The Markets and Competitive Environment facing Car Manufacturers, Car dealers and Car Servicing businesses Flashcards
The competitive environment of the car market can be assessed through Porters 5 forces:
- Bargaining power of suppliers
- Bargaining power of consumers
- Rivalry a,one existing competition
- Threat of new entrants
- Threat of substitutes
Bargaining power of suppliers
Manufacturers rely on suppliees
Cost of changing supplier is expensive
This affects the repairs market
Lack of supply for certain parts which gives some suppliers power
Bargaining power of consumers
Consumers have a wide range of choice
Depends on their brand loyalty
More to do with the power of dealerships rather than manufacturer
Some dealerships can price match as they are the ones wanting to make a sale
Rivalry among existing competition
Ease of travel has opened up the market
Luxury and lower priced cars are two separate markets within the car market
Rivalry has increased in the past 40 years
Threat of new entrants
Expensive to start up:
Have to establish the brand with the quality and have high standards
Biggest threats are new EV companies from already existing tech companies
Need high investment to set up production and distribution
Threat of substitutes
Public transport is seen as another option
Costs are high so consumers switch to a cheaper option
Eg: Get the bus for a short haul journey
Who are car manufacturers?
Large multinational cooperations
Benefit from high economies of scale
Many of them own other car brands
What are car dealerships ?
Often franchises
=companies given the right to sell other companies cars
An importance in consumer loyalty and repeat customers
What are car servicing businesses?
Independent, small businesses
Local competition or large dealer garages
Important to build relationships with customers and staff
Staff are an important asset- linked to HR
