Critical Thinking

Honda of customers, so each firm try to

Honda Rivalry Among Competitors: Strong ForceCompetition in the automobile industries is very high, as there are many firms in this industry that caters to many varieties of customers, so each firm try to do its best to make more profit than others, making its product more appealing and sellable in the market.Threats of Substitutes: Weak Forcethere is no huge threat of substitute in the automobile industry regarding utility, independence and efficient, even if there is a large variety of transportation, such as bicycles, subways, buses, trains and airplanes. Those could make our life easier, but that can be less convenient than automobiles. The price of fuel affects the consumer’s decision to purchase vehicles, along with the maintenance and the insurance of the car, but automobile will still be important in our personal and daily life.Barriers to Entry: Weak Forceit is not easy for an entrant to enter into the automobile industry easily, because of the loyalty that the consumer have for the brand. It is important for recognised companies to have barriers to entry to protect themselves, as there are some companies are entering into foreign markets by buying an existing company or merging with it and making a large profit. Buyers Bargaining Power: Strong Forceconsumers have many choice to choose from with the large amount of brands out there, but the factors that affects the consumer to buy a certain brand from another are: appearance, quality, price, design. Consumers always want something new and nice looking with the latest technologies. The car have to be efficient, fuel-saving, and smooth.Suppliers Bargaining Power: Weak Force there are many suppliers in the automobile industry, and there will be multiple suppliers fighting to be the one that the manufacturer buys their parts in bulk from. If the manufacturer chooses to switch suppliers, it will deal a devastating blow to the suppliers. Thus the manufacturers can switch suppliers freely, the suppliers holds little power.Toyota Competitive Rivalry: Strong ForceCompetition in the automobile industries is very high, as there are many firms in this industry that caters to many varieties of customers, so each firm try to do its best to make more profit than others, making its product more appealing and sellable in the market.Buyers Bargaining Power: Strong ForceCustomers are able to switch between Toyota and other firms at no extra cost. This change normally happens when a customer is purchasing a brand new car. Also, Toyota’s customers can choose their optimum option quite easily as they have access to accurate information, like the product information from companies’ websites. Substitutes are available, but cars from firms like Toyota are still better in terms of convenience, as they are more well known.Toyota have to ensure that its products match the preferences of its target customers.Suppliers Bargaining Power: Weak Forcethere are many suppliers in the automobile industry, and there will be multiple suppliers fighting to be the one that the manufacturer buys their parts in bulk from. If the manufacturer chooses to switch suppliers, it will deal a devastating blow to the suppliers. Thus the manufacturers can switch suppliers freely, the suppliers holds little power.Threat of Substitution: Moderate Forceit is quite easy for customers to shift from Toyota to substitutes. The substitutes are public transportation, bicycles and other modes of transportation. However, these substitutes are not available in some areas. Substitutes are unable to be used, such as in some rural areas where public transportation is not available. Thus Toyota makes its products more accessible, affordable and convenient.Threat of New Entry (Weak Force)The high costs of setting up and expanding a new firm in the industry are already entry barriers. These barriers weakens the new entrants affecting companies like Toyota. Thus, there is not much need to worry about the new entrants in the automobile industry.Nissan Industry rivalry: Strong ForceIntensity of rivalry depends on the number of competitors and their capabilities. Each company is fighting with other companies to make the most profit. Industry rivalry for Nissan is high as customers have many choices of cars in the market. There are many competitors for Nissan such as Honda, Toyota and many more. Threat of new entry: Weak ForceCreating barriers to prevent its competitors to enter to market. They may be new companies, or companies trying to expand with sub-brands. The arrival of new entrants depends heavily on the size of the market. Nissan have a low threat of new entry as the automobile industry has high entry barriers and low exit barriers. For any new competitors entering the industry, it is very hard for them to establish their firm as due to  the high cost of setting up and expansion of their firm.Threat of substitution: Moderate ForceThe Substitutions are like bicycles, public transport and other modes of transport. There are Nissan loyalists so the threat of substitution is moderate, but there are many substitutes, also known as competitors, in the market like Toyota, Honda. Customers of Nissan can easily find other products or services with the same or less or more price but with different kinds of technology, brands and quality. Having  Different kind of  technology, brands and quality of Nissan’s products keep the threat of substitute to be moderate, to keep the customers interests with their variety.Suppliers Bargaining Power: Moderate ForceNissan has limited bargaining power of supplier. Like all car companies, Nissan has some switching costs and transaction costs to switch suppliers, so the suppliers may have negotiating power, as Nissan has very limited of suppliers around the world. For example, “Nissan is an important customer to SynQuest where contract with SynQuest has made to plan solutions with Penske Logistics providing the logistics design services and IBM, hardware infrastructure which offer integrated software and services for optimizing logistics chain.”Source: https://www.ukessays.com/essays/marketing/introduction-of-nissan-motor-company-marketing-essay.phpBuyers Bargaining Power: Weak ForceNissan’s customers have low buyer power, as the shopping cost for the product is high.  The buyers are pretty fragmented around the world, and new cars can only be sold through authorized dealers, so buyers have relatively little power. Buyer’s bargaining power is low when offer differentiated product. Nissan will not face a big crisis because the buyer power is low.