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Competition in the auto industry
Competition in the Global Automobile Industry
Competition in the Global Automobile Industry
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Saturn Case Analysis
Saturn's sales are down, and market share needs to be increased. Also, the product line is too narrow. Current advertising is targeting the younger population, but the average age of a Saturn buyer is 43. Saturn's initial focus on employee relationships seems to be fading as demonstrated with the clash between GM designers in Europe and the U.S. on the L-Series car. In addition, overall styling of the vehicles needs to be addressed.
Key drivers of change in the industry (e.g., driving forces):
The trend in vehicles has moved towards larger sedans and SUV's, and the ones who are purchasing smaller vehicles are looking for cars more sporty than the models Saturn offers.
Competitor Strength Assessment (Competitor strengths & weaknesses,
primary strategies of each competitor (e.g. low cost leader, focused differentiation, prospector, reactor, etc.), Porter's 5-forces assessment):
Hyundai- cost leadership strategy, breadth of product line is low
Kia- cost leadership strategy, breadth of product line is low
Ferrari- differentiation strategy, very high price, breadth of product line is low.
Lamborghini- differentiation strategy, very high price, breadth of product line is low
Porsche- differentiation strategy, high price, breadth of product line is low.
Mercedes- differentiation strategy, high price, breadth of product line is moderate
BMW- differentiation strategy, high price, breadth of product line is moderate, known for their cars being in the shop constantly and high maintenance bills.
Toyota- focused differentiation, medium pricing, breadth of product line is low. Company is known for quality products, and nice styling.
Ford- focused differentiation, medium pricing, breadth of product line is high. A strength is their pick-up truck market share, a weakness is perceived reliability and styling on some of the lines.
GM- focused differentiation, medium pricing, breadth of product line is high. A strength is market share, and a weakness is styling and reliability and perceived quality.
Honda- focused differentiation, medium pricing, breadth of product line is high. Strengths are quality, reliability, overall value, and styling.
Nissan- focused differentiation, medium pricing, breadth of product line is high. A strength is styling, and a weakness is some Americans simply will not buy any car that is not American made; obviously this weakness applies to all imports, but is only listed once.
Porter's Five Forces:
1. Intensity of rivalry among competitors- there is intense rivalry among the automobile industry. There is only a handful of companies in the world, and it is war to survive.
Degree of Rivalry - Very High to Intense – Multiple competitors, high strategic stakes, innovation often easily imitated, and low switching costs for consumers
According to Porter, the key factors rising rivalry among firms in an industry are equally-balanced competitors, market maturity, high exit barriers and high fixed costs. And all of these factors are there in teams in the National Basketball Association (NBA).
As we can see from Peugeot's previous success they are very innovative and progressive in the car industry. Using every new technological advantage possible to create that competitive advantage over their rivals. And with policies like "eight airbags as standard" Peugeot are a tough act to follow. Especially with such high regards to recycling and safety to the environment.
Porter (1997) suggests in order to gain competitive advantages in the changing business environment, it is essential to design a generic strategy for the business: product differentiation or cost leadership. The competitive strategy is determined at round 2, when recognised our rivals held whole product profile which was the product differentiation strategy. To differentiate our strategy from rivals for competitive advantages, Digby designed to imply the cost
In this case, why consumer chose Porsche among so many other brands? Porsche buyers not only treat their car as a transportation which convenient them, they also subsequently set criterion on their car while other car buyers evaluate alternatives based on specification which satisfy practical needs. For instance, saving petrol, eco-friendly, maintenance costs and others. To the buyers who want to purchase Porsche, they takes a gander at different thing such as the sound produced by the car, the speed, design, horse power and so on. They felt that car is something for them to be enjoyed and to be delighted with. The potential customer will look for options from other brands or different types or Porsche cars that are compatible to suit their taste, desires or
There are many different automobile companies providing buyers with many styles of cars, trucks, SUVs, and motorcycles. Toronto Star January 14, 2005 present ways to approach the automotive buying process. There are many different surveys, crash reports, and rating systems comparing different companies and their vehicles. Things you should look for when reading these published articles are who conducted the study? Who paid for it? Who gains from it? Who loses? These are all things to keep eye on as some automotive companies will run their own surveys making their products seem overpowering against the competition. Some prove their products are safer then the competition where the competition has been proven time and time again to make that survey seem inaccurate.
Of the four mentioned strategies, I think the most feasible one would be either the price leadership or the technology innovation strategy. Maybe Boeing could engage in both these strategies simult
Large industries allow multiple firms and produces to prosper without having to steal market share from each other. This increases rivalry because more firm must compete for the same customers and resources.
(5) Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York: McGraw-Hill, 2004. Print.
Market Segmentation, Positioning and targeting for BMW 1.1 Introduction This report aims to examine the market segmentation, positioning and targeting of BMW (automobile company). BMW will be examined giving information about the company and where it is now and any recommendations that we feel are appropriate. 1.2 BMW Company Profile BMW was formed in 1917, from the merger of two small aero engine makers. Their famous blue and white symbol stems from the colours of the Bavarian Luftwaffe and is said to resemble the view of the one of their plane through a propeller. BMW is renowned for its sporty, sophisticated & luxury image which has been built up since the 1970's with many motor sport victories ranging from Touring Car to Formula 1.
Many economic factors exist that impact the development of Ford Motor Company's strategic plan and it’s no small task to project how some of these factors might change as the strategy is being realized. Consider the prospect of expansion into a new market like China or Mexico. Economic changes like currency devaluation will make Ford’s product more expensive to their target market potentially reducing overall sales revenue. Oil prices as we’ve seen in the U.S. economy can also play a big factor as large vehicles become less desirable and more fuel efficient compact cars gain market share.
Toyota Motor Corporation is a very successful automobile manufacturer that is recognized globally. They have continued to obtain and retain a competitive advantage over their counterparts, despite recalls over many years. Regardless of recalls, Toyota has been quick to rectify their shortcomings and continue to lead within the automotive industry with their innovative measures. In this essay, I will discuss key internal factors for Toyota. Within those factors will include Toyota’s core competencies, which are what they do really well in comparison to their competition, three of their strength’s, which will include their posture within the automobile market and their heavy focus on research and development, and two of their
Business experts have long debated whether GM’s Saturn Corporation was a success or failure in the automotive world. Today, many of the methodologies that the “Different Kind of Company” employed live on in other brands. One of notable areas that Saturn excelled was customer service. Until the waning years of its existence, Saturn was a perennial top 10 leader in customer service ratings. For example, Saturn finished first in 2002 among a sea of luxury and near luxury automobiles largely due to the dealership experience, according to J.D. Power.
Pricing. Our product is priced lower than our competitors in our industry. Even though our competitors have a different kind of product compared to us.
Ford’s business level is the integrated cost leadership/ differentiation strategy; this involves engaging in primary and support activities that allow the company to simultaneously pursue low cost and differentiation. This strategy is flexible and enables Ford to use technology to control the production of variety of products in moderate, flexible qualities and with a minimum manual interaction, whose goal is to eliminate cost verse product variety. Cost leadership is a strong strategy, but it can be undermined by the frequent changes in technology, the imitation of cost advantage and lost of focus on consumers. Ford’s differentiation strategy focuses on developing a unique product that consumers are willing to pay and the combination of these two strategies enables Ford to stay on its core competencies.