The Porters Five Force Analysis Research Paper Example | Topics and Well Written Essays - 2000 words

The Porters Five Force Analysis - Research Paper ExampleProduct innovation and wider range of products is another platform for competition. Companies admit to expand their reach to cater to more and more customers, both geographically and demographically. Competition will intensify in relation to environmental measures and energy use, as customers attitudes to the environment become gradually more important. In this scenario, basic technological trends will lead to a variety of technical vehicle-related innovations.With the shift in focus on to customer retention and loyalty, companies now comport to invest in improve customer service to ensure customer satisfaction. Better service also includes better geographical advantage to serve where the customers atomic number 18 located.There is little bargaining power for buyers in the luxury cable car segment as there are numerous buyers scattered all around the globe. There is better transparency and huge amounts of information avai lable to buyers regarding the pricing and cost of manufacture of cars and hence they have several(prenominal) leverage in negotiating the purchasing price. This advantage is mostly over-ridden by the fact that buyers for this segment are mostly individuals and are not grouped together for a collective advantage. Since luxury cars are sold typically by the company or direct dealers, there are few players in the statistical distribution channel at present. Luxury cars have lower or no resale value as compared to economy cars. This is an enormous factor that influences buying decisions in the eccentric of luxury cars.Bargaining power of suppliersThe suppliers to large premium segment manufacturers would typically be large and medium manufacturers themselves. Since quality is the biggest product differentiator in this segment, it is irresponsible that companies choose their suppliers with care and efficiency. In such a case, it would be difficult to replace or change suppliers with ease. As a result they have some flex in determining product pricing, delivery and distribution. bane of new entrantsThe threat of new entrants in this segment is very low due to the some(prenominal) entry barriers that exist in this industry. There are too many well established companies with stiff competition among them. A huge amount of slap-up is required to enter into this sector. There should also be tremendous amount of tacit and explicit knowledge of products and constant innovativeness to compete in this industry. The luxury car segment is driven by quality and goodwill as well and this comes with time and experience in the sector. With all the above barriers, few companies would look into entry this industry .However, there is the threat of companies already existing in the auto industry, entering into the luxury car segment. Many companies, which originally were small and economy car makers, have now entered into the luxury car segment and are giving the bigger and bet ter established giants in this segment a run for their money.Threat of substitute productsThe most prominent substitute to cars is public transports such as buses, taxis and aircrafts. The bigger companies in the premium car segment have taken move to compete with public transportation by manufacturing luxury buses and providing pick-up service in their premium cars as part of the hospitality sector. The other