Auto Industry
Auto Industry
1. What are the key trends in the general environment that you see in the case? (Pg.43)
Positive trends I saw were technological, economic and global key trends. Because of the global economic downturn and financial crisis there was persistently rising fuel prices over the last few years which lead to a technological and economical trends in the general environment. Technological because of developing new ways of making cars become more fuel efficient. Key economic trends were also realized because unemployment rates during that time were very high, and Ford had to think of how to make cars more affordable to consumers, by very low interest rates and a rising stock market that would boost luxury car sales. I also noticed global key trend, because ford was more of a regional company, and they wanted to change to expand its brand by standardizing it’s operations and vehicles across North America, Europe, and Asia with the intention of reducing complexity thus costs in purchasing and manufacturing processes, deliver more vehicles from fewer platforms maximizing the use of common parts and systems. Also the balance sheet showed that the assets increased, while the income statement showed fluctuating but improved revenues after 2010. Negative trends could be rising cost from suppliers and total costs and expenses increased from 2010 to 2012.
2. Think about how the 5- forces model applies to the auto industry. Who are the key buyers and suppliers? What are the key entry barriers?
The key buyers are the consumers of the automobiles because of walkaway power. Car dealers usually give out great deals to buyers who normally bargain before buying a car to get the industry moving. The key suppliers is the steel industry, Overall there are high barriers of entry into the automotive industry because the there are many close substitutes, direct rivals, within the industry. The automotive industry is competitive and any of these rivals can decrease
1. What are the key trends in the general environment that you see in the case? (Pg.43)
Positive trends I saw were technological, economic and global key trends. Because of the global economic downturn and financial crisis there was persistently rising fuel prices over the last few years which lead to a technological and economical trends in the general environment. Technological because of developing new ways of making cars become more fuel efficient. Key economic trends were also realized because unemployment rates during that time were very high, and Ford had to think of how to make cars more affordable to consumers, by very low interest rates and a rising stock market that would boost luxury car sales. I also noticed global key trend, because ford was more of a regional company, and they wanted to change to expand its brand by standardizing it’s operations and vehicles across North America, Europe, and Asia with the intention of reducing complexity thus costs in purchasing and manufacturing processes, deliver more vehicles from fewer platforms maximizing the use of common parts and systems. Also the balance sheet showed that the assets increased, while the income statement showed fluctuating but improved revenues after 2010. Negative trends could be rising cost from suppliers and total costs and expenses increased from 2010 to 2012.
2. Think about how the 5- forces model applies to the auto industry. Who are the key buyers and suppliers? What are the key entry barriers?
The key buyers are the consumers of the automobiles because of walkaway power. Car dealers usually give out great deals to buyers who normally bargain before buying a car to get the industry moving. The key suppliers is the steel industry, Overall there are high barriers of entry into the automotive industry because the there are many close substitutes, direct rivals, within the industry. The automotive industry is competitive and any of these rivals can decrease