Effects of Porter’s Strategies on Flying Vehicles (Essay Sample)

Effects of Porter’s Strategies on Flying Vehicles
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Effects of Porter’s Strategies on Flying Vehicles
Flying cars, otherwise known as electric air cars, have existed for a long time in people's minds. Sci-fi movies have made individuals more excited about the idea of flying automotive and waving traffic jams goodbye. Every day, more companies are showing promising outcomes of developing the technology, thus making this dream to get closer to reality. Despite the high cost associated with making the vision a reality, it will input massive benefits to the world and advance the technology in a significant way. Flying autonomous vehicles into the market will be determined by many factors and strategies used. The emergence of these cars in the market will be favored and disapproved by some of Porter’s forces and strategies existing.
Porter’s Five Forces Model Implications on Flying Cars
Porter’s forces and strategies were proposed to evaluate and assess the competitive positioning and strength of organizations. According to Bruijl (2018), a competitive approach must rest on comprehending the business structures and their overall changes. Porter's five forces include; the threat of new entrants, buyer power, supplier power, rivalry among existing contestants, and the threat of substitute products. Some of these forces will significantly favor the latest technology on developing flying autonomous cars.
The treats of new entrants into the market reflect on how new firms and products impose threats to the existing. When the industry is profitable, barriers of entry are low, which attracts more products in the market, and this, in turn, makes this threat high. In the case of flying cars, entering into the industry will require substantial capital and resources since designing and building flying cars is a more challenging task than that of a regular car or a plane. The design requirements of a ground vehicle are so different from those of an autonomous flying vehicle. This technology will face low threats of new entrants since the requirements are quite high and expensive for more firms to engage.
Threats of substitute products make a competitive atmosphere quite challenging. Flying cars may face a threat of substitute cars because they will be much expensive than regular cars. This will make consumers shift to other substitutes such as airplanes, which is much cheaper.
Rivalry among existing competitors shows the number of firms that give fierce competition. In the flying autonomous cars industry, the innovation will face very few rivalries from other firms since no organization has established the production using this technology. This will favor production and encourage companies to enter the market.
Negotiating power of sellers is the pressure applied by suppliers on corporations by the use of tactics such as raising prices. Strong supplier power results in a high cost of products (Chamata, 2017). Due to the low number of companies interested in developing this technology, suppliers will be few, which will strengthen their bargaining power against the firms. This will, in turn, make the produced cars very expensive for consumers and reduced sales.
The bargaining power of buyers is the pressure consumers impose on businesses in a bid to get quality products at an affordable price. Strong bargaining power of consumers will lower profit and make the market more competitive. Since the number of buyers will tend to be small at the start of this technology, the buyer’s power to bargain will be minimal. This will encourage the development of self-flying cars and boost other new entrants. Porter's forces reveal crucial information to consider when developing flying cars. They can be used to determine whether the industry will have potential attractiveness and profit. Most of these forces will favor the production, which will encourage more innovation of different models in the future.
Porter’s Three Generic Strategies on Flying Cars
Porter proposed three business strategies that organizations could use to achieve above-average performance in the industry. Firms can decide to target an entire market as a possible customer base or otherwise put emphasis on a target group to control the sector (Moon, Hur, Yin & Helm, 2014). The strategies include; cost leadership, differentiation, and focused approach. Cost leadership is where a firm becomes