...Analysis of the Automotive Industry | Threat of New Entrants – LOW | Supplier Power - LOW | Buyer Power – MEDIUM | Threat of Substitutes - LOW | Competitive Rivalry – HIGH | Capital Requirements * High upfront capital expenditure for designing and manufacturing. Cost Disadvantages * Car manufacturing has a long learning and experience curve, which results in higher defect costs.Product Differentiation * Established companies benefit from brand awareness/loyalty as a result of high expenditures in advertising * New entrants will incur high marketing/sales and distribution expenses to compete | * High number of suppliers selling undifferentiated materials to a limited number of buyers in the automotive industry | * Customers: Buyers have full access to information, are able to switch to different car brands, used cars, or alternative transportation method at a low cost. | * Substitutes: Busses, subway/train, bicycle, airplane, walking * Threat depends on convenience, cost/benefit, specific purpose for use, rising cost of possessing a car * Substitutes are less convenient than the car, as a result pose a minimal threat | * The three largest companies make up 49% of the total U.S. market. * Intense advertising, increased distribution, and constant innovation are necessary to successfully compete. * Exit costs are high for automakers. | Analysis of the Electric Vehicle (EV) Industry | Threat of New Entrants – Medium | Supplier...
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...An analysis in to the structure of the automotive industry Introduction This analysis and explanation of the structure of the automotive industry shall be limited to the boundaries of the UK. The automotive industry has a few larger businesses that have a larger market share and then some slightly smaller businesses competing with each other. Due to these facts the industry has been described as an oligopoly. This is because within an oligopoly there is a large number of product differentiations, which mirrors the automotive industry as the same company usually produces a wide variety of different models, shapes & engine sizes. Another feature is that the barriers entry are generally high as the few firms with a larger market share have already established themselves within the market and the firms with a reasonable market share are also fairly established and have a lot of capital. This makes it difficult for small & upcoming businesses to enter the market. The overall global automotive market is in a period of strong growth and profitability, and sales have reached prerecession levels in some areas. However the European and UK market is recovering the slowest due to the scale of the recession (Hirsh et al, 2014). This may have altered the structure of the industry as a whole. Industry Structure This chart is a representation of how the market share of each company is divided up in UK market in 2014. This evidence helps to further back up the point that the automotive...
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...Automotive Industry 13 Industry Analysis By: Francis Asuquo Crispin Charles Tivon James Ricky Araujo Sornrat Thawornyutikan Table of Contents Executive Summary 2 2.0 Industry Overview 4 2.1 Quantitative Overview 5 2.2 Evolution of the industry 7 2.4 Major Opportunities 12 2.5 Major Threats 12 2.6 Porters Analysis 13 Threat of Entry (Low) 13 Bargaining power of suppliers (Low) 13 Bargaining power of Buyers (High) 14 Threat of Substitutes (high) 15 Industry rivalry (Medium – High) 15 3.0 Company Overview 17 3.1 Company Overview 17 3.2 Operational Model 17 3.3 Company Evolution 18 3.4 Life Cycle 18 3.5 Growth Strategy 19 3.6 Financial Ratio Analysis 20 4.0 Customer Profile 21 4.1 Target Market 21 4.2 Product Usage 21 4.3 Purchase Motivation 21 5.0 Company Strategy 22 5.1 Resources 22 5.2 Value Drivers 22 5.3 Cost Drivers 23 5.4 Corporate Strategy 23 5.5 Business Level Strategy 23 5.6 Functional Level Strategy 24 5.7 International Strategy 24 5.8 Value Chain Analysis 24 6.1 Competitive Analysis 25 6.3 Effectiveness of Strategy 26 Volkswagen Group 27 3.0 Company Overview 28 3.1 Company Overview 28 3.2 Operational Model 28 3.3 Company Evolution 29 3.4 Life Cycle 29 3.5 Growth Strategies 30 3.6 Financial Ratio Analysis 30 4.0 Customer Profile 31 4.1 Target Market 32 4.2 Product usage 32 4.3 Purchasing Motivation 34 5.0 Company Strategy 34 5.1 Resources 34 5.2 Value Drivers...
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...From a humble origin as a ‘horseless carriage’ manufacturing industry dating back to 1890s, the automobile industry has come a long way emerging as market leader in manufacturing activity, providing employment to one in seven people, either directly or indirectly. Hailed as the ‘industry of industries’ by the Management Specialist, Peter Drucker, the automobile industry (US) set standards in manufacturing activity by contributing mass production techniques during early 1910s. The Japanese soon followed by offering lean production techniques in the 1970s. Riding high on economical revival in many developing countries in Asia and Europe, the industry’s global output touched 79,9 million vehicles in 2011. But with a downward slide in market share, the Big Three, Ford Motor Company (Ford), General Motors Corporation (GM) and DaimlerChrysler (DC), was fast losing their dominant position to Toyota, Honda, and Nissan, thereby setting the ground for the emergence of New Six. The report on “Automotive Industry Analysis” consists on a comparison between the Big Three and New Six. Ford, General Motors and Toyota are taken as examples. I. Industry Overview Hailed as ‘the industry of industries’ by Peter Drucker, the founding father of the study of management, in 1946, the automobile industry had evolved continuously with changing times from craft production in 1890s to mass production in 1910s to lean production techniques in the 1970s. The prominent role played by the US till...
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...The Automotive Industry Recovery Prepared for: Transmittal Letter TO: FROM: DATE: SUBJECT: Report Overview The following report discusses the automotive industry recover from the “Great Recession” that occurred in 2008/2009. Information presented will be the state of the automotive industry before the recession, after the recession, how the industry is doing now and how the future looks for automakers. Contents The Automotive Industry Recovery 1 Transmittal Letter ii Contents iii Figures iii Executive Summary iv Introduction 1 Finding 1 Pre-Recession 1 Post Recession 2 How is it now? 3 The Future Outlook 3 Analysis 3 Summary 3 Conclusions 4 Reference 5 Figures Figure 1, Annual Auto Sales in the U.S. 2 Executive Summary The Automotive Industry was hit hard by the “Great Recession”. Jobs and sales declined rapidly as the economy and Americans were coming up short financially. After a couple years and some restructuring the automotive industry started making a comeback. Increasing sales by focusing on consumer needs helped bring workers back to work. Now the industry is booming again with continued growth in the future. The Automotive Industry Recovery INTRODUCTION PURPOSE The nationwide effect from the Great Recession on the auto industry was apparent everywhere. With the bail-outs of some of the big auto makers and loss of jobs, the economy really went into a slump...
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...Proton’s External Environment Analysis Contents Introduction 4 PART: 1 Proton Introduction 4 About Proton 4 PART: 2 Proton’s External Environment Analysis 5 2.1 PESTEL Analysis 6 2.1.1 Political and legal factors 7 2.1.2 Economic Factors 7 2.1.3 Social-Cultural Factors 8 2.1.4 Technological Factors 8 2.1.5 Environmental Factors 11 2.2 PROTON’s SWOT Analysis 12 2.3 Industry Analysis 12 Proton five forces model 13 2.3.1 Threat of New Entrants 13 2.3.2 Bargaining Power of Suppliers 13 2.3.3 Bargaining Power of Customers 14 2.3.4 Threats of Substitutes 14 2.3.5 Competitive Rivalry between Existing Players 14 2.4 Some other external factors 15 2.4.1 Change in Customer Demand 15 2.4.2 Globalization 16 PART: 3 17 Recommendation 17 3.1 How can we deal with the pressure of innovation? 17 3.2 Cost Control 19 3.4 Innovative feature’s pricing decision 20 3.4 Dealer knowledge in customers 20 Conclusion 20 References 22 Appendixes 25 Appendix-1 Supplier spending on R&D 25 Appendix-2 Changes in external force 25 Appendix-3 Critical industry skills 25 Appendix-4 Expected challenges of automotive industry 26 Introduction The report is going to conduct Proton external analysis and the report has been divided into main three parts. The first part will be discuss some background of the company. The secondary part complete external analysis through using PESTEL, SWOT and Porter five forces model. The third and last part...
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...Automobile Industry in UK - An Internal and External environmental study Introduction: The automobile sector in United Kingdom (UK) is very vibrant and innovative with Seven commercial vehicle manufacturers, nine bus and coach manufacturers, eight major premium and sports car producers, seven mainstream cars manufacturers; eight formula one teams; thirteen R&D centers; and over 100 specialist brands and niche manufacturers. Some of the best premium and sports cars manufactured in UK are Aston Martin, Bentley, Daimler, Jaguar, Lagonda, LandRover, Lotus, McLaren, MG, Mini, Morgan and Rolls-Royce. UK automotive industry is producing over 1.5 million vehicles and 2.5 million engines every year. Another key point about the UK automobile industry is that it exports around 75 % of its production which makes UK the largest exporter of cars in the world. Apart from automobile manufacturing, UK also has notable presence in motorsport industry and auto racing industry. UK motorsport industry contributes with an annual turnover of £6 billion out of which more than 50% is exported with about 4500 companies involved in this industry. UK automobile sector has undergone tremendous change since its inception in the 19th century. From being the second largest manufacturer of cars in the world (next to United States), it went down to be the 14th largest producer of cars by 2012 because of the rising competition from countries like...
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...Recession on the Auto Industry Submitted by Luis A. Castro Prepared for Professor John Machnic BUSN 6120, Managerial Economics Summer 1, 2012 Section: OE Webster University July 24, 2012 CERTIFICATE OF AUTHORSHIP: I, Luis A. Castro, certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. ____________ 07/24/2012 Signature Date Introduction The automotive industry in the United States is a key factor in economic growth because of the significant impacts on all major industries and cultures. Automotive industry is one of the largest industries in the United States. Historically, it has helped 3 to 3.5 percent of gross domestic product (GDP). It directly employs more than 1.7 million people who are involved in the design, manufacture and distribution of parts, components to install, sell and service the components. The industry of auto uses $16 to $18 billion annually for the research and development of the products. By excluding the automotive sector, it is difficult to determine the effects of global recession with in United States (Gereffi, 2005). Recently, if the analysis is done it can be clearly seen that the automotive industry has fallen on hard times. However, the U.S. continues to be one of the largest car industries in the world and...
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...Introduction The automotive manufacturing industry began in the late 1800’s and has undoubtedly changed mankind forever. General Motors Corporation is one of the leading automotive manufacturers in the world. GM is a corporation that designs, builds, and sells cars and trucks. GM owns 18 brands some of which include Chevrolet, GMC, Cadillac, and Buick. The company operates in 160 countries, employs roughly 207,000 people, and is one of the world’s largest vehicle manufacturers (IBIS World, 2015). The automotive industry in the United States is worth $123 billion and has $5.2 billion in annual profit (IBIS World, 2015). It is spread across 3 main competitors. Toyota Motor Corporation, which holds 17.5% of the market share, General Motors Corporation, which holds 16.3% and Ford Motor Company, holds 11.3% of the market share in this industry (Mergent Online, 2015). Over the last 5 to 10 years the automotive industry in the United States has continuously fluctuated. As a result of the economic downturn, GM filed for Chapter 11 bankruptcy in June of 2009 and was bailed out by the U.S. government. During the Chapter 11 bankruptcy, GM eliminated about one-third of its plant assets and workforce and reduced its debt from nearly $95 billion to $17 billion. GM has bounced back tremendously, by releasing brands such as Saturn and Hummer in an effort to cut costs, and in 2014 the company made $152 billion in revenue (Mergent Online). Other automotive companies have struggled...
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...The report is about the analysis of the environment of automobile industry and the marketing strategy for Ford Motor Company. It initiates with examining of external environment of automobile industry by using PEST analysis and Porter's five forces analysis. After the internal analyses that focus on the resource audit on brand, products, markets, technology, people and son on, the value chain analysis of the company will be conduct. Then the generic competitive strategies would be discussed through SWOT analysis, Ansoff Matrix and BCG Matrix in order to identify the general business strategy taken by the Ford Company. After specifying the company strategy by those analysis tools, the strategic evaluations would be drawn together with the strategy control methods. Finally, a suggested recommendation for the company future development will be mentioned at the end of the report. I. INTRODUCTION 1.1 Aim of The Report This report aim to identify the external environmental of the global automobile industry, measure and evaluate viable and sustainable marketing strategies using by the Ford Motor Company. Through appropriate theoretical concepts and models, together with appropriate methodologies, the organization within its contextual setting will be carefully examined, and justify recommendation will be mentioned. Though the report, how a successful corporation is operated and how its business strategy is implemented and controlled will be understood. 1.2 Company Background Ford Motor...
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...Business Project 1) Further justification of reason for selecting particular industry(automotive industry).Justification can be on the basis of value chain links, externalities, why is it important ,distribution of sales.(use the book of Peter to justify why automotive industry). 2) Why specifically Toyota(it might be case that Toyota is unique, it has particular types of competitive advantages, discuss the emergence of Toyota as a key global player).Basically to say the main reason of this topic is find out what is actually happening in this industry,why is it point of interest. 3) Methodology: I want to find out what will make this company successful in this market ? Need to look for successful examples in this particular market especially in automotive industry, what autom. Company. invested in those markets,look which one is successful.(case study analysis of the companies that have already invested in those markets,look at the fact that has an influence on investment process and link with OLI,take each company and say OLI configuration for different companies(saying OLI conf.for P@G look like ….Unilever look like …..).Once I’ve done with this I can say in general that ownership characteristic that a company carries in order to be successful should be like …location characteristics of the country are these and these are internalization advantages and this is why it end ups with FDI rather than anything else. In general I take couple of successful companies...
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...The Secret of BMW’s Success I. Major Problem (Problem Statement) Achieving a turnaround of BMW’s revenue performance from a sluggish 2009 sales performance. II. Objectives (Situation Analysis) Introduction Specialized in the production of automobiles, Bayerische Motoren Werke commonly known as BMW Group is globally considered one of the most successful companies in the world. BMW continues to be one of the best players in the luxury automobile sector, growing despite the European markets’ crisis. The group is well positioned in worldwide market with 24 manufacturing facilities in 13 different countries, and it can count on a distribution network in more than 140 countries. Long term thinking, ecological and social responsibility in the value chain, strong investment in research and development, and an effective speed and agility in sustaining the changes in the market, are some on the key reasons for BMW success. The company has always promoted high-performing product trough a high-profile brand since the early stage; this perception is still present and evident in the company’s culture and has always been the guideline to narrow the strategic path of the group. Competitor analysis The German automaker experienced a steady increase in sales in the last few years, as it has always been able to respond to the attacks of its competitors with an increasing level of technology and innovation that characterizes its products. The design is also a fundamental and integrant...
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...The intense competition between the automotive producers keeps the prices down. By 2020 the profits are going increase by almost 50% in the automotive industry and the main source of these profits would be the emerging market of India and China. Through driving force analysis I came to conclusion that these are the factors that serve as the driving force in the global automotive industry. a. The convolution of the automobile and building cost pressures: There is an extensive range of modular system in the market and the public keep demanding for better and better systems for lower price. The customers are prioritizing their choice of car based on low emissions. The government is also tightening the regulation which is another add on to the troubles for the automotive industry. Customer’s demand and the government policy require investment in R&D. Price that are already prevailing in the industry are going to be flat so huge investment on research and development may have adverse effect on the profit of the company. b. The ongoing diversion of the market – With changing time there are alteration in the supply and demand and also the portfolios of the automobiles. The market for small vehicle is becoming big, the aftersales market specially in china is becoming huge. So the automobile industries also have to make alterations in their policies. c. Digital demand- The customers are seeking for a product that offers safety, ease of use and also is not exorbitant....
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...long time a focal point in the industry . The shift wasn't prompt , it was a combination of gradual steps from conventional , hybrids till full electric cars. With increasing innovation and environmental concerns and with the growth of the social responsibility of companies and individuals toward our planet , the EV might cars gain attraction and popularity. Nissan got the signal early and decided to develop its full electrical car as first mover and technology leader supported by the CEO ( Carlos Ghosn ) vision that EV cars will become soon the dominant auto technology. Nissan strategy was to make a significant change in the industry and start pushing for electric cars that are “affordable, cool, attractive and fun to drive.” After years of research and a large R&D investment the result was the Nissan LEAF , A medium sedan 5 seats car boasting features like immediate torque, silent ride, premium performance, lower fuel and maintenance costs. The vehicle was about the size of a Volkswagen Golf or a Renault Megane , It had an 80 kilowatt electric motor with about 110 horsepower powered by lithium battery that can provide 140 km/h speed. Nissan took a very challenging approach to launch the vehicle , for them to secure a good penetration to the European market , Germany should be the gate , if the company can make it in Germany , it will succeed to lay the foundation to dominate the EV cars in Europe. Analysis , External : the German automotive market : Germany is recognized...
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...Marketing 101 Section-30D Nick Varkonyi 12/7/2014 Table of Contents 1. Executive Summary------------------------------------------ pgs. 3-5 2. Description of Company------------------------------------- pg. 6 3. Strategic Plan/Focus----------------------------------------- pgs. 6-7 4. Situation Analysis--------------------------------------------- pgs. 7-11 5. Market Product Focus--------------------------------------- pgs. 11-13 6. Marketing program strategy and tactics----------------- pgs. 13-14 7. Financial Projections----------------------------------------- pgs. 14-15 8. Organization Structure--------------------------------------- pg. 16 9. Implementation Plan------------------------------------------ pg. 17 10. Appendix A: Biographies of Key Personnel------------- pgs. 18-20 11. Appendix B: Detailed financial projections-------------- pgs. 21-22 1. Executive Summary Heat & Clean, LLC Karen Akers, Jordan Capps, Alicia Collison Heat & Clean, LLC (referred to from hereon in as the "Company") was established as a Limited Liability Company on St Rd 52 in Lafayette, Indiana with the expectation of rapid expansion in the automotive accessories industry. The Company solicits financial backing in order to be able to introduce its new product (described below). Business Description The Company was formed in August 2011, as a Limited Liability Company under Indiana state laws and is headed by Karen Akers, Jordan Capps, and Alicia Collison. Heat...
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