TAXI INDUSTRY IN HO CHI MINH CITY Presented by: TRUONG HO THUY LINH Market shares • Source: vnmoney.nld.com.vn - 21/8/2014 WHAT FORM OF MARKET IS IT? Homogeneous products? Yes There are many firms in the market? Yes, but only firms have big market shares Barriers to entry? Yes →OLIGOPOLY HOW THE MARKET CHANGED? • Back to 2003, Mai Linh had the bigest market shares • 2003 Vinasun was just founded with
TAXI INDUSTRY IN HO CHI MINH CITY Presented by: TRUONG HO THUY LINH Market shares • Source: vnmoney.nld.com.vn - 21/8/2014 WHAT FORM OF MARKET IS IT? Homogeneous products? Yes There are many firms in the market? Yes, but only firms have big market shares Barriers to entry? Yes →OLIGOPOLY HOW THE MARKET CHANGED? • Back to 2003, Mai Linh had the bigest market shares • 2003 Vinasun was just founded with a dozens of cars • 10 years later, Vinasun takes nearly half of the market shares and Mai Linh has gone through a restucture to maintain their smaller market shares → Why does that happen? DIFFERENT STRATEGIES • MAI LINH Invested to set up branches in 60 provinces and cities of Vietnam → high fixed costs while demand decreases (scale became a disadvantage) ↓ LOSS FOR A COUPLE OF YEAR AND MARKET SHARE DECREASES • VINASUN Focuses only in cities with huge demand like HCMC, Binh Duong province, Vung Tau city (having fewer cars) Try to increase the revenue of each car per day by using it at the maximum capacity → high demand and lower fixed costs ↓ SUCCESSFULLY ENTERED THE MARKET AND GETS INCREASING MARKET SHARE HOW DOES MAI LINH REACT? • They sell an amount of cars to the their drivers, allow them to work on their own using Mai Linh brand name and charge them a fixed fee each month → REDUCE THE COSTS • Close down branches that not make much profits (branches where demand are low) → SMALLER SCALE ...Market shares • Source: vnmoney.nld.com.vn - 21/8/2014 WHAT FORM OF MARKET IS IT? Homogeneous products? Yes There are many firms in the