02 - Porter's Five Forces Flashcards
threat of new entrants (moderate-high)
Entry + exit barriers are high
Difficult to get suppliers + distribution channels (exclusive contracts)
More competitive - increased w/ globalization
Emergence of EVs - potential new entrants due to less complexity
- niche players have already entered the EV market
threat of substitutes (moderate-high)
Personal vehicles provide comfort + mobility + freedom
Consumers are more environmentally conscious + changing preferences
- transportation alternatives (ridesharing, autonomous…etc)
Low switching costs for the consumer
No significant ICE innovations
buyer bargaining power (moderate)
Access to information and transparency - easily compare
Low switching costs
Moderate differentiation between OEMs (standardization + regulations) = moderate buyer power
B2C - low threat (majority of customers only buy 1 car)
B2B - fleet purchasers (high bargaining power)
supplier bargaining power (low)
Large automakers have strong relationships w/ multiple suppliers (GM), allowing them to negotiate favorable terms
GM’s purchase quantities represent a significant part of suppliers’ sales - can dictate the price
GM + large automakers are more attractive for suppliers due to stability
Long-term - decreasing demand for suppliers - OEM hardware components will make up a lower % of EVs
competitive rivalry (very high)
Highly competitive + growing (globally + locally)
High investments in R&D, efficiency + innovation
EV race is forcing large automakers to adapt their business models
Majority of current value propositions for ICE will be obsolete
