An analysis of the factors influencing the shifts in buying power in the auto industry

Since its foundation in the 19th century, this sector has grown to become an important part of the world economy in terms of revenue. Apart from it, the focus is on fuel efficiency and environment friendliness.

A good starting point to identify company resources is to look at tangible, intangible and human resources. Not just this, the major technological players are trying to enter this sector of the industry. During the recent years, the Asian markets have proved highly lucrative for the automotive brands.

Law is another important factor that gets to affect the profitability and performance of the vehicle brands. The following area analyses are used to look at all external factors affecting a company: What are the key success factors, assets and competencies needed to compete successfully?

What are the key areas of uncertainty as to trends or events that have the potential to impact strategy? An environmental analysis is the fourth dimension of the External Analysis. When an organization matches internal strengths to external opportunities, it creates core competencies in meeting the needs of its customers.

Identify Against whom do we compete? Is this a business in which the average firm will make money? Given this fact, all the major players make huge investments in research and development.

Focus on your strengths. Threats are barriers presented to an organization that prevent them from reaching their desired objectives. Can these competitors be grouped into strategic groups on the basis of assets, competencies, or strategies?

Automotive Industry PESTEL

Technology and innovation have become important determinants of market share in the automotive industry. Interest rates, inflation, unemployment levels, energy availability, disposable income, etc Technological: It is estimated that over 4.

What are their size and growth characteristics? The scrappage rate - the rate at which cars are taken off the road - has also been declining with only This analysis should identify such trends and events and estimate their likelihood and impact.

What is their cost structure? What are the strengths and weaknesses of each competitor? The fleet is getting older. The most used angle is the purchasing power of the customers. What is happening in the world that might affect our company?

Weaknesses should also be examined from a customer perspective because customers often perceive weaknesses that a company cannot see.

Automotive Industry Analysis 2018 - Cost & Trends

What are our company resources — assets, intellectual property, and people? Intangible resources are largely invisible, but over time become more important to the firm than tangible assets because they can be a main source for a competitive advantage.

Segments, motivations, unmet needs Competitive analysis: An evaluation needs to be completed drawing conclusions about how the opportunities and threats may affect the firm. Those of us that only only one are bringing down the average! And there are a lot of cars on the road: How are we different from the competition?Will Generation Y Change How The U.S.

Auto Industry Does Business? (Editor's Note: The author of this article is with J.D. Power and Associates, an entity also owned by McGraw Hill Financialbut operated independently of Standard & Poor's. The opinions expressed are the independent opinions of J.D.

Power. Industry rivalry—or rivalry among existing firms—is one of Porter’s five forces used to determine the intensity of competition in an industry.

Other factors in this competitive analysis are: Barriers to entry; Bargaining power of buyers ; Bargaining power of suppliers; Threat of substitutes. The socio-cultural factors and consumer preferences also have a major and direct impact on the auto industry.

However, above all it is the emergence of the new markets that has affected the intensity of competition in this sector. Some common factors are political, economic, social and technological (known as PEST analysis). Companies also study environmental, legal, ethical and demographical factors.

Companies also study environmental, legal, ethical and demographical factors. Factors Influencing Employment in the U.S. Automobile Industry Abstract Section I will present a brief historical overview of the U.S.

auto industry since the s. Automotive Industry Analysis - Cost & Trends Get your motor running During the Great Recession of many people felt that the end of the American automobile industry was upon us.

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An analysis of the factors influencing the shifts in buying power in the auto industry
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