Automobile: Porter Generic Strategies and Strategic Group

Topics: Strategic management, Porter generic strategies, Automotive industry Pages: 14 (3917 words) Published: March 27, 2014


Table of Contents


The report will undertake a strategic analysis of Global Automobile Industry. Relevant theoretical frameworks and concepts will be applied to the automobile industry in order to make better understanding of its strategies.

Firstly, the report will provide background information such as industry definition, competitors and history outline. It will also include reasons for undertaking this research.

Secondly, strategic analysis of Automobile industry will be conducted with respect to Macro-environment (PESTEL) factors. In addition, impact of macro-environment factors on consumer demand and growth in the industry will be evaluated. Main key drivers among the PESTEL factors will be identified and explained.

Thirdly, the report will conduct analysis of the Automobile industry on the basis of Porter’s five forces (Industry analysis) and implications for the same will be provided.

In the next section, strategic groups operating in the Automobile industry will be identified and analyzed. A Strategy Canvas will be formulated and blue ocean space will be suggested.

Lastly, generic strategy as pursued by strategic group will be explained along with its response to macro and industry forces. The reports will conclude with a summary of key findings.


2.1 Rationale for the research

The research will focus on strategic analysis of Automobile Industry. Automobile Industry is one of the most prospering industry having footprints globally. This research is being conducted to gain insights to strategies adopted by a global industry in order to fulfill customer and macro environment needs. It would be worth knowing how a huge industry behaves in different environments. This research is valuable to companies or individuals looking to expand into automobile industry. Through this report, they can get familiar with different strategies implemented by companies to remain competitive.

2.2 Automobile Industry And Its History

Automobile industry is defined as number of companies involved in production, design, development, selling and marketing of motor vehicles. Many companies in this industry are also involved in manufacture of components such as engines, bodies and batteries. Key competitors in automobile industry include Toyota, General motors, Ford, Hyundai, Volkswagen.

Outline of Automobile industry history is as follows:
1769- Automobile powered by steam engine designed by French engineer Nicolas J. Cugnot. 1886- this era is regarded as birth of modern automobile. A German named Karl Benz manufactured three-wheeled Motor wagon. 1900s- In 1908, Ford Company led by Henry Ford created the ‘Model T’, being the first car sold to average families. William C. Durant established General Motors. 1910s- Ford set up an assembly line of mass production of Model T selling at an affordable price. In 1914, four cylinder based Dodge ‘Model 30’ was manufactured. 1920s- this stage is regarded as growth stage with many people purchasing their first car. In 1925, Chrysler Corporation was established with many other small companies being set up. 1930s- Due to 1920s great depression, there was a decline in sales growth. 1940s- During Second World War, there were advances in technology with vehicles being manufactured for military purposes. 1950s- More technological advances in cars were seen.

1960s- Automakers shifted focus to safety features. The first company to invent seat belt in its all series as a standard feature was Studebaker- Packard. 1970s- Due to oil crises, focus of automobile industry shifted to production of fuel-efficient cars. After 1980s- Car production became global with companies enjoying benefits of low cost labors in India and China. Currently, Automobile industry is in growth stage as companies are in process expanding...

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