In seven pages and 2 parts this paper applies the Porter's Five Forces model to the automotive industry of Europe and then assesses BMW's industry competitiveness. Ten sources are listed in the bibliography.
Name of Research Paper File: TS14_TEautobm.rtf
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of this. In Europe it has been argued that the market is saturated, with growth in the future projected at not greater than between 1-2% (IMAP Focus Group Report, 2002).
However, other evidence also exists that indicates the growth may not be this slow for some time. For example in the UK the market still has a great deal more
potential as the trend has been o move away from one car households to households with two or more cars with two car families increasing for 15% in 1985/6 to
22% in 2001 (The Department for Transport, 2002). For many car manufacturers this is a mixed message especially when considering their position in the industry. One tool a company
such as BMW can use is the Porters Five Forces Model, using this to identify the current market and trends in order to access current and develop future strategy.
The five forces model considers the external macro effects on an organisation in a business environment. His five forces model is designed to
show how the external environment can effect the way a business operates, and that any strategy a business undertakes should take these factors into consideration when analysing their position and
possible future (DAveni, 1999). Porter does not see these external factors as working alone, they act in relationship to each other, and can also be influenced by the organisation which
they effect, in understanding them the organisation is in the best position to influence them (Thompson, 1998). The first of Porters five forces
we will consider is that of rivalry, (exiting competition) within the existing market place. This rivalry may take several forms, and will depend on the competitive structure of the industry.