Opening a Franchise in Singapore: External Factors To Be Considered

Topics: Automobile, Substitute good, Economics Pages: 3 (510 words) Published: May 14, 2013
•The population figures and automobile buying capacity of people. • Strength of business demand for new vehicles.
• Real incomes of car buyers relative to car prices
•The cost and availability of motor finance (credit)
•The cost of running a vehicle
•Income and Employment
•Rate of Interest

•Legal provision relating to environmental population by automobiles. •Legal provisions relating to safety measure
•Anyone who wishes to register a new vehicle in Singapore must first obtain a Certificate of Entitlement (COE), which represents the right to own a vehicle for 10 years. •A Registration Fee of S$140 covers the costs of registering a vehicle in Singapore. It is collected upon registration of the vehicle. Overall cost of the car •Registration fee + Cost Price + Road Tax + COE + additional registration fee (140% of OMV) and customs duty (31% of OMV).

MRT & LRT Trains, Buses, Taxis
Rental services

Force 1: Barriers to entry
Barriers to entry measure how easy or difficult it is for new entrants to enter into the industry. This can involve for example: * Cost advantages (economies of scale, economies of scope)

* Access to production inputs and financing,

* Government policies and taxation

* Production cycle and learning curve

* Capital requirements

* Access to distribution channels

Force 2: Threat of substitutes
Every top decision maker has to ask: How easy can our product or service be substituted? The following needs to be analyzed: * How much does it cost the customer to switch to competing products or services?

* How likely are customers to switch?

* What is the price-performance trade-off of substitutes? If a product can be easily substituted, then it is a threat to the company because it can compete with price only

2. Threat of Substitutes - Rather than looking at the threat of someone buying a different car, there is also...
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