* Industry dominance by few large firms
The car automobile industry -There are various competitors in this market but the dominant ones include General Motors, Volkswagen, Chrysler, Ford, and Honda etc. Entry barriers prevent other entrants and pricing is mostly by competition and mutual understanding between top manufacturers. * Huge setup cost and complete resource ownership
* Prices remain stable if a firm reduces product price others follow suit and cut down their price as well, if a firm increases product price, others do not increase their price.
toyota focusing on continuously finding ways to reduce production costs. The company also optimized its processes to accelerate the various phases of production -- from initial design to production -- so that it could introduce new models faster than its competitors.
Seek less expensive ways to produce desirable products
-BMW Group and the Toyota Motor Corporation announced a collaborative effort aimed at developing new products and advanced-powertrain technologies. -Toyota also has an agreement with Ford to develop hybrid systems for light trucks and sport utility vehicles.
Threat of substitute products
* There are a lot of substitutes in the automobile industry. When the price of the vehicles rises, the substitutes will emerge, there are many types of equipment that can take the place of vehicles, such bus, subway, bicycle and even walking.
The Hybrid Synergy Drive also must be evaluated using Porter's model factor for threat of substitute products. Other companies could potentially enter the hybrid market by developing a similar drive and neutralizing Toyota's advantage. In fact, Nissan and Honda have developed similar technologies for their sedan models. However, Toyota continues to dominate the market for hybrid vehicles because Honda and Nissan do not have a significant impact on the market yet. In the future, Toyota may lose their competitive advantage if...