Porter Five Forces Model

In: Business and Management

Submitted By raj3018
Words 1543
Pages 7
Michael Porter’s Five Forces Strategic Competitive Model

By
Rajshekhar.V
IGTC 2012-14
Roll No. 29

Indian Automobile Industry
The Indian automobile industry is the tenth largest in the world with an annual production of approximately 2 million units. Indian auto industry, promises to become the major automotive industry in the upcoming years and the industry experts are hopeful that it will touch 10 million units mark. Indian automobile industry is involved in design, development, manufacture, marketing, and sale of motor vehicles. There are a number of global automotive giants that are upbeat about the expansion plans and collaboration with domestic companies to produce automobiles in India.
Porter's five forces model on Automobile Industry * Barriers to Entry – Automobile Industry is a capital extensive and labor extensive industry. The emergence of foreign competitors with the capital, required technologies and management skills began to undermine the market share of many automobile companies. Globalization has lead to huge investments and has caused businesses to move from national and domestic markets to a worldwide environment which is a huge factor affecting the auto market. Off late, it is becoming easier for foreign automakers to enter the Domestic market .Automobiles depend heavily on consumer trends and tastes. While car companies do sell a large proportion of vehicles to businesses and car rental companies (fleet sales), consumer sales is the largest source of revenue. For this reason, taking consumer and business confidence into account should be a higher priority than considering the regular factors like earnings growth and debt load.

* Threat of Substitutes - Rather than looking at the threat of someone buying a different car, there is also need to also look at the likelihood of people taking the bus, train or airplane to their destination.…...

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