Automotive Industry Analysis- SWOT and Competitor Analysis

746 words (3 pages) Essay in Business

10/08/17 Business Reference this

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The average age of registered vehicles in 2015 was 11.5 years old and has been steadily increasing since the Great Recession. Almost 75% of our population drive to work, people need their vehicles. If you can’t buy a new one and can’t live without one – you better keep the one you have operable.

With improved economic conditions, growth is expected to plateau, which will cause the average age of registered cars to jump from 11.5 years to 11.7 years by 2017.

The automotive industry is an extensive, contrast set of manufacturing and service businesses that bring large trucks and cars to the market, whether keeping them in working order, painting them, or cleaning them, fixing them or even trashing them when it’s time. While there are interesting business opportunities at the auto dealership level, it’s chiefly after the cars are sold that the franchising begins.

Environmental Analysis

Competition fosters affordability. With added suppliers of equivalent products, come more options for a consumer. One way to get a consumer to select one item verses another is to offer it at a lower price.

Inevitably the future of automotive technology becomes the present, what is costly now will decline in price as technology becomes less high tech and standardized.

(Strengths)

  • We have superior customer service.
  • Qualified mechanics.
  • Quality repair services at better value.
  • Trusted repairs with large customer base.

(Weaknesses)

  • High Liability.
  • Risks involved with unsupervised work.
  • Possible injuries due to equipment involved.
  • Open to lawsuits if not careful.

(Opportunities)

  • The increase in evolution of cars oftentimes resort to specialized training. Repair shops can gain an edge by staying current.
  • Hybrid and Electric vehicles are bringing new opportunities to the market.
  • Service providers can influence and gain marketing efficiencies.

(Threats)

  • Labor and overhead costs
  • Competitiveness in the automotive industry
  • Economy
  • Financial Stability

Competitive Analysis

The auto repair business is highly competitive. Each business within this arena has high principal costs, low margins, and a high intensity of competitiveness. Providers have a great deal of influence in setting and negotiating the prices of their goods and services to repair shops. This is due to the element that the suppliers who absorb the highest amounts of cash from repair shops are huge auto part companies. These corporations are more united that the repair industry, have bottomless pockets, an almost unlimited number of clients. Subsequently, these businesses can set whatsoever price they wish to. In addition, because the clients see the service as undistinguishable and a “product” with slight cost separation between competitors (if they offer an appropriate level of excellence) consumer power is likewise very high. Furthermore, the costs of services are not economical, and buyers are prepared to hunt for the most satisfactory combination of price and satisfactory service.

The barriers to entrance and departure are discreetly low in this business. Substituting costs are practically non-existent and the costs to entry and exist the marketplace are low. The huge number of opponents in this field including alternatives mean that the valuing for such services are actual competitive. The only method to have a benefit in this business is a low-cost management principal applied hostilely to all facets of the business or to build up customer relations to a point where the substituting costs are raised. Even though many clients looking to buying automotive repair services are worried with price, the main concern is with building an association of trust between themselves and their service provider. Many people within the country have experienced or overheard of bad service encounters within this business. As an individual’s car is usually associated in one way or another with that individual’s livelihood, a dependable automobile is critical. Consequently, countless clients are willing to pay a slight more for a mechanic they feel ensures a quality job and recognizes their needs. An automotive repair business that can anticipate, meet, and even surpass customer’s needs can shape an impregnable position within the marketplace and obtain market share at the expense of other competitors.

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