Question 1

Porter’s Five Forces model is used in strategic planning. Three of Porter’s five
forces refer to competition from external sources. The remainder is internal threats.
It is valuable to utilize Porter's five powers related to SWOT examination
(Strengths, Weaknesses, Opportunities, and Threats).

Firms are able to apply their core competencies, business model or network to
achieve a profit above the industry average. So, I choose automobile industry.

Automobile Industry

Automobile industry is considered as very labor and very high capital intensive.
The major chunk of cost involved –

1. Labor – In automobile industry there are lots of machine and robots who do
their job very well. But for manage all the machine and other purpose like
design and engineering automobile industry need large number of labor.

2. Advertisement – Automobile industry spend millions of rupees in

advertisement to engaged large number of consumer and also spend money
in research.

Porter’s five forces model on Automobile Industry

1. Barriers to Entry- The facts confirm that the normal individual can't go
along and begin producing autos. The rise of outside contenders with the
capital, required innovations and the executive’s abilities started to
undermine the piece of the pie of many car organizations. Globalization the
inclination of world speculation and organizations to move from national
and household markets to an overall situation, is an enormous factor
influencing the auto advertise.

2.  Threat of Substitutes - Instead of taking a gander at the risk of somebody

purchasing an alternate vehicle, there is additionally need to likewise take a
 gander at the probability of individuals taking the transport, train or plane to
their goal. The higher the expense of working a vehicle, the almost certain
individuals will look for elective transportation alternatives. The cost of fuel
largy affects purchasers' choices to purchase vehicles. Trucks and game
utility vehicles have higher net revenues, yet they likewise swallow gas
contrasted with littler cars and light trucks. While deciding the accessibility
of substitutes you ought to likewise think about time, cash, individual
inclination and accommodation in the auto travel industry. At that point
choose if one vehicle creator represents a major danger as a substitute.

3. Competitive Rivalry- Exceptionally serious businesses for the most part

gain low returns on the grounds that the expense of rivalry is high. The
automobile business is viewed as an oligopoly (An economic situation
wherein dealers are scarcely any that the activities of any of them will
tangibly influence value) which assists with limiting the impacts of cost
based rivalry.

4. Bargaining Power of Suppliers- The vehicle supply business is very

divided (there are numerous organizations). Numerous providers depend on
a couple of automakers to purchase a dominant part of their items. On the off
chance that an automaker chose to switch providers, it could be annihilating
to the past provider's the same old thing. Accordingly, providers are
amazingly vulnerable to the requests and necessities of the car maker and
hold next to no power.

5.  Bargaining Power of Buyers- The dealing intensity of automakers is

unchallenged. Shoppers may get disappointed with huge numbers of the
items being offered by specific automakers and started searching for choices,
to be specific outside autos. Then again, while shoppers are value touchy,
they don't have a lot of purchasing power as they never buy tremendous
volumes of autos.

The question is that you would like to invest in the industry?

According to me , Many suppliers depend on one or two automakers to buy a
majority of their products. If an automaker decided to change suppliers, it could be
destructive to the previous supplier’s business. The bargaining power of
automakers is unchallenged. Consumers are very price sensitive, they don’t have
much buying power as they never purchase huge volumes of cars.

But still Indian market so much achieved in recent years. Suzuki Honda Korean
giant still invest in the business. Although Indian automobile industry hit by
economic slowdown but its doesn’t effect the production of cars. Kia, MG hector is
big hit in the Indian market. So I would like invest in the industry. Because India is
the favorite place to invest.