.

Section 4

Calculation of price elasticity of demand

The price elasticity of demand is defined as of measure which outlines the change within the demand of the product in relation to change in the price. It simply means that it is an analysis which outlines percentage change within the quantity demanded due to change within the price of the product. With regards to the UK Road Transport fuel it is very necessary that the effective price elasticity is calculated so that the appropriate decisions can be taken relating to the demand and the setting up of the price of the product.

For example, the price of fuel increases by 60 % that is earlier it was $5 and now it is $8 and resultantly the demand reduced from 100 to 70 units. Then the elasticity of the fuel will be 30/ 60 that is 0.5. This simple means the elasticity of the demand is inelastic and this is good for the working of fuel. The reason underlying the fact is that when the change in price will be reflected within the quantity demanded then it implies that the goods and their demand is quite inelastic (Kutsyk and et.al, 2020). Thus, it is beneficial for the effective working of the company because whatever will be price of the fuel consumers will use it. Thus it will be beneficial for the company because the sales of fuel will increase even when the prices are high.

The implication of the price elasticity over the demand of the product is that it will help the company in setting of the prices effectively. This simply means that in case the product is elastic than it implies the atom change within the price will have a more impact over the demand of the product. Thus, it will help the company to effectively set the prices so that they are able to attract majority of the customers (Floro, 2019). In addition to this another implication of the price elasticity of demand is that it helps in influencing the behaviour of the consumer and the business as well. This is pertaining to the fact that the price elasticity assists the company in analysing the behaviour of the consumer and tries to influence it. Thus, it also assists in providing information relating to the changes within the buying behaviour of the consumer at different levels of the prices. It helps the company in finalizing the appropriate price by analysing the behaviour of the consumer at different price level of the product.

Section 5

Performance issues in production or retailing of road transport fuels

Within the road transport fuel industry there are many different performance related issues within the production and retailing of the fuel. This is particularly because of the reason that this industry is very wide and evaluating the performance of the companies is difficult. Thus, as a result of this, measurement of the performance of the company is difficult and the competitive position cannot be analysed. In addition to this, the UK 5 concentration ratio for the petrol industry includes 66%. This simply means that the average performance of the top 5 largest companies within the industry is 66%. This simply means that the UK retail petrol industry is working well and it can be stated that is growth within the selling of petrol and other fuels. Along with this the three form concentration ratio is 44% (Concentration Ratios, 2023). This simply means that is very necessary for the petroleum companies to effectively improve the working efficiency so that this ratio can be improved well.

This increase in the concentration ratio is because the supermarkets are also selling the petrol and this has made the market more competitive. This is particularly because of the reason that supermarkets are selling the petrol at the competitive prices and as a result of this the competition is increasing and for improving the performance it is mandatory for the petrol stations to increase the sales (Cahill, 2020). This concentration ratio is necessary to be calculated because it assists in analysing the degree of the competition being present within the industry. Along with this it also indicate the monopolistic power which the companies are possessing while working within the industry. Furthermore, another reason for analysing the concentration ratios is the regulatory oversight (Su and Liu, 2021). This is necessary because the 5 firm concentration ratio helps in evaluating and regulating the performance of the top 5 companies. When the performance of the top 5 companies will be effective than automatically it will regulate the whole industry and will assistive in improving the position of the company.

Section 6

Summary of main issues

In the end, it is concluded that effectively setting up of the prices is very necessary for any industry to work. It is particularly necessary because there are many different issues being found which can affect the pricing strategy of the company within the future. In the current case of UK Road Transport fuel industry the pricing strategies is impacted by many different kind of issues. The most common issue which will be faced by the companies in setting the prices of the fuel is the effect of COVID-19. The reason underlying the fact is that it has created many different issues over the working of the company (Spreen and et.al, 2020). Thus, as a result of this it will create issues in setting up of the prices effectively. Moreover the fuel shortage crisis within the year 2021 will also impact the overall pricing strategy of the companies. This particularly because of the reason that when there will be shortage of the fuel then automatically prices of the fuel will increase. Ultimately the sales of the fuel will reduce because at high prices the consumer will not buy it. Only in case of emergencies the consumer will use the fuel and it will impact the long run effects. Thus, all these issues and factors will be impacting the working and the setting up of the fuel prices in the industry.

CONCLUSION

In the end it is concluded that market analysis is very essential to be conducted. It is particularly because of the reason that with help of the market analysis the working of the company will be improved as they can evaluate the current trends and try to implement it within the working. The above study concluded that the market description is very necessary because it includes the evaluation of the size of the market types of the producer and suppliers type of products and many other different details. It also evaluated that for the company to be successful it is necessary to evaluate the price and quantity try and so that effective decisions can be taken. Moreover the study highlighted that there are different factors affecting the demand other than price which includes environmental changes household income and many other different factors. It also evaluated atom price elasticity need to be managed as it helps in setting up the pricing strategy effectively. In the end it was evaluated that the concentration ratio needs to be evaluated so that the competitive position can be outlined within the industry.

reference

Books and Journals

• Baek, S., Mohanty, S.K. and Glambosky, M., 2020. COVID-19 and stock market volatility: An industry level analysis. Finance research letters, 37, p.101748.
• Brigljevi?, B., Byun, M. and Lim, H., 2020. Design, economic evaluation, and market uncertainty analysis of LOHC-based, CO2 free, hydrogen delivery systems. Applied Energy, 274, p.115314.
• Cahill, D., 2020. Market analysis beyond market fetishism. Environment and Planning A: Economy and Space, 52(1), pp.27-45.
• Floro, S.L., 2019. Informal credit markets and the new institutional economics: The case of Philippine agriculture. Routledge.
• Giudici, G., Milne, A. and Vinogradov, D., 2020. Cryptocurrencies: market analysis and perspectives. Journal of Industrial and Business Economics, 47, pp.1-18.
• Kutsyk, P., Lupak, R., Kutsyk, V. and Protsykevych, A., 2020. State policy of the investment processes development on the market of IT services: analytical and strategic aspects of implementation in Ukraine. Economic Annals-XXI, 182.
• Ngwakwe, C.C., 2020. Effect of COVID-19 pandemic on global stock market values: a differential analysis. Acta Universitatis Danubius. Œconomica, 16(2), pp.255-269.
• Spreen, T.H., Gao, Z., Fernandes Jr, W. and Zansler, M.L., 2020. Global economics and marketing of citrus products. In The genus citrus (pp. 471-493). Woodhead Publishing.
• Su, X. and Liu, Z., 2021. Sector volatility spillover and economic policy uncertainty: Evidence from China’s stock market. Mathematics, 9(12), p.1411.
• Tanklevska, N., Petrenko, V., Karnaushenko, A. and Melnykova, K., 2020. World corn market: analysis, trends and prospects of its deep processing. Agricultural and Resource Economics: International Scientific E-Journal, 6(1868-2020-1688), pp.96-111.