Question

How would Porters five-forces model be evaluated as either a weak, moderate or strong competitive force based on the PPs and within the context of general knowledge of the world-wide automobile industry.  

Answer 1

Q) How would Porters five-forces model be evaluated as either a weak, moderate or strong competitive force based on the PPs and within the context of general knowledge of the world-wide automobile industry.

Ans- In 1979 Michael E. Porter of Harvard Business School developed five forces model. In order to understand the Porters five-forces model in context of the world-wide automobile industry. We found that the Five-Forces model is strong competitive force.

This include 5-Forces and their context with world-wide automobile industry which are as follows - a) Competitive Rivalry, here it means the increase of competition with their quality products and to maintain customer loyalty by providing benefits in term of incentives. The exit barrier is very high and brand has to face huge loss if they want to exit. b) Buyer Power, it can be explained as price sensitivity arrised because of difference in competitors cost of changing. Customers can switch because of cost and move to other auto dealers c) Supplier Power, this inludes size of suppliers and uniqueness of service. Supplier work as per rules set by brands, and switching costs are very high. d) Threat of Substitution, it means the performance of substitute and threat to get replaced in market. There is a no solution to provide cost -efficient solution by automobile manufacturer because of increase in fuel price. e) Threat of New Entry, it means new brand for new entry it includes time and cost of entry along with technology protection and new barriers to entry. Few entrepreneurs can afford entering into automotive industry and takes longer time to build reputation to be competitive.