The automobile industry value chain analysis PDF

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8/7/2021

The automobile industry value chain analysis

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Section 2: Following on from your analysis in Question 1, discuss the competitive p Europe (GME) at the time of the case. Threat of Entry The automobile industry is facing the mature stage, although the high barriers to entry considering the for companies to manufacture and design their cars and the very low switching costs consumers face w doesn’t mean there are no new entrants to Europe for instance Asian automaker as Toyota Nissan and o the market.

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Threat of Rivalry There is a very high threat of rivalry within the industry, as automaker should always be updated with n come out with new models and design. Moreover for GME the exit barrier is relatively high due to inve past decades. With the emergence of Asian carmakers in Europe there had been a diversification consid words it is a diversity of rivals.

Threat of Substitutes Substitutes within the industry are more or less depending on consumers and their preference of comm incorporates cycles, buses, underground and also could be planes and just walking. Consumers aren’t o transports within the most European countries, also traffic jam in some places are reason for not using switching cost., plus the high price of gas play a major role.

Threat of Suppliers As automakers manufacture their cars so the threat is considerably low, as there are a big number of su which make suppliers give more discounts, also cars elements are more or less standardised. Most of th one supplier and there is no forward integration as suppliers are small comparing the automaker and in backwardly the supplier or in some cases they create an alliance to reduce the costs

8/7/2021

The automobile industry value chain analysis

Production: GME was the largest manufacture of cars in Europe; the production reached its peak in the methods have showed an inadequacy, as they have been producing more than the demand. GME’s Marketing & Distribution efforts haven’t done an efficient job of pleasing the public. This could showrooms, announcement …etc. in order to get automobiles GME uses trucks and trains to deliver the Customer Service & Support: generally supporting the customers after a sale. GME has an 800 number have an enquiry they can call for free. Support Activities sustain the daily operations of GME but are not directly implicated in the manufactur These activities include Human Resources, communications and Consumer crediting.

Section 3: Assess the performance improving options taken or proposed by GME a General Motors Electric knew that it could only improve from within (internally) as Macro economic fac rate etc are beyond their reach. All successful businesses have mainly two aims; cut costs increase sales In GM’s case increased sales was not an accessible option, so therefore the company had to focus on p here below is what GM proposed at the time of the case. GM reduced it’s workforce by 20% in an attempt to boost productivity and reduce costs by $600 Use competitive pricing and offer additional services GME formed a strategic alliance with Fiat SPA in 2001 a restructuring plan called “Project Olympia costs and decrease production capacity by 15% Closing down Luton plant to again reduce costs Moving production to cheaper areas in this case a German plant was closed down and manufactu Integration of operations Abandon cost incurring practices like using different parts and wiring for different cars Strategically GME have achieved both some success and failure in its operations to improve the situatio reduction of employees and closures of unproductive plants are fully justified as the business can’t con on year, in fact these decisions should have been made faster reflecting GM poor management structur in a ever changing market. GM was also correct to cut out the practice off using different parts and wiri reduces overheads as any loss making business must cut costs at every opportunity. However there are implemented for example a strategic alliance with an Asian manufacturer would have been more benef could have given GM access to superior management and technology resources, in return GM could ha the US market. Another example of poor strategic decision making is the use of competitive pricing wh never implement as good marketing could over time allow for premium prices. GM should have offered actually costs the company very little in real terms, in the USA GM offer warranties for 100,000 miles ov implemented in its European business model.

General thoughts on how GM can improve their European performance 1. Change management team in Europe 2. Form strategic alliance with Japanese manufacturer with superior manufacturing techniques f

8/7/2021

The automobile industry value chain analysis

would expect a company with manufacturing facilities in 35 countries and sales in 200 countries to at le guilty of not paying enough attention to the Macro environment were political changes were gearing t GM also underestimated the threat from Asian car companies and as a result quickly lost market share  Share this:

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