Question
The five forces model is designed to better understand the competitive forces in an industry in which a firm competes. For example, if the combination
The five forces model is designed to better understand the competitive forces in an industry in which a firm competes. For example, if the combination of forces in an industry serves to restrict or reduce profitability, the industry is said to be unattractive. Naturally the inverse is trueif the combined forces serve to improve or increase the firm's chances for profitability, this is said to be an attractive industry in which to compete. Evaluate the U.S. automotive industry. Bear in mind you are evaluating an industry and not a particular firm, and your analysis should be positioned to evaluate the industry in which rivals compete in manufacturing and selling cars and trucks. This exercise will be all the more compelling since the industry has undergone some relatively significant economic shifts in the past few years as well as the potential for disruption due to new technology. As you will note after completing the exercise, a five forces model requires some solid research but also requires judgment and intuition as to how the forces interact. There are relatively few concrete answers to any of the forces. Your team should fill out and hand in the accompanying table along with your supporting analysis. Once identified and supported its rating for each force, summarize the results and indicate your assessment that the industry is either attractive or unattractive with respect to its profitability potential.