Porters Industry Analysis
Porters Industry Analysis: The automobile manufacturing industry
The Automobile Manufacturing Industry 3 Introduction 3 Power of Buyers (Medium-High) 3 Power of Suppliers (Low) 4 Threat of New Entrants (Low) 4 Threat of Substitute products (High) 6 Internal Rivalry (Medium) 6 Relative Power of Other Stakeholders (High) 7 Conclusion 8 References 9
The Automobile Manufacturing Industry
Introduction
The automobile manufacturing industry is comprised of companies that produce self-powered vehicles: cars, trucks, vans and commercial vehicles (trucks, buses, farm equipment). For the past twenty years, the automobile manufacturing industry has experienced continuous growth and globalization. The industry utilizes a global supply chain and provides its services to a universal customer base.
Porter developed a five-force model, which outlines the five competitive powers of the automobile manufacturing industry. The five basic competitive forces are: (1) market competitors, (2) new entrants, (3) suppliers, (4) buyers, and (5) substitutes (Porter, 1985). Porter identifies the forces are being the power of buyers and suppliers, threat of new entrants and substitutes, and potential rivalry with the companies within the industry (Kotler, 2009). It was not until later that a sixth force was developed: relative power of other stakeholders. Its inclusion was made to add a much-needed holistic element to the analysis of competition within an industry.
Ultimately, I will be analyzing the automobile manufacturing industry using Porter’s six-force foundation. Being that passenger vehicles add a significant contribution to the revenues of the automobile manufacturing industry, the primary focus of this paper will revolve around this part.
Power of Buyers (Medium-High)
A car is typical purchase for American that continues for up to six years after the purchase for a customer. So, it is obvious, that is does not justify for a repeat buyer or purchasing in
The Automobile Manufacturing Industry 3 Introduction 3 Power of Buyers (Medium-High) 3 Power of Suppliers (Low) 4 Threat of New Entrants (Low) 4 Threat of Substitute products (High) 6 Internal Rivalry (Medium) 6 Relative Power of Other Stakeholders (High) 7 Conclusion 8 References 9
The Automobile Manufacturing Industry
Introduction
The automobile manufacturing industry is comprised of companies that produce self-powered vehicles: cars, trucks, vans and commercial vehicles (trucks, buses, farm equipment). For the past twenty years, the automobile manufacturing industry has experienced continuous growth and globalization. The industry utilizes a global supply chain and provides its services to a universal customer base.
Porter developed a five-force model, which outlines the five competitive powers of the automobile manufacturing industry. The five basic competitive forces are: (1) market competitors, (2) new entrants, (3) suppliers, (4) buyers, and (5) substitutes (Porter, 1985). Porter identifies the forces are being the power of buyers and suppliers, threat of new entrants and substitutes, and potential rivalry with the companies within the industry (Kotler, 2009). It was not until later that a sixth force was developed: relative power of other stakeholders. Its inclusion was made to add a much-needed holistic element to the analysis of competition within an industry.
Ultimately, I will be analyzing the automobile manufacturing industry using Porter’s six-force foundation. Being that passenger vehicles add a significant contribution to the revenues of the automobile manufacturing industry, the primary focus of this paper will revolve around this part.
Power of Buyers (Medium-High)
A car is typical purchase for American that continues for up to six years after the purchase for a customer. So, it is obvious, that is does not justify for a repeat buyer or purchasing in
References: Kiley, D. (2007 06-Dec). Toyota Leads in Customer Loyalty. Retrieved 2012 3-Oct from http://www.businessweek.com: http://www.businessweek.com/stories/2007-12-06/toyota-leads-in-customer-loyaltybusinessweek-business-news-stock-market-and-financial-advice Kotler, P. (2009). Marketing Management. Pearson Education. Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, a Division of Simon and Schuster Adult Publishing Group . Rabinov, A., & Rodrigues, M. (2007 7-Sept). Motor vehicle outlook. Retrieved 2012 3-Oct from http://www.pickles.com.au: http://www.pickles.com.au/idc/groups/public/documents/webcontent/live-000834.pdf Zacks Equity Research. (2011 10-March). Auto Industry Outlook and Review – March 2011. Retrieved 2012 3-October from http://www.zacks.com: http://www.zacks.com/stock/news/48851/auto-industry-outlook-and-review-%96-march-2011