Assignment on
Analysis of Corporate and Business level strategy
Course Title: Management Control System
Course Code: MGT - 503
Submitted to
Kazi Sirajum Munira
Assistant Professor
Department of Management,
University of Chittagong.
Submitted by
Mohammad Ragib Hussain
ID: 18302048
Session: 2017-2018
MBA 1st Semester
Department of Management,
University of Chittagong.
Date of Submission: 28 August, 2023
BCG Matrix of Automotive Industry
A BCG Matrix for the automotive industry involves categorizing automotive companies or brands
into four quadrants based on their market share and market growth rate. The BCG Matrix, also
known as the Boston Consulting Group Matrix, helps analyze a company's product portfolio and
make strategic decisions. Here is a BCG Matrix for the automotive industry given below:
MARKET SHARE
HIGH
Star:
HIGH
• Tesla
• Toyota
• Volkswagen Group
LOW
Question
Mark:
• NIO
• Rivian
• Lucid Motors
MARKET
GROWTH
LOW
Cash Cow:
Dog:
• Ford
• General Motor
• Honda
• Mitsubishi
• Subaru
• Fiat
Five Forces Model of Automotive Industry
The Five Forces Model, developed by Michael Porter, is a framework used to analyze the
competitive forces within an industry. Here's an analysis of the automotive industry using the Five
Forces Model:
1. Threat of New Entrants:

High initial capital requirements: Establishing a new automotive manufacturing facility or
entering the market as a new automaker demands substantial capital investments.

Economies of scale: Existing companies benefit from economies of scale, making it
difficult for new entrants to compete on cost.

Brand loyalty: Established automotive brands have a strong customer base and brand
loyalty, making it challenging for newcomers to gain market share.

Regulatory barriers: Strict safety and environmental regulations can increase the cost and
complexity of entering the market.
2. Bargaining Power of Suppliers:

Suppliers in the automotive industry have moderate power.

Large automotive manufacturers often have multiple suppliers to choose from, reducing
supplier dependency.

However, specialized component suppliers with unique technology or resources may have
more bargaining power.
3. Bargaining Power of Buyers:

Buyers in the automotive industry have moderate to high power.

Consumers have access to a wide range of vehicle options and can easily compare prices
and features.

Information availability on the internet empowers buyers to make informed decisions.

Fleet buyers, such as rental car companies, have more bargaining power due to bulk
purchases.
4. Threat of Substitutes:

The threat of substitutes is moderate.

Public transportation, biking, and walking can be substitutes for personal vehicles, but they
do not meet all mobility needs.

Emerging technologies like ride-sharing and autonomous vehicles could potentially disrupt
the industry in the future.
5. Competitive Rivalry:

The competitive rivalry in the automotive industry is high.

Numerous established automakers and new entrants compete for market share.

Intense competition on factors like price, technology, design, and innovation drives
continual product development and marketing efforts.
Value Chain Analysis of Automotive Industry
A value chain analysis for the automotive industry can help identify the primary activities and
support activities that create value in the industry's products and services. Here's a simplified value
chain analysis for the automotive industry:
Primary Activities:
1. Inbound Logistics:

Sourcing raw materials and components like steel, aluminum, plastics, and
electronics from suppliers.

Managing transportation and warehousing of materials to manufacturing plants.
2. Operations:

Designing and manufacturing vehicles, engines, and other automotive components.

Implementing quality control processes and assembly line operations.
3. Outbound Logistics:

Distributing finished vehicles to dealerships and customers.

Managing transportation, vehicle storage, and delivery logistics.
4. Marketing and Sales:

Developing marketing strategies, advertising, and promotions to attract customers.

Managing sales channels through dealerships and online platforms.

Offering financing and leasing options to customers.
5. Service:

Providing post-sales services, including maintenance, repairs, and warranty
support.

Offering spare parts and accessories for vehicles.

Developing and managing service networks.
Support Activities:
1. Procurement:

Sourcing and negotiating contracts with suppliers for raw materials, components,
and technologies.

Managing supplier relationships and ensuring a stable supply chain.
2. Technology Development:

Research and development of new automotive technologies, including electric and
autonomous vehicles.

Innovation in manufacturing processes, materials, and design.
3. Human Resource Management:

Recruiting and training skilled workers, engineers, and management personnel.

Ensuring a safe and productive working environment.
4. Infrastructure:

Building and maintaining manufacturing facilities, research centers, and
distribution networks.

Investing in information technology and data systems for operations and sales.
5. Firm Infrastructure:

Corporate governance, leadership, and decision-making processes.

Legal and regulatory compliance.

Financial management and resource allocation.
Three Generic Strategy of Automotive Industry
Michael Porter's three generic strategies offer a framework for businesses to achieve a competitive
advantage within their industry. Here are the three generic strategies and how they can be applied
in the automotive industry:
1. Cost Leadership Strategy:

Objective: To become the lowest-cost producer in the industry.

Application in the Automotive Industry: Companies following this strategy
focus on minimizing production and operational costs while delivering quality
vehicles. They often achieve economies of scale through high-volume production
and efficient supply chain management.

Example: Companies like Toyota and Hyundai have historically employed cost
leadership by emphasizing efficient manufacturing processes and economies of
scale.
2. Differentiation Strategy:

Objective: To offer unique or premium products and services that are valued by
customers.

Application in the Automotive Industry: Companies following this strategy aim
to create vehicles with distinctive features, design, technology, or brand image that
set them apart from competitors. They often target specific market segments.

Example: Brands like BMW and Mercedes-Benz are known for their
differentiation strategy, offering luxury vehicles with advanced features and
superior performance.
3. Focus Strategy:

Objective: To concentrate on a specific market segment or niche and tailor
products or services to serve that segment exceptionally well.

Application in the Automotive Industry: Companies following this strategy
focus on specific vehicle categories, such as electric cars, sports cars, or economy
cars, and cater to the unique needs and preferences of those customer segments.

Example: Tesla is a prime example of a company using a focus strategy by
specializing in electric vehicles and targeting consumers looking for sustainable
transportation.