In this part, it simply illustrates the contrast between the Porter Five Forces Model and the practice of car industry in China. For instance, the Ford Motor Company in China are intended to increase its investment and cooperation sparing no effects to endeavor for another 10% share in the car industry, production ability reached 400,000 which is a huge shift from the original forty thousand, reaching most vehicles production local technology. Such actions mean Ford Motor Company is struggling to drive up the bargaining power of suppliers which is one of the most influential factors in Porter Five Forces Model.
In the next part, it can be more explicit and more detailed through five forces to analysis how could Ford Motor do to win the share market and make the profit when enormous competitors flood into China market. In more modern and developed areas in China, such as Beijing, Guanos and other cities, buyers basically have buying standardized products that branch from multiple suppliers is also completely available economy. If this is the case, the bargaining power of buyers tend to be increased, it also can cut the profit to car manufactures.
In addition, with the rival competition in car field and a variety of dilemmas, this port will put forward to some suggestions to Ford Motor Company as a recovery plan to conflict it. What is more, the risk management is the material effect in strategy management admittedly. Risk management is the identification, assessment and priority (either positive or negative), through the application of the risk of coordination and economic resources to the lowest, monitoring and controlling the predictable event which most might happen, in order to optimize opportunities (Douglas W.
Hubbard, 2009). In the next part, it will focus on the reason why company must make risk management and owe to institute it, even how to develop a series of measures for risk management. Main analysis 1 . How Porter Five Forces Model Reflect Upon the Reality 1. 1 Porter Five Forces Model Porter five forces analysis is a technique for competitors to make analyzing of industry, as well as a tool of evaluating strategy of business development. Michael E.
The competition teens existing enterprises is often reflected in the price, product distribution, advertisement, and after-sales service. 1. 5 Bargaining Power of Suppliers Supply-side, mainly through the ability of increasing input prices and reducing the quality of the unit value has influencing the profitability and competitiveness of existing enterprises in the industry. 1. 6 Bargaining Power of Buyers As for buyers, they mainly request a higher product or service quality or through lower prices to impact on the profitability of existing enterprises in the industry (Cone, K. P. And Jujitsu Blandishing, 1996). 2. Compare Theory and Practice
China’s auto market is continuous growth and the total size also continuously expands, leading significantly improvement of the international status of China’s auto market. In regard to proportion of car sales in China occupied to the total global automotive sales, has been from 4. 3% in 2001 up to 2012 reached 11%, taking up 40% of the global auto increment 0. D. Power, 2012). China now has become a major force in promoting growth around the global automotive market. Ford Motor Company (also known as simple Ford) is an American multinational car manufacturer. It was founded by Henry Ford and incorporated on June 16, 1903 Leggiest, Thee. March 6, 2005).
In order to take up more car market share of China, Ford Company has been suggested to apply the competition analysis model of Porter Five Forces to estimate and examine success or failure of expansion strategy. China’s auto market not only has becomes the multinational strategic market of Volkswagen, General Motors, Honda, Handy and other. However, Handy Motor Company has treated China as an important part of its global strategy. Handmaid’s 2010 strategy of passenger cars in China had a significant impact on production capacity which reached at CCNY 100 million, making China ranked second- arrest overseas factories of four overseas factories followed by India.
