Business Industry : A Competitive Advantage

809 Words4 Pages
There are a variety of challenges that firms may face when attempting to be the best in their specified industry. Economic and political challenges can make it difficult for companies to maintain a competitive advantage. In addition to maintaining a competitive advantage, some firms also find difficulty in keeping its branding alive and by attracting customers as their strategies, products, and management change over the course of time. Industries such as the automotive industry, healthcare industry, retail industry, and many more experience a variety of challenges based on their competition. Firms must create successful strategies in order to maintain competitive with their competition and in order to gain advantages in their industry (Hitt, 2013). Porsche, for example, had been faced with its fair share of challenges when they faced a financial crisis in 2008 which led to VW Auto Group taking control of the Porsche brand in 2010 (Hitt, 2013). Shortly thereafter, Matthias Mueller became Porsche’s new CEO and shared his mission of successfully having Porsche join into the VW family, broaden Porsche’s products, and increase production (Hitt, 2013). Challenges began to arise for Porsche prior to its binding with VW Auto Group. For example, in 2007 when oil prices increased, consumers were not buying as much, and unemployment was at an all-time high. In order to increase the fuel efficiency of their cars, Porsche tried to re-engineer many of its products but was faced with additional challenges due to President Obama’s initiation for Corporate Average Fuel Economy (CAFE) which meant they would be required to pay fees (Hitt, 2013). Porsche realized that by 2020 it would be nearly impossible for them to be able to sell their cars as t... ... middle of paper ... ... consumer markets rather its traditional target consumer (Hitt, 2013). In order to ensure that they maintain their brand and customer base, Porsche will have to implement new strategies in order to maintain a competitive advantage and to be successful long-term as they integrate with VW Auto Group (Hitt, 2013). In conclusion, the automotive industry is one of the most competitive industries there are, and Porsche is one of the most luxurious car brands that requires constant innovation and upkeep as their competitors are far from few in the sports car industry. Competitors in the sports car industry are targeting similar customers and often engage in competitive rivalry through the use of competitive behavior in order to gain a competitive advantage. However, it is important for firms to be aware of their strategies and how they affect their competitors’ responses.
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