FORD vs GM Industry Analysis

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Please provide at least 2-pages (1.5-spaced) in answering the following questions regarding Ford and General Motors as you prepare an overview of the industry analysis.

  • Describe what your two firms do and how they operate
  • List the primary industry in which your firms compete, and identify at least two other competitors
  • Assess the industry’s dynamics using both Porter’s Five Forces and SWOT analysis

All work should be YOURS, and CITE your sources (MLA format) if any because I'll withdraw the assignment if it was plagiarized.

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Explanation & Answer

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Running head: FORD VERSUS GM INDUSTRY ANALYSIS

Ford vs GM Industry Analysis
Institution
Date

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FORD VERSUS GM INDUSTRY ANALYSIS

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Introduction
General Motors Company, commonly known as GM, is an American multinational
automotive corporation that designs, manufactures, markets, and distributes vehicles and vehicle
parts, and sells financial services in more than 33 countries worldwide. The Ford Motor
Company commonly referred to simply as "Ford", is an American multinational automotive
corporation which was founded by Henry Ford on June 16, 1903. Both General Motors and
Ford operate in the automotive industry which is an industry that is very competitive. As seen
above, both companies manufacture and sell vehicles, offer financial services and sell spare
parts. The two main competitors of these companies are The Toyota Motor Corporation and
Volkswagen AG, known internationally as Volkswagen Group.
The Porters Five forces analysis is a tool for understanding the competitiveness of a
business environment. Competitive rivalry or competition, bargaining power of buyers or
customers, bargaining power of suppliers, threat of substitutes or substitution and finally threat
of new entrants or new entry are the five forces that determine the strength or weakness of an
industry.
Porters Five Forces Analysis for General Motors
GM was a leader of the automobile industry in the 1970s and 1980s. However,
competition in the US automobile industry had become much stronger with the increase of
foreign rivals such as Honda, Toyota and Nissan which started to compete with GM providing
some different offers and started to produce cars with lower price and higher quality. This has
made GM have difficulties with competing with them (Naga 108,109). As a result of highly
improved information technologies, and as well as with globalization, customers of GM became
more aware of what were they buying and how much were they paying. The internet has also
increased the bargaining power of the buyers as they have more access to information. General
Motors have a high overall supply rate of raw materials which has an insignificant impact on the
automotive industry. Customers are less likely to shift from General Motors when there is less
variety of substitutes in the area. As a result the low threat of substitutes against GM is
weakened. New entrants to the automotive market of GM are a significant but limited force on

FORD VERSUS GM INDUSTRY ANALYSIS

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the success of its business. This is because the high economies of scale in the industry create
challenges against new entrants in the automotive industry.
Porters Five Forces Analysis for Ford Motors
The Ford automotive industry has high exit barriers, which means that firms would rather keep
competing with Ford than to close their business, because of the high costs and investments. This
exerts a strong force of competition against Ford. Moderate size of individual purchases,
switching costs and moderate availability of substitutes are ...


Anonymous
I was having a hard time with this subject, and this was a great help.

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