Threat Of New Entrants : Low

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I. Threat of New Entrants: Low a. Government Polices: During the days when the Big Three (Ford, General Motors and Chrysler) controlled 85 percent of the world’s auto production, automotive safety was given little consideration (Michaels). Whether driven by cost or genuine concern of market rejection, automakers for years resisted even the most basic precautions (Michaels). This all changed in the 1960s when the Nation Academies of Sciences released a watershed report that highlighted the danger of the automobile and the industry’s reluctance for safety measures. Therefore, this caused many government policies to be in acted to protect innocent citizen driving motor vehicles, such as the Highway Safety Act and Low Volume Motor Vehicle…show more content…
c. Access Distribution Channels: The access of distribution channels is barrier for new entrants into the automotive industry because it can sometimes be difficult for a new company in the industry to find a tolerable means of distribution due to the limited space within a dealership lot and the amount of money needed to access the level of marketing achieved by the top automakers today. II. Threat of Substitute Products or Services: High a. Public Transportation: There are many substitute products or services to buying an automobile, such as walking or riding a bike, but luckily for the auto industry though, many don’t want their suit trousers getting caught in a bike chain, or wish to show up to work drenched in sweat after a ten mile morning journey. However, automakers should be extremely concerned with the growing rate of public transportation usage in the U.S. Public transportation serves as a viable and cheaper substitute to buying an automobile. According to the New York Times, there is a directly relation between gas prices and the usage of public transportation as seen in 2008 when gas rose to an average of $4 and $5 causing passenger trips taken on public transit systems to rise to about 10.59 billion (Hurdle). Furthermore, the cost of
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