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Select one of the following industries: personal computers, airlines, or automobiles. For this industry, evaluate the strength (High/Medium/Low) of each of Porter’s five forces. Justify your evaluation.

User Zandra
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Final answer:

Porter's five forces in the automobile industry show a Medium to High bargaining power of buyers, Medium bargaining power of suppliers, Low threat of new entrants, Medium threat of substitutes, and High industry rivalry. Globalization has broadened competition, decreasing concentrations like HHI in a global perspective versus a national context.

Step-by-step explanation:

When evaluating the strength of each of Porter's five forces within the automobile industry, it's important to consider the current global landscape. For the bargaining power of buyers, we could assess it as Medium to High due to the wide range of choices and significant brand competition. The bargaining power of suppliers is Medium because of the substantial number of suppliers, yet with significant market leaders who control key components.

The threat of new entrants is Low given the high barriers to entry such as capital costs and brand loyalty. The threat of substitute products is Medium with the increase in popularity of alternative modes of transportation, such as electric scooters and bikes. Finally, industry rivalry is High, evidenced by a globally competitive landscape with manufacturers like Toyota, Honda, Nissan, and Volkswagen providing stiff competition to the traditional American manufacturers like General Motors, Ford, and Chrysler.

Globalization has notably changed market boundaries, reducing the concentration measured by the Herfindahl-Hirschman Index (HHI) when looking at industries on a global scale compared to a national one, which is particularly noticeable in the automobile industry.

User Depechie
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