Automobile Industry Analysis

Topics: Tata Motors, General Motors, Automotive industry Pages: 10 (2795 words) Published: June 5, 2013
Executive Summary:
Industry Selected:
Automobile industry has been focused in this analysis being one of the fastest growing industry eventhough it’s highly competitive in the recent years. Since 2005, there are several changes in the Automobile Industry due to globalization and the demand for high featured cars from the growing economical countries despite the oil shortage which is a challenging the industry.

Methodology:
Te below analysis of the Global Automobile Industry is based on the PORTER’s 5 forces framework to analyze and evaluate the competitiveness of the industry. In this analysis, two big global automobile giants, General Motors and TATA Motors are compared on the success of the firm against each other based on different factors like sales revenue, market performance, profit and loss, and return on assets, market capitalization and also involving some major economic concepts related to the analysis to correlate the academic understanding with the real time situation in the corporate world.

Major Findings and Conclusion:

The analysis concludes with the findings of the two firms based on the above factors. Then it integrates the findings with the scholarly journals and using the economic concepts it distinguishes the success of the one firm versus other in the same industry. Finally it concludes the report with the recommendations of the best practices and strategic decisions followed by the successful firm to compete in the industry with sustainable competitive advantage and huge profits.

Table of Contents:

Executive Summary………………………………………….…………………………….…..1 Table of Contents………………………………………………………………………...........2 1. Introduction………………………………………………………………………………...3
2. Industry Analysis using PORTER‘s Five Forces…………………….………….………….3 3. Comparison of Profitability and Performance ……………………………………………..5 3.1 TATA Motors………………………………………………………………………..5 3.2 General Motors………………………………………………………………………7 3.3 Comparative Analysis……………………………………………………….………9 4. Findings……………………………………………………………………………………10 5. Recommendations…………………………………………………………………………11 6. Conclusion…………………………………………………………………………………11 7. References…………………………………………………………………………………12 8. Appendices………………………………………………………………………………...13

1. Introduction:
the below essay analyzes the competitiveness and challenges in one of the world’s fastest growing industries, Automobile Industry. Due to its increasing changes over the period of time, the industry is highly subjected to competition and global transformation. Hence this essay analyzes the competitiveness of this dynamic industry using PORTER’s Five Forces Model. It compares and contrasts the success factors and challenges of the two leading automotive manufacturers in the world, TATA Motors and General Motors from different geographical locations. It analyzes the data from the company’s financial statements and reports regarding the profitability, market capitalization, sales revenue, sales volume and market asset value to understand the differences between both the firms in terms of the performance and profitability. Then it correlates the strategies and performance of the companies with the economic theories and concepts. Finally based on the results it gives a recommendation for the growing firm to compete in the industry with a sustainable competitive advantage and to have more profits.

2. Industry ANALYSIS using Porter‘s Five Forces:
michael Porter has identified five forces to determine the competitiveness of the industry to facilitate the new players planning to enter the industry to take any strategic decisions. These forces critically evaluate the market and determine the potential opportunities and threats from the industry to help the management to take on any investment decisions. The major five forces are as follows: (1) Degree of Rivalry (2) Barriers to Entry (3) Threat of Substitutes (4) Buyers’ Power and (5) Suppliers’ Powers.

Fig 1:...

References: Letter to Stockholders (2004).
http://www.gm.com/company/investor_information/docs/fin_data/gm04ar/download/gm04arletter.pdf
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