Discuss the threat of the entry of new competitors

Assignment Help Other Subject
Reference no: EM132205811

Question: Complete your Research Project 2 in a Word document, APA formatted. All word content, no charts or photos. This needs to be 10 full pages of content, not counting the title, abstract, or reference page.

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, with a focus on the U.S. market.

Your paper needs to include at least three scholarly sources, i.e. peer reviewed articles. Your needs to be structured as follows:

1. Cover page with a running head

2. Abstract

3. Introduction to the Auto Industry

• Industry Definition

• Industry Profile

• Industry Market Structure

• Future Outlook

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

• Bargaining Power of Buyers

• Bargaining Power of Suppliers

• Competitive Rivalry in the Industry

• Threat of New Entrants

• Threat of Substitutes

5. Conclusion

6. References

Reference no: EM132205811

Questions Cloud

Compose brief biographical narrative : Compose a brief biographical narrative in 2 pages that details their journey to their current day position.
Icon of fast-food culture and one of primary targets : Consider McDonalds—an icon of the fast-food culture and one of the primary targets (other than Wal-Mart) for critics of the American business climate.
What would be the effect of the merger : In granting (or prohibiting) proposed acquisitions or mergers in an industry, government regulators consider a number of factors.
Quantitative and qualitative in nature : Why is it important for managers to be able make decisions that are both quantitative and qualitative in nature?
Discuss the threat of the entry of new competitors : 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.
What has changed in terms of the perception of immigrants : What has changed in terms of the perception of immigrants since this film was made and what has stayed the same?
The effect of family control on corporate performance : The Effect of Family Control on Corporate Performance. The objective of this work is to analyze whether family controlled companies are more profitable than non
Stage of comprehensive physician-satisfaction study : As the first stage of a comprehensive physician-satisfaction study, a hospital wants a market researcher to interview about 20 of its 100 physicians.
People be prepared for change : What can an organization do to help its people be prepared for change?

Reviews

Write a Review

Other Subject Questions & Answers

  Does our criminal justice system need an exclusionary rule

Explain what difference the exclusionary rule makes to law enforcement. Does our criminal justice system need an exclusionary rule?

  How have native american responded to the depictions

Discuss some of the ways that Native Americans and African Americans have been depicted in Hollywood films throughout the history of cinema.

  How did the sergeants respond in both given scenarios

Evaluate the sergeants' responses to the scenarios. How did the sergeants respond in both scenarios? Write a 2-page response for each scenario.

  Which political information is available on the web

GOV 2306-Here is the assignment: Locate at least six ways in which political information is available on the Web. You may use political party websites, interest group websites, government websites, media outlets, etc.

  A sentence is said to be truth-functional if and only

A sentence is said to be truth-functional if and only if

  How can you show compassion and care in restoring

Discuss some of the effects of low socioeconomic status on student development and learning.

  Capital budgeting techniques to investment decision making

FINA6000 Managing Finance - Case Analysis – Analyse the cost of capital and explore its link to the capital structure of an organisation

  Determine market opportunity

A high-tech firm has just developed a new technology to correct bad vision without surgery or contact lenses. the company needs to estimate the demand for such a service. describe the MkIS that might be used by the firm to be able to determine market..

  Work needs to be done to initiate project

What work needs to be done to initiate a project before it gets under way, and why?  From your own experience, who performs this work and how is it funded?

  Question 1the structure and significance of bilateral

question 1the structure and significance of bilateral tourism has received relatively little attention in the

  What is the purpose of a risk and needs assessment

What is the purpose of a risk and needs assessment? Are these assessments necessary?

  Unilateral neglect ignore one side of their visual field

Patients with unilateral neglect ignore one side of their visual field. This problem illustrates the importance of

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