Swot Analysis Of Automotive Industry

Column # 9
ECON 21 7:30 AM – 9:00 AM MW
INDUSTRY: AUTOMOTIVE INDUSTRY
One of the leading industries today is the automotive industry. The automotive industry is principally composed of a broad range of organizations and societies involved in the fabrication and sale of motor vehicles. Organizations and establishments that design and develop the different components of the vehicles are also included in this industry. The automotive industry has an oligopoly type of market structure. An oligopolistic competition in the market is characterized by a large number of potential buyers but only a few sellers, a homogeneous or differentiated product, and high barriers to entry. Products for the automotive industry include passenger automobiles,

They are also price setters rather than price takers. Price setters are those industries that dictate the price its customers pay for goods and services. It is in contrast with price takers who cannot dictate the price but their prices are dependent on the market. Each firm must also consider the actions and reactions of other companies or their rivals in the market in regards to pricing, output and investment decisions. Car companies pay close attention to their competitors. They see to it that they know the competitors’ strategies, costs, prices, and market offerings. They have to assess the gathered information so that they can come up with an excellent pricing strategy for their products so that they can avoid being left out in the ever-changing field of competition. These industries are interdependent between one

This competition does not only refer to the different offers of different companies. The threat does not only mean buying a different car. The automotive industry products also have substitutes that must be considered. These include bicycles, motorcycles, commuting or even walking. Because of the high price and value of cars, other customers may drift their interest towards other substitutes. The higher the cost of operating a vehicle, the higher the chance that people will seek other options for transport. They may prefer to walk rather than buy a car or spend a few cents every day to commute rather than pay a lump sum amount for a branded car. The price of gasoline affects the decision of consumers whether to buy a vehicle or not. This actually has a large impact on the consumer’s decision. There are also several factors to be considered in determining the availability of substitutes. Time, money, personal preference, and convenience are some of these factors to determine if the substitute poses a big threat to the