It has been argued that it has been so since the inception of the industry but that the extent of competition faced by firms in this industry has changed over time Hashmi, AR, Van Biesebroeck, J There were also significant consolidations over the last few decades and many global giants found it beneficial to merge with some of their former rivals.
For example mergers between Daimler-Benz and Chrysler in and between Hyundai and Kia, the association between Renault and Nissan and the takeover of Mazda, Jaguar and Volvo by Ford are some of the most significant examples of this consolidation. The major competitors are so closely balanced that it increases the rivalry for example in , Toyota sold In order to gain market share in the automobile must gain market share by taking it from their competitors. One of the other reasons there is such high rivalry is that there is a lack of differentiation opportunities.
Firms under oligopoly are interdependent so that they find themselves copying the design of their rivals. The industry is very mature and it has successfully reached economies of scale. In order to compete in this industry a manufacture must be able to achieve economies of scale.
Another barrier to entry the high amount of capital needed to manufacture the automobiles and invest in the research and development necessary in this highly innovative industry.
Finally, access to distribution channels can be another barrier as a company must find a dealership to sell their automobiles or have their own dealership. Being first to implement a moving assembly line for automotive manufacturing, Ford was able to more efficiently mass produce their products than their competitors.
In addition to its core automotive business, Ford has a finance division, a parts and service division, and they also currently own Hertz Corporation, the largest car rental business in the world. Bradley D, et al Ford began to struggle: Bradley D, et al Ford Motors India Motive In the early s, the Indian market became increasingly open due to reforms implemented by the government, evolving from a quasi-socialist economy into a more market-based economy Trade.
De-licensing and de-regulation of the auto-industry reduced the barriers to entry considerably. As a result, the period post witnessed a large number of global automakers making an entry into the Indian automotive market. This led to the rise in demand for four wheelers, in a market earlier dominated by scooters or other two wheelers. India therefore represented an untapped market with an upcoming middle class with disposable income to spend.
In , Ford Motors established a The company was renamed Ford India in , following a change in equity holding, with Ford buying out a majority stake.
Ford executives in stated that Ford wants to learn the ropes of a market that is expected to grow to at least , units annually within 10 years. Ford intention was to use the joint venture to facilitate the transfer of knowledge from the domestic Indian car producers to themselves.
Ford joint venture created in Ford India Private Limited began production in , but was shut down in as the company was in loss. Ford re-entered the market in October Business. As Ford was one of the first foreign companies to enter the Indian automotive market they had a First-Mover advantage.
By being the first to enter a market, the business gains an advantage over its actual and potential rivals. First, the lack of competition helps it to gain market share much more easily because the lack of competition means that they are not competition with any firm for the same customers.
Second, when competition does arrive the first-mover will have advantages, such as familiar products, brand loyalty, the best retail outlets, and up-and-running distribution systems. By beating rivals into the market, the first-mover can consolidate its position and compete more effectively Pearsoned. With this advantage, first-movers can be rewarded with huge profit margins and a monopoly-like status. All but one of major global auto majors chose to enter the Indian market chose to enter via Joint Venture or Technical Collaboration with local players.
Companies can choose to enter into a joint venture because they want to explore international trade without taking on the full responsibilities of cross-border business transactions. International investors entering into a joint venture minimize the risk that comes with an outright acquisition of a business, if due diligence is performed on the foreign country and the partner limits the risks involved in such a business transaction.
International joint ventures are viewed as a practical vehicle for knowledge exchange, international corporates learn about customer preferences, behaviors, best distribution list from the local firm and the local firms gain technology transfer which can contribute to the performance improvement of local companies Wikipedia, Whilst the benefits listed above are true for JV, they are not always guaranteed.
The potential for conflicts and disputes is one of the biggest disadvantages present in a joint venture. There may be disagreements regarding the direction or future of the business, as well as disputes regarding how to capitalize the business Small Business — Chron. Ford developed a foothold in the region and the Indian auto company through the partnership learnt the best global practices in manufacturing, which it later used in developing its most successful product, the Scorpio Rediff, They must consider the Institutional frameworks of the country.
The population of India is so large that we need many such industries to produce enough material so that things are available in plenty and at reasonable prices. Goods can be exported after they are manufactured in various industries. If quality is maintained by the manufacturers, the reputation of Indian industries would be high. Goods should be highly sophisticated so that they capture world market. To survive in the world, every country needs to be noticed and respected for what it produces and contributes to the world market.
Cars and electronics manufactured in Japan have created uproar in the world. Their high quality is greatly applauded and Japan has almost become a super power in the world because of its advanced industrial development. Consumer goods are produced for direct use by people. Bread, butter, cloth, spices, drugs, etc. Producer goods or capital goods are required for the production of consumer goods. Raw materials, machinery, equipment, plastic, rubber, aluminum, etc.
These industries are concerned with reproducing and multiplying of certain species of plants and animals with the object of earning profits from their sale. Plant nurseries, poultry farms, cattle breeding farms, fish hatcheries and forestry are examples of genetic industries. These industries are engaged in extracting useful materials from land, sea and air.
In these industries the products gifted by nature are obtained for the benefit of mankind. Agriculture, mining, fishing and hunting are some of the examples of extractive industries. Produce of extractive industries maybe used either as finished products or as raw materials for further production.
Such industries change the shape and form of materials produced by genetic and extractive industries. They create form utility.
One meaning of the word industry is manufacturing, mining, agriculture, etc., the arts by which useful articles are produced, as opposed to trade and commerce, by which such articles are distributed. In this sense we talk of the industrial development of a country, meaning the improvement of its.
Industry means the production of goods for sale by the application of human or mechanical power. It is concerned with changing the form of goods at any stage from raw material to the finished Here is your sample essay on industry.
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