Industrial Life Cycle Analysis & Porters Five Forces Analysis of the Indian Automobile Industry Click to edit

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AGEESH.A style Reg No: 1005103 4th Sem MBA, IMK-ICM, Poojappura

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I.Industrial Life Cycle Analysis

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Stage 1: Introduction

In the introduction stage of the life cycle, an industry is in its infancy. firm will use a focus strategy at this stage to stress the uniqueness of the new product or service to a small group of customers. may also cluster together in close proximity during the early stages of the industry life cycle to have access to key materials or technological expertise Indian automobile sector has passed this stage quite successfully.

Firms

The

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Stage 2: Growth Phase

The

growth stage requires funds to launch a newly focused marketing campaign as well as funds for continued investment in property, plant, and equipment to facilitate the growth required by the market demands. Automotive Industry is booming with a growth rate of around 15 % annually. growth rate of the automobile industry in India is greater than the GDP growth rate of the economy. automobile sector can be very well

Indian

The

The

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Stage 3: Maturity Phase As the product matures, growth slows as

penetration reaches practical limits.
Then

Automobile companies will began to focus on market share rather than growth. scope of growth of the automobile sector is very much possible in India due to the increasing income of the middle class and their income as well as standard of living. maturity, Industry demand tends to follow the overall economy.

The

At

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Stage 4: Decline Stage

If

product innovation has not kept pace with other competitors, or if new innovations or technological changes have caused the industry to become obsolete. Automobile Industry is very far beyond decline, since a great number od International players as well as their products are yet to arrive here. the industry is facing a boom period after its introduction.

Indian

Presently

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II. Porters Five Force Analysis

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Degree of Rivalry among existing Competitors

Rivalry

in the Indian auto sector is intense due to the entry of foreign companies in the market. industry rivalry is extremely high with any being product being matched in a few months by the competitors. industry is primarily driven by technical capabilities acquired over years of gestation under the technical collaboration with international players.

The

The

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Threat of Substitutes
The

threat of substitutes to the Indian automotive industry is fairly mild. other forms of transportation are available, but none offer the utility, convenience, independence and value offered by automobiles. switching cost associated with using a different mode of transportation, may be high in terms of personal time, convenience and utility.

Numerous

The

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Barriers to entry
The

barriers to enter Indian automotive industry are substantial. the barriers to new companies are substantial, established companies are entering the new markets through strategic partnerships or through buying out or merging with other companies. a new company, the startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive. domestic company, with local knowledge and expertise, has the potential to compete its home market

Although

For

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Suppliers power
In

the relationship between the Indian Automobile industry and its suppliers, the power axis is tipped in industrys favor. industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers.

The

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Buyers Power
In

the relationship between the Indian automotive industry and its ultimate consumers, the power axis is tipped in the consumers favor. is due to the fairly standardized nature and the low switching costs associated with selecting from among competing brands.

This

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