Porter's Five Forces Model Of The Market

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Recommended: Trust and its effect on daily life

In my opinion the most important element of their strategy should be forming a trustworthy and positive relationship with their existing and potential customers. As Hennig-Thurau (2000) explains in such a competitive market the contact with customers is vital.
There is a lot of arguments in the press relating to compensation for customers that were affected by the scandal, this is because they were sold a vehicle with false information and also will have lost value on their purchase due to the market value dropping (BBC, 2015). In their updated strategy that should be released next year, it is important they inform consumers how they are going to mend their relationships and bring back the trust. By offering a small amount of compensation …show more content…

With it also being important to inform customers there are no other devices purposely administered on the cars.
Porter 's five forces model of competition can be used to explore the micro-environment of an industry. Clegg et al (2011) describes the five forces model as a method of viewing the company 's competitive position in comparison to its competitors, while also showing the positive aspects that appeal to customers. It is vital when creating the new strategy that VW takes the competition model into consideration. This is because VW already have lost some of their market share as a result of the scandal meaning they need to research the best approach to competitors. The force that relates the most to VW is "The bargaining power of customers". As stated in Clegg et al (2011:60) 'customer …show more content…

'The existence of strategic groups influences competition because firms that utilize similar strategies compete more directly inside their strategic group than outside ' (Clegg, 2011). Implications with strategic groups occur because all firms are in the same industry meaning there is a high level of rivalry occurring. As most car manufacturers aim to have the best reputation as a company and also the highest economical level it means they are all trying to achieve similar objectives.
The external environment has been mentioned previously and is used to help firms identify what they might decide to do to be in the competitor environment. On the other hand, the internal environment is used for firms to identity what a firm can do, this could include uniqueness as a result of specialised resources or

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