Complete your Research Project 2 in a Word document, APA formatted, and then submit it in the Assignment section of the classroom by midnight, EST, Day 7.

Complete
your Research Project 2 in a Word document, APA formatted, and then submit it
in the Assignment section of the classroom by midnight, EST, Day 7. The
instructions concerning this assignment as well as the grading rubric are
reproduced below.In 2009 the American auto industry was in a dire economic
state. Chrysler was in Chapter 11, GM was on the brink of bankruptcy, and
Ford’s future was at best uncertain. The demise of the U.S. auto industry would
have a devastating impact on our national economy and specifically the
economies of Michigan and Ohio. Economists occasionally use Porter’s five
forces framework when making a qualitative evaluation of a firm’s strategic
position. According to Porter, his model should be used at the industry level,
defined as a marketplace in which similar or closely related products or
services are marketed. This research paper requires the application of Porter’s
Five Forces Model to the auto industry.
Porter’s
analytical framework consists of those forces that affect a producer’s ability
to serve its customers and make a profit. A change in any of these five forces
requires a re-assessment of the marketplace. The five forces include:
1) The
threat of substitute products: The existence of close substitute products (i.e.,
high elasticity of demand) increases the propensity of customers to switch to
alternatives in response to price increases.
2) The
threat of the entry of new competitors: Unless there are significant barriers
to entry, profitable markets that yield high returns will attract firms (i.e.,
perfect competition), effectively decreasing profitability.
3) The
intensity of competitive rivalry: As in the case of oligopoly markets, rivals
may choose to compete aggressively, non-aggressively or in non-price dimensions.
4) The
bargaining power of customers: The ability of customers to put the firm under
pressure due to availability of existing substitute products, buyer price
sensitivity, uniqueness of the products, etc.
5) The
bargaining power of suppliers: The cost of factors of production (e.g. labor,
raw materials, components, and services such as expertise) provided by
suppliers can have a significant impact on a company’s profitability. As such
suppliers may refuse to work with the firm or charge excessively high prices
for unique resources.
References
Porter, M.E.
(1979) “How competitive forces shape strategy”, Harvard Business
Review, March/April 1979.
Porter, M.E.
(1980) “Competitive Strategy”, The Free Press, New York, 1980.
Porter, M.E.
(1985) “Competitive Advantage”, The Free Press, New York, 1985.
Develop a
detailed paper applying Porter’s Five Forces Model to the American automotive
industry, with a focus on the U.S. market.
Your paper
needs to include at least three scholarly sources, i.e. peer reviewed articles.
I strongly recommend the use of the APUS library for these sources, as most
acceptable resources can only be found in protected databases.
Your paper
should be about 10 double spaced pages, in APA format, and structured as
follows:

1. Cover
page with a running head
2. Abstract
3.
Introduction to the Auto Industry
3.1.
Industry Definition
3.2.
Industry Profile
3.3.
Industry Market Structure
3.4. Future
Outlook
4. Porter’s
Five Forces Strategy Analysis as it applies to the Auto Industry
4.1.
Bargaining Power of Buyers
4.2.
Bargaining Power of Suppliers
4.3.
Competitive Rivalry in the Industry
4.4. Threat
of New Entrants
4.5. Threat
of Substitutes
5.
Conclusion
6. References

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