Power of the Buyer: Medium
The bargaining power of the buyer can have either a negative or positive effect on a company and the industry in which they operate. “Buyers affect an industry through their ability to force down prices, bargain for higher quality or more services, and play competitors against each other (Wheelen 112)”. The power that buyers have in the automobile industry is relatively moderate due to the following factors:
• Special Offers
- Manufacturers are desperate to sell inventory; therefore, they often offer deals for customers to buy their vehicles. While Toyota is the leading automobile manufacturer in the world; they are currently “offering finance with the purchase of a new Avalon, Camry, Corolla, Sienna, and Yaris with …show more content…
“From 1995 through 2012, public transportation ridership increased by 35%—a growth rate higher than the 18% increase in U.S. population and higher than the 22% growth in the use of the nation’s highways over the same period” (American Public Transportation Association). Public transportation has grown to become a large industry that many utilize for the purpose both work and vacation travels. The amount of people that travel by public transportation are gradually increasing and this could possibly have a negative effect the automobile manufacturing company in the …show more content…
“First, Toyota is able to develop a product platform from a technical perspective by utilizing modular design alternatives. This is a technical prerequisite for developing in sets, i.e. each design alternative is in principle interchangeable. Second, Toyota has a significant skill in cooperating efficiently with select first-tier suppliers and on average buys the majority of its total vehicle value (on a cost basis) directly from suppliers” (Schäfer). “When competitors are few and roughly equal in size, they watch each other carefully to make sure that they match any move by another firm with an equal countermove” (Wheelen 112). Toyota’s modular design alternatives along with the company’s relationship with first-tier suppliers, makes it slightly more difficult for competitors to respond to Toyota’s activities which provides the company with a competitive
The bargaining power of the buyer can have either a negative or positive effect on a company and the industry in which they operate. “Buyers affect an industry through their ability to force down prices, bargain for higher quality or more services, and play competitors against each other (Wheelen 112)”. The power that buyers have in the automobile industry is relatively moderate due to the following factors:
• Special Offers
- Manufacturers are desperate to sell inventory; therefore, they often offer deals for customers to buy their vehicles. While Toyota is the leading automobile manufacturer in the world; they are currently “offering finance with the purchase of a new Avalon, Camry, Corolla, Sienna, and Yaris with …show more content…
“From 1995 through 2012, public transportation ridership increased by 35%—a growth rate higher than the 18% increase in U.S. population and higher than the 22% growth in the use of the nation’s highways over the same period” (American Public Transportation Association). Public transportation has grown to become a large industry that many utilize for the purpose both work and vacation travels. The amount of people that travel by public transportation are gradually increasing and this could possibly have a negative effect the automobile manufacturing company in the …show more content…
“First, Toyota is able to develop a product platform from a technical perspective by utilizing modular design alternatives. This is a technical prerequisite for developing in sets, i.e. each design alternative is in principle interchangeable. Second, Toyota has a significant skill in cooperating efficiently with select first-tier suppliers and on average buys the majority of its total vehicle value (on a cost basis) directly from suppliers” (Schäfer). “When competitors are few and roughly equal in size, they watch each other carefully to make sure that they match any move by another firm with an equal countermove” (Wheelen 112). Toyota’s modular design alternatives along with the company’s relationship with first-tier suppliers, makes it slightly more difficult for competitors to respond to Toyota’s activities which provides the company with a competitive