Driving Forces of Change
As the final waves of developments take up momentum, the manufacturers in the 21st-century face situations that could create competitive advantages or opportunities. Companies such as Toyota and Ford are making significant improvements to keep up with the 3-D technologies. The firms are looking for new techniques to respond to risks and sustain a competitive edge. This essay takes a succinct look at the trends and operations within the automobile industry.
The changes that have risen in the vehicle industry emanate from several forces within and outside the corporations. The first one is the rapid emergence of new production technologies such as 3-D printing and collaborative robots. Success needs the firms to scan the advancements regularly to capitalize on their opportunities. The second force demands that the automobile industry moves from the lean processes to win the manufacturing game. The lean approach was highly recommended in the 1990s, but it has not helped all the vehicle companies. Lastly, the automobile corporation together with other sectors has witnessed a shift in labor relations that required increased managerial relationships with the employees, owners, and labor unions (Nahmias & Olsen, 2015).
Relevant Economic Trends & Forecasts
The economies today are transforming drastically due to the triggers from the onset of emerging markets, sustainability policies, changing customer preferences, and technological rises. The forces have introduced various economic trends such as connectivity, autonomous, driving, diverse mobility and electrification. The four elements accelerate and reinforce one another disrupting the operations within vehicle industry. The automobile revolutions are set to increase the revenue pools of the companies by 30 percent before 2030. Also, car sales will rise with the consumers requesting for vehicles that fall in the range of fit-for-purpose. The towns will replace the rural areas speeding up the automobile revolution (Al-Alawi & Bradley, 2013).
Market Trends & Forecasts
Car sales have been on the rise for the past years. Hence, the automobile market seems to be moving in the appropriate direction. The vehicle industries are being called upon to tap the opportunities in the emerging markets. There is an increasing demand for them to go out of their way to penetrate new regions to provide the services. Also, due to the series of climatic changes the vehicle companies have been called upon to measure and regulate the emission of pollutants. The efforts have increased the cost of production affecting their revenue generation process. The future requires them to save the ecosystem and provide automobiles that are easier and safe to use (Ingrassia & White, 2013).
Industry analysis
The changes and trends have created power struggles within the automobile industry as firms go out of their way to increase their sales and become world leaders. The vehicle industry is now at its maturity stage judging from the advancements in technology and the growth of national firms into international corporations. With so many developments comes increased competition. The big leagues such as Toyota and Ford no longer have a monopoly over the production of automobiles. Fortunately, customers remain loyal to their brands on most occasions; hence, the competition is at a moderate level with the popular corporations still holding on to their leadership position (Al-Alawi & Bradley, 2013).
A BCG analysis of top brands such as Toyota indicates that they possess relatively large market shares in particular regions compared to others. For instance, Toyota take precedence in the Asian continent while in the U.S., it has a lower market share. The evaluation proves that the automobile industry is fragmented immensely since each firm has a certain region where it distributes most of its cars. The aspect is associated with the loyalty of the customers to the brands produced in their countries. The industry has not attained full concentration levels since only the strong can survive. The factors of manufacturing are costly and require plenty of funds and support from the buyers (Nahmias & Olsen, 2015).
According to Shaheen & Cohen (2013), the Ansoff Box assists in providing a framework for growth opportunities within the vehicle companies. It considers the impacts of establishing a business in a new market or creating a new product. The paradigm is an upgrade from the SWOT analysis that was used previously by most firms to assess the entrepreneurial environment. The structure helps the automobile organizations to draw on the external and internal influences and evaluate alternative strategies within their grasp. The industry has to direct its attention towards its present and future priorities such as environmental preservation and autonomous production. Most companies within the sector that maintain their top positions have adopted the approaches together with the Five Forces Model that enable them to steer clear of competition. Their success relies on focusing on the external and internal aspects of the industry such as rivalry and managerial decision-making respectively.
Summary of Findings
The economic deregulation and reforms have transformed the industrial scene with new and fast-growing markets cropping up such as India and China. The managers have the vital role of utilizing various models to evaluate their chances of penetrating the regions and sustaining their production. The large corporations face the risk of losing their market share due to foreign firms with better managerial skills, required capital, and adequate capital entering the vehicle scene (Ingrassia & White, 2013). A new competitor has to break down the oligopoly in the automobile industry where suppliers depend few automakers to obtain products. The phenomenon limits the bargaining power of the customers and suppliers within the sector. However, with the increased growth in the automobile industry competition and revenues are bound to rise as well.
References
Al-Alawi, B. M., & Bradley, T. H. (2013). Review of hybrid, plug-in hybrid, and electric vehicle market modeling studies. Renewable and Sustainable Energy Reviews, 21, 190-203.
Ingrassia, P., & White, J. B. (2013). Comeback: The Fall & Rise of the American Automobile Industry. New York: Simon and Schuster.
Nahmias, S., & Olsen, T. L. (2015). Production and operations analysis. London: Waveland Press.
Shaheen, S. A., & Cohen, A. P. (2013). Carsharing and personal vehicle services: worldwide market developments and emerging trends. International Journal of Sustainable Transportation, 7(1), 5-34.
