The U.S. Automobile Manufacturing Industry
External Remote/macro-environment Analysis: Socio-cultural, Technological, Economy, Environmental/Ecological, Political, Legal (STEEPDG)
The US automobile manufacturing industry includes about 200 companies with combined annual revenue of about $250 billion. Major companies are GM, Ford, and Chrysler (which is controlled by Italy 's Fiat). The industry is highly concentrated: the top three companies account for more than 90 percent of revenue.
Selling the Vision
Most US auto manufacturers have experienced difficult times in recent years, including loss of market share, financial losses, increasing legislative pressure, and investor dissatisfaction. With improvement plans in place, CEOs must convince employees, investors, suppliers, and customers that the plans will work to restore the company to a position of strength. Building confidence with these various constituencies is a prerequisite to successful execution.
Business challenges
Import Competition — Imports represent a rising percentage of US auto sales. US market share for Chrysler, Ford, and GM dropped from 73 to 44 percent between 1996 and 2009. Imports that generally are smaller and more fuel-efficient increase in popularity when fuel prices rise. Offshore manufacturers also enjoy the advantages of substantially lower wages and benefits for employees and lower costs for suppliers. The strength of the dollar against the yen and other foreign currencies can impact import prices.
Sociocultural
Today 's society judges people on the type of car you drive. Society does not like to admit to this but it is very true. Manufactures know this happens and targets their markets by these thoughts. For example, anyone who drives a mini van is perceived as a soccer mom. This is because the manufactures target mini vans to mothers. Anyone who drives a nice vehicle is thought to be wealthy. No one wants to be seen driving an unattractive piece of junk because of what other people will think of him or her.
The US automobile manufacturing industry includes about 200 companies with combined annual revenue of about $250 billion. Major companies are GM, Ford, and Chrysler (which is controlled by Italy 's Fiat). The industry is highly concentrated: the top three companies account for more than 90 percent of revenue.
Selling the Vision
Most US auto manufacturers have experienced difficult times in recent years, including loss of market share, financial losses, increasing legislative pressure, and investor dissatisfaction. With improvement plans in place, CEOs must convince employees, investors, suppliers, and customers that the plans will work to restore the company to a position of strength. Building confidence with these various constituencies is a prerequisite to successful execution.
Business challenges
Import Competition — Imports represent a rising percentage of US auto sales. US market share for Chrysler, Ford, and GM dropped from 73 to 44 percent between 1996 and 2009. Imports that generally are smaller and more fuel-efficient increase in popularity when fuel prices rise. Offshore manufacturers also enjoy the advantages of substantially lower wages and benefits for employees and lower costs for suppliers. The strength of the dollar against the yen and other foreign currencies can impact import prices.
Sociocultural
Today 's society judges people on the type of car you drive. Society does not like to admit to this but it is very true. Manufactures know this happens and targets their markets by these thoughts. For example, anyone who drives a mini van is perceived as a soccer mom. This is because the manufactures target mini vans to mothers. Anyone who drives a nice vehicle is thought to be wealthy. No one wants to be seen driving an unattractive piece of junk because of what other people will think of him or her.