What’s more, existing companies have barriers to new entrants such established market strength and shares of the already established firms, cumbersome process of registration, high initial capital outlay, and developed brand loyalty amongst existing customers. As such, new entrants are likely to find it difficult to penetrate into such existing markets and industries calling for efficient and effective strategies.
Regarding established industries and market, automotive industry and market is one of the deeply established with many players but controlled by few. Some of the great players within the industry include GM, Ford, Daimler, Chrysler, Toyota, Honda, Nissan, Peugeot, Renault, Hyundai Motor, Mazda, and Fiat amongst others (Nieuwenhuis & Wells, 2005; p 69). European Motor Company (EMC) operated as part of a large industrial conglomerate with interests in the aerospace, defence and medical sectors before is acquisition several years ago to an automotive group who made significant investment in the company for a few years. Nevertheless, the automotive group felt unable to support the business any further because of a rapidly declining market share.
The following is an analysis of EMC Plc and the automotive industry. Main analysis of this paper focuses on both internal and external market factors. Attaining such an analysis is possible through various strategic management tools and models such as PESTLE, SWOT, Porter’s Five Forces, and Critical Success Factors that have so far been of importance to the organization. In addition, this analysis focuses on strategic direction of EMC Plc covering a period of 5 years (Nieuwenhuis & Wells, 2005; p 75). Such strategic direction employs the use of strategic defining tools and concepts such as mission, vision, overall target markets, strategic rationale, as well as financial objectives. The analysis winds up by providing strategic development and progress coupled with reflective portfolio. In order to attain these, the paper is divided into three parts with different sections. Part 1: Initial Strategic Position and Intentions 1.1 External and Internal Initial Situation Industries and firms face different factors both from within and outside. External environmental factors refer to those that business organizations and industries have no control over for instance, political, economical, socio-cultural, technological, legal, and environment. On the other hand, internal environmental factors are those that a firm or industry may control such as the strengths, weakness, threats, and opportunities (Watson & Head, 2009). The following discussion uses various tools to explain automotive industry’s environmental factors and their effects on EMC Plc’s operations. 1.1.1 PESTLE Analysis EMC Plc is likely to experience political, economical, socio-cultural, technological, legal, and environment as illustrated in Appendix 1(a). EMC Plc experiences political stability and advantages from various political factors such as degree of government involvement in business activities, the serene political atmosphere that European