The Porters Five Forces Model

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The Porters Five Forces Model was devised by Professor Michael Porter. The aim of the model is too analyse the nature of competiton within an industry. This means that the porters five forces model can be a powerful tool (E. Dobbs, 2014). The first of the forces is competition in the motor industry. There is a high level of competition within the motor industry as the companies have a high level of competition between themselves especially when it comes to marketing and innovation this is seen on a daily basis with the sometimes odd tv adverts used by car companies in order to differentiate themselves. The industry has many firms in it that have chosen to specialse across all areads such as cost, fuel efficient, brand image and style. However the Auto industry is segmented as it ranges from high cost and very specialist companies all the way down to low cost mass production companies. This can be seen as you wouldn’t say that Ferrari is competiting with KIA. However there is a high level of competition between firms. The next of porters five forces is the bargaining power of buyer which in this case is customers. The customers of the Auto Industry are what provides the revenue for all of the incumbents in the market. The result of this is that there are low switching costs in the market place this means that customers would be able to switch between competing firms for no extra cost. This ties in with the next point which is that customers also have access to accurate
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