Could anyone please help me answer this question You are the CEO of a European a
ID: 366110 • Letter: C
Question
Could anyone please help me answer this question
You are the CEO of a European auto maker group Audi company that is planning to launch a subsidiary in Detroit Michigan (USA). The size of the European company is the equivalent of a fortune 500 company in the USA. You are asked to research the market and international management issues, including finding detailed data. You should consider the broad auto industry in the USA but you will also be asked to find detailed information about the major companies that operate in that industry.
Please answer the question belows
- Conduct a SWOT analysis of your industry with the data that you found in your own words ( at least 2 paragraphs for each analysis )
** Please include the reference **
Explanation / Answer
SWOT analysis of the industry
Strengths:
Developing industry: Automobiles are still evolving and developing industry which has tremendous growth opportunities in coming future. People are getting better off and affordability is no longer an issue, so people will continue buying cars for personal mobility. This has a bright future for automobile companies.
Continuous product innovation & technological advancement: With the advent of E-vehicles & alternative fuel such as Shell gas, there are many environmental products coming up which will drive the next phase of growth for automobile industry.
Growth shifting to Asian markets: New markets in China & India coming up where there is a huge demand for cars and advanced vehicles. This offers another great opportunity for automobile manufacturers.
Increase in demand of luxury vehicles: Luxury vehicles demands are increasing which have better profitability and margins, making them a good segment to target for automobile companies.
Weakeness
Quality Issues : The car manufacturing companies are facing many quality issues resulting in massive recalls. This has reduced the public confidence in them and governments are also stepping up to create more stringent guidelines.
Multiple choices for consumers leading to drop in prices: The car prices has been declining over the years due to heavy competition in the market. This has led to the drop in prices and overall profitability for the industry.
Environment Consciousness Increasing: This has resulted the governments stepping up and creating many legislations which has increased the input costs for the companies.
Opportunities
Fuel-efficient vehicles: Reduction in fuel consumption has led to the development of cost efficiency programs that are helping the companies reduce their cost structures.
Strategic Alliances: Partnership with companies like OEMs and technology companies has resulted in acquisition of strategic capabilities and offers a good differentiation strategy in the market.
Rise in car ownerships: Car ownerships has been increasing across the world and market is getting bigger. This offers a great opportunity for the automobile manufacturers.
Market expansion: New markets such as BRICS nations and South East Asian economies are gibing a good upshot in the growing markets for the automobile firms.
Threats
Heavy Competition: The presence of so many competitors in the market makes it a really difficult space to manage the sales and profitability. There are many new and nimble players who are disrupting the market like that of Tesla, etc.
Increase in fuel Prices: Increase in the fuel prices across the world has shifted the growth towards shared economy and might pose a threat towards acquisition of new cars.
High investments in Research & Development: The cost involved in research and development are huge and they are draining the new investments and increasing the overall costs for the companies. This will only increase in the future as well.