Main players of the Automobile industry are Toyota, General motors, Volkswagen, Honda, Ford and more. The Automobile Industry is very complex and to start a business in automobile industry high level of capital investment is required. Not only huge amount of money but also a labor force will be essential, which are the main barriers to enter into the automobile industry. For Example, the US auto industry was once considered safe until Honda Motors gave a big challenge to these companies by opening a manufacturing plant in Ohio. The Automobile industry includes many other industries as well for example, tires and seat manufacture.
The company was the first to manufacture and sell hybrid cars as well. For example, introducing Toyota Prius to the market as a hybrid car strategy empowers the company to attract customers concerned about the green earth. Toyota was the first successful mass produce the hybrid car on the market when it released the Prius in 2003. Being the first to get their hybrid on the market allowed Toyota to gain a large portion of the market share in the area of hybrid cars as stated in official website of Toyota. This exception product supports Toyota’s broad differentiation generic strategy by using innovative products that are attractive on the basis of uniqueness and advanced features.
For example, is there was only one car manufacture, the automotive industry would greatly suffer for multiple reasons. Firstly, if a person wanted to buy a new car, there would only be one option to buy from. The car company could pick any price arbitrarily because there would be no competing car companies. The car company could also sell low quality cars. It would not make a difference because there would be no industry standard.
Porter identified five discovered five undeniable causes that play a part in shaping every market and industry in the world. The forces often used to measure the intensity of competition, attractiveness and profitability of the industry or market which is: I. Competition in the Industry. Geely Company Toyota Company • .Automobile industry nowadays growth rapidly because of the new invention from
3. Threat of new entrants High barriers to entry in the industry. Licensing requirements are high. There is a minimum size requirement to achieve profitability and the initial investment is required and fixed costs of operating. How much of the control is in the hands of existing players of the market or key resources?
The Big Three dominated the American Market and as oligopolies controlled the prices of the vehicles. GM set the price and the other two followed suite. Honda and Toyota products became very attractive to American consumers due to their fuel efficiency, style, and competitive prices. Protectionist policies of the Reagan era failed to shore up declining market shares of the Big Three. The US auto industry had to lay off workers.
Some countries have imposed a luxury-tax on cars valued over a certain amount. Some countries also have a tax on imported cars, which main purpose is often to protect own industries. This creates a significant barrier to the industry as more governments are reducing taxes for environmentally friendly vehicles, which is a major competitor to the industry. Competitive Globalisation Drivers The main components in this category include: • High level of exports and imports • Competitors from other countries • Transferrable competitive advantage • The interdependence of countries Luxury-car manufacturers are constantly attempting to reinvent and diversify themselves in order to remain competitive in the market place. They are also often setting up manufacturing sites different from assembly sites in order to more easily access different markets and more cost-effectively distribute their products.
By 1927, over 15 million T cars were sold, which was still a legend. The American car industry was not only brought in new technology, but also led the industry globally. Besides Henry Ford, there were more businessman that promote car industry in the world. William Durant, who created the system of multi-brand selling companies with cars. He illustrated a greater blueprint of the flouring car industry.
In the past few years, manufacturing companies have been competing in an increasingly dynamic environment. Among them, small and medium-sized businesses are increasing considerably, innovations are on the rise and product-life cycles are getting shorter. For this reason, companies need to devote more effort and resources in order to be able to compete in a highly competitive market and to continue to generate profit, as this is increasingly necessary to reduce the cost of production. Despite availability of different tools and techniques proposed for manufacturing industry, it has been reported that manufacturers are usually facing significant practical problems when trying to model in detail the way they operate or to implement changes in existing environments. A very useful tool that helps avoid unnecessary expenses and also gives an idea of the possible effectiveness of systems in