...| The Automotive Industry | Ford AutomotiveOctober 3, 2012 | | | | | INTRO: BARRIERS TO ENTRY: Since the company we chose to analyze is Ford, the industry is limited to the North American automobile industry. Barriers to entry are defined as characteristics of the industry itself that prevent rivals from getting in as well as set standards for the competitors in that industry. The automotive industry has grown exponentially and it is currently one of the most competitive industries. One of the major players in barriers to entry is brand strength. Over the years brands have been developing and customer loyalty to one particular brand is very strong. This makes it difficult for a company to enter the industry and expect to be a significant competitor. Customers are loyal to one particular brand and that diminishes the customer base for new entrants. Unless the company already has the internal structure of a big automotive manufacturing company then it is very difficult for them to enter this particular industry. Not only are start-up costs very high, but there are significant costs in the design and manufacturing of cars. Product differentiation is also another major factor, since many companies have had to rely on their unique products to attract more customers as well as expand their customer base. Other factors to barriers to entry include government regulations. In the United States, the Environmental Protection Agency has set standards of emissions...
Words: 3364 - Pages: 14
...Business Information Analysis | Table of Contents Electronic Cover Sheet………………………………………………………………………1-2 Introduction………...................................................................................................................4 1. Key business issues and challenges……………...................................................................5 1.1 Globalisation, regionalisation and market convergence...........................….......................5 1.2 Increasingly diversified consumer aggregate patterns of behaviour...................................5 1.3 Accelerated modification and diversification of the product portfolio………………..….6 1.4 Pervasion of automobiles with digital technology..............................................................6 1.5 Increased pressure for innovation and flexibility in development and manufacturing…...6 1.6 Strategic levers……………………….................................................................................7 1.6.1 Brand management...........................................................................................................7 1.6.2 Customer relationship management……………..............................................................7 1.6.3 Core competency management…………………….........................................................7 1.6.4 Software management.......................................................................................................7 1.6.5 Quality management.....
Words: 3077 - Pages: 13
...OF AUTO INDUSTRY 1.1 Current Status One of the major industrial sectors in India is the automobile sector. Subsequent to the liberalization, the automobile sector has been aptly described as the sunrise sector of the Indian economy as this sector has witnessed tremendous growth. Automobile Industry was delicensed in July 1991 with the announcement of the New Industrial Policy. The passenger car industry was, however, delicensed in 1993. No industrial licence is required for setting up of any unit for manufacture of automobiles except in some special cases. The norms for Foreign Investment and import of technology have also been progressively liberalized over the years for manufacture of vehicles including passenger cars in order to make this sector globally competitive. At present 100% Foreign Direct Investment (FDI) is permissible under automatic route in this sector including passenger car segment. The import of technology/technological upgradation on the royalty payment of 5% without any duration limit and lump sum payment of USD 2 million is also allowed under automatic route in this sector. With the gradual liberalization of the automobile sector since 1991, the number of manufacturing facilities in India has grown progressively. The cumulative production of automobile for April-December 2011 registered a growth of 14.94 per cent over same period in 2010. Production in December 2011 increased by 10.91 per cent year-on-year. Automotive Industry comprises...
Words: 4070 - Pages: 17
...5160: STRATEGIC MANAGEMENT SCL#3: The automotive industry in Malaysia PREPARED BY: marziana basir gm04459 SYAZwANI MUSTAFA gm04625 johan adam leong gm04319 FADZILLA ZAHRA SAMIAN GM04550 PREPARED FOR: SR. DR. HJ MAZLAN HJ HASSAN Graduate School of Management Universiti Putra Malaysia Q1. View this industry through the eyes of a CEO. Which would you regard as the three most important opportunities or threats to Mahathir’s idea? Reputation and consumer impression Merger between both Malaysia carmakers will improve the reputation of Malaysia carmaker in world’s eyes. With both manufacturers has its’ own Japanese counterparts (Mitsubishi for Proton and Daihatsu for Perodua), it will further boast the consumers’ impression of a combined quality from both makers in developing countries especially in ASEAN region. Merger can be seen as the platform for a united and consolidated effort for refinement in terms of technologies and quality control on each end product. Example is that using proven Mitsubishi’s robust engine development coupled with Daihatsu or Toyota’s ways of manufacturing and quality control (Kaizen) by utilizing the cheaper local Malaysia resource and facilities. The end product can be seen as a reliable piece of vehicle produced in the most efficient manner with lower cost and yet achieving the international standards recognition (i.e., EURO NCAP 5 start ratings). Total domination of the Malaysia automotive market Both car makers if merged may impose...
Words: 1836 - Pages: 8
...AUTOMOTIVE INDUSTRY ANALYSIS Submitted by Team A Donald Bradley Morgan Bruns Adam Fleming Jay Ling Lauren Margolin Felipe Roman Presented to: Prof. Alan Flury December 5, 2005 ME 6753: Principles of Management for Engineers Executive Summary Chosen industry: This analysis focuses on the automotive industry, specifically, large-scale manufacturers of automobiles. The automotive industry is inherently interesting: it is massive, it is competitive, and it is expected to undergo major restructuring in the near future due to globalization and decreasing oil reserves. The analysis team members (we) feel qualified to perform this investigation due to our familiarity with the industry and our education—several of us have studied and worked on problems associated with automobile manufacturing and we are all mechanical engineering graduate students. Analysis Methodology: The report begins with a historical overview of the automotive industry. This is followed by an analysis of the industry’s structural characteristics using Porter’s 5 Forces Model as a framework, which provides an understanding of the automotive industry as a whole in its current state. Next, ten representative companies of varying sizes are analyzed and compared; the chosen companies and selection criteria follow. General Motors, Ford, and Toyota were chosen because they are the current market leaders. DaimlerChrysler, Nissan, Volkswagen, and Honda were chosen because of their status as stable international...
Words: 13102 - Pages: 53
...Evolution of Automotive Industry The automotive industry is a competitive yet lucrative business industry. Everyone is designing and developing the latest revolutionary model car. Automotive manufacturers and dealers are able to price their products at exorbitant prices if they so choose because in most cases the consumer does not have a choice but to purchase a car. We all need transportation and with that in mind automotive traders basically determine product pricing. The market structure of the automotive industry is relative to the number, size, kind and distribution of buyers and sellers (ModernIr LLC [MILLC], 2008). Needless to say the automotive industry is a very huge market. The automotive industry is considered to be in the perfectly monopolistic competition market structure, having many sellers of a similar product yet each seller’s product is somewhat unique to the producer. There are no seller or buyer entry barriers and there are numerous buyers and sellers within this market structure. One main purpose of the producers of the automotive industry is profit. As with any industry the introduction of a new company, leads to the assumption of new and better products. In the case of the automotive industry that case might be very true in a dwindling economy where there is no foreseeable relief on the rising gas prices. Consumers are now concerned with the cost of gas consumption and are ready to opt for more cost effective means of transportation. Companies promoting...
Words: 1781 - Pages: 8
...Overview of the Automotive Industry Malaysia automotive industry established on early 1960s. In the early 1960s, the development of automotive industry had become the attention from Malaysian government to build up the industrial base, at the same time to decrease dependency on the agricultural sector. Nowadays, automotive industry had become one of main income for Malaysia. The large demands from the resident of Malaysia make the automotive industry develop smoothly and rapidly, and well known as the biggest automotive customer market in South –East Asia. From the MAA 2012 report the total average sales of commercial car are 52,300 units every month (Kenanga research, 2013). There are 77 issues about manufacturing licenses by the Malaysia government but only have 35 manufacturers in operation at the year of 2012. In addition, almost 18 main well known car manufacturer in Malaysia market there are Proton and Perodua subsidise the most sales in the market and followed by Toyota, Honda and Nissan. Risk of Entry by Potential Competitors. In a country that is well developed such as Malaysia, we have competition from public transport companies. These include the KTM and several bus companies such as City Liner. When we look at risk of entry, it should be clear that a high risk of entry by potential competitors’ leads to an alteration of the profitability of the existing companies in the industry, simply because the more companies that enter, the smaller the market share of established...
Words: 2752 - Pages: 12
...EXECUTIVE SUMMARY OBJECTIVES OF THE STUDY 1. To explore the history of the automotive industry in the Philippines 2. To examine the implications of various laws and regulations, whether domestic or international, on the local automotive industry 3. To provide and survey the current profile of the industry 4. To analyze the problems and challenges significantly affecting the industry, especially those which are economic in nature 5. To provide various recommendations that would address the problems identified and eventually, aid in the betterment of the industry I. INTRODUCTION The Philippine automotive industry has been greatly characterized by parts and components manufacturing as a result of its participation in production sharing. Parts and components manufacturing accounts for more than 80 percent, while motor vehicle assembly accounts for about 17 percent of the local automotive industry. The components sector consists of: metalworking, rubber, seats and trims, plastics, electrical, and others. The components sector manufactures the following parts: * Suspension: tires steel rims, aluminum wheels, leaf and coil springs * Interior: carpets, seats * Electrical system: wiring harnesses, batteries, lamps, relays * Pressed components: mufflers, radiators, seat frames, sea adjusters, oil and air filters, pedals * Rubber and plastic components: fan belts, rubber hoses, small plastic parts * Mechanical...
Words: 8979 - Pages: 36
...The problem to be investigated in this study is the economic importance of the automotive industry. It will explore the social impact it has brought worldwide and how it is affecting the world of commerce. It will also explain the foreign trade and the different automotive industries of each country. The following sub-questions will be evaluated: * What pollution-control strategies each automotive industry are practicing? * What are the latest in automobile safety measures? * How does motor vehicle production affect the economy? * What are the standards of manufacturing efficiency in an automobile? INTRODUCTION The automobile industry is concerned with profits and competition; with consumer demands for styling, safety, and efficiency; and with labor relations and manufacturing efficiency (“,” 2008). About 250 million vehicles are in the United States. Around the world, there were about 806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially in China and India (“” 2008). In 2008, with rapidly rising oil prices, industries such as the automotive industry, are experiencing a combination of pricing pressures from raw material costs and changes in consumer buying habits. The industry is also facing increasing external competition from the public transport sector, as consumers re-evaluate their private vehicle usage...
Words: 2272 - Pages: 10
...Table of Contents * Introduction * Overview of an Automotive Industry * Place of the industry in an economy * Automotive industry in world’s economy * Automotive industry in Turkish economy * Trade perspective * Conclusion The automotive sector is a developing sector in the world. Its importance has increased drastically for the economies of countries. In this sector, the competition between companies has been increasing and with this expected increase; the elements such as efficiency in production, efficient use of resources have become an essential part of it. Therefore characteristics such as; investing on research & development , quality management , relationships between main and sub-industry collaboration , qualified employment has been on the competitors list in order to beat the competition. Automotive industry is one of the world’s largest industry that have been received the largest investments. In the scope of research & development and production, it has received 85 billion euros investment and the countries that have received an investment, have a tax income of 433 billion euros which proves us how big the industry is in the world. Automotive industry has a turnover of two trillion euro. Therefore this economy scale equals to economy of a country that is the sixth one of the world. In Turkish automotive industry, we would witness the same kind of structure. If we take a look at the proportion of it in the...
Words: 1565 - Pages: 7
...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...
Words: 533 - Pages: 3
...FINAL REPORT SUPPLY CHAIN MANAGEMENT IN AUTOMOTIVE INDUSRTY MARCH 13, 2015 TABLE OF CONTENTS INTRODUCTION 2 OVERVIEW OF SUPPLY CHAIN STRATEGY: 3 FORD: LOGISTICS AND SUPPLY CHAIN STRATEGY 3 About the company 3 Features of Ford system of manufacturing 4 Supply chain Design 4 Push Pull Strategy 5 Best practices 6 TOYOTA: LOGISTICS AND SUPPLY CHAIN STRATEGY 6 About the Company 6 Supply chain design 7 Key features of Toyota business model 7 Drivers of supply chain 8 Parts Ordering 9 Parts and Supplier Master 9 Forecasting 9 Toyota distribution model 10 Best practices 10 COMPARISON 10 ISSUES 11 RECOMMENDATIONS 12 REFRENCES 13 INTRODUCTION The Indian automotive industry, comprising vehicle and component manufacturers, has grown steadily since the economic liberalization of the early 1990’s. The arrival of major global auto companies has galvanised the domestic sector into adopting Supply Chain best practices. The changing business conditions of the 21st century has led to companies facing issues ranging from globalisation, economic uncertainty to new technologies and increasing consumer demands. In the automobile industry, as manufacturers design and build vehicles globally, their supply chains become increasingly complex with challenges that often stand in the way of profitability and higher shareholder value such as long order-to-delivery lead times, unreliable production schedules, excess inventory...
Words: 3533 - Pages: 15
...Through the years, various automobile makers have come and gone. Hudson Motor, Auburn Motor, Essex Motor, and Duesenberg are just to name a few automobile companies that have failed through the years (Sullivan, 2008). The competition has been fierce between different automakers, whether it is with Ford, Mercedes-Benz, Honda, or General Motors (GM). Each company strives to make a car that will not only sell at a reasonable price, but also appeal to the consumer. Now the U.S. automotive industry is financially struggling and may mark an end to an era. Currently Chrysler, Ford, and GM are struggling so much so right now that the manufacturers are temporarily closing doors in an effort to save money. Chrysler itself is in such financial need that the government recently bailed them out with a loan of $4 billion dollars. However, that money has not helped this company out. Sales for Chrysler are steadily dropping. Chrysler sales were so low for the year of 2008 that the Toyota Camry alone outsold the entire line of cars that Chrysler manufacturers combined. Chrysler admits that they need approximated $7 million every 45 days to operate, yet with sales so low analysts are predicting an end to Chrysler alone (Critics suggest reeling Chrysler is a lost cause, 2009). While U.S. auto manufacturers had the biggest drop in sales, Japanese automakers Toyota and Honda also saw a drop in sales, 15.4% and 7.9% respectively. Overall, car and truck sales for all auto manufacturers in the year...
Words: 2220 - Pages: 9
...Industrial Strategy: government and industry in partnership Driving success – a strategy for growth and sustainability in the UK automotive sector July 2013 Contents | 3 Contents Foreword Executive summary Challenges and opportunities Investing in innovation and technology Enhancing supply chain competitiveness and growth Investing in people – ensuring the right skills A business environment that enables a competitive automotive industry 1 The UK automotive industry Overview of the sector Competitiveness – a high productivity sector Enhancing UK competitiveness: strengths and weaknesses Vision for the UK automotive sector Investing in innovation and technology Success through collaboration Developing more detailed technology roadmaps Maintaining the UK’s strength in propulsion systems Hydrogen and fuel cells Enhanced links with motorsport Enhancing collaboration with the research base Better engagement with EU funding Delivering intelligent mobility Future technologies Enhancing supply chain competitiveness and growth Key challenges for the supply chain Quantifying and capitalising on the business opportunity for the UK supply chain Improving long-term supply chain competitiveness Encouraging inward investment in the UK supply chain and creating export opportunities Access to finance Innovative processes for premium manufacturers 3 5 6 6 7 8 8 9 9 10 12 16 18 21 24 26 31 31 32 32 32 33 34 37 38 40 44 47 48 2 3 4 | Driving success – a strategy for growth...
Words: 24676 - Pages: 99
...Nano technology in the automotive industry:- ABSTRACT What is Nanotechnology? Nanotechnology is the engineering of materials on the scale of 1 nanometer (nm) to 100 nm, a nanometer being 1 billionth of a meter. At this level, the basic physical laws governing macro objects undergo a drastic change. A macro particle is a cluster of atoms arranged together in random order. The formation of the structure is left to nature, and control over the properties of the material is difficult. Nanotechnology, on the other hand, is a bottom-up approach where materials are created by placing individual atoms together. This decreases the randomness in the structural formation, enabling significant control over the properties of the material. Mechanical properties such as strength, ductility, and resilience can all be incorporated into one material. Currently, nanotechnology is functioning as an enabling technology. It is being used to enhance the properties of existing materials. This is largely attributed to the fact that the technology has clearly not been understood and there is still much more to nanotechnology than meets the microscopic eye. It is rare for a single technology to have the power to dramatically influence almost every major industry in the world. Nanotechnology falls into this category and offers fundamentally new capabilities to architect a broad array of novel materials, composites and structures on a molecular scale. This technology has the potential to drastically...
Words: 8073 - Pages: 33
