A Critical assessment of the Industry Environment
Executive Summary
The given report is for understanding the forces that shape contention inside an industry. It is moreover significant for helping you with changing your strategy to suit your relentless environment and to chip away at your conceivable advantage. Industry cycles reveal principal information to you about advancement prospects, openings, and hardships, similarly, to supply chains, corporate strategies, and their advantages. The business cycle impacts the company’s method and the company’s advantages. Accomplishment and perseverance factors are the huge parts required for an association to battle in its target business areas. Fundamentally, it expresses what the association ought to do, and advance pleasantly, to achieve the goals delineated in its fundamental game plan.
| Identification of the Industry Question | GB auto is an important part of the Egyptian automobile industry, and we are the holding association for a group of assistants working at all levels of the car business value chain, providing after-bargains organisation through a cross-country after-bargains organisation association, and selling auto fragments and advancement equipment. | |
| Environmental Factor | Issues influencing to the industry | Implications for the Industry |
| Political | Changes in government monetary approach | ● Political Stability
● Regional tax policy may hinder with company’s profitability ● Feasibility of export operations |
| Economic | Declining GDP
Increasing inflation rate |
● Reducing consumer purchasing power
● Reduced economic growth affects the company’s ability grow and make profit |
| Social | ● Changes in consumer behaviour
● Preferences towards lower emission vehicles
|
● The preferences of consumers have a shifted towards my efficiency that consumes low petrol and therefore it is necessary for the company to develop search models in future (Black et al. 2020) |
| Technological | Technological advancements | ● Installation of contemporary technology and usage of innovative machinery to boost industrial efficiency.
● Improving car mechanics and utilisation of computer software for both production and running vehicles |
| Environmental | Waste and energy consumption | ● It collaborates with eco-converse enterprises to provide ecosystem benefits and with industry municipalities to dispose of solid waste.
● To reduce hazardous emissions, modern and modern machinery is used. |
| Ethical/ Legal | Non-compliance to system | ● Set-up code-of ethics at zero-tolerance and Whistle-blower policy for better communication and to avoid unethical behaviour.
● Establish an anti-corruption and anti-bribery management system to encourage anti-corruption and anti-bribery practices. |
| Porter’s Force | Strength | Justification/Reasons |
| The threat of new entrants | Low | As GB auto-builds a strong partnership and diversified player, capturing a wealth of opportunities in the market. Brand image and reputation become a major challenge for the new entrants.
New contestants may expect time to arrive at the market position that GB Auto as of now acquires in the referenced business across the Egyptian market. |
| Threat of substitutes | low | The availability of many comparable brands makes it easier for the customer to switch brands, however in the case of GB auto this threat is low indicating better opportunity (El-Haddad et al. 2017) |
| Bargaining power of buyers | High | GB auto has been operating in the respective industry with a range of renowned competitors offering similar services. This factor has increased the option for consumers to go for substitute products and thereby enhanced the bargaining power of buyers. |
| Bargaining power of suppliers | Low | There are a great number of suppliers. Suppliers do not represent a risk to downstream integration. |
| The intensity of new rivalry | Medium | Due to a comparably less number of competitors, moderate chances of rivalry is present in the market. It increases the chances of maintaining a loyal consumer base (Abdellatief et al. 2019). |
| Nature of competition | High | Typically, competitors battle for various customer segments. |
| Stages in the industry life cycle | Ghabbour Auto industry is in the Mature stage of the industry life cycle |
| Implications | Increase in a fraction of the entire industry as a result of continued demand in a broader range of things and administrations.
Governing reputation for quality, dependability, durability, and value across all service and product offerings is provincial in scope. The administration acknowledges that we are well-positioned to capitalize on provincial fare opportunities in the Middle East and Africa, particularly for privately gathered and produced commercial vehicles, semi-trailers, and superstructures that benefit from international alliances with specific nations. Recently, excessive import taxes that stifled growth in the car industry has been reduced as part of new exchange advancement endeavours (ElHakim et al. 2021). It has a beneficial influence on the pace of growth of the gross domestic product. This industry has the potential to attract significant international investment. The most difficult one is the floatation of the Egyptian pound, which has had a detrimental impact on per capita income. The industry has a strong brand value and provides product awareness that meets the demands of the customers. This can optimise sales and profitability while requiring little investment and marketing expenditures. Changes in modern design, request, and innovation prerequisites through the industry life cycle have significant ramifications for wellsprings of upper hand in each stage. |
| Issue | Survival Factor | Success factor |
| A changing global environment | Despite the greater inflation rate, the firm persisted in a competitive climate. By developing a drive financing section that provides loans to business and traveller automobiles, including brands not distributed by Ghabbour auto. | ● Finance (Assets, Facilities, and equipment)
|
| Unavailability of foreign currency | Downgrading of the nearby cash of global contenders | ● Strong export-oriented growth plans
● Economic liberalization reforms ● Low labor cost |
| Disruption in Supply of certain raw materials and component | Commodity risk
Customs duty reductions |
● The Egypt-turkey free trade agreement |
Conclusion
Based on the findings in the above analysis it can be concluded that it would be essential for GB auto to focus more on the above-mentioned success factors to minimise their existing issues present in the automotive industry. Adding to that the micro and macro-environmental factors that have been stated above also help in understanding how focusing on technological advancements and other factors can help GB auto to minimise their existing market risks.
References:
Ghabbour Auto, 2021. About us. [Online]. Available at: <http://www.ghabbourauto.com/About.aspx> [Accessed on 20 October 2021]
Black, A., Roy, P., El-Haddad, A. and Yilmaz, K., 2020. The political economy of automotive industry development policy in middle income countries: A comparative analysis of Egypt, India, South Africa and Turkey.
El-Haddad, A., Hodge, J. and Manek, N., 2017, June. The political economy of a sector in crisis: Industrial policy and political connections in the Egyptian automotive industry. In Economic Research Forum Working Paper (Vol. 1112).
Abdellatief, M., Shaaban, E.M. and Abu-Raya, K.A., 2019, December. Egyptian Case Study-Sales forecasting model for automotive section. In 2019 International Conference on Smart Applications, Communications and Networking (SmartNets) (pp. 1-6). IEEE.
ElHakim, R., Elqadi, A., Torky, M., Zayed, M., Farag, I. and Agamawi, M., 2021, March. Let’s DO-Automotive Platform for Interoperability. In 2021 4th International Conference on Information and Computer Technologies (ICICT) (pp. 294-299). IEEE.
