Strategic 2 Essay Example | Topics and Well Written Essays - 500 words

Strategic 2 - Essay Example Automobile manufacturers’ sales proved the most lucrative for the global automobiles industry in 2008, generating total revenues of $1,698.5 billion, equivalent to 95.19% of the industry's overall value. In comparison, sales of motorcycles generated revenues of $85.8 billion in 2008, equating to 4.81% of the industry's aggregate revenues. The performance of the industry is forecast to accelerate, with an anticipated CAGR of 4.5% for the five-year period 2008-2013, which is expected to drive the industry to a value of $2,220 billion by the end of 2013. 1) Threat of New Entrants: A tremendous increase in raw material costs in recent years has resulted in pressure on both market players and suppliers. The diverse markets in which suppliers operate have reduced their reliance on the automobile industry. Barriers such as stern government regulations, high fixed costs and exit barriers hinder new entrants to the market. Competition in the industry has increased as a result of econom ic downturn. 2) Bargaining Power of Suppliers: Suppliers such as steel and aluminum manufacturers are often large companies who supply to a wide variety of industries, reducing their dependence on the automobile manufacture market.