Competitive Environment for Proton Company

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  • Topic: Automobile, Six Forces Model, Economics
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  • Published : July 29, 2010
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Competitive Environment

PROTON is the first Malaysia national car. The big competitor in Malaysia in term of automobile companies and affordable car is PERODUA. The competitive environment as we can see roughly in Malaysia is affordable car where all citizens in Malaysia can buy it and the car maintenances also cheap. Here, the porter five are been applied for more clearly because the competitive environment not only about the competitor. It can be about the economic recession, natural disaster and etc.

Porter five
1.Competitive Rivalry
2.Threat of New Entrant
3.Threat of Substitutes
4.Buyer Power
5.Supplier Power

Competitive Rivalry
In Malaysia, there is not too much competitor around affordable car. The low cost car as I mentioned above (cheap maintenance) is not have a lot of competitor in generally. The affordable car in Malaysia also, gets more potential to sell compared to luxury car. The luxury car is only certain people used. As we see the environment in Malaysia, 1 family will have more than 1 car. For sure, the first car they will choose the cheaper car and affordable car.

Threat of New Entrant (high)
The economic recession will be a big threat for PROTON. As we know, all big company will facing over budget or does not achieve the sale for that year. The government will lose a lot of money cause of policy and shareholders. By the way, economic down turn actually comes suddenly without notice.

Threat of Substitutes (high)
Substitutes also will be a big threat for PROTON. Malaysia has to national car. The First automobile is PROTON and secondly PERODUA. The substitutes will high in term of car model (some of car model looks similar), and car spare part.

Buyer Power
Buyer will choose the low cost car for the first car and buyer also actually are fragmented. So, it will not has much influence.

Supplier Power
Nowadays this is not giving a big threat for PROTON compared to the many years ago. Many years ago, the...
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