Auto Industry
Competitive Environment and Government Policies Facing the Global Automobile Industry
New Entry Activity
The automobile market is always a hotbed for mergers and acquisitions. In the early part of last century, General Motors was at the head of those gaining market share through mergers and acquisitions when they absorbed such companies as Cadillac, Pontiac and Chevrolet. Ford followed suit, but made many of its agreements with companies later in the century with companies like Mercury, Mazda, Volvo, Land Rover, Jaguar and Aston Martin. However, the global financial crisis forced these large automakers to divest some of their holdings and to stop partnerships with other auto companies. Ford cut Jaguar and Land Rover, and cut ties with Volvos car division. Because these companies were available and there has been more money to invest lately in places like India and China, other companies were able to quickly add some of those that had been dropped through mergers and acquisitions. Tata Motors based in India was able to acquire Land Rover and Jaguar for a very small price (comparatively) because they were companies that were worth very little to the international market. Basically all that Tata wanted was the name anyway (IMAP, 2010).
More mergers have happened with automobile products manufacturers than among the large automakers In recent years because it is an industry that has much greater diversity from top to bottom with small shops that specialize in a very small array of products to very large distributors which work exclusively for one of the large automakers. According to an IMAP (2010) report
"In 2008, the largest deal worth USD 31.8 billion took place in the German automobile space between Schaeffler KG and Continental; whereas 2009's largest deal, valued at USD 1.07 billion, was in Asia...
" (Tripathi, Ansolabehere, and Snyder, 2002) Additionally, groups that place emphasis on lobbying tend to may more attention to the position of power that members hold inside Congress and pay less attention to the electoral circumstances of member than do other groups and as well groups that place emphasis on lobbying "also appear to be more bipartisan and less ideological than other groups, giving more equally to both parties and more
Policy Extension General Context The company was established in 1886 and since its inception the technology developed by Daimler has revolutionized the automotive industry (Daimler AG, 2014). Daimler's initial product line started with a motor carriage and a three wheeled vehicle. The quality, safety and comfort of Daimler's vehicles have impressed their customers, establishing the standards of the industry. With automotives being a physical product, it is very easy to measure them. Standards
Marks & Spencer further has quality food products that are perishables such as salads and vegetables. This is complex and requires accurate and fast delivery to the UK food stores. The work entitled: "Keeping Real Time Tabs on Fresh Food Supply Helps Guarantee the quality of Perishable Products" cites the statement of the Head of Supply Chain Logistics and it at Marks and Spencer who states that in order to
Government Intervention in the Steel Industry The Bush administration announced the imposition of sweeping tariffs of up to 30% on steel imports to the United States for a period of 3 years in March 2002 purportedly to save the ailing steel industry from collapsing. Predictably, the action has invited particularly harsh criticism from the U.S. trade partners that have been directly affected by the tax, i.e., the European Union, Japan, and
For this reason, they have stepped out to pursue alternatives, especially foreign cars. On the contrary, as consumers become price oriented, they have minimal purchasing power because they are not buyers of large volume automobiles (Porter, 1985). 3.3 Threat of New Entrants It is extremely difficult for new entrants penetrate the auto industry because of the existing high level of brand loyalty. Nevertheless, the few popular overseas firms and entered the
United States Automotive Industry and Porter's Five Forces Model American Automotive Industry United States Automotive Industry and Porter's Five Forces Model United States Automotive Industry and Porter's Five Forces Model The purpose of this report is to analyze and discuss the automotive industry of the United States in the light of Five Forces of Competition presented by Michael Porter. The report starts with an in-depth introduction to the U.S. automotive industry; including its profile,
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