Low market growth, so it can be increased only by taking another firm’s market share. This leads to a conclusion of Strong Competition in the Auto Insurance Industry. 2.2 PESTLE ANALYSIS Political Factors Currently there are no as such political issues relating to the auto insurance industry, but in the future if government plans to impose any law regarding to auto insurance like it did before stating that every driver is supposed to purchase car insurance. However, this increased the car insurance sales, benefitting GEICO so wouldn’t be considered as an issue. Economic Factors If the economy is flourishing, it tends to increase the purchasing power of the individuals and it is likely that customers will be purchasing new, perhaps more expensive cars on a regular basis.
After these companies go about developing products, which may be product modification or it may be a completely new product. Product offerings are increasing every year as consumers are looking for more and more variety of products. Companies which are unable to churn out new products fall back on competition and suffer the consequences. Companies face danger not just from competitors but consumer needs, technology, and product life cycle. New product development has its share of challenges.
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.
Intense competition. BMW faces increasing competition from its direct competitors and now tends to compete on price rather than differentiation. Moreover, the markets for luxury cars are saturated in the developed economies, thus intensifying competition. 2. Rising raw material prices.
In 1886 the first petrol powered automobile the Benz patent Motorwagen was invented by Karl Benz. It was the first time in history that an automobile (car) was produced in production. It was the beginning of the car industry, what today has become one of the world’s most important economic sectors by revenue. Although the car industry has always been a huge Market it has mostly be regional, the past 30 years have enabled the car market to gain growth through globalisation. These factors were a result of a market that started to transform globally: Foreign Direct Investment or (FDI) which is an investment made by a company based in one country, into a company based in a another country.
Customers do not want to switch to purchase different brands, as such they hold some bargaining power to drive the demand. In the luxury industry, it is possible that existing companies or new designers could enter internationally. However, the brand positioning serve as a serious barrier to create awareness due to customer loyalty and acceptability of the brand. In this case, threat of new entrants is relatively low. Luxury products are not easily substitute as it is not an ordinary goods but the threat can derive from imitation.
This is a complete shift from the policy adopted by company in safeguarding and patenting its technical know-how for competitive advantage. As per the company, to advance its objective of providing sustainable transport, it is best suited to open up its know-how to other manufacturers so that massive adoption of electric vehicles as a substitute for gasoline powered vehicles takes place. The company hopes that it will create a fast growing and bigger market for electric vehicles, thorough which Tesla Motors will also eventually benefit. The company also believes that technology leadership is not defined by patents, but its ability to attract the most talented engineers.  Competitor Analysis Tesla Motor is simply the leader in the product range of Electric Vehicle.
The threat of new entrants would also increase. New businesses can establish themselves as manufacturers for customers. Customization, costs savings, and rapid delivery speeds from new businesses question larger manufacturing facilities. With the new entrants into the industry, the threat and competition between sellers remains intensely high because of all the newly added disruptions. Several of the five forces analysis results changed when comparing the entrance of 3-D printing to the toy industry.
This question brings up the topic of this proposal, is it feasible to automate the construction industry? This is an important topic of discussion for a few reasons. First, the construction industry is a very physically demanding industry, that at some times can also be very dangerous if tasks are not performed correctly. If humans are able to completely automate the industry, then the need for humans to put themselves in potential harmful situations would be obsolete. Rachael Everly, agrees and gives an example for this idea in her article, 3 ways automation will change the construction industry, she writes, “tools like drones can make it much easier and safer to inspect and monitor construction sites” (Everly).
The main problem that the Mercedes - Benz would have faced if they had remained a niche player selling 'world cars' to the luxury market worldwide , would be the stiff threat of competitions from the Japanese automobile industry as they produced luxury cars of good quality at cheaper rates with added features. Another problem would be the decline automobile sector. They won't be able to earn more profits if they are marketing their products in only one segment. Question 2 What were the key approaches to Fords model of Globalization and Internationalization? The key Characteristics of Fords approach to Globalization • Introduced Assembly line leading to mass production which resulted in low cost production , high volume and rapidly expanded its markets • Set up Sales branch in France , further expanding its market to European countries.