Economics Research Paper Example | Topics and Well Written Essays - 1500 words

Economics - Research Paper Example This piece of research paper is an attempt to present a strategic analysis of US automotive industry by using Porter’s Five Forces model, which is one of the best strategic analysis widely used to measure and assess the competitive position of a company within its industry. This research paper presents a brief outline of the US automotive industry-profile and addresses five forces in detail, they are competition rivalry, threats of new-entrants and substitutes and bargaining power of suppliers and buyers. The US automotive industry includes all those firms and their activities involved in designing, developing and manufacturing of motor vehicles and major components like engines, bodies but excluding tires, batteries and fuels (Automotive Industry, 2010). The main US automotive marketers are Big-Three- (GM, Ford and Chrysler), Navistar International Corporation and Paccar Inc. There are currently many structural issues in the US automotive industry which in turn foreign auto-marketers have been able to take advantages and gain greater competitive advantages too. Datamonitor (2009) found that these issues include greater dependency on cheap oil, preference for building big cars, under-emphasis on fuel efficiency and excess capacity and legacy costs (p. 5). The recent economic turmoil and increasing oil price have eventually led the Big-Three to experience such structural issues. General Motors, one of the largest auto-manufacturer in the word, traces its root back to 1908, headquartered in Detroit. With various brands like Buick, Cadillac, Chevrolet and GMC, it manufactures a wide range of cars, trucks and auto-parts (Company Profile, 2010). It employs more than 200,000 people throughout its businesses in more than 120 countries. in very recent years, GM has experienced significant financial crisis that has threatened its market feasibility (General Motors