Porter’s Five Forces : skoda

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Threat of new entrances

One of the barriers is that the market is very competitive so if you want to enter on the automobile market you must bring new added value because there is a vast range of types of vehicles. Furthermore, the costs of installation are high because they need to have their own dealers and plants. The transport from plants to dealers is another cost which can represent a barrier. Also the norms of security are different in some countries and that implies companies have to invest to match the norms.

Determinants of buyers power

The buyers’ power is high because consumers have a large range of choice when they want to select a car to purchase.

Determinants power of suppliers

The suppliers’ power is weak because they are linked to the automobile companies who work in just-in-time so they are subjected to the automobile companies. Also they are implanted nearly of it.

Threat of Substitute products

People have a substitute product, this is the public transportation. For many people this kind of transportation is more efficient because sometimes the cost of one route with public transportation is less than a route with a car. Also a car represents a constraint, for example, you must find a car park to put your car in large towns.

Rivalry among existing firm

The automobile market is one of the most competitive markets in the world, in addition, there are many companies try to reduce their costs by moving to low cost countries such as Eastern Europe and Asia countries, and try to find new market, so the competitive rivalry is high in the long