Skoda's Case Study Of The Automobile Industry

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About Skoda A European company which started with manufacturing of cycles and then they started manufacturing of ploughs of farms, cars and airplanes. Vaclav Laurin and Vaclav Klement started with this company which is one of the world’s biggest company’s of cars. It started its business in Czechoslovakia and expanded its manufacturing units all over the world. Skoda’s sales are in more than 85 countries all over the world which excludes US and Canada. The company emerged as the most successful and globally known manufacturers. Skoda holds the flagship and a vehicle of national pride to the Czech Republic. Skoda employs five percent of the Czech population directly or indirectly by its suppliers. In terms of exports, Skoda contributes eight…show more content…
These cars have a high demand and car maker’s gets full support from the government. For e.g. UK government has increased the tax of cars which have more CO2 emission. • European automobile industry had strict rules to manufacture high mileage a car, where Skoda made Octavia. Economical Factors • Over the years, the automobile industry has been increasing the price of the cars due to inflation. There have been infrastructural developments in the industry and prices have been increasing as the customers want new cars whether the price of petrol increases or not, customers will look for new cars in the market. The new cars are more fuel efficient which attracts the customers. This was one of the reason for customers to buy Skoda. • The automobile industry is very much concerned with the country’s economy. The demand of the motor trade always changes and production affects the supply chain of the business. Social Factors • A customer looks for the brand which is most common in all the products. • Businesses rely on transport which transfers their goods and services to different locations. People have their own way of transport so automobile had a very significant…show more content…
• Automobile companies are coming up with the new way of motoring the vehicles. Skoda has come up with Fabia which runs on synthetic fuel. Porter’s 5 Forces Threats to new entrants For Skoda there are very few threats as in this industry, it is rare that a new entrant will enter. This is because it requires a high amount of capital and manufacturing facilities. A company existing can enter a new market but for a new company is very difficult. Satisfying the customers, brand loyalty, durability takes time which is difficult for the new entrants. Skoda is spread all over the world except US and Canada. Competition from Substitutes In this industry, there are very low threats from substitutes. The only thing a customer would shift could be a public transport for e.g. bus or railways. To be realistic, there is no substitute to personal cars even if the fuel prices increases. A company can only come up with new technology with high mileage cars which would attract the customers. Skoda is well known for its mileage for which it takes advantage from its competitors. Bargaining power of
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