Strategic Management Automobile Industry

1)

Analysing the structure of the global manufacturing industry is not an easy thing currently. High gasoline prices combined with environmental consumerism and increased regulation form the basis of underlying trends. This is exasperated by signs of downturn in the market and economic depression making access to credit more difficult.

Emerging markets represent a large and growing market less influenced by environmental consumerism. The industry is still repositioning resources cautiously towards the greener more environmentally friendly products in increasing demand. Strategy seems to be most effective when brand identity and product promotion are implemented correctly, coupled with the ability to optimise costs of production.

The principals of Porters Five Forces will be used through ought in order to determine the competitive intensity and therefore attractiveness of a market using Porter’s Five Forces as a gauge. (See appendix 2). PESTEL analysis will also be used throughout in order to ascertain any political, economic, social, technological, environmental and legal influences on the industry.

The cyclical nature of national and global markets presents problems for all industries; however the automobile industry faces greater difficulties than just the wavering nature of consumer confidence. Regulatory developments; especially within the US and European governments in reaction to social pressures aimed at the reliance on oil and tackling of green house gases, has seen the necessity for dramatic strategic changes within the sector. This includes a restructuring of product development with a direction for smaller more environmentally friendly cars. Traditionally these are the products with the lowest profit margins. There is a growing recognition that the declining international competitiveness of the US auto majors is not simply the result of uncompetitive cost levels or the current recession, rather the underlying causes relate to weaknesses in...