Five Forces Essay

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Porter’s Five Forces Analysis

Diagram 1 Porter’s five forces model (source from Business Resource Software, Inc.)

The Porter’s five forces model will be used to evaluate information system and automobile industries.

Determinants of Entry
By entering into car manufacturing market is very costly and risky as the initial costs required a large capital investment on technologies, economics of scale and accessibility to distribution channels has restricted the entry of new entrant to the industry. Toyota is a popular brand and constant market presence in different sectors with largesize that allows Toyota to have a competitive advantage over the new entrants in the automobile industry (Toyota Motor Co. 2013). An automotive …show more content…
Of the top the manufacturers of 2010, American manufacturers conquered over 90 percent of the car industry. However, Toyota has stood out as the leading movers by increasing market share since 1980 and has increased the market shares to 13.38 percent over the last two decades, which signifies a yearly raise of 2.5 at average over the last 3 decades. This indicates that Toyota's success can be qualified to their low price and high quality values which is part of their 14 Toyota ways approach (Liker, 2004). Thus, rivalries among the competitors in automobile industry are high.

Strategies of Toyota
Toyota Motor adopted cost leadership as their business strategy to achieve its visions: "low cost and higher quality product". They have reconcile high quality with low cost to toughen the three core functions of quality maximization, cost minimization and human resources development in support of regional strategy, product strategy and business-sector strategy and shape a solid.
Moreover, Toyota states that they have fewer defects than other manufacturer such as Honda and Nissan. Meanwhile, they only need 13 person-hours to assembly a car and other manufacturer required about 20. The reason is because they dispose waste at every stage and speed up the delivery system to save time. Also, Toyota does not implant expensive executive parts and only spends 5
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