JAGUAR

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JAGUAR
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The new caton the block...
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GROUP EIGHT Jaguar

• Robert Folk
• History Of Jaguar
• Overview of Company
• Economics and Cars
• Ryan Jaczesko
• Supply
• Demand
• Scott Logan
• Substitute Luxury Cars
• Factors of Production

• Jennie Vicinie
• Profit Maximization
• Costs of Production
• (Short and Long Run)
• Anne Reynolds
• Explicit and Implicit Costs
• Advertising

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Jaguar

• Like the smooth shifting, precise turning, rapid
  acceleration and unsolicited compliments, the
  Jaguar Experience is just one more thing about
  driving a Jaguar that will make you break into a
  satisfied smile of recognition.  Especially when
  you consider that the convenient benefits and
  services provided by the Jaguar Experience are
  the most extensive ever offered to Jaguar owners.

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The History of Jaguar

• The Jaguar story is a rags to riches one.
• Here a young motorcycle enthusiast by the name
  of Bill Lyons, not yet 21 years of age, met
  William Walmsley, who was building a rather
  stylish sidecar
• As soon as William Lyons came of age, the
  Swallow Sidecar Company was formed in September
  1922
• Then in 1927 Herbert Austin introduced his baby
  car, the famous Austin Seven.
• The Swallow company had now been in existence for
  a year short of a decade and it had been an
  exciting time of steady expansion and sound
  success.

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Economics

• The scientific study of the choices made by
  individuals and societies in regard to the
  alternative uses of scarce resources which are
  employed to satisfy wants.

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Jaguar

• Like any other product, a choice needs to be
  made.
• Jaguar is one of several options of cars for the
  consumer
• Jaguar displays the economic model

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Supply

• The Law of Supply
• When the price of a good rises, and everything
• else remains the same, the quantity of the good
• supplied will rise.
• If Jaguar raises the price of their cars, then
  they
• will make more cars available to the market.

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Quantity Supplied

• Change in Quantity Supplied
• A Movement along a supply curve in response to a
  change in price.
• Price increase Rightward movement, increase in
  quantity supplied.
• Price decrease Leftward movement, decrease in
  quantity supplied.

Price
S
Quantity
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Changes in Supply

• Ceteris Paribus factors for Supply
• Input prices
• Prices of alternative goods
• Technology
• Number of Suppliers in the Market
• Expectations of Sellers
• A change in any of these Factors will cause a
  change in supply.

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Supply
S3

• Change in Supply
• A change in any influence
• on supply except price,
• causes a shift in the curve.
• Sell more - Rightward shift,
• increase in supply
• Sell less - Leftward shift,
• decrease in supply

Price
S1
S2
Quantity
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Demand

• The Law of Demand
• When the price of a good rises and everything
• else remains the same, the quantity of the good
• demanded will fall.
• If Jaguar raises their prices, the demand for
  their cars will be lower.

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Quantity Demanded
Price

• Change in quantity Demanded
• A movement along the demand curve in response to
  a change in price
• Price Increase Leftward movement, decrease in
  quantity demanded.
• Price Decrease Right ward movement, increase in
  quantity demanded.

Quantity
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Changes in Demand

• Ceteris Paribus Factors for Demand
• Income
• Prices of Related Goods
• Taste
• Number of Consumers in the Market
• Expectations of Consumers
• A change in any of these factors will cause a
  change in demand.

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Demand

• Change in Demand
• A change in any determinant
• of demand except price,
• causes a shift in the curve.
• Purchase more - Rightward shift,
• increase in demand
• Purchase less - Leftward shift,
• decrease in demand

Price
D2
D1
D3
Quantity
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Substitute Luxury Cars

• Substitute Good
• Any good that can be used in place of some other
  good that fulfills more or less the same purpose

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Substitute Luxury Cars

• Audi
• BMW
• Bentley
• Cadillac
• Land Rover

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Substitute Luxury Cars

• Lexus
• Lincoln
• Mercedes-Benz
• Porsche
• Volvo

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Factors of Production

• Also known as Resources
• Used to produce goods
• Includes Land, Labor, and Capital,

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Factors of Production

• Land
• Any naturally occuring factor of production such
  as geographic locations and minerals
• Includes Natural Resources
• Limited Quantity
• Jaguar Land
• Factories
• Dealerships
• Water, Coal, Aluminum, etc.

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Factors of Production

• Labor
• Work done by human beings in the process of
  making a good
• Jaguar Labor
• Factory Workers
• Dealership Salesman

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Factors of Production

• Capital
• Man made factor of production that is not
  immediately used up in production
• Two Types of Capital
• Human Capital (skills of workers)
• Physical Capital (machinery and tools)

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Long Run Production Costs

• Costs in the Long Run in which all inputs are
  variable
• 450 million to refurbish Halewood, England plant

Courtesy of http//media.ford.com/facilities/jagu
ar.cfm
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Economies of Sale

• Lower ATC as Q increases
• Specialization and division of labor
• Final assembly at different facilities
• R D facility
• Racing Facility

Courtsey of http//media.ford.com/facilities/jagua
r.cfm
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Diseconomies of Sale

• Increases ATC as Q increases
• More layers of Management
• Premier Auto Group
• Distribution of Dealerships

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Law of Diminishing Marginal Physical Product

• As input increases a point will be reached where
  further addition will result in less and less
  additional output

Courtsey of http//www.jaguarusa.com/us/en/r_perf
ormance/models/default.htm
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Short Run Production Costs

• Some variables must be fixed in the short run
• Wages paid to hourly employees in the factory

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Short Run Production Costs

• Some of these costs have decreased because of the
  value of a dollar
• Profits have increased

Courtesy of http//www.detnews.com/2002/autoinsid
er/0208/06/c01-553112.htm
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Profit Maximazation and Minimazation of Losses

• Profits are maximized at MRMC
• Premier Auto Group includes Jaguar, Aston Martin,
  Land Rover and Volvo.

Courtesy of http//media.ford.com/article_display
.cfm?article_id10090
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Implicit and Explicit Costs

• Implicit costs Returns to self-owned factors of
  production opportunity costs of working at a
  certain job
• ex.) implicit rent, wages, interest, and profit.
• Explicit costs Out- of pocket expenses what
  an accountant would record typical costs of
  production

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Implicit andExplicit Costs

• The total economic cost of running a business is
  the opportunity cost OR implicit costs explicit
  costs.

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Implicit andExplicit Costs

• Explicit costs to manufacture a Jaguar include
• Salary expense
• Supplies expense
• Depreciation expense
• Property/rent expense
• Taxes

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Implicit andExplicit Costs

• Implicit costs of manufacturing a Jaguar include
• All the time and money that could be spent,
  saved, or earned on something else.
• Ex.) Money that could be earned working at a
  Lexus dealership.
• Ex.) Time that could be spent patenting a new
  idea.

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Implicit andExplicit Costs

• Explicit costs of owning a Jaguar include
• Payments on financing the vehicle
• Borrowing 44,000 from the Jaguar company with
  monthly payments for 60 months at an .05 interest
  rate would cost 734.27 a month for the next five
  years.
• Insurance payments
• Gas and maintenance expenses

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Implicit andExplicit Costs

• Implicit costs of owning a Jaguar include
• Garage space
• More than one vehicle for the same price
• In general, anything else that you could use your
  money for.

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Advertising

• Advertising is used by companies to differentiate
  their product from ones similar.
• It serves to inform the customer
• It promotes efficient resource allocation
• It promotes and discourages competition
• It persuades buyers

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Advertising

• When we as consumers think of Jaguars, what do we
  associate with owning and driving one?
• Status
• Money
• Prestige

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Advertising

• Is the previous commercial still what Jaguar
  wants us to associate with their vehicles?

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Advertising
http//www.jaguarcars.com/global/sad/sad6.html
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Advertising

• Why is advertising important to economics?
• It all comes back to supply and demand.
• Advertising generates demand
• The ads must reach the correct target market. A
  market that has a demand for the product.
• If the right market does not receive the correct
  message, there will be little demanded, and
  therefore, little to manufacture and supply.

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JaguarGroup 8

• Robert Folk
• Ryan Jaczesko
• Scott Logan
• Jennie Vicinie
• Anne Reynolds