![]() ![]() Introduced more than thirty years ago by Professor Michael Porter of the Harvard Business School, Five Forces Analysis has long been and remains perhaps the most popular analytical tool in the business world (Table 3.8). Visit the executive suite of any company and the chances are very high that the chief executive officer and her vice presidents are relying on Five Forces Analysis to understand their industry. Luckily for automakers competing in the US market, Americans are notoriously reluctant to embrace these substitutes. ![]() Threat of substitutes for the auto industry’s products include bicycles and mass transit. Automakers also have to pay careful attention to end users, of course, such as individual drivers and rental car agencies. Rivalry of industry competitors in the auto industry include firms such as Ford, Fiat Chrysler, and GM.īargaining power of buyers are those firms that buy directly from the industry such as automobile dealerships. For example, Tesla Motors’ production of electric vehicles poses a threat to displace the traditional powers in the auto industry, and Chinese automakers are rumored to be eyeing the US market.īargaining power of suppliers to the auto industry include firms such as Lear Corporation who produces auto interior systems. Threat of potential entrants are firms that are not currently considered viable competitors in the industry but that may become viable competitors in the future. Table 3.8 Porter’s Five Forces Industry Analysis: Porter’s Five Forces ![]()
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