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Introduction The railcar industry is one of the biggest industries in the United States as well as globally. The automobile is a part of our frequent lives and this causes the industry to be effected by the smallest of changes in our petition and economy. I will use Porters 5 Forces model to test the industry and the changes that it has gone through. The most interesting thing some this case is how the smaller foreign competitors tapeed the market and became a legitimise threat to GM, Ford, and Chrysler. Risk of Entry by Potential Competitors The automobile industry is such a concentrated industry to bestow started in, much less succeed in. This is why I cipher that the force is considered to be weak. The resources and time it takes to even begin to enter the market as a competitor ar extraordinary, and thus you must find a way to compete with the self-aggrandizing 3 and many others. The barriers to entry include brand loyalty, economies of scale, sheer(a) cost profits, customer switching costs, and government regulation. I conceive the largest barrier is governmental regulation. The government has already pumped in billions of dollars the GM, Chrysler, and Toyota to help them stay afloat in the industry. It is extremely difficult for a new entrant to compete with that.

Economies of scale are another big barrier to the industry. Manufacturers today are tooth root to use the same platforms to build different cars over a wide model range. Chrysler has reduced their platforms from 13 to just 4 now, and Ford is using its Mazda 6 platform as the instauration for 10 new vehicles. These changes are expected to reduce drudgery costs by billions of dollars a year. Absolute cost advantage is also a large barrier that already complete companies do not have to worry about as much. The amount of rubber, glass, and steel that the industry uses makes it very hard for a new competitor to keep up. Established companies are inception to lower their material costs by using the... If you urgency to get a full essay, order it on our website: Ordercustompaper.com

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