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Size of competing firm’s vary but they usually compete for different consumer segmentsĦ.

If a firm would decide to leave an industry it would incur huge losses, so most of the time it either bankrupts or stays in automotive industry for the lifetimeĤ. Threats of new entrants Threats of new entrants to the industry is low because the fast-food industry is saturated with consumers that wants to eat affordable/cheaper food that comes together with a package of good customer service and an atmosphere of Family Togetherness as denoted from the survey conducted by DLSU students. Alternative types of transportation almost always cost less and sometimes are more environment friendlyĢ. Substitutes can rarely offer the same convenienceģ. There are many alternative types of transportation, such as bicycles, motorcycles, trains, buses or planesĢ. Buyers do not threaten backward integrationġ.

Buyers are price sensitive and their decision is often based on how much does a vehicle costĦ. Buyers can easily choose alternative car brandĥ. It doesn’t cost much for buyers to switch to another brand of vehicle or to start using other type of transportationĤ. Most of the buyers are individuals that buy one car, but corporations or governments usually buy large fleets and can bargain for lower pricesģ. Suppliers do not pose any threat of forward integrationĢ. Companies use another type of material (use one metal instead of another) but only to some extent (plastic instead of metal)ĥ. Some suppliers are large but the most of them are pretty smallģ. Governments often protect their home markets by introducing high import taxesĢ. It is very hard to achieve economies of scale for small companiesĨ.

New entrant could easily access suppliers and distributorsħ. Products are mainly differentiated by design and engineering qualityĦ. All automotive companies have established brand image and reputationĥ. Few legal barriers protect existing companies from new entrantsĤ. High vengeance possible from existing companies, if new entrants would bring innovative products and ideas to the industryģ.