Focal Industry Provide A Clear Title And Definition Of Your ✓ Solved

Focal Industry Provide a Clear Title and Definition of your Focal

Provide a clear title and definition of your focal industry (industry of study). Identify the buyers and assess the buyer power: Is it high? Who are the buyers? List names and/or categories of buyers. Explain price sensitivity of buyers and provide data sources. Discuss supplier power: Is it low? Who are the suppliers? List names and/or categories of suppliers. Assess price sensitivity and provide data sources. Analyze rivalry within the industry: Is it high? Who are the competitors? Assess product homogeneity, barriers to exit, economies of scale, and industry concentration. Explore the threat of new entrants: Is it low? List potential entrants and evidence/data. Examine substitutes: Is the threat high? Identify potential substitutes. Discuss complementors: Are they adding or reducing value? Provide a list of complementors. Draw overall industry conclusions: Is the industry poor, average, or attractive? Rate its attractiveness on a scale of 1-10, noting reasons for your conclusion and any contradicting factors. Suggest strategies to reverse negative forces and capitalize on positive forces in favor of industry players.

Paper For Above Instructions

The focal industry for this analysis is the electric vehicle (EV) industry. Electric vehicles are automobiles powered by electric motors, using energy stored in rechargeable batteries. With growing environmental concerns and the push for sustainable transportation solutions, this industry has gained significant traction in recent years. The primary buyers of electric vehicles include individual consumers, fleet operators, and government agencies. The buyers' power is deemed high due to the increasing availability of options in the EV market, which gives consumers leverage to negotiate prices and seek better deals. According to a recent study, consumer demand for EVs has increased by over 30% in the past two years, highlighting their pivotal role in shaping the market dynamics (International Energy Agency, 2021).

In terms of price sensitivity, buyers face high sensitivity due to the significant cost of electric vehicles relative to total transportation costs. Electric vehicles often require a substantial upfront investment, although they can lead to cost savings through lower fuel and maintenance expenses over time. Therefore, buyers are increasingly likely to evaluate their choices carefully, comparing the total cost of ownership for different vehicle types (EIA, 2021). The buyer's negotiating position is further enhanced by their access to information about product pricing, specifications, and competitor offerings, which allows them to make informed decisions.

Moving on to the suppliers, the power of suppliers in the electric vehicle industry is comparatively low. The suppliers include battery manufacturers, component suppliers, and raw material providers such as lithium and cobalt. The industry is characterized by a growing number of manufacturers entering the battery production market, leading to increased competition among suppliers and driving down prices (Cohen & Liao, 2020). Moreover, electric vehicle manufacturers often have multiple supplier options for components, reducing their dependency on any single supplier. This trend empowers manufacturers, as they can switch suppliers if prices or quality become unfavorable.

Price sensitivity among suppliers is also notable. Suppliers are increasingly pressured to lower their prices, especially as competition intensifies within the battery manufacturing segment. For instance, the cost of lithium-ion battery packs has fallen dramatically, declining by almost 89% from 2010 to 2020 (BloombergNEF, 2020). Additionally, many electric vehicle manufacturers are adopting vertical integration strategies to produce their batteries, further decreasing supplier power and allowing for better control over costs.

Competition within the electric vehicle industry is fierce. The rivalry among established automakers, new entrants, and technology companies aiming to penetrate the EV market is intense. Companies like Tesla, Nissan, and GM are increasingly competing on features such as battery range, technology integration, and safety features, creating a condition of low product differentiation (IEA, 2021). Furthermore, there is excess capacity in manufacturing as companies ramp up production to meet growing demand. Incumbents face high economies of scale, where large-scale production significantly lowers per-unit costs, further intensifying competition.

The threat of new entrants is currently assessed as low. While numerous startups are emerging in the EV space, significant barriers to entry exist, including the high capital requirements needed for research, development, and production capacity. Established companies benefit from economies of scale, strong brand recognition, and existing distribution networks, making it challenging for new entrants to gain traction (PWC, 2021). Additionally, government regulations and consumers' loyalty to established brands pose further challenges to new firms seeking to enter this market.

The threat of substitutes within the electric vehicle industry is high. Alternative fuel vehicles, such as hybrid cars and hydrogen fuel cell vehicles, provide viable substitutes for traditional electric vehicles. Additionally, advancements in public transportation and shared mobility solutions pose competition for individual vehicle ownership (McKinsey, 2021). Drivers' propensity to substitute is influenced by factors like fuel costs and technological advancements in alternative transportation methods. As consumers become more conscious of their environmental impact, the relative appeal of both conventional and alternative vehicle types may shift, further affecting the electric vehicle market.

Complementors in the electric vehicle industry play an essential role by influencing sales through supportive products and services. Charging infrastructure is one critical complementor; the greater the availability of charging stations, the more likely consumers will purchase electric vehicles (International Energy Agency, 2021). Additionally, software applications and connected car technologies, such as over-the-air updates and advanced driver assistance systems, enhance overall value and encourage EV adoption. The collaboration between EV manufacturers and tech companies is crucial for creating value-adding complementors that strengthen the industry's position.

In conclusion, the electric vehicle industry is considered attractive, rating it an 8 on a scale of 1-10. The industry's attractiveness stems from several factors: growing consumer demand for sustainable transportation, increasing regulatory support, and continued technological advancements. However, challenges such as intense competition and high buyer power present significant threats. Addressing negative forces requires electric vehicle manufacturers to focus on innovation, enhance customer experience, and develop strategic partnerships for charging infrastructure expansion. Additionally, capitalizing on positive forces involves leveraging economies of scale, investing in research and development, and promoting the environmental benefits of electric vehicles over alternatives.

References

• BloombergNEF. (2020). Battery Price Survey. Retrieved from [link]
• Cohen, J., & Liao, J. (2020). The Future of Electric Vehicles: A Supply Chain Perspective. Journal of Business, 15(3), 20-45.
• International Energy Agency. (2021). Global EV Outlook 2021. Retrieved from [link]
• McKinsey & Company. (2021). The Future of Mobility. Retrieved from [link]
• PWC. (2021). The Future of Automobiles: Trends and Predictions. Retrieved from [link]