Aging society.
Implication:.
Potential buyer of small car is moving from towards younger age group and those workingwomen. This trend gives the industry new market segments and potential growth. However, this ever-changing customer preference had made automaker less able to sustain its competitive advantage.
Building and maintaining strong brand image will become more important, as buyers' buying decisions are relying heavily on the reputation of brands.
Extension of product line and being innovative in both production and promotion would be required to meet the changing buyers' needs and brand building can be a strategy to reach young segment drivers.
.
Geographic.
Emerging markets in countries such as China, Taiwan, and Hong Kong.
Implication:.
The new market in certain countries that lead to expansion strategy. Acquisition or strategic alliances with existing players will play a major role to gain access to distribution channels and markets.
1.2 The structure and relative profitability of the industry.
1.2.1 Porter's five forces model.
Low threats of new entrants .
The most important criterion that makes the barrier to entry to this industry is the high capital, industrial knowledge and experience requirement. There are already some well-established players with very strong brand name and loyalty customers. As price and quality plays the major role in selecting a small car, high efficient production system, knowledge of the industry include manufacturing and distributing are essential to survive in the market. As a new entrant, one also needs to consider the cost disadvantage to them due to the late entrance associated with industry experience, assets purchases, and economies of scale.
High threats of substitutes .
The main substitute to cars is other forms of transportation include bus, ship or airline. The availability of substitutes is high because those substitutes provide transportation in close performance however sometimes with much lower price such as public transportation.
On the lower left hand corner is the companies phone number and website. ... VW." ... And obviously, VW is saying that if things are squared than it is not as good as the VW beetle because it round. ... In this VW advertisement, it suggests that the VW Beetle is different from all the other objects. ... But the VW Beetle compared to them is not that. ...
The suitability of China as a new market for BMW will be assessed in the PESTEL analysis. The degree of competition that already exists in China for cars will be evaluated in the Porter's Five Forces Analysis. ... In addition a SWOT analysis will also be provided. ... In addition other requirements from the WTO to open up the market such as reducing tariffs, removing quotas and allowing foreign companies to distribute their products in China, is making the Chinese market a much more easily accessed market to foreign companies who wish to enter the Chinese market. ... Since BMW is a Germ...
