Question

Consider the automobile industry. Identify competitors to Ford SUVs and organize them in terms of their intensity of competition.

Also organize them into strategic groups.

What are the key success factors for the strategic groups? Do you think that will change in the next 5 years?

Answer 1

Following re the competitors of Ford SUVs

1) Subaru - Subaru SUVs are known to be one of the best bets for bucks with the overall quality of performance they provide. They are a little cheaper as compared to Ford SUVs.

2) Chevrolet - With their models like Equinox, Chevrolet is one of the biggest competitors of Ford. Their SUVs are a little better in terms of comfort technology, but ford beats chevrolet on performance related technological aspects.

3) Toyota - Toyota SUVs are perhaps the biggest competitors of Ford. Both their SUVs are pretty similar in terms of performance and design, with Ford being marginally cheaper compared to Toyota.

4) Cherokee - Cherokee SUVs are known for being strongly built, even though they aren't as technologically advanced as their peers. For off-pavement performance, they are perhaps the best bets. They are higher priced compared to Ford.

5) Hyundai SUVs - They are again similar to Ford SUVs, but Hyundai, in general, doesn't enjoy as big a brand value as Ford in US.

6) Volkswagen - These are the strongest competitors of Ford in terms of both technology and performance. They are priced comparble to Ford.

7) Honda - Honda SUVs, like Cherokee, are strongly built. They lack the comfort technology of say, chevrolet, but are at par in all other aspects.

Based upon their market shares, they can be divided into 3 categories:

High Pie Share Medium Pie Share Low Pie Share

Toyota, Volkswagen Chevrolet, Ford(High-Medium), Honda Cherokee, Subaru

Success Factors for each group-

1) High Pie Share - For these companies there performance, value for money, quality and longevity would matter. This is because their brand value has already been built, hence they don't really need to invest heavily in marketing. But to maintain their market share, it is important to provide their customers with the best possible SUVs.

2) Medium Pie Share - For these companies, their reasch is the most important thing. Companies in this segment tend to dominate a particular region, and not so much in the rest. Also, their performance and marketing would matter as they compete for the top spot.

3) Low Pie Share - Marketing is probably the most important thing for these companies. This is because the cars in a particular segment today are pretty similar. A Cherokee SUV wouldnt be too different to a Toyota SUV in terms of performance. And therefore marketing, reach and performance are the most important factors.

No, I don't think much will change in the next 5 years too, unless something drastic happens. This is because if the smaller companies improve themselves, bigger ones would do it too. And unless a big through is made by one of the smaller companies in technology, the market situation would remin the same.