Porter's Five Forces In Automobile Industry

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3.2 External Environment Analysis -Industry Analysis (Porter’s Five Forces Analysis)

Porter’s Five Forces Framework Model analyses the competitive forces within the environment in which a company operates, to assess the potential for profitability in an industry. Porter consists of threat of new entrants, threat of substitute, buyer power, supplier power, and rivalry among existing competitors. The change in any forces normally requires firms to observe the market and make the decision in overall change of industry information. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average.

Threat of New Entrants
Profitable industries that yield high returns will attract new firms. New competitors may force existing firms to be more efficient and to learn how to compete on new dimensions. Threat of new entrants is high when it is easy for new competitors to enter a market ad low when there are significant entry barriers to entering a market. These entry barriers make it difficult for new firms to enter an industry and often place them at a competitive disadvantage even when they are able to enter. The domestic cars that have produce in Malaysia are Proton and Produa. This can be seemed that in automobile industry, there have
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Firms can take measures to reduce buyer power such as given discount by helps the company to find out which is firm’s loyal customers. Buyers' power is high if buyers have many alternatives and it is low if they have few choices given. The buyer power increases when the Produa products are differentiated or standardized. Buyers pose a credit threat to integrate backward into the sellers’ industry. For example, buyers might influence by price which buyers wants the cheap and adorable car. They also have the option to choosing types of cars, colour and others additional

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