Discuss the companys strategic moves over the last 3 years. II. Internal Environmental Analysis Create a table that includes numbers for the last three years for the following
hi wendy i have uploaded part 2 of the project and i uploaded the first part that you had done for me already so you can continue the project thank you
Instructions for Project – Part 2
You will use the company that you introduced in Project Part 1.
This is a research paper and what you write should be backed by facts. If you write about “company growth” or something like that then you need numbers to back up that statement.
Use the following headings to organize your paper: I. Introduction 10 points Discuss the company’s strategic moves over the last 3 years. II. Internal Environmental Analysis 30 points
1) Create a table that includes numbers for the last three years for the following: – Sales, net profits, and year-end stock price – At least 3 ratios (see the text’s Guide to Case Analysis for help). Your ratios must come from 3 different categories (profitability, liquidity, leverage, and activity). You must have comparators for each of your ratios, either industry averages or ratios of a rival. This must be a table you create, not a cut and paste. The table goes in the appendix, while the body of your paper will analyze/discuss what the numbers in your table mean for the company. Analyze, don’t just report the numbers. 2) In addition to your financial analysis, analyze at least 2 of the following functional areas:
• Research and Development • Production • Supply Chain Management • Marketing • Human Resources Management
III. SWOT Analysis 10 points
Using both your external (Project Part 1) and internal analyses, develop a SWOT analysis. Discuss the highlights of your SWOT in this section. The full SWOT, with many entries in each column, should be in the appendix. Do not cut and paste a SWOT you find on-line: Your SWOT will be analyzed to be sure it was built with items from your prior analyses.
IV. Strategic Concerns 10 points
From your SWOT, identify the two biggest concerns for this company going forward and explain your reasoning. These concerns are what you will address in the next section. Concerns can be positive (new opportunities for growth, for example) or negative (problems that need to be fixed). If your concerns are negative, once you have fixed them in Part V be sure to take the company forward from there.
V. Strategy 30 points
– Detail the strategy (singular) and tactics (plural) within that strategy you propose to address the Strategic Concerns. Use at least one of the following generic strategies (you may combine them) and its concepts from the text as a foundation for your discussion/proposal.
Instructions for Project – Part 2
Strategies Business level: Cost leadership (focused or broad), differentiation (focused or broad), or best-cost (focused or broad). International: Global, Multi-domestic, or Transnational. Tactics here would include the entry modes (pp. 192-197). Corporate: Related diversification, unrelated diversification Tactics (Ch. 6) Product development, market expansion, merger, acquisition, internal development, joint venture, strategic alliance, blue ocean, first-mover, late-mover, vertical integration (designate whether forward or backward), etc.
-This is to be a strategic approach the company could take going forward from the point of your internal/external analysis. This is where you are telling the company executives what they should do, not what they’ve already done. The strategy should be fully developed, multi-functional, viable for the company and strong enough to stand on its own. Be sure to highlight the expected benefits to the company of pursuing this option, and any potential pitfalls as well. Examples of how to fully develop your strategy: 1) “They should expand into another country via Global strategy and make an alliance with a company there.” What country and why, what company and why, how will the alliance work (who does what), etc.? When you detail all this THEN it’s fully developed. 2) “They should pursue differentiation through product development.” What products and why, how will they be differentiated, are they able to make these products with current skills, what new rivals/industry does this expose them to and can they handle that, etc.? 3) “They should diversify and acquire Company X.” Is the company able to operate Company X? How does this change the portfolio? How much is X worth and what should be offered? Why? How will this be financed? How will X be handled once purchased – assimilated, left as a subsidiary, etc.? Details!
Writing requirements 10 points – The paper should be 10 pages maximum (appendices do not count in page total), typed double- spaced. This is essay, do not use bullet points. – Use good writing style – headings, introductory/ conclusion sentences for paragraphs, complete sentences, transitions between paragraphs/sections – References – you should have at least 6 references and you should put them at the end of the paper (use whatever style you like on this as long as the references are complete). Be sure you indicate in the body of the paper where the references are used. – Please write in your own words – “borrowing” significant portions of quoted material without attributing it to an author is plagiarism. Having much of your paper being quotes is also bad, it’s not your paper then. If you use your own words but you got the concepts from a source, you still need to reference the material. (NOTE: Papers will be run through a plagiarism program, so be careful to use your own work.) – Put tables in the appendix at the end of the paper and number them. Number them within the body of the paper as shown:
—————- Table 1 here —————-
,
Automotive industry
Automotive industry
Giselle Pulido
7/13/2022
1. Introduction
General Motors Company.
This is a multinational American automotive manufacturing company headquartered in Detroit, Michigan, USA. It is the largest automaker in the United States and, for 77 years, the largest in the world. The auto industry includes all companies and projects involved in the production of motor vehicles, including the majority of their components, such as engines and bodies, but not tires, battery packs, or fuel. In terms of revenue, it is regarded as one of the world's most important commercial sectors.
The auto industry produces automobiles as well as other gasoline-powered vehicles such as trucks, vans, and motorcycles. The automobile industry, as one of the most important in the world, has an influence on global cultures as well as economies. It generates billions of dollars in international revenue, employs millions, and serves as the foundation for numerous related service and support sectors. Automobiles transformed mobility in the twentieth century, forever changing how people live, travel, and conduct business.
The vehicle has enabled people to travel further and faster, as well as transport goods, and it has expanded the market for industrial and commercial enterprises. The automobile industry has also reduced the total cost of mass transit by utilizing techniques such as mass manufacturing, which involves producing many items at once rather than one at a time, mass marketing, which involves selling goods nationally rather than domestically, and globalization products with components manufactured all over the world.
Beginning in the early 1890s, dozens of manufacturers created the first horseless carriages, forerunners of the vehicle. For a long time, the United States of America dominated global vehicle production.
Due to an ever-growing middle class, a young population, and increasing interest on the part of automobile companies in examining the local market, the two-wheeler segment has become the market leader in many countries, including India.
The main products of the industry are civilian vehicles as well as light trucks, which include pickups, buses, and SUVs. Semi-trucks are commonly used to refer to commercial vehicles such as delivery trucks and large transit trucks. Despite being critical to the industry, they are secondary.
2. Competitive analysis grid.
Competitive analysis refers to the strategy that involves researching major competitors to gain insight into their products, sales, and marketing tactics. There are many companies in the automotive industry that competes directly with General Motor Company (GM). These companies include Toyota Motor Corporation, Volkswagen Group, Ford Motor corporation, Tesla Inc, and BMW.
The reason for choosing this group of companies is that they all deal in the production of automobiles and are competitors in the auto industry. Their products are similar and vary in slight aspects including brands and designs. The key success factors include product quality, product innovation, product reliability, product performance, and product cost.
|
quality |
innovation |
Reliability |
performance |
cost. |
Total |
|
|
General Motors Company |
7 |
1 |
7 |
7 |
5 |
27 |
|
Toyota Motor Corporation |
7 |
5 |
7 |
5 |
7 |
31 |
|
Volkswagen Group |
5 |
7 |
1 |
7 |
1 |
21 |
|
Ford Motor corporation |
7 |
5 |
1 |
5 |
3 |
21 |
|
Tesla Inc |
7 |
7 |
5 |
5 |
3 |
27 |
The rating is done comparatively, they range from 1 to 7, with 1 being poor and 7 being excellent. The choice of key success actors, and why they are important in the industry.
Product quality,
The ability of a vehicle to meet all expectations in terms of function and behavior, including engine efficiency, product features and options, and environmental exhaust standards, is referred to as product quality. Product quality is important because it ensures that vehicles are free of defects and have proper operation.
For starters, it reduces costs. Purchasing high-quality products may appear to be an expensive decision, but it can save you money in the long run. A product with poor quality control, particularly in the automotive industry, can result in costly recalls (Work Clout, 2021). Dangerous products can lead to car accidents and endanger drivers. Quality control is critical in the automotive industry because cars are inherently dangerous if they are not properly constructed with good materials.
Product innovation,
Making something that addresses an issue in a novel and intriguing manner is considered product innovation in new products. Product innovation refers to the addition of better or more functionality to already existing items.
Since it is essential to the financial success of the automobile, innovation is advantageous in the sector (Hebisch et al, 2022). The success of a corporation in an industry is determined by elements such as innovations that transform the driving experience, improve roads, increase consumer safety and comfort, and reduce fuel costs.
Product reliability
The likelihood that a product may be defective determines how reliable the product is. It costs the company money to replace a bad product and provide a better one. When the product does not degrade, consumers gain high utility from consumption; otherwise, they derive poor utility. The capacity of a vehicle to function consistently with few surprises is known as reliability.
An organization is more likely to have a good reputation if its products are more dependable. Customer contentment (Wayne et al, 2022). While a reliable product might not have a significant positive impact on consumer satisfaction, an unreliable product will have a significant negative impact. Naturally, people choose trustworthy items because they encourage brand loyalty.
Product performance
The response of a product to outside actions in its working environment is referred to as product performance (Orcanos, 2020). A product's performance is realized by the performance of each of its individual parts. Numerous of these definitions imply that product performance is a gauge of its functional qualities.
The effectiveness of the products is crucial since it generates more recommendations, enhances the brand recognition of the business, and helps it flourish in the market. On the other side, the subpar performance of the items deters customers from purchasing the company's goods, which is bad for the business (Potura et al, 2022). For this reason, the corporation works hard to make sure that its car functions as planned. Enhance consumer satisfaction and hence generate customer loyalty.
Product cost.
In the automotive industry, determining the overall price position relative to the assortment's other products or rival brands is a constant challenge (Orcano, 2020). If you need to price a good (or service) in a new market, knowing what customers are ready to pay makes all the difference in the world.
Pricing is crucial because it establishes the value that your product has for both you and your customers. Customers can determine whether an item is worthwhile of their time and investment by its actual pricing.
The chart below indicates the factors for automotive industry success and profitability.
(Orcanos, 2020) The success factors in the automotive industry.
Competition nature.
It is clear from the grid's evaluations that the auto industry's businesses are largely on par with one another, with a few minor exceptions. A corporation that performs poorly in one area excels in another. This shows that vehicle products made by one business can be simply replaced by those made by a different company.
The grid shows that there aren't many businesses in the sector with roughly similar skills. The ability of the dominant market players to set their prices for the cars they manufacture helps to prevent rigidity and price wars.
The grid displays that the battle for supremacy between the major automakers and survival among the independent car makers and dealers is currently in full force. In an industry that is paradoxically both extremely competitive and highly concentrated, it has enhanced both the competitiveness and the move toward monopoly.
The automobile sector is considered to have an oligopolistic market structure and is extremely competitive in terms of investment return (Lempp & Siegfried, 2022). There aren't enough manufacturers for competition to exist because only five companies own all of the car models they sell. Under the names of companies like Toyota and Chevrolet, various car models are offered for sale. In the past, this conflict was less about automobile costs than it was about establishing market domination by innovative design, which only served to increase market share.
The big three in the automotive industry are viewed as an oligopoly due to their combined extreme market domination. In total, the three biggest automakers in the nation are responsible for more than 90% of all domestic output. Due to their size, they have control over client pricing and purchasing patterns, which is expected to reduce manufacturing costs for one or more of these businesses. It is anticipated that this will greatly increase their market dominance and grant them what might be considered a monopoly.
3. Industry environment analysis
People who purchase automobiles for personal, professional, or recreational use make up the buyer group in the automotive industry. Government and institutions purchase a fleet of automobiles to operate their business (Kumar & Bhatia, 2021).
These clients don't like to haggle for lower prices. Switching to a new brand is simple for both small and large clients, and it doesn't cost much to use a different brand or mode of transportation. Most customers are cost-conscious and would switch to another company if it offered better products for less money.
Due to the high cost of long-term purchases, fluctuating vendor costs, and the requirement for a plethora of information regarding using this product, the negotiating power of customers poses a serious risk. The ratio of buyers to businesses in the automobile industry and buyer price sensitivity were used to arrive at this conclusion.
Backward integration is not threatened by big companies or small, individual buyers, though. When taken as a whole, their bargaining power is moderately strong (Lempp & Siegfried, 2022). Brands put a high priority on building consumer loyalty by focusing on design, quality, and affordable pricing. In the automotive industry, fierce competition has intensified, and changing consumer tastes have given consumers more negotiating power.
Powerful customers make it less likely that particular industry will generate profits. Customers encourage competition within a sector by driving down costs, negotiating for better or more comprehensive services, and pitting rival businesses against one another. This has a detrimental impact on industrial profitability.
Suppliers are businesses that produce commodities that are either utilized directly or indirectly by an automobile manufacturer in the production of an automobile or that are used as components of an automobile (Hebisch et al, 2022).
System providers, component suppliers, and parts suppliers are among them.
Their negotiating power explains how closely connected suppliers are to a specific business in the automobile industry.
The existence of strong suppliers poses a hurdle to a sector's likelihood of making money. Vendors might strengthen competition by provocatively raising prices or lowering the caliber of their goods and services. They consequently reduce profitability in sectors where companies are unable to pass on cost increases through price increases.
A large number of suppliers in the car manufacturing sector typically consist of small and medium-sized businesses, which limits their negotiation power. Few of them are particularly large. Vendors pose the least risk of advanced unification because of the first group of identified factors. These vendors are required to abide by the guidelines established by the automakers. Due to the constant availability of building supplies, car manufacturers with considerable clouts, such as BMW, Ford, Toyota, and VW, can easily switch suppliers. Vendors have very limited negotiating power in this regard.
Competitive Rivalry in the Industry
Toyota, GM, Honda, Volkswagen, Tesla, and Ford are among the industry's fiercest rivals.
Competition in an industry often takes the form of jockeying for position through a range of tactics, such as pricing competition, advertising conflicts, and product debuts. Businesses often become more competitive when they encounter market competition or see an opportunity to strengthen their position.
In the auto industry, when one company makes a move to compete, its rivals will notice and react by implementing countermeasures. The pattern of action and reaction could hurt the industry as a whole due to the interconnection of enterprises. Some forms of competition are very unstable and harm an industry's profitability. Other tactics may have favorable results in the industry since they enhance product differentiation.
There aren't many well-known and important brands, and the barriers to departure are very high. Any brand that tried to withdraw would have to pay a high price. Despite the industry's size, it has matured and has a high level of consumer loyalty (Bruijl et al, 2018). As a result, the battle for market share is more intense. Although different market niches are being targeted, brands frequently overlap. Brands compete based on a variety of factors, including cost, originality, robustness, innovation, and safety. Basically, the automobile industry is characterized by significant, if not particularly intense, competition. Automakers are investing heavily in R&D, technology, marketing, and general consumer happiness in order to grow their customer base and revenues.
The leading firms are in strong competition, whether it be in the premium segment, the compact car segment, or the SUV sector. Due to rising competition, brands are competing to provide the best possible customer experience while attempting to maximize customer satisfaction. Along with giving after-sales assistance more focus, they are also investing in growing their sales and distribution network.
When one considers how established (rather than rapidly growing) the sector is and how difficult it is to quit the automobile business, competition is heightened. The fact that the market is currently not oversupplied and the clear differences between the items lessen competition.
New Entrants
New market competitors don't seem to present much of a challenge either.
It's critical to take switching providers into account when analyzing the threat to new competitors. Every few years, car buyers commonly switch between brands based on their current needs and preferences.
It is difficult for new companies to enter the automobile business because creating a car brand necessitates such a high investment. A sizable initial investment will be needed to set up the manufacturing facilities, and distribution network, and hire qualified personnel. The level of competition from the well-known companies is still another major challenge. Except if the company produces a unique product in the market, there is little chance of a new brand obtaining a sizeable share of the market. Although the rules weren't always a barrier for entrants, they have become more so in recent years, raising another barrier to admission.
Additionally, brand awareness and reputation can be quite difficult for new competitors to overcome. The reputation and brand recognition of established brands are some important advantages. Any new brand would focus mostly on two things: engineering and product quality. Although obtaining raw materials may be straightforward, smaller businesses may have difficulty achieving economies of scale. Furthermore, entering new markets is difficult. Several countries have imposed high import taxes in order to discourage foreign brands.
As a result, several elements mitigate the risk posed by emerging participants. Aside from Tesla, there aren't many new brands in the automotive industry that have had a significant international impact (Poturak et al, 2022). Concerns about well-known brand identities, the requirement for significant resources to enter the automobile sector, and the requirement for licenses and insurance are examples of low threats from new entrants.
When companies in similar industries are forced to compete with industries that offer alternatives for their products or services, there is a risk of substitution. The danger of substitutes is one of the five forces that govern how fiercely a market is competitive.
Substitutes limit the ultimate yields of an industry by putting a cap on the prices that businesses in that industry can charge to make a profit. As substitutes' price-performance alternatives become more appealing, it becomes increasingly difficult for those companies to generate revenue. The need for substitutes may reduce demand for industrial products and services. When the economy is doing well and growing steadily, alternatives can amplify fierce rivalry.
Taxis, buses, trains, and airplanes are just a few of the alternative modes of transportation available. However, none of them can compete with a car in terms of accessibility and convenience. If you miss the bus or train, it will wait for you, but your car will be there for you every day. However, if you choose one of the alternate modes, you won't have to worry about upkeep. Nonetheless, most people consider owning a car to be both convenient and prestigious. This reduces the risk posed by substitutes. However, substitutes pose a threat because daily commuters may discover that taking the train or bus is more convenient and less expensive.
The risk of substitutes is minimal because alternatives have functional limitations, consumers must pay to switch, and there are no real alternatives to the items in the automobile sector. Customers are likely to select alternatives based on various capabilities and designs, which significantly increases the risk of substitutes in this particular situation.
When viewed as a whole, the threat of substitutes, the risk of new entrants, and the bargaining power of customers and suppliers are all minor threats to the automotive industry. Because there is no threat, the market is more appealing to potential competitors. Although there is competition among the current participants, corporations can differentiate themselves, making the competition less fierce. Because automakers strive to differentiate their products from an increasing number of consumers, the sector is also appealing to established businesses. Automakers can provide a variety of models, sizes, colors, and other features to meet each customer's needs and preferences.
References
Orcanos. (2020). How to succeed in the automotive industry. Orcanos. Retrieved from: https://www.orcanos.com/compliance/2020/01/19/whys-succeeding-automotive-industry/#:~:text=The%20top%20success%20factors%20%E2%80%93%20quality,as%20a%20critical%20success%20driver.
Work Clout, (2021). The role of quality control in Automotive manufacturing. Work Clout. Retrieved from: https://www.workclout.com/blog/the-role-of-quality-control-in-automotive-manufacturing
Hebisch, B., Wild, A., & Herbst, U. (2022). The power of alternative suppliers in the automotive industry – A matter of innovation? Industrial Marketing Management, 102, 1-11, https://doi.org/10.1016/j.indmarman.2021.12.017.
Lempp, M.& Siegfried, P. (2022). Characterization of the Automotive Industry. In: Automotive Disruption and the Urban Mobility Revolution. Business Guides on the Go. Springer, Cham. https://doi.org/10.1007/978-3-030-90036-6_2
Wayne, F., Atalay, A., & Necati, T. (2022). Warranty Length, Product Reliability, and Secondary Markets. Manufacturing & Service Operations Management. DOI.10.1287/msom.2021.1062
Poturak, M., Muratović, H., Pintol, A., & Salih, Y. M. M. (2022). Client satisfaction and loyalty factors in the automotive industry. Journal of Global Social Sciences, 3(10), 77–101. https://doi.org/10.31039/jgss.v3i10.21
Kumar, S., & Bhatia, M, S. (2021). Environmental dynamism, industry 4.0 and performance: Mediating role of organizational and technological factors, Industrial Marketing Management, 95, 54-64, https://doi.org/10.1016/j.indmarman.2021.03.010.
Bruijl, Gerard H. Th., (2018). The Relevance of Porter's Five Forces in Today's Innovative and Changing Business Environment. Available at: http://dx.doi.org/10.2139/ssrn.3192207
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