S.W.O.T.

 

 

Strengths:

bulletSupports Main Form of Transportation- This industry provides parts that are used in the manufacturing of motor vehicles.  This is good because these vehicles are the main form of transportation used around the world.  The demand for these products is nearly never ending due to this fact.
bulletDurable and Time Tested Industry-  This industry has been around for decades.  Its success has been evident throughout history, and the continuation of this success seems possible considering the products that it supports.
bulletStock Performance- The overall stock performance of the industry has been increasing over time.  There have been a couple of recessions, but those were quickly made up for with increases over the next few years.  The future of he stock also seems to be a sound investment with possibility of growth
(Value Line, 2004).
bulletTechnologically Advanced- This industry by nature is on the cutting edge of technology.  There are constant advancements to automobiles, which are already very technology driven,  and the parts that are used in them. 
bulletLarge Volumes of Product- This industry supports the main and most popular form of transportation.  The sheer volume of cars that are produced and the amount of parts that go into them is a good fact for this industry. 
bulletIncreased Profit Margin of Light-vehicle Sales- The increasing profit margin on light-vehicles, which are the main support of the industry, is a positive for the financial strength of the industry (S&P, 2004).

 

 

Weaknesses:

bulletStrong and plentiful competition- The competition in the industry is fierce and can have a negative effect.  Strong competition has good aspects, but I consider this a weakness because of some of the indirect consequences that it can contribute to.  An example of this would be that fierce competition could lead to diminishing profit margins for the industry because of "price wars" in an attempt to stay competitive.
bulletLight-vehicle sales dependent- This industries success is very dependent on the sales volume of light-vehicles because that is where it achieves most of its profit (S&P, 2004).
bulletDomestic car production dependent- The industry is depended on the success of domestic car producers because they are the main customers of the companies in the industry (S&P, 2004).
bulletConsumer trends dependent- The trend of consumer purchases has a great affect on the industry because of its dependence on the type of vehicle that is purchased.
bulletSteel availability dependent- Steel is the main material used in production in the industry.  The cost and availability of this material has great bearing on these companies in their effort to make product (Value Line, 2004).
bulletFuel cost dependence concerned with vehicles- This is a weakness because the higher the cost of fuel is then the less a person will want to drive their vehicle.  In turn, decreasing the usage of vehicles and the amount vehicles that are sold.

 

 

Opportunities:

bulletMore applications for parts- Finding more applications for parts will enable the industry to increase product sold and overall profit.
bulletSupport for more vehicle usage- By supporting more vehicle usage there would be more vehicles sold and more need for the parts form this industry.
bulletMore alternates for manufacturing materials- Finding more alternatives for materials in production will help to offset the heavy dependence on the availability of steel.
bulletAlternate fuel sources- Finding alternate fuel sources can offset the vehicle usage deterrent of high gas prices.  The more the fuel costs to operate a vehicle, the less people want to use them. An example of an alternate fuel source could be corn or some other reoccurring source.
bulletMore hybrid automobiles (gas/electric)- this goes along with alternate fuel sources, but not the same thing.  The use of gas in combination with electric can help to reduce the fuel costs, but it also gets people to have to purchase more vehicles to get this ability.
bulletMergers or acquisitions within industry- This could help to reduce some of the extreme competition that is evident in the industry.   If some companies could work together to achieve common goals, then the profit margin per product sold would be much greater.

 

 

Threats:

bulletForeign car manufacturers- The industries reliance on domestic car manufacturers makes this a formidable threat.
bulletEconomy- How well the economy is doing has a great affect on the amount of cars that are purchased.
bulletAlternate forms of transportation- This industry is vehicle sales dependent, so other forms of transportation are a threat to its success.
bulletSupplier power- The suppliers of steel have a lot of clout in this industry because of its heavy dependence on the material.
bulletLegal/political- This is always a threat because of the possible laws restricting the use of vehicles that could be imposed.  This could be a concern because of the amount of pollution that is evident today.
bulletGas prices- This is a threat because the increasing price of gas will keep people from wanting to use or purchase vehicles.