Business Recommendations for Big Drive Auto

Which of these forces and factors are the most important to the corporation and to the industries in which it competes at the present time? Which will be important in the future?

Industries will look different with all of these forces. The strategy will change based on how these forces look for the organization and industry. These concepts can be applied across the board, and they help organizations from getting trapped into the latest trends and technology out there selling solutions. This matrix really helps to

Factors that can limit the threat of new entrants are known as barriers to entry. In this case barriers to entry are low because: there is no government intervention to prevent businesses from entering the industry, resources are abundant, and customers’ switching costs are low as well as fixed costs to start this type of business.

price point than the big 3, the company saw this as the perfect strategy to penetrate the saturated

The automotive industry designs, develops, manufactures, markets and sells motor vehicles, and is one of the world’s most important economic divisions by profits. This analysis focuses on the industry, specifically, manufacturers of automobiles. There are five competitors in the StratSim environment: Firm A, B, C, D, and E. Industry sales in the most recent year were 4.3 million units, with expected growth in the next year. Within this industry, there are seven-vehicle classes: Economy, Family, Luxury, Sports, Minivan, Truck, and Utility. There are two new classes with potential – if properly marketed.

Barriers to Entry: The entry barriers in the market are relatively low, making it easy to access. However, as the market is saturated it could be unlikely for new companies to decide to start new enterprises in this field.

Autotech company is an automotive manufacturing and supply company. It has started its business as a family business. Nowadays it is one of the fast growing automotive companies. Currently it is facing complex operation of its business as it keeps all records such as billing, inventory, personnel, customers, products, stock, financial etc. in hard copy format such as files, note, books etc. It is very tough to maintain files, papers, notes manually for an extensive time, which is time consuming, costly as well not accurate as paper work is required more time and their maintenance cost is more than soft copy storage and maintenance. As per my point of view, Autotech needs to develop Information Systems in its business to make easy and

Economic: The industry’s performance is highly tied in with the economy. A weak economy will mean weak sales.

Identifying influencing factors of a company’s macro-environment helps in the strategic development and management within a company. The macro-environment outlines an industry and the competitive environment as seen in figure 3.1, (Gamble, Peteraf, Thompson, 39). Within the macro-environment there are the political factors, economic conditions, sociocultural forces, technological factors, environment forces, and legal/regulatory factors. All of these factors blanket the habitat an industry and its competition thrive in. Inside the industry and competitive environment there are five factors that influence an individual company. The five factors are suppliers, rival firms, new entrants, buyers, and substitute products. The biggest impact on a company are these five factors. For example, Under Armour focuses on their industry and competitive environment to survive and grow. Their strategy to win over the market share from Nike and Adidas consists of expanding a stable and original brand within record time, taking an innovative approach to their product line-up and brand-name appeal where the market seemed to be barren, and lastly, the company enters in the foreign market early on to establish its brand and influence markets outside of the US.

Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.

Before this analysis will begin, it is vital to stress that this model is well-known as an effective instrument. An advantage of this model is that it captures the immediate environment in which the company competes. It allows to clearly understand the forces which

- New competitor’s entry in the market: The Mercedes Benz faces an intense competition from small car manufacturing company and the reason these small companies can affect the sales of the Mercedes is the economic crisis faced by the world people prefer to opt for a small less costly car

If the firms have similar costs then firms are also less likely to want to initiate a price war because it would be unprofitable for firms to simultaneously cut prices as eventually prices would fall bellow total costs. If there are very high entry barriers new firms will not be attracted to enter the market which allows

Barriers to entry- there can either be high barriers to entry which makes the market unattractive and hard for new entrants or there can be low barriers to enter which make it easy for new entrants in the market.

To increase sales and diversify in the market, they also have a reasonable pricing policy along with the premium price ranges.