Movie: Tucker – Preston Tucker
Preston Tucker was a car-crazy kid who hung around auto speedways and
grew up to create an automobile Tucker that was years ahead of its time. He was
a man of pioneering spirit, ingenuity, and daring, who revolutionized Detroit
in the 1940s with his stunning car of tomorrow. It was streamlined, futuristic,
and fast the car every American dreamed of owning, at a price most people could
afford. When he wanted to start to produce the car he faces a lot of barriers,
In the movie Tucker, there are only a small number of firms. Like
Kaiser-Frazier Automotive Company and Ford Motor Company. Each of the companies
holds a large share and the action from each one may have a great affect on the
others. The product in this movie is car. Car is similar, differentiated
product and this is the characteristics of an oligopoly. There are many
problems when Tucker tries to produce his dream car. Since his car is a new one,
he needs to use a lot of advertising to promote it in order to attract people
to buy it. Like magazine, car shower, and TV.
When Tucker tried to produce his car, he faced many problems. First he
had the financial problem he needed $15 million to produce the bomber engine.
However, he did not have enough money, so he issued 4 million shares to raise
his money. Besides, retooling for a model change could cost $20 million and
since his car was a new brand, Tucker was lack of support of the big firms, so
he needed a lot of money to advertise his car. Second, Tucker’s company had to
produce 100 cars as the outputs every day so that he could make a balance. He
also needed money to employ dealers and he needed 800 dealers in his company.
Third, he did not have enough resources to make his cars. He only had 200 tons
of steel and this was barely enough for 200 cars. He needed more steel. He also
had to spend $16 million to buy a mill. Forth, since “Tucker Torpedo” was a new
brand, many people were not familiar with it. Some of them even did not know it.
Thus, it might affect the sales of “Tucker Torpedo” much. People also did not
have confidence on this car because they did not know that it us safety or not.
Fifth, Tucker did not have the technology to produce his car in a mass
production. Therefore, it could not achieve the economies of scale and the
costs of producing his car were very high. Lastly, there was a bad publicity
which depressed the stock from $5 to $2 a share. Tucker forced to close the
plant after finishing only 47 cars.
Everyone has their own dream, but not everyone can make their dream
come true. Because when you want to make the come true, you need to have a lot
of things to support you. Like money, technique, time, place, and people.
Tucker is a very good sample. Since he got money, place, and people. But he
does not have much technology on build a new car, the other thing is wrong time.
Since the market is oligopoly, so when you have a new thing, you need to deal
with the big company. When they know you can do a thing better than them, then
they will use any way to stop you or control you, they never let you do it.
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