Automotive industry - Five Forces Analysis

Automotive industry - Five Forces Analysis

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Short description of Porter's Five Forces analysis for…

Intensity of Existing Rivalry

International competition is high Please edit this page to add a description…
Large industry size Large industries allow multiple firms and produces to prosper without having to steal market share...

Bargaining Power of Suppliers

Low concentration of suppliers - Automotive industry A low concentration of suppliers means there are many suppliers with limited bargaining power. Low...
Volume is critical to suppliers When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...

Threat of Substitutes

High cost of switching to substitutes - Automotive industry Limited number of substitutes means that customers cannot easily switch to other products or...

Bargaining Power of Customers

Product is important to customer When customers cherish particular products they end up paying more for that one product. This...
Large number of customers When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

Strong distribution network required - Automotive industry Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
High capital requirements High capital requirements mean a company must spend a lot of money in order to compete in the...
High sunk costs limit competition High sunk costs make it difficult for a competitor to enter a new market, because they have to...
Strong brand names are important - Automotive industry If strong brands are critical to compete, then new competitors will have to improve their brand...
Advanced technologies are required Advanced technologies make it difficult for new competitors to enter the market because they have to...
Patents limit new competition Patents that cover vital technologies make it difficult for new competitors, because the best...
Industry requires economies of scale - Automotive industry Economies of scale help producers to lower their cost by producing the next unit of output at lower...
Geographic factors limit competition - Automotive industry If existing competitors have the best geographical locations, new competitors will have a...
Customers are loyal to existing brands - Automotive industry It takes time and money to build a brand. When companies need to spend resources building a brand,...
High switching costs for customers - Automotive industry High switching costs make it difficult for customers to change which products they normally...
High learning curve for new competitors - Automotive industry When the learning curve is high, new competitors must spend time and money studying the market...
Entry barriers are high When barriers are high, it is more difficult for new competitors to enter the market. High entry...

What is Porter's Five Forces Analysis?

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