New Bus Dilemma
The author of this report has been asked to assess a situation where a bus company is trying to make entry into a market. They are present in said market but the barriers to entry as well as the barriers for any firm other than the top three players in the field to stay there are quite high. It is to the point that there would seem to be subterfuge being executed by at least one of the three competitors. Given all that, it would seem that the best option is to put Greenbus (the subterfuge party) in the limelight for not following the law or just acquiring the two smaller players in the market and go after Greenbus head to head. The author of this report will describe the situation and will then describe the best path forward.
Analysis
The situation here is pretty basic. Tom Newhouse is the CEO of Newbus and he is finding it very hard to compete in a market where three other companies make up eighty percent of the market share by themselves. Indeed, there is Greenbus, Brownbus and Whitebus. They command market shares of fifty percent, twenty percent and ten percent, respectively. Newbus is finding two major challenges as they do business. First, they have very high-quality buses but they are losing out on tenders to the bigger competitors all of the time. This is particularly true of government tenders. About the only reliable business that Newbus can get a hold of are private sales of buses to schools and community organizations. Newbus has also attempted to procure maintenance contracts on Greenbus buses. However, the business model is being greatly complicated by what has to be at least some amount of subterfuge and sabotage on the part of Greenbus. Newbus is getting charged a huge premium as compared to what should be the normal price and the parts take a much longer time than they should to arrive. It is easily to the extent that they could be pursued for violating the terms of the Competition and Consumer Act of 2010. Indeed, the law as written is supposed to provide for proper competition, fair trading and protection...
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