Global Case

Once called the "Industry of industry" by Peter Drucker, the automobile industry has withstood numerous economic challenges. One of the main challenges faced in the US was the economic crisis in 2008. Before the economic crisis in 2008 there were three main automobile companies dominating the US market General Motors, Ford, and Crysler. However; after the 2008 economic crisis, foreign countries seized the opportunity to take share market in the automobile industry with advanced technology that favored consumers.

* Risk of entry by potential Competitor:

The risk of entry for a new competitor is a week force due too many factors. One of the most important in my opinion is the capital needed to begin and maintain an automobile company is too high. Another important fact to consider is the economies of scale which established companies acquire in the mature stage where the company can lower the costs of building a car by increased mass production. This is the case of Toyota, that according to Hill, and Jones, "Strategic Management 9th Editing" (pg C227), capitalized on its lean production system to grow faster than its rivals; by 2008, the company had replaced General Motors as the world's largest automobile manufacturer. Brand loyalty is a threat for new competitor because consumers tend to prefer brands that they already know or have dealt with in the past. In the global financial crisis of 2008, it was seen as an opportunity for new competitors in the case of Volkswagen, Honda, Nissan, and Toyota. On the other hand, due to the financial crisis many companies were forced to seek government aid in an attempt to stave off bankruptcy, Hill and Jones (pg C229), this was a threat for new potential or existing companies who did not beneficiate for this government regulation.

* Rivalry amount established companies:

The Rivalry amount established companies in before the economic crisis in 2008 and current is a strong force making the ability t established companies to raise price and earn profit. Before the 2008 financial crisis in USA General Motors, Ford, and Chrysler dominated united stated market; the by far the world's largest Hill and Jones, (pg C227) but after the financial crisis USA automobile industry were invading by innovating foreign manufactures companies. Toyota started to tweak the mass production system first developed by ford, Hill and Jones , (pg C227), and after many years of Engineers research Toyota find a way to develop more efficient cars at a lower prices taking a big percent of the USA auto manufactory companies.

* Barging power of buyer:

The barging power of the buyer in the automobile industry in my opinion is a strong force due to the fact that the consumers have a wide variety of other automobile companies to choose from. Customers have a demanded more