Portal 5 Forces

Topics: Barriers to entry, Automobile, Marketing Pages: 4 (1074 words) Published: November 6, 2012
Rivalry among existing firms for (UMW TOYOTA MOTOR)UMW
The intensity of competitive rivalry is the major determinant of the competitiveness industry. UMW Toyota Motor Sdn Bhd is mainly engaged in the manufacturing/assembly, marketing and distribution of the Toyota marque, and the marketing and distribution of Lexus vehicles. UMW Toyota commands pole position in the aggregate sales of non-national passenger cars, commercial vehicles and four-wheel drives in Malaysia. Intensity of competitive rivalry

The main competitors for UMW Toyota Motor are the TCMH (TAN CHONG MOTOR HOLDING BHD), DRB-HICOM and. TCMH franchising NISSAN to compete in the market and DRB-HICOM franchising HONDA and takeover PROTON to gain more market share. This two company grab most of the market share and this caused the UMW profit effected significantly but UMW still sustained their respective leadership in the market and collectively controlled 44.8% of total industry volume. High exit barriers

This type of companies need has a large number of employees in order to run their daily business. If wish to leave the market there will be high redundancy costs. The high investment in non-transferable fixed assets (vehicle) also build up the high exit barriers to the companies.

High storage cost
The storage cost was significantly high due to time is very important to any type of business especially car business. To make sure customer can get their car immediately after purchased, company must have prepared large enough of storage to store cars that can satisfy customers and also continuous daily business.

Low switching cost
The switching cost for other transport are low due to the government policy that want to protect their own brand vehicle (proton and produa). Government charging high import tax for foreign vehicles including Toyota which UMW franchising. This made the domestic vehicles much cheaper than foreign car. Beside that, other public transport is cheap and convenient...
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