A structural analysis of the German Web Design industry by using the model of Porters five forces

Product Quality - Increasing consumer warranties or service is very common these days. To maintain low cost, companies consistently has to make manufacturing improvements to keep the business competitive. This requires additional capital expenditure which tends to eat up company's earning. NANO enjoys the monopoly are there are no competitors in this segment. Switching Costs - If switching to another product is simple and cheap the customers does not think much before doing it.

In case of NANO car the switching cost from bike to car is too high.

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Thus increasing the demand of the car many fold. They pull down the cost by Bargaining. The bargaining power of buyer is high as there are lot of choice available to the buyer and the service do not vary from one manufacturer to the other. They force the manufactures to improve the quality. All this can be clearly seen in the case of NANO car the price tag at which it has been offered or the quality of the NANO car no compromises has been done at any front.

Number and Size of Suppliers - A company to manufacture its products requires raw material, labor etc. If there are few suppliers providing material essential to make a product then they can set the price high to capture more profit. Powerful suppliers can squeeze industry profitability to great extend. In case of NANO the supplier are limited and the size of the suppliers are big enough to bring about the controlling power in the price of the car.

The NANO car has more than suppliers in all and the major portion of the building cost of the car is the parts supplied by the suppliers. Supplier industry is dominated by a few firms. The some parts of the NANO car are obtain from the supplier who them are big enough and limited substitutes are available against them. So the entire production line depends upon them only. Ability to substitute - Suppliers' products have high switching costs. In many case even when substitute are available its not that easy to opt for substitute as the next product in the assembly line depends upon it.

If the change in the any part is brought about the long list of depended parts also have to be changed , which in most cases is not feasible to do. The internationalisation strategy so far has been to keep local managers in new acquisitions, and to only transplant a couple of senior managers from India into the new market. For example after the Daewoo acquisition the Indian company leaned work discipline and how to get the final product 'right first time. The company's passenger car products are based upon 3rd and 4th generation platforms, which put Tata Motors Limited at a disadvantage with competing car manufacturers.

Sustainability and environmentalism could mean extra costs for this low-cost producer. This could impact its underpinning competitive advantage. Obviously, as Tata globalises and buys into other brands this problem could be alleviated. Economic reforms and deregulation have transformed that scene. India has already become one of the fastest growing automobile markets in the world.

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The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to maintain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved splendid achievement in the recent years.

In the Indian economy, auto industry maintains a high-flying place. Automobile industry has a strong multiplier effect and is capable of being the driver of economic growth. A sound transportation system plays an essential role in the country's rapid economic and industrial development. The well-developed Indian automotive industry skillfully fulfils this catalytic role by producing a wide variety of vehicles: The automotive sector is one of the core industries of the Indian economy, whose prospect is reflective of the economic resilience of the country.

Continuous economic liberalization over the years by the government of India has resulted in making India as one of the prime business destination for many global automotive players. The automotive sector in India is growing at around 18 per cent per annum. The auto industry is just a multiplier, a driver for employment, for investment, for technology. The Indian automotive industry started its new journey from with delicensing of the sector and subsequent opening up for per cent FDI through automatic route.

The automobile sector has been contributing its share to the shining economic performance of India in the recent years. With the Indian middle class earning higher per capita income, more people are ready to own private vehicles including cars and two-wheelers. Product movements and manned services have boosted in the sales of medium and sized commercial vehicles for passenger and goods transport.

Side by side with fresh vehicle sales growth, the automotive components sector has witnessed big growth. The domestic auto components consumption has crossed rupees crore and an export of one half size of this figure. India is on the peak of the Foreign Direct Investment wave. It is commonly believed that soon India will catch up with China. India is up-and-coming a significant manufacturer, especially of electrical and electronic equipment, automobiles and auto-parts.

The country is expected to witness over Rs 30, crore of investment by Over the next one year, some 20 new cars will be seen on Indian roads. Maruti Udyog has set up the second car plant with a manufacturing capacity of 2. Hyundai and Tata Motors have announced plans for investing a similar amount over the next 3 years. Hyundai will bring in more than Rs 3, crore to India, Tata Motors will be investing Rs 2, crore in its small car project. General Motors will be investing Rs crore, Ford about Rs crore and Toyota announced modest expansion plans even as Honda Siel has earmarked Rs 3, crore over the next decade for India - a sizeable chunk of this should come by since the company is also looking to enter the lucrative small car segment.

Commercial vehicle segment, Ashok Leyland and Tata Motors have each announced well over Rs 1, crore of investment. Hero Honda is about to establish its fourth manufacturing plant. The growth of the Indian middle class along with the growth of the economy over the past few years has attracted global auto majors to the Indian market. Moreover, India provides trained manpower at competitive costs making India a favoured global manufacturing hub. The attractiveness of the Indian markets on one hand and the stagnation of the auto sector in markets such as Europe, US and Japan on the other have resulted in shifting of new capacities and flow of capital to the Indian automobile industry.

Global auto majors such as Japanese auto majors Suzuki, Honda and Korean car giant Hyundai are increasingly banking on their Indian operations to add weight to their businesses, even as numbers stay uncertain in developed markets due to economic recession and slowdown. Moreover, according to a study released by global consultancy firm Deloitte, at least one Indian company will be among the top six carmakers that would dominate the global auto industry by According to the study, the car industry would see a massive capacity building in low-cost locations like India as manufacturers shift base from developed regions.

Although the sector was hit by economic slowdown, overall production passenger vehicles, commercial vehicles, two wheelers and three wheelers increased from Passenger vehicles increased marginally from 1. In recent times, India has emerged as one of the favourite investment destinations for automotive manufacturers. Across all categories, total sale of vehicles increased The Indian auto industry is likely to see a growth of per cent in sales in , according to a report by the global rating firm, Fitch. According to its report, Indian Auto Sector Outlook, competition in the country's auto sector is likely to increase due to increasing penetration of global original equipment manufacturers OEM.

The average person can't come along and start manufacturing automobiles. Rather than looking at the threat of someone buying a different car, there is also need to also look at the likelihood of people taking the bus, train or airplane to their destination. The auto industry is considered to be an oligopoly. The bargaining power of automakers are unchallenged. Consumers are very price sensitive, they don't have much buying power as they never purchase huge volumes of cars.

Indian automobile industry has achieved splendid achievement in the recent years. India is on the peak of the Foreign Direct Investment. India is a significant manufacturer of automobiles and auto-parts. Global auto majors such as Japanese auto majors Suzuki, Honda and Korean car giant Hyundai are increasingly banking on their Indian operations to add weight to their businesses. The car industry would see a massive capacity building in low-cost locations like India as manufacturers shift base from developed regions. Although the sector was hit by economic slowdown but it doesn't effect the overall production of automobiles.

The Indian auto industry is likely to see a growth of per cent in sales in Competition in the country's auto sector is likely to increase due to increasing penetration of global original equipment manufacturers. Essay UK - http: If this essay isn't quite what you're looking for, why not order your own custom Business essay, dissertation or piece of coursework that answers your exact question?

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Apply the Porter's five forces model on Automobile Industry and analyse the attractiveness of the Industry for Investment purpose Evolution of Porter's Five Forces Model Five forces is a framework for the industry analysis and business strategy development developed by Michael E.

Porter's five forces include: Barriers to entry Barriers to entry measure how easy or difficult it is for new entrants to enter into the industry. This can involve for example: Cost advantages economies of scale, economies of scope Access to production inputs and financing, Government policies and taxation Production cycle and learning curve Capital requirements Access to distribution channels Patents, branding, and image also fall into this category.

Threat of substitutes Every top decision maker has to ask: The following needs to be analyzed: How much does it cost the customer to switch to competing products or services? How likely are customers to switch? What is the price-performance trade-off of substitutes? Competitive Rivalry In this,we have to analyze the level of competition between existing players in the industry. Are there exit barriers? How fast does the industry grow? Does the industry operate at surplus or shortage? How is the industry concentrated?

How do customers identify themselves with your brand? Is the product differentiated? How well are rivals diversified? Bargaining power of buyers Now the question is how strong the position of buyers is. The following is a list of other examples: Buyer volume and concentration What information buyershave Competitive price How loyal are customers to your brand Price sensitivity Threat of backward integration How well differentiated your product is Availability ofsubstitutes Having a customer that has the leverage to dictate your prices is not a good position.

Bargaining power of suppliers This relates to what your suppliers can do in relationship with you. How strong is the position of sellers? Are there many or only few potential suppliers? Is there a monopoly? Do you take inputs from a single supplier or from a group? Can you easily switch from one supplier to another one? Are there other suppliers with the same inputs available? Automobile Industry The auto manufacturing industry is considered to be highlycapital and labor intensive. The major costs for producing and selling automobiles include: The major areas of auto parts manufacturing are: Rubber Fabrication - This includes everything from tires, hoses, belts, etc.

Indian Automobile Industry The Indian automobile industry is the tenth largest in the world with an annual production of approximately 2 million units. The passenger car segment in the Indian auto industry is growing by percent. Commercial vehicle will grow by 5. India is a potential emerging auto market. India is the largest two-wheeler manufacturer in the world. India's motorcycle segment will grow by percent in the coming years. India is the fifth largest commercial vehicle manufacturer in the world.

India has the number one global motorcycle manufacturer. In Asia, India is the fourth largest car market.

Analysis of the German Long Distance Bus Market by Porter´s Five Forces

Used car Market The new chapter in the automobile industry is that of used cars. Market Share At present major Indian, European, Korean, Japanese automobile companies are holding significant market shares. Hyundai and Tata Motors is the second and third car producer in India The automobile Industry in India is now working in terms of the dynamics of an open market. Porter's five forces model on Automobile Industry 1. While a new design may pay off significantly in the long run, it's always a risky proposition 4. Porter's 5 Forces Model of the NANO car There is continuing interest in the study of the forces that impact on an organisation, particularly those that can be harnessed to provide competitive advantage.

Tata motors strengths The internationalisation strategy so far has been to keep local managers in new acquisitions, and to only transplant a couple of senior managers from India into the new market. The benefit is that Tata has been able to exchange expertise.

The company has had a successful alliance with Italian mass producer Fiat since This has enhanced the product portfolio for Tata and Fiat in terms of production, knowledge exchange , logistics and its infrastructure. Two of the World's luxury car brand have been added to its portfolio of brands, and has undoubtedly off the company the chance to market vehicles in the luxury segments. NANO is the cheapest car in the World. The range of Super Milo fuel efficient buses are powered by super-efficient, eco-friendly engines.

Tata motors weaknesses The company's passenger car products are based upon 3rd and 4th generation platforms, which put Tata Motors Limited at a disadvantage with competing car manufacturers. However, the entry barriers for new entrants are what is bothering The case company right now. The case company has little chance to compete on the economies of scale and reduce costs per unit, as they are not intending to move manufacturing to a low labour cost country or change their manufacturing processes to more effective ways.

Another disadvantage is that their products so far are non-flat-pack solutions. It might be an opportunity to create a flat-pack-solution and increase the economies of scale in a logistic context. The capital needed to enter the home office supplies is comparably low as machinery and knowledge exists within the company. However, The case company lacks distribution channels. They want to set-up a webshop, but have an unexplored network where to retail their products beside the webshop. The threat of substitutes is existent since consumers face low switching costs in the market of home office supplies.

There are plenty of products form different companies to choose from.

Price is one factor in choosing substitutes. Substitutes in the high quality to luxurious segment are often made in wood, leather or metal, giving the customer a more stable and durable product choice. Since the growth of digitalization more and more customers store documents digitally, reducing the usage of paper or avoiding it all together.

The case company lacks differentiation. The market already offers a product that the case company wants to place on the market, making itself redundant. The power of suppliers is not very high. Even though The case company relies on fiber boards, they can be sourced from different suppliers with a good selection of options across Europe PricewaterhouseCoopers , Since fibreboard is a standardized product which is easily available from different suppliers, The case company may have a good bargaining power as buyer.

However, compared to other companies that use fibreboard, the case company does not purchase large quantities. Moreover is the quality important to them which leads to reduced negotiating influence by The case company. The Intensity of competitiveness rivalry is very high in the market for stationary. The biggest markets for stationary are Russia, France and Germany GfK, with Sweden and the other Scandinavian countries not ranging in the top.

This implies little market share if The case company keeps on insisting to offer the home office accessories in Scandinavia only. Even the market of high quality home office supplies has been grazed during the last couple of years. There is little room left, especially for unknown brands with low visibility that do not want to compromise on the retail price.

Ideally the customer expects a product with the highest quality and functionality at the lowest price. Since this is not realistic the consumer then lowers their expectations gradually or refuses the product. The case company wants to build on quality and value. Developing a long-term relationship build on trust can prove especially difficult for companies such as The case company that are unknown in the market and try to enter it without much budget for a marketing strategy.

The case company checks all boxes on the customer expectation for high quality: Currently customers do not perceive the quality The case company is offering in their products and therefore do not meet customer expectation on the predictable level according to Miller It is not visible to customers why a paper box is more stable and enduring than a wood or leather box when comparing products among competitors.

Turning their products towards home office accessories might help The case company, since cardboard is a traditional material for stationary. However, this is usually true for products at low prices. Most of the positive customer satisfaction is based on experience with the product. This also means that the customer needs to buy it and will then be surprisingly satisfied. Customer expectations need to meet before or during the decision process of buying a product not after the purchase. This chapter consists of the findings derived from the analysis of market competition and customer expectation in chapter 3.

Since the market for home office accessories did not look very appealing, the project team decided that it would be unnecessarily hard for The case company to enter in the market of home office supplies. Especially since the brand is unknown among customers, they are trying to enter a niche market of high quality stationary in a generally declining market segment with low margins. Therefore the project team discussed which options are available with ease of market entry and high profitability as well as a prospect for the future. The team decided to take a new approach to design a meaningful product and discover new opportunities for The case company.

As a starting point to investigate further was to take a look at the material of cardboard, an unchangeable boundary in the design process. The project team brainstormed possible ideas with cardboard for The case company 4. The strongest outputs were two concepts: Since packaging is closer to the current concept of The case company, it was decided to dig deeper into the market of luxurious packaging and company gift packaging.

With the recession in the paper industry, the growth of paper-based packaging seems like a bright outlook for the future of pappermills Qureshi, Moreover is this a business where not the end consumer is served, but usually other companies who produce or sell the to be packaged product.

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In a Business-to-Business market, price is less relevant than when catering to the end-consumer Wright, This can help The case company to sell their products at a comparably high price, but generating profitable margins at the same time. Paperboard is especially applied in the markets for secondary packaging of alcoholic beverages, perfume and cosmetics, tobacco as well as confectionary. Interestingly, paperboard packaging is usually manufactured by hand, which falls right into the field of The case company Cakebread, Another competitor to keep an eye on is the pulp giant StoraEnso, having entered the market of luxury perfume packing this year.

Nevertheless, this shows that specialized, small companies have a good chance to establish themselves in this niche market. Looking at the suggested concept of luxurious packaging, The case company can gain in customer expectation, because the material of cardboard is taken for granted here and not considered as disturbance. Often the qualities of cardboard are appreciated since it is a lightweight and variable material.

One of the biggest strength for The case company is that they were approached by customers with a need for their customized products as packaging solutions. Even though the company shut down all their marketing activities, contact possibilities, visibility of product offerings etc. Surprisingly the customer wanted to use the product not for its initially intended use as a suitcase to travel, but as a decoration in its luxurious shop window display. It is crucial to consider this customer need instead of ignoring it.

It is a luxury for a company to have customers approaching them instead of needing to acquire them. This finding confirmed the assumption that The case company does not know their customer needs and is not picking up on its full potential. The case company is confronted with customers who present their need on a silver platter and still The case company is not picking up on that.

This is mainly due to the fact that the customers do not use their products as initially intended, but give them a new function. This is something currently disliked and romanticised by The case company. Furthermore they prefer end-users over businesses as consumer. Picking up the niche of customized packaging solutions can be a great possibility without adapting their manufacturing process and products itself too much.

The adaption would need to be a change in customers and strategy. The case company will be able to turn its strength into action by accompanying customers in the selection for their individual packaging. By their expertise in tailoring products to their customer needs, customer expectations can be met quality and uniqueness-wise.

This can help The case company, not being a strong brand. And there are more possibilities, cooperating with the local glass manufacturers could link The case company back to its roots with customers close by to develop solutions for. The case company is at a breaking point with little to lose. The company has a lot of potential, if they are courageous enough to take a new direction. Instead of romanticizing the idea of their products, the company needs to listen to market needs and have a close eye on their competitors.

It is hard to understand for an outsider why the company is prodding for the concept of home office accessories, when they have failed to be successful with a colourful, modernized line just a short time ago and customers are serving their needs on a silver platter. This paper shows how important secondary and thorough research is to reveal realities. Basing a product development on assumptions can lead to big failures. Business economics - Business Management, Corporate Governance.

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Results from the perspective of customer expectations 6. References from the World Wide Web Summary This report describes the importance of market research and awareness of customer expectations from a business perspective in the design process for a new product. Introduction In the first chapter, the background of the report will be set, introducing the project and company The case company.

Background To create a meaningful, successful product, market insights and knowledge about customer expectations are needed. Problem This report will critically analyse the design concepts for the case company by competiveness and customer expectations. Method Information for this report was gathered through primary sources such as interviewees and observations as well as secondary sources such as literature research.

Porters Five Forces. Innovation through Business, Engineering and Design

Theory In this chapter the theoretical framework will be set by describing Michael E. Porter identified seven entry barriers: Customer expectation according to Miller Customer expectation is closely linked to customer satisfaction. Miller discovered four levels of customer satisfaction when customer expectation is met: Empirical findings This chapter includes a short description of the case company and all the information that was collected during the company visit, interview and observations. Secondary research The market of stationary was closely analysed. Analysis of design concepts from a business perspective In this chapter rivalry in the market the case company prefers to enter are discussed as well as a short insight on the market for further design concepts.

Porters Five Forces applied on the home office accessory market and the case company self-made The threat of new entrants is not very present since the market is saturated and already declining with competitors harvesting the little that is left in revenues.

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A positive aspect is the little regulation by the government in the home office supply market. Results and further analysis This chapter consists of the findings derived from the analysis of market competition and customer expectation in chapter 3. Results from the perspective of competiveness Since the market for home office accessories did not look very appealing, the project team decided that it would be unnecessarily hard for The case company to enter in the market of home office supplies.

Results from the perspective of customer expectations Looking at the suggested concept of luxurious packaging, The case company can gain in customer expectation, because the material of cardboard is taken for granted here and not considered as disturbance. It is hard to understand for an outsider why the company is prodding for the concept of home office accessories, when they have failed to be successful with a colourful, modernized line just a short time ago and customers are serving their needs on a silver platter This paper shows how important secondary and thorough research is to reveal realities.

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