VW Company Analysis

Besides, the switching cost is relative low since the time and effort required making the switch is low.
             High bargaining power of buyers .
             The most important criteria in selecting small cars are economical concern and quality. The potential buyers of small cars tend to be young and not as affluent as middle-size or large-size car buyers. As the product generally represent a large part of the buyer's cost, thus, the buyers will be looking for ways to exert pressure on the industry rivals and so reduce their own costs.
             Low bargaining power of suppliers .
             There could be many, small suppliers that provide the materials that needed in manufacturing car as an automotive manufacturer typically has about 13,000 individual parts on the inbound system. Although factors such as uniqueness and differentiation are taken into consideration in selecting supplier, cost of materials is still the major concern that automakers have due to the high manufacturing cost. Therefore, suppliers' products usually need to contend with other products for sale to the industry.
             The intensity of rivalry is high because.
             Although there are only handful major players fighting in this industry, due to those major players are mostly equal in size and power as they all have a strong background and brand name. The slow growth in the automotive industry means that the rivals will have difficulties in achieving the expected target, this may cause intense battle for additional market share. Moreover, the fixed cost in the industry is very high due to the high requirement of operating costs and capital intensive. And finally the exit barriers are high due to the large amount of investment is required.
             1.3 Competitors Analysis.
             The major competitors in the U.S. small car market were the top five brands, Chevrolet, Ford, Saturn, Toyota, Nissan, and Dodge. The competitors were analyzed in the following table.
             Table Competitor Analysis.
             Main competitor Market Share and growth (%) Product Business directions, objective and Strategy Strengths Weaknesses Competitive position.