BUS 225 Critical Thinking (DUE TODAY)
September 26, 2021
BUS 225 Project One
Executive Summary
Problem
In the workforce, diversity is essential to better understand the clients needs as well as form
new ideas to accommodate the current and potential employees and clients. Some companies
might not focus on the overall diversified spectrum which includes focusing on the evolution of
the involving technology.
New ideas on how to become more innovative, increasing sales, recognizing potential risks, and
automotive competitors are the four subjects I will be targeting.
Understanding the quantitative and qualitative data for the auto industry is necessary so we
can target the current and new products that the auto industry is always improving and
introducing to the industry.
"Quantitative research is a numerical and statistical analysis of statistical and numerical data
(numbers and statistics). On the other hand, qualitative research deals with open-ended and
non-numerical data (concepts, descriptions, meanings, words, and more)" (Pickell, 2021).
First is to understand how important quantitative date is in the automotive industry.
Quanatative data that is defined as the value of data in the form of counts or numbers where
each data-set has an unique numerical value associated with it".
Automotive Manufacturing Industry
Lately the automotive industry has become really innovative when it comes to gas
pollution,fully electric, hybrid, different functionalities that a car will feature.
The automotive industry is very broad, which includes light vehicles, heavy duty trucks/suv's
and the more stylish and improved all electric cars.
In the NADA Data overview of 2020 written by Manzi,"its breakdown of the midyear 2020
review features the many major milestones achieved by the retail auto industry during the first
half of 2020, including such highlights as:• The nation’s 16,646 franchised light-vehicle dealers
sold 6 .4 million light-duty vehicles .• Total light-vehicle dealership sales topped $437 billion .•
Dealerships wrote more than 125 million repair orders, with service and parts sales totaling
more than $51 billion"(Manzi,2020).
There was a total of $2.7BN profit in the auto industry. The top 3 major players of the auto
industry is Honda, Toyota and Ford motor company that brought in the most revenue.
Despite the profit, there was a decline in employment growth due to pandemic slowly
approaching different departments within the industry.
The diversity was a major focus due to those top 3 auto companies, they included hybrid,
electric and body styles.
California, Texas and Pennsylvania were the most productive states that sold the most light
weight cars, which are all located in three different regions of the United States.
California is a huge contender on wanting to eliminate their mass air pollution. They are one of
the only states to not using straws and plastic bags (they charge for each bag).
The new auto industry is focusing on producing more electric vehicles. Ford has produced more
electric cars and even revamped their mustang into an all electric SUV. Going electric is a very
positive move forward in the industry because companies are creating more attractive looking
cars.
Tesla was the auto company that changed the view of electric cars. "Launched in 2008, the
Roadster unveiled Tesla’s cutting-edge battery technology and electric powertrain. From there,
Tesla designed the world’s first ever premium all-electric sedan from the ground up – Model S –
which has become the best car in its class in every category" (Tesla,n.d.).
Focusing on more of what the world is leaning towards, which is more electric and less gas
power vehicles.
Every consumer isn't able to afford an all electric vehicle so they are trying to create more
affordable vehicles. The most popular body type of the electric vehicle is the sedan.
Tesla brand introduce a zero emissions powered vehicle that can go 0-60 in under 5 seconds.
They are also powered with auto pilot, which allows the driver to take their hands off the
steering wheel. These type of features are what drives the pricing on these cars become so
expensive.
New Industry
"In each of the past three years, EVs accounted for about 2% of the U.S. new-car market. The
COVID-19 pandemic may have affected vehicle sales of all types in 2020, making comparisons
difficult. Electric vehicles are more popular in China and Europe but the US is on board with the
plug in and charge" (Desilver,2021).
The overall value of an EV is a great invested due to paying for no gas and saving the planet.
The top competitors of the EV is Tesla and Toyota. Toyota introduced the hybrid car, which
takes gas and can charge as well. Toyota has been in the auto industry much longer than Tesla
have.
"Consumers spent USD 120 billion on electric car purchases in 2020, a 50% increase from 2019,
which breaks down to a 41% increase in sales and a 6% rise in average prices. ... In 2020, the
global average BEV price was around USD 40 000 and around USD 50 000 for a PHEV" (Iea,n.d.).
Electric vehicles weren't anything people thought was possible. Introducing a hybrid car made
consumers see that not all cars need gas to be mobile. A good long lasting battery can do the
job as well.
Like Tesla and Ford, they presenting more stylish looking cars for the consumer. The electric car
isn't going to go anywhere anytime soon in the US, companies are always trying to find new
ways to attract people and have more reliable features.
Porter’s Five Forces Analysis of the New and Automotive Industry
New Industry Automotive Manufacturing Industry
Rivalry
among
existing
competitors
Nio, Ford and Volkswagen is Tesla
biggest competitors in the EV
industry. Nio is a brand that is
doing really well in China. Ford
recently launched their new fully
electric and redesigned Mustang.
Volkswagen is a German based
company that is looking to surpass
Tesla in sales within the next 10
years or so. Tesla still out rank
those three competitors.
Engines take more parts to build
unlike an EV its only powered by a
battery. More torque with an EV due
to zero emission. There are several
competitors that supply engines to
companies.
Threats of
new
entrants to
the market
Nio has already made big noise in
China with great sales. So far it is
no legal barriers of the top three
competitors. Tesla parts are very
pricey but don't recommend
buying anything aftermarket to
replace on their cars. There aren't
many companies prepared to take
on such a huge haul of EV cars for
the public. Technology must be real
studied and tested before allowing
just any company to have EV on
the road.
Devloping longer lasting batteries and
quicker charge. Even though it takes
engines more manpower to build,
some consumer enjoy having rely on
gas for their cars.
Bargaining
power of
suppliers
So far Tesla is the only company
that supply their own parts for the
company.
"Stocks of companies that make EV
components and raw materials for
The bargaining power of suppliers is
low due to the smaller companies. A
lot of the current suppliers are
already working with big name car
brands. So it will be hard for small
batteries - has fared well, rising by
about 13% year-to-date,
outperforming the stocks of EV
manufacturers such as Tesla and
Nio which remain down year-to-
date" (Team, 2021).
General Motors plan on
aggressively entering into the EV
industry real soon by 2025. More
competitors are being introduced
to the already EV companies.
time contenders to compete for good
pricing and etc.
Threat of
substitute
products
If every competitor creates their
own parts then the industry will be
in a higher competitive demand.
The substitute parts can be made
for much cheaper but also can
cause a major threat if not properly
tested.
The substitute products can hinder
the EV industry because everyone
can't afford the vehicle. Also public
transportation such a bus and train
are becoming environmental friendly.
Public transportation and owning a
car both has its perks. Owning your
EV is convenient but when it comes to
maintenance the owner has to take
care of every problem. Public
transportation doesn't have much
responsibility but catch the route on
time and pay the small fare.
Bargaining
power of
buyers
There will be more electric
companies looking to sell their
products to the EV driven
companies so they can be their
supplier. This will raise the stock up
on electricity and power plants.
The bargaining power of the buyers
are usually looking for an affordable
price. But since EV's aren't in
everyone's budget, most of their
buyers are already wealthy people.
The price point is still important but
they are also looking for more
features that will not be so hard to
use.
Comparison of the Industries
The two industries are similar due to the rivalry amongst existing customers and threats of new
entrants to the market. The biggest difference of the two industries is bargaining power of
buyers. Its the biggest because buyers are always looking for something different in each
vehicle.
Summary of Findings
Analyzing the technology advancement has made the EV industry a top competitor in the auto
industry. I don't see technology slowing down due to trying to a lot of elimination in the world,
as mentioned is that air pollution is such a huge factor to keep in mind.
Porter’s Five Forces Analysis Chart—New Industry
Bargaining power of suppliers
medium
Bargaining power of buyers
low
Threat of substitute products
low
Threat of new entrants
high
Rivalry among
existing competitors
medium
Porter’s Five Forces Analysis Chart—Automotive Manufacturing Industry
Bargaining power of suppliers
high
Bargaining power of buyers
high
Threat of substitute products
medium
Threat of new entrants
high
Rivalry among
existing competitors
medium
References
About Tesla. (n.d.). Retrieved from https://www.tesla.com/about
DeSilver, D. (2021, June 10). Today's electric vehicle market: Slow growth in U.S., faster in China,
Europe. Pew Research Center. Retrieved September 27, 2021, from
https://www.pewresearch.org/fact-tank/2021/06/07/todays-electric-vehicle-market-slow-
growth-in-u-s-faster-in-china-europe/.
Iea. (n.d.). Trends and developments in Electric Vehicle Markets – Global EV outlook 2021 –
analysis. IEA. Retrieved September 27, 2021, from https://www.iea.org/reports/global-ev-
outlook-2021/trends-and-developments-in-electric-vehicle-markets.
Team, T. (2021, June 14). Ev suppliers are faring well this year. which stocks should you pick?
Forbes. Retrieved September 27, 2021, from
https://www.forbes.com/sites/greatspeculations/2021/06/14/ev-suppliers-are-faring-well-this-
year-which-stocks-should-you-pick/?sh=78f9c0f2213a.
https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474862016
https://www.g2.com/articles/qualitative-vs-quantitative-data