porters forces

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Recommended: Porter’s five force analysis

Porter’s five forces analysis

Bargaining power of customers
Indus Motor Company has a policy of “Customer First” (IMC, 2013, p. 49). Meaning, for IMC, customers certainly matter to a very high extent, so it comes to bargaining power it is safe to say that it is not low. The amount of surveys by IMC also shows how much it values its customers. Given the trust IMC has provided Pakistani customers for them to depend on it, customer’s demand for high quality and durable vehicles (Qeemat, 2012), IMC does have some grip over as its customer base is quite loyal.
But since switching costs are not too high either, be it IMC’s biggest competitors or people using other means to avail a vehicle. It has been seen that a major decrease was faced by IMC when government allowed the usage of used cars for a long time as well as allowing smuggled cars to be used. Sales went down to an unexpected number. The amount of surveys by IMC also shows how much it values its customers (Nadeem, 2009). The economy of Pakistan has not been going through times where disposable incomes are enough to afford such a higher quality. It completely depends on the customers if they would like to leave the brand and all that comes with it. Most of Pakistani customers who go for Toyota cars are usually the ones who have the ability to afford a status symbol like an expensive car (IMC, 2013). Not many people can do that other than the ones living in urban areas.
Increase or decrease in number of sales can show how strong or weak buyer power is. In past it has been seen that Toyota will increase the prices and same can be said about all of its family (Dewang, 2013). This is not just because of the buyers but other economic circumstances can affect such a shift too for ex...

... middle of paper ...

...in Pakistan so yes IMC does have a huge threat of substitute in this market because of changing policies of government, its inability to conduct programs favourable for locally assembled and manufactured vehicles and suffering economic state of affairs.

Competitive rivalry
Austerity of rivalry towards competitors in automotive industry around the world is strong. IMC has two major rivals, Pak Suzuki and Honda Atlas. Pak Suzuki has more or less of a monopoly in Pakistani market (The Express Tribune, 2013) while Honda Atlas comes up with models which are quite cheaper than Indus Motor Company (The Express Tribune, 2013). Even in hard times all of these have stunned analysts the way they managed to get through. So competitive rivalry is quite strong but one thing should be kept in mind that all of these automakers have their own competitive advantage over each other.

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