2014 Corvette sales were 37,288. Since the market for an American-made 2 seater sports car is probably around 40,000 units per year, I think if Ford was able to pull away ¼ of this market (unlikely), it would raise the production cost per unit for both manufacturers and actually reduce the sales numbers. Probably would result in the death of both cars.
New FGT to be offered to original owners?
- Thread starter RickH
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twobjshelbys
GT Owner
That is the marketing and economics lecture about Total Available Market (TAM). If Ford decided to build a Corvette competitor, they would have to find enough people to sell them to to make it worth while. There are two ways: 1. Make a product that noone else builds and make a new market, or 2. Obtain market share from a competitor. A Corvette competitor would be #2 (as is, by the way, the New Ford GT). The basic premise is that situation 2 is "entropic" - that is, market can neither be created nor destroyed. Like air in a balloon you can shift it around but the amount of air is still fixed. Thus it would be with Corvette. For the market share that Ford could "steal" from the very loyal Corvette market, Ford decided they couldn't compete on volume.
Cobrar
GT Owner
I love this kind of discourse. Another dynamic to consider is that the marketplace discussion is bigger than just product volume. Re-read what you wrote and then think about Ford's Raptor. It has sold pretty damn well, I'd say, with some really strong margins. So, if it's a 'zero sum' game, what did it steal sales from?
BTW - Either of you guys ever read Blue Ocean Strategy, one of my fav books - exec summary - find/create white space.
twobjshelbys
GT Owner
I would call the Raptor a disruptive product. Those are products that take something common and change it in a way that appeals to people. Disruptive products can make new market, or cause a stagnant market to revitalize (ie, people waiting to do something just got off the stick). I suspect the raptor was a little of both. The first ipod was disruptive.
For a Ford corvette-like product to obtain market share it would somehow have to be disruptive.
Another thing to consider is that in a stable commodity market (e.g., computer components) the TAM over all suppiers is stable. But market share does shift. It usually shifts becasue someone lost a recipe and someone has to find another source. An example was a few years ago when the flooding happened in Thailand. There was some HDD production that was in the valley that got flooded but also the components the HDD vendors used were. Some HDD vendors were shut down completely for certain product lines, and others that had differnet primary sources and no direct manufacturing in the affected area, picked up the slack. There was a significant TAM reorganization during this event. But like all things, it has . Hmmm, maybe airbags as the commodity and Takata as the supplier might be a better example.
P.S. I don't have a degree in marketing. But I had a dear friend who excelled at this. He taught me that area and I taught him the techhie stuff (and we both knew enough about each others areas to call the other when we should). He passed away in 2013. We were both car nuts and were friends for thta reason outside of work. I find myself often asking "what would Marc think about that". I miss him alot
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daytrayd
GT Owner
Indy GT
Yea, I got one...too
