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...
Obviously, Greenbus is trying to prevent Newbus from getting a foothold in the market and should absolutely have their hand slapped and be told to stop it (Australia, 2016). However, there is not the only alternative that is present.
There is also the option of partnering with a private equity firm to make a much larger gambit. Rather than try to have Greenbus punished for its misdeeds, there is instaed of the idea of making a ploy to buy out Brownbus and Whitebus so as to make a larger company that will encompass at least thirty percent of the market, which is much closer to the fifty percent that is currently possessed by Greenbus. The growth that will be experienced by Newbus will obviously not be organic, at least not at first, but this would allow Newbus to make a firm entry into the market and the reliance Newbus previously had on Greenbus to be ethical in their business patterns will almost certainly be negated or at least limited. Rather than having to rely on maintenance contracts for Greenbus buses, they can do maintenance contracts for their own buses including all of the current Brownbus and Whitebus fleets. The creation of a much larger competitor would also position Newbus and the larger new company in a way that will make it much easier to receive and keep government tenders.
As for what Mr. Newhouse should do, the recommendation is actually both. If Greenbus is not following the law when it comes to competitive practices, they need to be reviewed and sanctioned appropriately. However, the primary focus of Newbus should be to make themselves a player in the market overnight by become a company that will have at least sixty percent of the business that Newbus has. There may be some antitrust concerns on the part of the Australian government. However, the anti-competitive practices being executed by Greenbus might mitigate those concerns and make the case that Newbus should be allowed to become a larger presence given their fair dealings and quality buses.
This all being said, Newbus and the company…
References
Australia. (2016). Competition and Consumer Act 2010. Legislation.gov.au. Retrieved 6 June 2016, from https://www.legislation.gov.au/Details/C2011C00003
Australia. (2016). Frequently Asked Questions (FAQs) -- Department of Finance. Finance.gov.au. Retrieved 6 June 2016, from http://www.finance.gov.au/procurement/ict-procurement/contract-framework/sourceit-model-contracts/faqs.html
In short, the petitioners accused Microsoft of monopolizing the market by way of unfair practices. In 2000, the court found Microsoft guilty of such violations of antitrust laws. As a consequence, Microsoft was broken into two businesses. What's more, other businesses filed grievances against Microsoft; the latter oftentimes settled out of court, paying restitution to the claimants. Shortly after the judgment to breakup Microsoft was made, it was partly
antitrust claims faced Microsoft corporation Who to Trust: Analysis of United States vs. Microsoft On May 18, 1998, The United States vs. Microsoft trial began. The computer networking and software company, Microsoft, was being charged with numerous allegations, the most salient of which included monopolizing the market for computer operating systems and engaging in illicit practices that were detrimental to competition. The company was also charged with trying to create a
ANTITRUST Economics Antitrust practices and market power: Technology, social networking sites, and anti-competitive behavior Q1.Why was/were the firm(s) investigated for antitrust behavior? IBM, AT&T, Microsoft, Intel, Google, Twitter, and Facebook are all technology companies that have been accused of operating as de facto and de jure monopolies: in other words, of engaging in blatant violations of the Sherman Antitrust Act or of substantially limiting market competition to such a degree that a monopoly has been
Antitrust and Intellectual Property Antitrust Law Remedies in Intellectual Property Cases In any research paper it is important to first define the terms used prominently in order to make sure that the reader understands what is being said. In this case, the two terms that require definition are antitrust and intellectual property. According to a definition from Cornell University Law School "Trusts and monopolies are concentrations of economic power in the hands
One of the reasons it is against the anti-trust laws to do this is because it places large businesses like Wal-mart and Microsoft at an unfair advantage because they have enough capital to get through lean times caused by below cost pricing long enough to drive the small business competitors out of business. Many states have laws against selling gasoline below a legal limit that is set by the government for
One of these is Chapter 2 of Title 15, Subchapter 1, Section 45. This Section regulates unfair methods of commerce and competition. These methods are declared as unlawful under the act. The Section specifically relates to national and local practices, as opposed to foreign trade, and therefore applies to our proposed partnership. "Unfair" practices are defined as those practices that are likely to cause some injury to other businesses