Devastating impact on our national economy

Assignment Help Macroeconomics
Reference no: EM131148792

COMPLETE THE ESSAY WITH NO PLAGIARISM

In 2009 the American auto industry was in a dire economic state. Chrysler was in Chapter 11, GM was on the brink of bankruptcy, and Ford's future was at best uncertain. The demise of the U.S. auto industry would have a devastating impact on our national economy and specifically the economies of Michigan and Ohio.

Economists occasionally use Porter's five forces framework when making a qualitative evaluation of a firm's strategic position. According to Porter, his model should be used at the industry level, defined as a marketplace in which similar or closely related products or services are marketed. This research paper requires the application of Porter's Five Forces Model to the auto industry.

Porter's analytical framework consists of those forces that affect a producer's ability to serve its customers and make a profit. A change in any of these five forces requires a re-assessment of the marketplace. The five forces include:

1) The threat of substitute products: The existence of close substitute products (i.e., high elasticity of demand) increases the propensity of customers to switch to alternatives in response to price increases.

2) The threat of the entry of new competitors: Unless there are significant barriers to entry, profitable markets that yield high returns will attract firms (i.e., perfect competition), effectively decreasing profitability.

3) The intensity of competitive rivalry: As in the case of oligopoly markets, rivals may choose to compete aggressively, non-aggressively or in non-price dimensions.

4) The bargaining power of customers: The ability of customers to put the firm under pressure due to availability of existing substitute products, buyer price sensitivity, uniqueness of the products, etc.

5) The bargaining power of suppliers: The cost of factors of production (e.g. labor, raw materials, components, and services such as expertise) provided by suppliers can have a significant impact on a company's profitability. As such suppliers may refuse to work with the firm or charge excessively high prices for unique resources.

References

Porter, M.E. (1979) "How competitive forces shape strategy", Harvard Business Review, March/April 1979.

Porter, M.E. (1980) "Competitive Strategy", The Free Press, New York, 1980.

Porter, M.E. (1985) "Competitive Advantage", The Free Press, New York, 1985.

Develop a detailed paper applying Porter's Five Forces Model to the American automotive industry.

Your paper should be between 2200 and 2500 words, in APA format and structured as follows:

1. Cover page with a running head

2. Abstract

3. Introduction to the Auto Industry

3.1. Industry Definition

3.2. Industry Profile

3.3. Industry Structure

3.4. Future Outlook

4. Porter's Five Forces Strategy Analysis as it applies to the Auto Industry

4.1. Bargaining Power of Buyers

4.2. Bargaining Power of Suppliers

4.3. Competitive Rivalry in the Industry

4.4. Threat of New Entrants

4.5. Threat of Substitutes

5. Conclusion

6. References.

Reference no: EM131148792

Questions Cloud

Produce the income statement for the year : From the income statement accounts on the next page: a. Produce the income statement for the year b. Produce the operating cash flow for the year Income Statement Accounts  For the Year Ending 2011 Cost of Goods Sold ... $345,000 Interest Expense .....
What you noticed this past week with rega : What have you learned about prejudice, stereotypes, discrimination and microaggressions. Why discussions need to be supported and fostered by sensitivity and respect.
How cultural or social expectations created : Explain how cultural or social expectations created the mental set that prohibited you from solving it easily. How did you ‘think out of the box' to solve it
Suppose traffic is congested on lane of multilane highway : Suppose traffic is congested on a lane of a multilane highway. The average spacing is observed to be 220 ft and the average headway is observed to be 3.6 seconds. Estimate the rate of flow, the density, and the speed of traffic in this lane.
Devastating impact on our national economy : The demise of the U.S. auto industry would have a devastating impact on our national economy and specifically the economies of Michigan and Ohio.
Unprofitable produce furtengrinders : The Otto Maddick Machine Tool Company produces two products, muffler bearings and torque amplifiers. One muffler bearing requires 0.125 hr. of assembly labor, 0.25 hrs. in the stamping department and 9 square feet of sheet metal. Use Solver's sensiti..
Calculate the change in net working capital : a. Construct a balance sheet for 2010 and 2011. b. List all the working capital accounts. c. Find the net working capital for the years ending 2010 and 2011. d. Calculate the change in net working capital for the year2011.
Organize arguments and support your claims effectively : Provide two or three (2-3) major points to support your thesis statement. (Put each major point in a separate paragraph.) Provide one (1) paragraph in which you identify and answer an expected argument against your view
How far did the bill go in the legislative process : Analyze two different policy changes your boss should consider regarding to the topic. Consider whether these changes are desirable, and why or why not. This could be a major change in the existing system or specific minor amendment to existing po..

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Write a response in which you state your position

On the whole, is going to a summer sleep-away camp as a child a positive experience or a negative one? Why? Plan and write a response in which you state your position and persuade readers to agree with you.

  What do toms indifference curves relating hot dogs

What do Tom's indifference curves relating Hamburgers (horizontal axis) to Hot-dogs (vertical axis) look like Graph and explain the shape of your indifference curves. Do these indifference curve imply that Tom will only eat hamburgers

  Stock option plan to the shareholders

One shareholder feverishly objected to the plan, claiming that such a move would dilute the value of the outstanding shares. As CEO, how would you defend the stock option plan to the shareholders?

  Inflation and unemployment during the business cycle

Explain what happens to inflation and unemployment during the business cycle.

  Federal government is giving more than it receives in tax

If the Federal Government is giving more than it receives in tax revenues in an effort to reduce unemployment

  Discuss why the tax multiplier is different

Discuss how the Multiplier leads to closing the gap between equilibrium and full employment. - Discuss why the tax multiplier is different.

  How much each annual payment should be

A person desres to accumulate $18500 over a period of five years from now so that a cash payment can be made foe a new car. to have this amount when t is neede, annual payments at the end of each year will be made to a savings account that earns 8..

  Obesity in the u.s.

Macroeconomic studies would be more interested in the trend in overweight and obesity in the U.S. and other OECD countries rather than the percent of public spending on health care.

  Series of studies of economic growth

In a series of studies of economic growth conducted at the National Bureau of Economic Research, economists showed that the historic rate of economic growth in GDP could not be accounted for entirely by growth in labor and capital inputs. Consensu..

  Graphing the indifference curves for given preferences

Draw a set of indifference curves for Jones, and second set for Smith, with alcoholic drinks on vertical axis and non-alcoholic on the horizontal axis.

  Explain whether monetary and in-kind payments

Explain whether monetary and in-kind payments are sources of motivation. If they are not, defend your answer.

  Producing and selling exactly the same product

In a competitive market, a single firm is only one of the many sellers producing and selling exactly the same product. The demand curve facing a firm exhibits perfectly elastic demand.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd