Car Industry Porter's Five Forces

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This essay will begin by identifying a recent event, in which three large car manufacturers have created a joint manufacturing site in Mexico, in order to cut costs and respond to the competitive forces in the luxury-car market. In this venture, Nissan’s Infiniti brand, Mercedes-Benz and Daimler will exchange benefits by cooperating and this will have economic benefits as well as improved logistics and manufacturing efficiency. This essay will identify the market in which this industry is operating in and provide an analysis of the industry, using several frameworks. Porter’s Five Forces framework will firstly be analysed in order to determine the driving forces of global competition. The Globalisation driving forces will also be examined and explained and to…show more content…
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. Although, some companies actively avoid entering into some markets as the competition is already too
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