The Automobile Industry

Paper Summary:

This paper presents an analysis of the automobile industry by looking at a number of aspects of the industry and how they will affect a company's strategy and, ultimately, its competitive advantage. Some of the factors the paper considers are internal rivalries within the industry, complements within the industry, barriers to entry, buying power, supplier power and substitutes.

From the Paper:

"The industry selected for analysis in this report is the automobile industry. Porter identified five major factors that affect the strategy that a company can utilize in the modern day market. Strategy planning in organizations is conceptually and practically complex in nature. (Greenwood and Carter, 1997) The type of product, the life cycle of the product and the process involved in designing, manufacturing and marketing of the product all determine the strategy that is used by a company no matter what the industry. An organization has to allow for constant and steady improvement in the company's position in the market if it has to maintain a sustainable competitive advantage. Structure-conduct performance paradigm (SCP) was used by Porter to design the five-force business strategy model that has become the foundation of business strategy studies. (Besanko, Dranove and Shanley, 2000) Successful competitive advantage is defined in a variety of performance measures such as market share, return on sales, return on investment and bottom line profitability."

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