Essay Example on The automotive industry generated an annual domestic revenue of 2.3 Trillion









According to Griffin and Shen 2013 the automotive industry generated an annual domestic revenue of 2 3 trillion USD and annual global revenues of 9 trillion USD As of the December 2017 the industry employed over 2 9 million people in areas such as manufacturing and retail trade National Employment and Seasonally Adjusted Table The following five industry forces within the automotive industry are the most important factors that executives should consider 1 Bargaining power of buyers As buyers get more sensitive to prices they would switch to any other brand that would offer greater value for the money they are willing to spend 2 Bargaining power of suppliers nowadays car manufacturers are becoming system integrators thus relying heavily on their suppliers 3 Rivalry between established competitors competition is fierce and car makers should pay great attention to their competitors 4 Threat of entry The costs of entering the market is very high which would create a barrier to new entry 5 Threat of substitutes Other available transportations don't impose a great threat to the car s market since they are not as convenient as cars 

To optimize their return on capital employed ROCE and increase profit margins CEOs need to consider investing in new technologies to address the increase in regulations with respect to the environment and safety standards Mohr et al 2013 page 10 maximize their buying powers to minimize the cost of goods by partnering with various suppliers maximize their inventory turnover using electronic data interchange and minimize their capital deployment through outsourcing Grant 2016 page 62 A report by KPGM 2017 page 9 indicates that 50 of automotive executives believe that battery electric vehicles to be the 1 trend followed by connectivity and digitalization and Tesla seems to be leading the industry in manufacturing electric vehicles Tesla is well-positioned in the market for electrical vehicles EV automakers currently it offers four models that cater to different needs and classes

Tesla Model S has been in taxi services for over three years and surpassed the 250 000 mile mark which is uncommon to in the EV market Szymkowski 2018 7 Secrets Tesla knew that it needed to design cool EV for the famous eco conscious drivers As population increases the demand for a more efficient and affordable car that meets regulations and standards is on the rise and the auto manufacturer that capitalizes on this idea will develop a competitive advantage and increase their market share in this area of manufacturing Grant R M 2016 Contemporary strategy analysis Chichester West Sussex UK John Wiley Sons Ltd Griffin G Shen L 2013 Automobiles and personal vehicles industry Salem Press Encyclopedia Klippenstein M 2018 Electric Vehicle Sales in the United States 2017 Half Year Update online FleetCarma Available at https www fleetcarma com electric vehicle sales united states 2017 half year update

Accessed 14 Jan 2018 KPMG 2018 Global Automotive Executive Survey 2017 online Available at https home kpmg com xx en home insights 2017 01 global automotive executive survey 2017 html Accessed 14 Jan 2018 Mohr D Müller N Krieg A Gao P Kaas H Krieger A and Hensley R 2013 The road to 2020 and beyond What's driving the global automotive industry online Available at https www mckinsey com industries automotive and assembly our insights the road to 2020 and beyond what's driving the global automotive industry Accessed 14 Jan 2018 National Employment n d Retrieved January 12 2018 from https www bls gov iag tgs iagauto htm emp_national Steinbuch 2018 7 Reasons Why Tesla Has Been So Successful online Available at https steinbuch wordpress com 2015 01 22 7 reasons why tesla has been so successful Accessed 14 Jan 2018 Szymkowski S 2018 Tesla Model S durability cars with 250K and 300K miles still humming along happily online Green Car Reports Available at https www greencarreports com news 1112465_tesla model s durability cars with 250k and 300k miles still humming along happily Accessed 14 Jan 2018

It offers the Roadster which is a high end car that starts at around 200 000 and it also offers the Model 3 car that starts at 35 000 To demonstrate their successful position Tesla s Model S held the first position in EV sales in the first half of 2017 where the company sold 11195 Model S Klippenstein 2018 Steinbuch 2015 lists seven reasons on why Tesla has been so successful and others may have failed 1 Technology Tesla s battery technology is so advanced that other companies use their batteries 2 Timing Tesla s entry to market was at the right place at the right time 3 Monopoly Tesla is moving towards dominating the high end electric sports car by their Roadster model 4 Team Their team is a diversified team that has great engineering and sales skills 5 Distribution Tesla s is working on expanding their factory to the Gigafactory which will be able to produce cars at much higher rates 6 Durability It seems that a 2014

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