Executive Summary

Eagle Motors Ltd is a well-established Swedish Car Manufacturing Company trying to set up their firm in Australia. In order to compete successfully in the car industry in Australia, Eagle Motors Ltd needs to conduct an analysis of the industry context in which they would like to operate. Using the porters five forces model, this provides a detailed analysis of the competitive nature of the Australian car industry and also it suggests an appropriate competitive strategy for Eagle Motors to gain a sustainable competitive advantage. Eagle Motors Ltd is planning to employ a mixture of Swedish and Australian managers and employees to run there operations in Australia. However, the senior management at Eagle Motors does …show more content…

It is the number of customers in the market and the availability of substitutes that determine the amount of influence buyers have in an industry. The buying power of consumers in the car industry in Australia can be said to be rather weak. This can be made evident in a few simple statistics, and the basic economic fact that cars are essential to the average Australian household and business which make’s consumers vulnerable to price changes made by producers.
In 2007, a total of 1,049,982 motor vehicles were sold on the Australian market. This was a new record, up 9.1 percent on the last years 962,666 motor vehicles sold {REF}. The buyers in the Australian Car market are said to be weak because they have the following characteristics:
1. Producers threaten forward integration: producers can take over there own redistribution /retailing. For example Holden dealers.
2. Significant buyer switching costs: Cars are an expense item on the buying list for most consumers; hence it’s not easy for consumers to easily switch to other products/ brands of cars.
3. Buyers are fragmented/ different: no buyer has any particular influence on product or price.

Supplier Power:

The bargaining power of suppliers is the degree of power that suppliers exercise over firms in a particular