1. The competition to develop and market electric vehicles has increased during the last year and is expected to continue to increase. The electric bicycle industry has four major manufacturers and a large group of small companies. The major manufacturers are Honda, Suzuki, Sanyo and Yamaha. They mainly sell products to Japan and Europe. The other group of manufacturers is much smaller in size and sales volume. These manufacturers have products they sell into the U.S., European and Asian markets. Porter's five-forces model is a powerful tool for systematically diagnosing the principal competitive pressures in a market and assessing how strong and important each one is. The electric vehicle industry is a definite for applying this technique. These are my observations about the five forces affecting the EV industry: The rivalry among competing sellers in the EV industry is high, with new businesses popping up every year. The barriers to entry for new competitors at this time is low, which is why rivalry is becoming stronger among companies with new companies forming left and right. The threat of substitute products is also high because new technology combined with new and innovative companies has created many product options in the EV industry. The bargaining power of suppliers is the EV industry is low because so many companies exist that create the parts EV markers are looking for. This gives companies more options at finding the cheapest prices for the parts they need. Finally, the bargaining power of customers is high, because there are so many companies out there offering electric vehicles. This allows consumers to pick and choose whom they want to deal with, thus lowering t... ... middle of paper ... ...ns and allow Zap's products to maintain a position of superiority in the EV industry. My final recommendations as far as forecasting would be to utilize both benchmarking and market demographics. When weighing the pros and cons, I find it strange for a company to use one forecasting tool without the other. Benchmarking will help Zap better understand the strategies of competitors. Then they can take the information gathered here and use it in trying to study market demographics for their own industry. Also, I would recommend Zap use the skimming strategy. They don't want to make mistakes that might jeopardize their current superiority. If they were to go with a market penetration strategy, they would be sacrificing quality products to help gain market entry at lower prices, but they don't want their profits to suffer because consumers sense a lack of quality.
According to article call “Porter’s Five Forces Model/Strategy Framework” it stated, “The Five Forces Model was developed by Michael E. Porter to help companies assess the nature of an industry’s competitiveness and develop corporate strategies accordingly. “ (Martin, 2014). According to article call “Porter’s Five Forces Model/Strategy Framework” it also stated “The framework allows a business to identify and analyze the important forces that determine the profitability of an industry.” (Martin, 2014). According to article call “Porter’s Five Forces: Analyzing the Competition”. It stated that “
Rivalry among established firms is fierce. There are several factors that illustrate this: established market players (6.1). The product is highly standardized and the switching costs of the customers are low. Players are aggressive (6.2)
This was noted as a bold endeavor with a substantial amount of risk. Tom Folliard, the CEO of CarMax used innovation to redirect the current trend of standard practices, (De Wit, & Meyer, 2010). Through expansion, CarMax provided a wide variety of automotive brands to their customers, not limiting their sales to only a few makes and models, (De Wit, & Meyer, 2010). CarMax also eliminated the past practices of pressure sales by establishing fixed prices. The Team agreed that CarMax had gained a competitive edge in the market by catering to the consumer through a variety of products with set prices and no sales pressure. AutoNation CEO, Wayne Huizenga was noted as quite the entrepreneur with an initial focus on Waste Management and Block Buster Videos, an example of fragmented industry, (De Wit, & Meyer, 2010). This diversity definitely has its advantages, but can lead to misdirection regarding sustainability in one industry. The team noted similarities between the CEO’s regarding their creativity and defiance of industry rules. As the team compared the different strategies of CarMax and AutoNation, we noticed two different methods of application, each were effective yet differed in application. In a bold move, AutoNation, under new CEO Mike Jackson, followed the CarMax strategy of implementing set prices and eliminating high-pressure sales, (De Wit, & Meyer, 2010). Through creative thinking, AutoNation improved upon their practices by implementing Smart Choice software, which enhanced customer satisfaction by reducing transaction times, (De Wit, & Meyer, 2010). AutoNation captured the competitive edge over CarMax by catering to the automotive manufactures with a focus on brand versus variety, (De Wit, & Meyer, 2010). The
Electric cars have dated as far back as 1880, with the first model being mass produced in the later 1880’s. At early stages of automobiles, there were no clear benefits from either type of engine. In fact, a majority of cars in use at the time were electric. Steam and combustion engines were less developed and not as popular. Before the 1900’s an electric car held the land speed record for motor vehicles. (Bellis, 2014) As roads were built and the range that vehicles would need to travel increased, the need for a longer lasting vehicle rose. This is why at the turn of the century the popularity of gasoline powered engines arose. Electric vehicles were still valued for their short term transportation (within cities) and relatively easy use, but they began to lose prevalence as developments into combustion rose. Production for electric cars peaked in 1912 (Bellis, 2014) and saw a drastic decline since
Degree of Rivalry - Very High to Intense – Multiple competitors, high strategic stakes, innovation often easily imitated, and low switching costs for consumers
Porter’s five factors include: the intensity of rivalry among incumbents; the threat of new competitors; the threat of substitute products; the bargaining power of the buyers; and the bargaining power of the sellers (Parnell, 2014). The rivalry with competitors in the used vehicle marketplace exhibits a level of intensity based on the age and stage of this industry. In the US, the automotive industry has been in a mature phase of its life cycle for nearly 50 years (Gao, Kaas, Mohr, & Wee, 2016). As the leader in the industry, Manheim Auto Auction must maintain a keen awareness for potential changes in consumer behaviors or disruptive technologies that would be more difficult for us to quickly adapt to. The second factor, the threat of new challengers entering the industry, coincides with the first factor in understanding our competition. There are high barriers to enter the vehicle auction market and Manheim has set the industry standard for buying and selling used vehicles at live auctions and online. The infrastructure required to open a competing auction is quite significant, along with the necessary permits, licenses, and federal requirements there is limited ability for traditional competitors to enter the marketplace. Conversely, this also means that the industry has very high exit
The 2006 documentary about Who Killed the Electric Car shows the determination of several California citizens whose willpower was to keep the electric car alive and running. The first existence of the electric car under General Motors (GM) dates back to 1996 when they launched the EV1 electric vehicle. And although several consumers took to this new form of transportation, a car that was powered by an electric motor in place of the basic gasoline engine, GM decided to take back its newest technology and removed all existing EV1’s from off of the streets. With several upset consumers who were concerned as to both what GM and the government were up to and how they could get their cars back. Overall, the fact behind why the electric car became such a superior commodity and then vanished was the question being asked. The electric vehicle was destroyed during 2004 and 2005 because a car of this statue was far ahead of its time and greater parts of consumers were not about “going green.” Today the electric car has begun to revive itself because of the existence of global warming, and the efficiency of the electric car is rising. In other words, the electric car has been brought back to life, and many automobile manufacturers are gaining interest.
In December of 2010, the world’s first, entirely electric vehicle was introduced to the car industry and Nissan was responsible for launching this innovative car known as the Nissan Leaf (“Nissan Product Information”). According to business reporter Michael Strong, Nissan Motor Company’s CEO Carlos Ghosn previously set a goal of selling 1.5 million electric vehicles by the year 2016. However, in 2013, Ghosn announced that it is very likely that Nissan will not reach this goal. He believes this may be achieved four or five years later than expected. Ghosn and Nissan Motor Corporation have evaluated the weaknesses of the Nissan Leaf and have discovered the contributing factors in the surprisingly low sales (Strong). In this commentary, it will become evident if Nissan has made effective improvements to pick up sales of this innovative vehicle that could result in the future of cars all around the world. The reasons for their underperformance will be evaluated and their ability to make the necessary changes to improve sales will be evaluated. A SWOT analysis has been set up to analyze the Nissan Leaf, its strengths, weaknesses, opportunities, and threats. This will show if Nissan has made the necessary changes to better their sales of the Nissan Leaf.
In the recent past, Tesla has been noted as a great competitor in the automotive industry. This is attributed to its three huge competitive advantages. Generally, the advantage lies in its ability to bring about innovative disruption in the industry. This include; a strong battery supply chain that is sustainable in itself, a supercharger network celebrated by the customers and a software system several leagues ahead of its competitors (Zach, 2015).
the price of the vehicle, the company gives these individuals a vision of even greater power and
Environmental concerns have been raised from time to time because of the dependency on the gasoline-fueled engine as the chief auto powertrain technology. This has resulted in exposing many automobile users to unpredictable prices of fuel. These issues were, however, the reason for the inception of Tesla Motors so as to bring into existence another set of automotive which serves the similar purpose; but uses another form of energy that being electricity to drive them instead of the disadvantageous gasoline-powered engine. This invention was influenced by a number of factors in terms of their planning and performance (Hunger, 2010).
The substantial increase in the demand for EV’s came just in time as we are slowly but surely running out of oil. Some estimate that by the year 2040, 35 percent of all vehicles will be electric (Sullins, 2017). An article from the U.S. Department of Energy stated that “Electric vehicles hold a lot of potential for helping the U.S. create a more sustainable future. If the U.S. transitioned all the light-duty vehicles to hybrids or plug-in electric vehicles, we could reduce our dependence on foreign oil by 30-60 percent, while lowering the carbon pollution from the transportation sector by as much as 20 percent (energy.gov, 2014). It’s obvious that gas-powered vehicles have harmed our planet with their emissions. Although EV’s cannot reverse that damage that has been done, they can eliminate, or at least slow down, the inevitable demise that our planet is headed towards. Along with the beneficial environmental factors that correspond with electric cars, there are also beneficial financial factors. The average American spends about $2,000 on gas annually. In the future, charging stations will charge roughly $12.00 for a full charge, which is about 300 miles. This means that the average American will save about $1,400 per year on these specific car
Chiefly, and most apparently, it is the goal of Tesla Motor to generate demand for Tesla vehicles (Andrade, Holloway, Payne, Roy & Sheffield, 2015). In turn, demand will drive leads to the Tesla sales team (Andrade, Holloway, Payne, Roy & Sheffield, 2015). Tesla will continue to build long-term brand awareness, in addition to continual management of corporate reputation (Andrade, Holloway, Payne, Roy & Sheffield, 2015). Tesla Motors will expertly manage the existing customer base to create loyalty and increase customer referrals (Andrade, Holloway, Payne, Roy & Sheffield, 2015). Additionally , Tesla Motors hopes to enable customer input into the product development process (Andrade, Holloway, Payne, Roy & Sheffield, 2015).
I choose to do the porter’s five forces analysis over the automotive industry. But before I start talking about the automotive industry I would like to talk about what the porter’s five forces model is and what it does. “The porter’s five forces model is a tool for examining the industry level competitive environment, especially the ability of firms in that industry to set prices and minimize costs” (McNamara, 2012). This model describes the competitive environment in terms of five basic competitive forces. “These forces are: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry
In 1968, General Motors became the first automotive company to establish a formal supplier diversity program (GM, 2008). GM’s mission will remain the same during this establishment of diversity. “To develop and grow a performance-based, world-class, competitive diversity supply base that will work with General Motors toward its goal of being the market leader in the Automotive industry” (GM,2008). GM is primarily engaged in the production of vehicles. The company designs, manufactures, and markets cars, trucks and other automobile parts in North America, Europe, Latin America, and Asia Pacific regions. GM vision is to be the world leader in transportation products and related services. In order to achieve this vision, GM recognizes that hurdles will block them and they will address them before GM achieve goals to reach this vision (GM, 2008). GM’s future success is dependent on innovation in technology, which will allow GM to achieve aggressive goals.