University Questions

Long Term Success if an enterprise depends upon how it handles the 5

forces enumerated by Porter. Discuss this wrt Porters 5 forces Model.
Competition in any industry is shaped by 5 forces highlighted by Porter.
Hence understanding of these forces is crucial for strategy
formulation.Comment.
Long run success of a company is largely dependant upon structural
attractiveness of Industries in which they compete. Evaluate this stmt in
context of Porters 5 forces model& elaborate each force as a determinant of
competitive environment for a company. Illustrate .
Liberalization and Globalization has virtually changed the industry scenario
for financial services. Perform external analysis for State Bank of India
covering environmental scanning and 5 forces model.
Global players are entering Indian Consumer Durables market in a big way
with heavy investment. How can they achieve sustainable competitive
advantage given the fact that they have different levels of entry? Can they
apply Porters Model of generic
Same for Automobile industry.
 Influencing the Power of Five Forces

Reducing the Bargaining Power of Suppliers

Reducing the Bargaining Power of Customers
Reducing the Treat of New Entrants
Reducing the Threat of Substitutes
Reducing the Competitive Rivalry between Existing Players
 Entry of Global Competitors in the
Automobile Industry An Analysis based on
Porters 5 forces Model

Competition from Substitutes

Inadequate Public Transportation System

Developmental Stage of Electric Cars

The lack of adequate public transportation system coupled

with the fact that the electric or hybrid cars are still in
the developmental stage means that the Indian car
industry faces minimal competition from substitutes.
 Threat of New Entrants

Economies of Scale - capital-intensive industry

Government Policy - license-raj rsegime of the Indian
government
Huge Capital Costs require deep pockets
Absolute Cost Advantages - Maruti's presence

Although liberalization of the Indian economy has reduced

the impact of government policy as an entry barrier, the
car industry still enjoys high entry barriers due to huge
capital costs involved in setting up efficient plants and
numerous cost advantages enjoyed by Maruti. The
recent pull-out of Peugeot is an example that even a
global automobile company could find it extremely
difficult to operate in India if it faces labor trouble and
problems with its joint venture partner.
 Rivalry between Established Competitors

Highly Concentrated Industry

Diversity of Competitors
Product Differentiation - a perceptible shift towards "cars"
being treated as a commodity rather than as a consumer
good
Excess Capacity and Exit Barriers
Increase in Working Capital Needs

The competition between firms in the car industry is

expected to intensify considerably as newer companies
will start reducing Maruti's dominance of the market. The
expected significant over-capacity in the industry,
increasing working capital needs, and high exit barriers
coupled with low differentiation between models
especially in the economy segment will put downward
pressure on prices and profitability of companies.
 Bargaining Power of Buyers

Buyers' Price Sensitivity

Relative Bargaining Power s
Availability of Easy Financing
Used Car Market

The entry of the global car manufacturers has transferred the

balance of power into the hands of the buyer. The Indian car
buyer is not only extremely price conscious, but also wants
the highest value and service. Huge dealerships, member
clubs, mobile squads, and replacement vehicles are just some
of the sops being offered to the customer. The availability of
cheap financing and maturing of the used car market will also
increase the choices for the consumers. With many new
models waiting to be launched, the Indian car buyer will only
have more power to choose and dictate terms to the dealer.
 Bargaining Power of Suppliers

Diminishing Supplier Power

Supplier power in the automobile industry will diminish

greatly in the coming years due to the large number of
competing suppliers, threat of cheaper and better-
quality imports, and an increasing trend towards
reduction of a car company's vendor base.