Assignment details: New Industry (Electric Vehicle) & Automotive Industry (Current)
1. Analyze Rivalry Among Existing Competitors
Intense competition for market share can limit a company’s profits when diversifying into a new industry. Consider these questions as you describe the rivalry in your company’s existing industry.
* How many competitors currently supply engines for the automotive manufacturing industry?
* What is each competitor’s position? How much of the market share has each one captured?
* Do these companies compete intensely in the automotive industry? If so, do they engage in rivalry and lower prices to gain market share?
* Do companies compete to provide additional services or constant innovation?
Describe the rivalry among your company’s existing competitors (supplying engines to the automotive manufacturing industry).
- Examine Conflict Among Current Competitors
When expanding into a new industry, a company’s profitability may be constrained by fierce rivalry for market share. As you discuss the competition in the current industry your firm is in, take into account these questions.
- How many suppliers of engines are there today for the vehicle manufacturing industry?
- Where does each rival stand? What percentage of the market has each one seized?
- Do these businesses engage in fierce competition in the automobile sector? If so, do they compete with one another and cut costs to increase their market share?
- Do businesses compete to offer more services or to innovate constantly?
Describe the competition amongst the current rivals of your business (which provides engines to the car manufacturing industry).
- Examine potential threats posed by new competitors
Determine if it is simple or difficult for new businesses to start supplying engines to the car manufacturing sector. Then, use the form below to present your conclusions. Always keep the following questions in mind:
Are there numerous laws or legal obstacles that businesses must overcome before they can start providing engines to the car manufacturing industry?
- Does acquiring the knowledge required to create products or offer services to the market come at a significant cost?
- How many businesses are ready to join the automotive sector?
Describe the dangers posed by new competitors in the car manufacturing sector.
- Examine the Suppliers’ Bargaining Power
Analyze the potential influence raw material suppliers may have on pricing increases. Be careful to respond to these inquiries:
Are there numerous suppliers, or just a select few, that offer the raw components for your product?
- Does supplier competition influence the price of some raw materials?
Is it probable that the price of raw materials will increase if one supplier effectively has a monopoly on certain of them? In general, how will supplier negotiating strength impact the price and simplicity of getting the materials required to sell in the automobile industry?
Describe the car manufacturing industry’s suppliers’ negotiating position.
- Examine the Risk of Replacing Products
Analyze the danger posed by replacement items for the car sector. Make sure you respond to the following inquiries:
- Are new items in this sector on the horizon that might challenge those already on the market?
- What may these rival products be?
- Are these potential rival products’ production costs lower than those of the market’s present offerings?
- Are these potential rival items superior in other ways?
- Could these potential rival items drive your business off the market?
Describe the danger posed by alternative items for those made in the automobile sector.
- Examine the Buyers’ Bargaining Power
The more pressure customers may apply to your business to offer goods and services for less, the less customers you have. As you assess the negotiating capacity of purchasers, take into account the following:
The number of organizations or consumer groups that now purchase the engines that your business produces for the automobile manufacturing sector. If there are just a few clients, are they able to exert pressure on the manufacturer to decrease the price of the goods. Exist any groups that allow a sizable consumer base to get together and exert pressure on a company to lower the price of its goods?
Describe the buying power of the market in the production of automobiles. Describe the buying power of the market in the production of automobiles.
