Five Forces Analysis Of Fiat
The industry analysis framework we have chosen to analyse the car industry in Ireland is the 5 forces framework by Michael Porter.
Rivalry â'between firms them selves.
The various players in a particular sector or niche who are trying to do the same things. They are constantly jockeying for position and trying new things out, (product and process innovation) in order to develop a strategic edge and hence a stronger position in this space.
⢠While the car market in Ireland is very competitive, Fiat also faces competition from within the dealership itself. There has been very few new car launches from Fiat in the 1.4, 1.6 and 1.8cc engine size over the last number of years. With 17 of the 27 Fiat dealerships in Ireland being shared dealerships with other manufacturers, Fiat cars appear less attractive in comparison with their more modern and fashionable rivals .
⢠Sales in the car market in Ireland are decreasing at an alarming rate. The most recent figures from the central statistics office show the total number of new cars licensed in Ireland during October 2008 was 2,699. The same figure for October 2001 was 6,563. This is a decline of approximately 59%. Slow market growth or in thus case negative market growth causes firms to fight for market share increasing the degree of rivalry.
⢠Strategic stakes are high when a firm is losing market position which in turn increases rivalry. Fiat has been consistently losing market share over the past 10 years. From having a 7.62% market share in 1998, it now commands only a 1.36% share of the car market in Ireland.
⢠High exit barriers place a high cost on abandoning production, this may force firms to compete. Fiat has formed a number of agreements with different manufacturers to share skills and competencies in developing their cars. In Poland, Fiat and Ford have come together to make the Fiat 500 and the Ford Ka at the same plant. The two vehicles will share their entire powertrain and a number of...
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