Porter 5 Forces Tesla

In: Business and Management

Submitted By julieta1
Words 1135
Pages 5
After several downturns of the gas-fuelled automobiles market some caused by the 2009 financial crisis in US and the instability of the oil price, the automobile industry has been looking forward to develop new energy powered vehicles. This is the case of the British automaker Aston Martin, in recent days, has announced the deal with the Chinese firm LeTV to develop electric cars and bring them to the market by 2018. Through this initiative, both firms are vying against Tesla luxury car segment where is the forerunner of the new-energy vehicles marker. In this essay, the Porter Five Forces framework will be analysed on the electric vehicle market. The emerging market of Electric Vehicles, in the start-up stage of the industry lifecycle, is capturing the attention of automakers prompting a strong rivalry between incumbents namely Nissan, General Motors, and allowing the entrance to new comers such as Tesla that is now heading the market with a clear differentiated position in the industry.
The attractiveness of the electric vehicle market has been catching the attention of the already positioned luxury automakers, for example, Daimler's Mercedes-Benz, Volkswagen's, Porsche and Audi, but also new comers such as Tesla, this last one, with a strong automobile positioned as current market leader on electric vehicles. To tackle Tesla’s strategy, Aston Martin recently signed a deal with a Chinese tech company LeCo (formerly LeTV) to develop an all-electric car, model RapidE, to compete against the Model S from Tesla Motors, to be released on 2018. The companies said that the collaboration could lead to “a range of next-generation connected electric vehicles [built] on behalf of Aston Martin, LeEco and Faraday Future” [Sharman, A. (2016). Aston Martin signs deal to develop electric car. Financial Times] and will merge by providing their expertise; on one hand, the…...

Similar Documents

Porters 5 Forces

...professional services and application management services, with IMB solutions, which leverage industry and business-process expertise while integrating the industry-leading portfolio of IBM and strategic partners, to define the upper end of client-valued services. 3. Software * Consists primarily of middleware and operating systems software 4. Systems and Technology * Provides clients with business solutions requiring advanced computing power and storage capabilities. 5. Global Financing * facilitates clients’ acquisition of IBM systems, software and services Main IBM Competitors: Hewlett-Packard HP operations are organized into seven business segments: 1. Personal Systems Group (‘‘PSG’’) Is a hydride across all IBM SBU 2. Services The Strategic group competing with IBM Global Business Services SBU 3. Imaging and Printing Group (‘‘IPG’’) 4. Enterprise Servers, Storage and Networking (‘‘ESSN’’) The Strategic group competing with IBM System and Technology SBU 5. HP Software The Strategic group competing with IBM Software SBU 6. HP Financial Services (‘‘HPFS’’) The Strategic group competing with IBM Global Financing SBU 7. Corporate Investments Oracle Corporation Oracle is organized into three businesses units: 1. Software The Strategic group competing with IBM Software SBU * Operating System: * new software licenses * software license updates * product support 2. Hardware systems The......

Words: 1277 - Pages: 6

Porter 5 Forces

...Understanding the Tool: Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are: Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. Competitive Rivalry: What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do – for example, if......

Words: 384 - Pages: 2

Apple Porters 5 Forces

...Coursework 1 Hand in Date and Time: 13/11/13 at 3pm on StudyNet and in Coursework Hand-In point Weighting: 30% Title: Marketing Audit Format: Report Type: Group (approx 4-5 members) Select one of the following organisations and familiarise yourself with the relevant organisation website * Apple Inc www.apple.com CONSUMER ELECTRONICS * Tiffany’s & Co www.tiffanys.co.uk LUXURY RETAIL 1. Write a brief overview of the organization Access the relevant industry Mintel /Keynote report and other relevant research from information databases 2. Identify and illustrate the SBU’s (Strategic Business Units) for the organization External Environment 3. Apply PESTEL to the chosen industry. Illustrate and provide detailed explanations 4. Apply Porters 5 Forces to the relevant industry /organization /sector. Illustrate and provide detailed explanations 5. Illustrate in a grid format: Opportunities and Threats Internal Environment 6. Apply McKinsey’s 7S matrix to the organization /sector 7. Apply Marketing mix to the organisation /sector 8. Illustrate in a grid format: Strengths and Weaknesses SWOT Analysis 9. Illustrate in a grid format: corporate SWOT Analysis 10. Illustrate in a grid format: SBU SWOT Analysis (For Apple choose ipad and for Tiffany’s choose Jewellery Strategic Positioning 11. Identify competitors for Apple or Tiffany’s and using a perceptual map with appropriate axes demonstrate a gap in the......

Words: 1792 - Pages: 8

Porters 5 Force Analysis

...Porter’s 5 Forces Analysis = Suppliers, Customers, New Entrants, Substitute Products, Competitors What is Porter’s 5 Forces Analysis? Porter’s 5 forces analysis represents the competitive environment of the firm. It is a strategic foresight to avoid putting the competitive edge at risk and ensure the profitability of products on a long term. For the company this vision is quite important because the firm is able to direct its innovations in terms of choice of strategies and investments. The profitability of businesses within the industrial structure depends on the following forces: Competitive rivalry within the industry; Threats of new entrants; Threats of substitutes products; Bargaining power of customers; Bargaining power of suppliers. Golden Rules 6th force = Often the model is adjusted with a 6th force, the public authorities. This is important because the law and the norms can influence each of Porter’s 5 forces. Key factors for success = The key success factors of the environment have to be identified. To have a competitive advantage some strategic elements should be controlled. Threats of new entrants Public Authorities Bargaining power of suppliers Competitive rivalry within the industry Bargaining power of customers Threats of substitute products © Copyright 2008 LUXINNOVATION G.I.E., The National Agency for Innovation and Research in Luxembourg 1/2 Porter’s 5 Forces Analysis = Suppliers, Customers, New Entrants, Substitute......

Words: 594 - Pages: 3

Porter 5 Forces

...Porter’s Five Forces ------------------------------------------------- Assessing the Balance of Power in a Business Situation The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into. With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your planning toolkit. Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable. However it can be very illuminating when used to understand the balance of power in other situations. Understanding the Tool Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are: 1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are. 2. Buyer Power: Here you ask yourself how easy it is for......

Words: 1159 - Pages: 5

Porter 5 Forces Concept

...Porter's Five Forces A MODEL FOR INDUSTRY ANALYSIS The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure. Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. Diagram of Porter's 5 Forces SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry THREAT OF NEW ENTRANTS Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products RIVALRY THREAT OF SUBSTITUTES -Switching costs -Buyer inclination to substitute -Price-performance trade-off of substitutes BUYER POWER Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward......

Words: 3333 - Pages: 14

Porter 5 Forces

...well about what customers needs, and who it is the customers see the firm will competing with. Porter (1980) said that “the first step in structural analysis is an assessment of the competitive environment – the basic competitive forces and the strength of each in shaping industry structure. The second is an assessment of the company's own strategy-of how well it has positioned itself to prosper in this environment.” When these two are taken together, these two will be the key factors to forecasting a company earning power. 2. Literature Review 2.1 The theory of Porter's five forces The successful of a company's competitive strategy depends on how it relates to its external environment and how well they prepare for it. In the contrast, a company who does not prepare well is ill equipped to deal with a competitive marketplace (Bennett & Blythe, 2002), therefore, company should know well about the advantage of competitive on the market, and what problems they will face in the future. The environment must be viewed each forces which have influence the company, including the products and services (Vignali&Vignali, 2009) when the company face these problems what strategy will they use to flight back; from external environment to understand the advantage of the competitive market in order to plan and build itself strategy, this thinking are from outside-in (Porter, 1980 and Mintzberg et al, 1998). 1 Vignali & Vignali(2009) indicate that the company......

Words: 2007 - Pages: 9

Porter 5 Force

...Michael Porter’s 5 market forces framework. McDonalds Corporation continually monitors its performance to make sure it is competitive and profitable while also being aware of its immediate community responsibilities. This can be achieved by using the Porters 5 Forces model so the company is able to determine where its business needs to change or improve in order to stay competitive in the fast food industry. Porters 5 Forces model focuses on 5 key factors affecting the environment in which a business operates. The threat of substitute products A substitute product is one that can be used as an alternative to a company’s own. It could be argued that the threat of substitute to McDonald’s comes from pizzas and other domestic kebab and fast food houses. However, most of the above do not have the same level of convenience that McDonald’s offers, in having a number of outlets in big cities and also through the use of multiple drive-through outlets. The threat of new competitors The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are: * How loyal are the end users in this industry? * How troublesome or hard is it for the end users to switch and use another product? * Does it require a large seed capital to enter this industry? * Do entries to this industry regulated by government? * How hard is it to gain access to the distribution...

Words: 891 - Pages: 4

Porter 5 Forces

...Awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack. 78 Harvard Business Review | January 2008 | hbr.org STRATEGY STRATEGY by Michael E. Porter Peter Crowther SHAPE THE FIVE COMPETITIVE FORCES THAT Editor’s Note: In 1979, Harvard Business Review published “How Competitive Forces Shape Strategy” by a young economist and associate professor, Michael E. Porter. It was his first HBR article, and it started a revolution in the strategy field. In subsequent decades, Porter has brought his signature economic rigor to the study of competitive strategy for corporations, regions, nations, and, more recently, health care and philanthropy. “Porter’s five forces” have shaped a generation of academic research and business practice. With prodding and assistance from Harvard Business School Professor Jan Rivkin and longtime colleague Joan Magretta, Porter here reaffirms, updates, and extends the classic work. He also addresses common misunderstandings, provides practical guidance for users of the framework, and offers a deeper view of its implications for strategy today. IN ESSENCE, the job of the strategist is to understand and cope with competition. Often, however, managers define competition too narrowly, as if it occurred only among today’s direct competitors. Yet competition for profits goes beyond established industry rivals to include four other......

Words: 10999 - Pages: 44

5 Forces by Porter

...Porter 5 forces of Universal Music Group Rivalry within Music Industry According to Universal’s last full-year results of recorded music market, for FY 2014, we can conclude that the music industry is concentrated, the market share of which is held by three largest firms. They are Universal Music, Sony Music and Warner Music separately. Hence, there are not many other firms except these three giants that can have a significant market share. Although the competition is remain intensive among these three firms, Universal Music has achieved the highest revenue of the total recorded music market in the world. [pic] Reference: http://www.musicbusinessworldwide.com/whos-more-powerful-universal-music-or-sonyatv/ Bargaining power of Suppliers In Music Industry, the suppliers are artists, who have signed a contract with a music company. In the beginning, these artists are not famous, they just need to cooperate with music companies and rely on the packaging and sensationalization. Hence, they do not have much leverage with UMG. However, once these artists have became celebrities or even giant stars, they will gain more reputation and power to bargain with UMG. After all, in this moment, they can use their own fame to achieve revenues without UMG. Bargaining power of Buyers Power Buyers can be classify into two groups: one is mass consumers, another is retailers. Mass consumers command a high bargaining power. Although there are a minority of famous firms...

Words: 486 - Pages: 2

Porter 5-Forces Model

... [pic] Keuka College Bachelor of Science in Management List 1. Develop a Porter 5-forces model of the casino industry. Make sure you discuss each of the five forces in a separate paragraph or section 3 2. How are the gambling companies in Las Vegas responding to the changes in the industry structure and the increased competition . 21 3. How have the casinos in Atlantic City tried to compete with Las Vegas? What threats do they face . 23 Chen Huisheng 323945 Lin Weijie 324066 1.Develop a Porter 5-forces model of the casino industry. Make sure you discuss each of the five forces in a separate paragraph or section. For purposes of this case, we will define the casino industry as including full-service, diverse entertainment (i.e. traditional) casinos of Las Vegas and Atlantic City, and treat other gambling alternatives (e.g. Native American casinos, riverboat gambling, etc.) as substitutes. When discussing each of the five forces, be sure to consider each of the factors relevant to each of these five forces as we discussed in class. In terms of Porter’s 5 forces analysis, the bargaining power of suppliers is weak because of the fact that casinos basically provide their own services with internal resources, such as employees properly trained in various casino games. The bargaining power of customers is strong, especially because even a slight change in the demand for casino services could directly impact the revenues of the......

Words: 6744 - Pages: 27

5 Porter Forces of Ryanair

...5 Porters Forces de Ryanair 1. Amenaza de productos sustitutos Los Demás productos de sustitucion para las compañías aereas son otros medios de transporte como los coches, trenes o barcos. Que pueden suponer una amenaza para unos viajes de distancias cortas, regionals. Sin embargo al aumentar de la distancia, los vuelos se conviertan en una opcion mas popular para amenaza es moderada. Recientemente las tecnologias de la comunicacion en desarrollo, como el internet, que permiten a las reunions virtuales, reducido la necesidad para viajes de negocios. Nos muestran que la amenaza de productos sustitutos a ser baja. 2. Amenaza de la Entrada de nuevas competidores La amenaza de la entrada es baja para Ryanair debido a las barreras de entrada asociados con la entrada del sector aerlinea que incluye, Economias de escala, los requierimientos de capital, acesso a los canals de distribucion, etc. Economias de ecala que se conoce como la ventaja de costas asociadas a la expansion del negocio de su considerado como el mayor obstaculo entrado en industria de las aerolineas Los requerimientas de capital asociodas con la entrada de la industria de la aerolineas incluyen, pero no limitad a la obtencion de las instalaciones fisicas, la participacion en loas actividades de marketing y la atraccion de mono de obra cualificada representan otra barrea significativo. Dificultades asociadas a la obtencion de acesso a las canals de Distribucion es otra barrera que enfrentan......

Words: 507 - Pages: 3

Porter 5 Forces

...Porter's Five Forces 12-1-15 上午3:06 Diagram of Porter's 5 Forces The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure. I. Rivalry In the traditional economic model, competition among rival firms drives profits to zero. But competition is not perfect and firms are not unsophisticated passive price takers. Rather, firms strive for a competitive advantage over their rivals. The intensity of rivalry among firms varies across industries, and strategic analysts are interested in these differences. Economists measure rivalry by indicators of industry concentration. The Concentration Ratio (CR) is one such measure. The Bureau of Census periodically reports the CR for major Standard Industrial Classifications (SIC's). The CR indicates the percent of market share held by the four largest firms (CR's for the largest 8, 25, and 50 firms in an industry also are available). A high concentration ratio indicates that a high concentration of market share is held by the largest firms - the industry is concentrated. With only a few firms holding a large market share, the competitive landscape is less competitive (closer to a monopoly). A low concentration ratio indicates that the industry is characterized by many rivals, none of which has a......

Words: 3845 - Pages: 16

Porters 5 Forces

...Supermarket Industry Porters 5 Force’s Porter (1980) illustrates in this analytical tool 5 variables that determine the attractiveness of an industry for organisations in terms of profitability in their immediate environment. Using the forces in this model we can analyse how attractive the UK Supermarket industry is to enter, the 5 forces are as follows. The threat of potential new entrants Barriers to entry in the UK supermarket industry relies on the entrants capability of matching capital requirements of existing firms, the UK supermarket industry is dominated by firms known as Tesco, Asda, Sainsbury’s and Morrison’s (Big 4) owing up to 69% of market share in the UK. Looking at the experience curve (1960: Boston Consultancy Group) A new entrant would have to achieve the economies of scale needed to achieve cost parity with the big 4 and compete on cost advantage. In the supermarket industry achieving economies of scale is not on production but other factors such as efficiency, pricing, range of goods and value of products. Tesco for example have very low cost margins in comparison to the scale of their operations and distribution channels but they are able to achieve high sales because the convenience, range of products and different services they offer. Product differentiation is another barrier to entry, a new entrant would need to achieve and individual level of differentiation and attain an identity through promotions and costly advertising, total......

Words: 1807 - Pages: 8

Porters 5 Forces

...Nakia Hart MBA 640 Dr. Turnquist Porters 5 forces Analysis of Casino Industry Internal Rivalry (High significance) In Las Vegas, the casino-resort market has become hyper-competitive, especially since all of the hotel-casinos rely heavily on room revenues and convention guests. Currently, the supply of hotel rooms far outweighs the demand for them, pushing room rates down to unprofitable levels. Entry and Exit (High significance) Entry and exit forces are probably the most restricting aspects of the competitive landscape in the casino-resort industry. The casino-resort industry is highly regulated and highly taxed. Government officials play a crucial role in the success or failure of casino-resorts. It is impossible to enter the industry without a gaming license and, in some cases, a land concession. Buyer Power (Moderate significance) As evidenced by the Las Vegas market, buyers have some power in the casino-resort industry and are capable of exerting downward pressure on room rates. Furthermore, buyer preferences are considered in determining attractions and other amenities, such as entertainment shows and restaurants. Every casino-resort company is constantly trying to out-do its competitors with new developments and offerings. Supplier Power (Low significance) Suppliers in the casino-resort industry have extremely limited power, as they reside in a highly competitive market place in which price is determined by supply and demand. Obtaining......

Words: 369 - Pages: 2