BUS225_Project_One

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1 Project One: Executive Summary Southern New Hampshire University BUS 225: Critical Business Skills for Success 2023

2 Project One: Executive Summary Problem Problem Statement In the evolving landscape of the automotive manufacturing industry, it has become imperative for our company to explore diversification avenues. Our core business, primarily focused on engine manufacturing for the auto sector, faces increasing challenges due to technological shifts, changing consumer preferences, and global economic dynamics. Ensuring our sustained growth and market leadership requires that we not only capitalize on our core competencies but also venture into new arenas where our engine technology can find application and value. Need for Diversification Diversifying into new industries will not only reduce our dependency on a single sector but will also open up new revenue streams, enhancing our risk resilience in a turbulent market. This proactive step can protect us from potential downturns in the automotive sector, safeguard jobs, and promise increased returns for our stakeholders. Data Collection Approach To make an informed recommendation on which industry our company should diversify into, a comprehensive evaluation of both our current industry and potential new industries is pivotal. Quantitative Data: 1. Current Auto Industry: We'll analyze sales trends, market share shifts, growth rates, and technological advancements in the automotive sector. This will help gauge where we currently stand and the future trajectory of the industry. 2. Potential New Industries: A financial assessment of industries where engines play a critical role will be carried out. Key indicators like industry growth rates, profit margins, barriers to entry, and market size will be of prime focus. Qualitative Data: 1. Current Auto Industry: We'll review industry forecasts, expert opinions, and emerging technological disruptors. Feedback from our current clients can shed light on unmet needs or potential areas of collaboration. 2. Potential New Industries: Interviews with industry experts, SWOT analysis of potential sectors, and cultural fitment of these industries with our core values and capabilities will be assessed.

3 In the following sections of the executive summary, we will delve deeper into our findings and outline a proposed roadmap for our diversification strategy. Automotive Manufacturing Industry Overview of the Automotive Industry Based on the information gleaned from the provided sources, the automotive industry remains a dynamic sector, with shifting preferences influenced by technological advancements, environmental concerns, and evolving consumer tastes (Alliance For Automotive Innovation, n.d.; NADA, n.d.). Sales Analysis: 1. By Region: North America, particularly the U.S., maintains a robust market for automotive sales. Asia, dominated by China and India, shows high growth potential due to urbanization and a burgeoning middle class (MarketLine, n.d.). 2. By Fuel Type: Electric vehicles (EVs) have witnessed a significant uptick in sales, especially in developed markets (IBISWorld, n.d.). Growing environmental concerns and governmental initiatives drive this trend. Gasoline engines continue to dominate sales globally, but hybrids are gaining traction (Alliance For Automotive Innovation, n.d.). 3. By Body Type: SUVs have surged in popularity across many regions. Trucks hold a significant market share in North America, while sedans remain popular in urban areas (NADA, n.d.). Total Industry Value: The overall value of the automotive industry continues its growth trajectory, particularly in the electric vehicle segment (Alliance For Automotive Innovation, n.d.). Trend Analysis: 1. Motor Preferences: A discernible trend is the pivot towards electric motors (IBISWorld, n.d.). Hybrids also attract attention, merging traditional and electric capabilities. 2. Customer Demands: The modern consumer's vehicle expectations go beyond mere transport. Advanced tech features, ranging from infotainment systems to autonomous driving, are highly sought-after (MarketLine, n.d.). 3. Fuel Efficiency: Enhanced fuel efficiency is a priority, resonating with global carbon reduction agendas (IBISWorld, n.d.). 4. Body Types Trend: Compact SUVs and crossovers are gaining popularity due to urban congestion, while trucks maintain steady demand for specific uses (NADA, n.d.). Strategy Recommendations

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4 Considering these insights, the automotive sector is veering towards a sustainable, tech- forward direction. Prioritizing hybrid and electric motor tech in our manufacturing processes is crucial. Catering to the SUV and crossover market also presents promising prospects. In our subsequent research phase, we'll explore industries adjacent to automotive to diversify our offerings (Alliance For Automotive Innovation, n.d.). Current Market Trends in the Automotive Industry In today's automotive landscape, the market is rapidly evolving, influenced by technological innovations, customer preferences, and environmental concerns. Trends in Products Motors: The automotive propulsion landscape is undergoing a seismic shift. Electric vehicles (EVs) are witnessing an upsurge in sales and are predicted to dominate the future of transportation (Alliance For Automotive Innovation, n.d.). Hybrids, which combine traditional combustion engines with electric motors, serve as a pivotal transition product, bridging the gap between conventional vehicles and fully electric models (MarketLine, n.d.). Trends in Body Types SUVs: Sport Utility Vehicles (SUVs) continue to soar in popularity. Valued for their spaciousness and perceived safety, SUVs have established themselves as a staple across various regions (NADA, n.d.). Trucks: Particularly in North America, trucks hold a significant market share, catering to both personal and commercial users (NADA, n.d.). Sedans: Though facing fierce competition from SUVs and crossovers, sedans remain a popular choice in densely populated urban areas, where their compactness aids in maneuverability (MarketLine, n.d.). Trends in Customer Demands Cost: Consumers are increasingly seeking value for money. While the upfront cost of EVs can be higher, many consumers see savings in the long term, given tax incentives and decreased fueling costs (IBISWorld, n.d.). Safety Features: Advanced safety features such as autonomous braking, lane departure warnings, and adaptive cruise control are becoming standard expectations rather than luxury additions (Alliance For Automotive Innovation, n.d.).

5 Vehicle Color and Customization: Modern consumers seek personalization, driving demand for a broader palette of vehicle colors and customization options, enabling them to reflect their individuality (MarketLine, n.d.). Additional Data Environmental Concerns: The push for sustainability is affecting purchasing decisions. Governments worldwide are implementing strict emission norms, urging manufacturers to innovate and reduce the environmental impact of their products (Alliance For Automotive Innovation, n.d.). Tech Integration: With the advent of the digital age, vehicles today are more than just transportation means. Integration of AI, infotainment systems, and seamless smartphone connectivity are evolving from novelties to necessities (IBISWorld, n.d.). The automotive industry is at an inflection point. To remain competitive, manufacturers must recognize and adapt to these emerging trends, ensuring they cater to both current market demands and anticipate future shifts. New Industry The Lawn and Garden Equipment Manufacturing industry, a subset of the broader consumer durable goods sector, offers a plethora of opportunities for companies looking to diversify. This sector has evolved in tandem with changes in consumer behavior, technological advancements, and environmental considerations. Sales Dynamics : Sales within the Lawn and Garden Equipment Manufacturing sector have experienced steady growth over recent years. Geographic segmentation reveals that suburban regions and states with predominant individual housing structures, like the Midwest and South, witness higher equipment sales. In terms of product types, power lawnmowers, string trimmers, and garden tractors lead the pack, each catering to a specific subset of consumer needs (IBISWorld, n.d.). Industry Value : The Lawn and Garden Equipment Manufacturing industry's value has trended upwards, reflecting the increasing importance of home gardening and outdoor recreational activities. Consumers view gardening not just as a hobby, but also as a sustainable and therapeutic practice, thereby fueling demand for high-quality equipment (MarketLine, n.d.). Growth Projections : There's a palpable optimism surrounding this industry. The rise in the concept of home gardening, coupled with an increasing number of households in suburban and rural areas, points to a promising trajectory. External factors like the push for sustainable and organic food consumption, as well as a renewed interest in landscaping, further accentuate this growth narrative. However, urbanization trends in certain regions might temper this growth to an extent (IBISWorld, n.d.).

6 Competitive Landscape : The industry is dotted with both giants and smaller players. Key competitors include John Deere, Toro, and MTD Products. These industry stalwarts have carved a niche for themselves through technological innovation, robust distribution networks, and brand loyalty. For new entrants, the barriers include the need for substantial R&D investment, regulatory adherence related to equipment emissions, and the challenge of breaking into established supply chains (MarketLine, n.d.). Market Trends : There's a discernible shift towards eco-friendly equipment – battery-operated mowers or equipment that reduces water usage, reflecting environmental consciousness among consumers. Additionally, the integration of smart technology into garden equipment, like automated sprinkler systems and app-controlled garden tools, is witnessing traction. As the lines between indoor and outdoor living blur, consumers demand equipment that is efficient, ergonomic, and aesthetically pleasing (IBISWorld, n.d.). The Lawn and Garden Equipment Manufacturing industry presents a lucrative proposition for diversification. With its growth potential, dynamic trends, and a healthy competitive spirit, this sector could be the next frontier for companies looking to expand their horizons. Current Market Trends in the Lawn and Garden Equipment Manufacturing Industry The Lawn and Garden Equipment Manufacturing industry is undergoing significant changes driven by both technological innovations and evolving consumer preferences. These dynamics, combined with broader socio-economic and environmental factors, are crafting a unique trajectory for the industry's future. Trending Products and Services 1. Smart Gardening : There's an increasing adoption of smart technology in lawn and garden equipment. Products integrated with IoT (Internet of Things) capabilities, such as app- controlled sprinklers, soil sensors, and automated lawnmowers, are gaining traction. These devices cater to a growing segment of consumers interested in optimizing their gardening practices through data analytics and remote controls (MarketLine, n.d.). 2. Eco-Friendly Equipment : Reflecting global environmental concerns, there's a shift towards sustainable gardening tools. Battery-operated mowers, solar-powered lights, and water- conserving irrigation systems are among the products experiencing increased demand. Such equipment reduces the carbon footprint and resonates with environmentally conscious consumers (IBISWorld, n.d.). Customer Demand Trends 1. Quality over Quantity : Consumers are leaning more towards durable, high-quality equipment rather than frequent replacements. This shift has led manufacturers to prioritize robustness and longevity in their product designs (IBISWorld, n.d.).

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7 2. Aesthetic Appeal : As home gardening becomes a lifestyle statement, there's heightened demand for equipment that's not only functional but also aesthetically pleasing. Modern designs, customizable color options, and sleek finishes are becoming industry standards (MarketLine, n.d.). 3. User-Friendliness : Given the diverse age group of garden enthusiasts, equipment manufacturers are focusing on user-friendly designs. Ergonomic handles, lightweight tools, and intuitive controls are now central to product development (IBISWorld, n.d.). Industry Evolution and Future Projections Historically, the Lawn and Garden Equipment Manufacturing industry catered to a niche audience with basic tools. However, with rising urbanization, shrinking green spaces, and a renewed focus on mental well-being, home gardening has transitioned from being a hobby to an essential activity. The integration of technology, sustainability considerations, and consumer feedback has guided the industry's evolution. In the coming years, the industry is poised for further transformation. Augmented Reality (AR) and Virtual Reality (VR) might find applications in garden design and planning. Furthermore, as urban farming becomes more mainstream, equipment tailored to small spaces and vertical gardening will likely see an upswing. The emphasis on sustainability will only intensify, driving further innovations in eco-friendly tools (MarketLine, n.d.). The dynamic nature of the Lawn and Garden Equipment Manufacturing industry, combined with its adaptability to changing global trends, makes it a promising avenue for diversification. With its finger on the pulse of both technological advancements and consumer desires, this industry is well-positioned for sustainable growth. Porter’s Five Forces Analysis of the New and Automotive Industry New Industry Automotive Manufacturing Industry Rivalry among existing competitors In the Lawn and Garden Equipment Manufacturing industry, rivalry among existing competitors is characterized by several key factors that shape the competitive landscape. 1. Number of Competitors : The industry consists of a mix of established multinational corporations, regional powerhouses, and local companies. Given the wide array of products, The automotive manufacturing industry, especially when zeroing in on engine production, stands as one of the most competitive sectors worldwide. The market for supplying engines to the automotive manufacturing industry has several key players, each vying for a dominant market position. Companies such as Toyota, General Motors, Volkswagen, Ford, and Honda are not only significant

8 from simple gardening tools to advanced machinery, numerous businesses participate at various levels of the value chain. The expansive nature of the product range allows for multiple players to coexist (IBISWorld, n.d.). 2. Competitors' Positions : While multinational corporations dominate the industry in terms of advanced machinery and smart equipment, regional and local manufacturers often have a stronghold in specific markets or product categories. These regional players often cater to localized preferences, ensuring their relevance and competitive position (Fortune Business Insights, n.d.). 3. Market Share Dynamics : Although exact market shares for each competitor might vary based on the segment analyzed, large international players tend to command significant portions of the global market. However, in regional breakdowns, local players can have substantial shares due to their adaptability and understanding of local needs (IBISWorld, n.d.). 4. Intensity of Competition : Competition is fierce, especially among top players who aim to innovate constantly. With the integration of technology into gardening tools, companies are in a race to offer the most advanced, user-friendly, and sustainable manufacturers of vehicles but also crucial engine suppliers. Each company has carved its niche and established its footprint in specific regions and segments of the market. For instance: Toyota remains a dominant force, particularly in the hybrid engine market, with its successful Prius model leading the charge (Transforming Personal Mobility, n.d.). General Motors , meanwhile, has been a longstanding power player in the North American engine supply sector, especially with its EcoTec family of engines (IBISWorld, n.d.). Based on market analysis from IBISWorld, while exact market share percentages for each company fluctuate, top players such as those mentioned often capture a significant portion of the global market. The intensity of the competition is palpable. Companies are incessantly driven to innovate, both in terms of engine performance and efficiency. The push for greener, more sustainable engines—like electric and hydrogen-based solutions—has only heightened the rivalry. For example, the shift towards electric vehicles has seen traditional engine manufacturers diving into the world of battery technology and electric propulsion systems (Lawn & Garden Equipment Market Size, Forecast |

9 products. This rivalry extends beyond just product quality to include factors such as distribution networks, post-sale services, and brand reputation (Fortune Business Insights, n.d.). 5. Price Wars and Additional Services : Given the industry's maturity, there's a propensity for price-based competition, especially in segments dominated by commoditized products. However, for premium and tech-integrated products, companies differentiate themselves by providing additional services, warranties, and innovative features. Constant innovation remains a pivotal strategy for companies to maintain or gain market share, ensuring they stay ahead of consumer demands and technological advancements (Producer Price Index by Industry, 2023). The Lawn and Garden Equipment Manufacturing industry is marked by a robust competitive dynamic. While the industry has room for various players due to its broad product range, rivalry remains intense, particularly among leading brands. Companies looking to enter or expand within this industry must be prepared to innovate continuously, offer value-driven products and services, and understand regional market Growth, 2028). Price remains a competitive factor, especially in developing markets where cost-effective solutions are vital. However, in mature markets, while price is a factor, innovation and added services (like extended warranties, maintenance packages, and software updates) often take center stage (Producer Price Index by Industry: Lawn and Garden Equipment Manufacturing: Primary Products, 2023). Companies supplying engines to the automotive manufacturing industry are embroiled in a fierce rivalry. They compete not just on price but also on innovation, additional services, and their ability to cater to the ever- evolving demands of both the industry and the end consumer.

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10 dynamics. Threats of new entrants to the market Regulatory Barriers: The industry faces specific regulatory standards concerning the safety and environmental impact of the equipment manufactured. These standards can make it challenging for new players to ensure compliance without incurring considerable costs (IBISWorld, n.d.). Capital Requirements: Establishing a manufacturing unit requires significant capital investment, including acquiring the necessary machinery, setting up a supply chain, and implementing quality control mechanisms. High start-up costs can deter new companies from entering the market (Producer Price Index by Industry, 2023). Expertise: The industry demands a high level of expertise, especially as garden and lawn equipment grow increasingly complex and technology-oriented. Technical know-how in engineering, materials science, and ergonomics, among others, is required. This creates an additional barrier for companies that do not possess this specialized knowledge (Fortune Business Insights, n.d.). Entering the automotive manufacturing industry, particularly in the segment of supplying engines, is a challenging endeavor. The barriers to entry in this industry are significant and can be outlined as follows: 1. Capital Intensive Nature : Building an engine requires high-tech machinery, research facilities, and skilled manpower. The costs associated with setting up a factory, procuring materials, and establishing a production line are substantially high (IBISWorld, n.d.). 2. Technical Expertise : Engine manufacturing requires intricate knowledge of automotive engineering. As cars become more sophisticated, the engines need to meet higher performance, efficiency, and emission standards. Acquiring such expertise is neither easy nor cheap (Transforming Personal Mobility, n.d.). 3. Regulations and Legal Barriers : Automotive engines are subjected to stringent regulations worldwide, both for performance and environmental reasons. For instance, engines need to meet emission standards set by governments, which often vary from one region to another. Navigating these regulations requires substantial knowledge and resources (Alliance For Automotive Innovation, n.d.). 4. Established Competition : As

11 Brand Loyalty and Distribution Networks: Established players often have well-developed distribution channels and a loyal customer base. Gaining traction in the market is difficult for newcomers without a significant marketing budget or innovative product offerings (IBISWorld, n.d.). Number of Potential New Entrants Competitive Landscape: While larger, well-established companies dominate the market, the industry is diverse enough to allow for specialized niche players. However, these companies would need to be as prepared, if not more so, than existing companies in terms of capital, expertise, and compliance with regulations (Fortune Business Insights, n.d.). Conclusion Entering the Lawn and Garden Equipment Manufacturing industry is relatively challenging due to regulatory compliance requirements, high capital costs, and the need for specialized expertise. Additionally, strong brand loyalty and established distribution networks serve as barriers that new entrants would need to overcome to gain a foothold in this market. Therefore, the threat of new entrants can be considered moderate to low, depending on the market segment and geographic focus. discussed earlier, key players like Toyota, General Motors, Ford, and Volkswagen already dominate the market. These companies have built extensive relationships with car manufacturers over decades, making it hard for new entrants to secure contracts (NADA, n.d.). 5. Brand Reputation and Trust : Engines are a crucial part of any vehicle. Manufacturers and consumers alike place immense trust in established engine suppliers because of the perceived reliability and performance of their products. New entrants would face the challenge of building this trust from scratch. 6. Scale of Production : Established players benefit from economies of scale, producing engines in massive quantities which allows for cost savings. New entrants would struggle to achieve such scales initially, making their production comparatively more expensive (MarketLine, n.d.). Given these barriers, while it's not impossible for new companies to enter the industry, the challenges are substantial. Only firms with deep pockets, a long-term vision, and a unique value proposition (like revolutionary engine technology) might consider venturing into this sector. The threat of new entrants supplying engines to the automotive manufacturing industry is relatively

12 low due to the high capital requirements, stringent regulations, established competition, and the importance of brand reputation and trust in this sector. Bargaining power of suppliers Suppliers of Raw Materials The Lawn and Garden Equipment Manufacturing industry relies on a variety of raw materials including metals (such as steel and aluminum), plastics, and rubber. The source of these materials is often diverse, with metals coming from mining companies, plastics from chemical producers, and rubber from both natural and synthetic sources (IBISWorld, n.d.). Number and Rivalry Among Suppliers 1. Metals : The steel and aluminum industries are vast, with several major global and regional players. While there are dominant players in the field, there's also significant competition, which means that no single supplier can easily dictate prices (Fortune Business Insights, n.d.). 2. Plastics and Rubber : While there are numerous suppliers for both plastics and rubber, certain specialized types or grades might have fewer suppliers, increasing their bargaining power (Producer Price Index by Industry, 2023). 3. Rivalry : Given the multiple industries that rely on these raw The automotive manufacturing industry relies on a diverse range of raw materials, making the supply chain dynamic and intricate. An understanding of the power dynamics between suppliers and manufacturers is crucial for strategic decision- making. Companies Providing Raw Materials: The raw materials for the automotive manufacturing industry include steel, aluminum, plastics, rubber, electronics, glass, and textiles, among others. Companies such as ArcelorMittal and Nucor provide steel; Alcoa supplies aluminum; DowDuPont offers polymers and other chemicals, and so forth (MarketLine, n.d.). Number of Suppliers: For many raw materials, there are multiple global suppliers, ensuring competition. However, for certain specialized components, like rare earth elements used in electronics, the supply might be concentrated in a few regions or countries. Rivalry Among Suppliers: The rivalry between suppliers, particularly for more common materials like steel and aluminum, can drive down prices due to competition. These materials are largely commoditized, and many

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13 materials (automotive, construction, electronics, etc.), suppliers face competition. This rivalry generally works in favor of the Lawn and Garden Equipment Manufacturing industry as it helps in keeping the raw material prices competitive (Fortune Business Insights, n.d.). Monopoly Concerns While it's unlikely for any single supplier to have a virtual monopoly on generic raw materials like steel or plastics, specific specialized components or patented materials could be controlled by a limited number of suppliers. Such monopolistic control can lead to increased prices and dependency (IBISWorld, n.d.). Overall Bargaining Power The Lawn and Garden Equipment Manufacturing industry enjoys relatively moderate to low supplier bargaining power for generic raw materials due to the availability of multiple suppliers and the intense competition among them. However, the power dynamics can shift when it comes to specialized components or materials, where suppliers might have higher bargaining power. Manufacturers should be wary of over-reliance on a single supplier for such specialized needs. In conclusion, the bargaining power of suppliers for most raw materials suppliers worldwide are vying for contracts with major automakers (IBISWorld, n.d.). Virtual Monopolies: While many raw materials have multiple sources, there are concerns about virtual monopolies, especially in the domain of rare earth minerals. For instance, China dominates the rare earth mineral production, which is essential for electronics in modern vehicles. This concentration gives China substantial bargaining power and can lead to price hikes (NADA, n.d.). Bargaining Power of Suppliers: The overall bargaining power of suppliers varies across the supply chain. For common materials, the power of automotive manufacturers may be more pronounced due to the large volume of orders they place. However, for specialized components or materials, suppliers may hold more sway. The increasing push towards electric vehicles and the subsequent demand for batteries has given considerable bargaining power to lithium suppliers, for instance. The automotive manufacturing industry's vast and varied supply chain means that the power dynamics are nuanced. While competition among suppliers of common materials can benefit manufacturers in terms of pricing, the reliance on specialized components or materials can tilt the scales in favor of suppliers. As the automotive industry evolves, especially with the transition to

14 in the industry is moderate, but vigilance is required to avoid pitfalls related to specialized components. Diversifying the supplier base and ensuring alternate sources for critical materials can help in mitigating risks. electric and autonomous vehicles, understanding and managing supplier relationships will be paramount for sustained success. Threat of substitute products Emerging Competing Products The Lawn and Garden Equipment Manufacturing industry faces emerging threats from alternative technologies and solutions. For instance, robotic lawn mowers and smart irrigation systems are gaining popularity as substitutes for traditional lawn mowers and sprinkler systems, respectively (Fortune Business Insights, n.d.). Cost of Production Some of these emerging technologies may initially be more expensive to produce due to R&D costs and specialized components. However, as these technologies mature and scale, production costs are likely to decrease, potentially making them more cost- competitive with traditional products (IBISWorld, n.d.). Product Advantages Robotic and smart technologies offer several advantages over traditional lawn and garden equipment, such as greater efficiency, lower long-term costs due to less manual labor, and The automotive manufacturing industry is undergoing a transformative phase, with technological advancements and environmental concerns driving change. The introduction of alternative transportation modes poses challenges and opportunities for traditional automakers. Emerging Competing Products : Electric Vehicles (EVs) are a prominent example. Traditionally fueled vehicles are facing competition from EVs, which offer lower emissions and are becoming increasingly affordable for consumers (Transforming Personal Mobility | Alliance For Automotive Innovation, n.d.). Beyond EVs, hybrid vehicles, which combine traditional fuel with electric power, are also gaining traction. Another substitute gaining attention is autonomous or self-driving vehicles, which, when combined with ridesharing platforms, could diminish the demand for individual car ownership (MarketLine, n.d.). Furthermore, non-vehicular transport options, such as e-scooters and

15 enhanced features like remote control through mobile apps. These aspects could make them more attractive to consumers, especially those willing to pay a premium for convenience and automation (Fortune Business Insights, n.d.). Potential to Force Company Out of Market The threat from substitute products is real and growing. Companies sticking to only traditional forms of lawn and garden equipment may find themselves increasingly marginalized as technology advances. It's crucial for any new entrant to be adaptable and willing to invest in new technologies to stay competitive (Producer Price Index by Industry, 2023). Conclusion The threat of substitute products in the Lawn and Garden Equipment Manufacturing industry is moderate but increasing. New technologies that offer more efficient and convenient solutions are emerging, and while they might be more expensive now, the costs are likely to decrease over time. Failure to adapt to these changes could render traditional products obsolete, posing a risk to companies that do not innovate. bicycles, especially in urban settings, are gaining traction as eco-friendly, cost-effective alternatives to traditional cars (NADA, n.d.). Cost of Production : Currently, the production cost of EVs tends to be higher than that of traditional vehicles, primarily because of the battery costs. However, with advancements in battery technology and economies of scale, the production costs of EVs are expected to decrease over time (IBISWorld, n.d.). Advantages of Substitutes : Apart from being environmentally friendly, EVs offer lower maintenance costs and an increasingly comparable range to traditional vehicles. Autonomous vehicles promise safety enhancements by reducing human error. Ridesharing services provide convenience and can be more cost- effective than owning a vehicle, especially in urban settings (Alliance For Automotive Innovation, n.d.). Threat to Traditional Automakers : If traditional automotive manufacturers do not adapt to these changing dynamics, they face significant threats. Companies that fail to invest in EV technology or other emerging trends might lose market share to companies that are pioneering these shifts. Moreover, as cities consider stricter emission regulations, traditional vehicles might face restrictions or bans, further diminishing their market presence

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16 (Transforming Personal Mobility | Alliance For Automotive Innovation, n.d.). In light of these developments, the threat from substitute products in the automotive manufacturing industry is high. Traditional automakers must evolve to integrate these new technologies and transportation modes into their offerings to remain relevant and competitive. Bargaining power of buyers Buyer Demographics The Lawn and Garden Equipment Manufacturing industry caters to a broad range of customers. These range from individual homeowners and landscaping companies to larger institutions like golf courses, municipal parks, and real estate developers. Given the vastness and diversity of the customer base, there isn't a concentration of buying power among a limited number of customers (IBISWorld, n.d.). Price Pressure For individual consumers or homeowners, the bargaining power is relatively limited because they make purchases in low volumes. In contrast, larger buyers such as landscaping companies, especially those with substantial contracts or extensive operations, might exert more significant pressure on manufacturers for volume discounts or favorable terms, especially if they purchase The automotive manufacturing industry is marked by its complexity, with a vast supply chain, interdependencies, and a relatively small pool of dominant global players, especially when considering engine manufacturers. The bargaining power of buyers can significantly influence pricing dynamics and other terms of trade in this industry. Number of Buyers : While there are many automakers globally, the number of dominant players who purchase significant volumes of engines is relatively limited (MarketLine, n.d.). These major manufacturers usually have their engine manufacturing capabilities but might rely on external suppliers for specialized engines or during peak demands. The smaller, niche, or emerging automotive companies might not have in-house engine production and can form a secondary customer base for engine suppliers. Power to Dictate Prices : Given the limited number of significant buyers

17 equipment in bulk (Fortune Business Insights, n.d.). Customer Organizations and Consortiums There are trade associations and groups within the landscaping and gardening sector. These associations, while mainly serving as platforms for networking, information exchange, and advocacy, can sometimes indirectly influence equipment prices. By providing feedback, reviews, or even collectively voicing concerns, these groups can impact manufacturers' pricing strategies or feature inclusions, especially if many members share a common sentiment (Producer Price Index by Industry, 2023). Conclusion The bargaining power of buyers in the Lawn and Garden Equipment Manufacturing industry is moderate. While individual consumers may have limited influence over pricing, larger institutions and businesses can exert more substantial pressure, especially when purchasing in bulk. Manufacturers must remain responsive to both individual and collective needs to stay competitive in the market. (the major auto manufacturers), these companies can exert significant pressure on engine suppliers, especially if the supplier isn't one of the dominant players in the industry (IBISWorld, n.d.). They have the ability to negotiate prices aggressively, given the volume of their orders and their importance to the suppliers' business. Collaborative Efforts Among Buyers : There's no widespread public evidence suggesting that major auto manufacturers collaborate to drive down engine prices. However, automakers do form strategic alliances or partnerships to co- develop technologies, which could indirectly influence price dynamics (Transforming Personal Mobility | Alliance For Automotive Innovation, n.d.). In essence, while they might not directly band together to negotiate prices, their collaborations can influence market dynamics, including pricing. Bargaining Power Assessment : Given the smaller number of dominant automotive manufacturers compared to engine suppliers, and their significant purchasing volumes, the bargaining power of these buyers is high. Engine suppliers need to ensure they offer cutting-edge, efficient, and reliable engines to maintain their relationships with these major players and to justify their pricing. However, with technology advancements and the push towards electric vehicles, engine suppliers must remain agile

18 and innovative to maintain their bargaining power and relevance (Alliance For Automotive Innovation, n.d.). Comparison of the Industries 1. Rivalry Among Existing Competitors : · Lawn and Garden : There's notable competition among key players but less intense compared to automotive giants. · Automotive : Intense rivalry among major global players leads to constant innovations, marketing campaigns, and strategic alliances. Comparison : The automotive industry faces higher rivalry intensity than the lawn and garden equipment sector, driven by global brand competitions and market stakes. 2. Threat of New Entrants : · Lawn and Garden : Moderate barriers to entry due to the specialization of products and established distribution networks. · Automotive : High barriers to entry due to capital requirements, regulatory hurdles, and brand loyalty. Comparison : It's considerably harder for new entrants to penetrate the automotive industry than the lawn and garden equipment sector. 3. Bargaining Power of Suppliers : · Lawn and Garden : Suppliers have a moderate influence based on specialized component requirements. · Automotive : While specialized raw material suppliers have significant power, multiple suppliers for general components dilute individual influence. Comparison : Both industries deal with supplier power, but the automotive industry's diverse supplier base and volume needs can reduce individual supplier influence. 4. Threat of Substitute Products : · Lawn and Garden : Potential substitutes, such as manual tools or organic farming techniques, pose a medium threat. · Automotive : Growing alternatives like electric vehicles, public transit, ride-sharing, and cycling pose a moderate to high substitution threat.

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19 Comparison : While both industries face substitute threats, the automotive industry encounters a broader and rapidly evolving range of substitute products and services. 5. Bargaining Power of Buyers : · Lawn and Garden : Diverse buyer groups with individual consumers and businesses spread out the bargaining power, leading to a medium effect. · Automotive : Significant bargaining power is with the buyers, especially large automotive companies that make bulk purchases. Comparison : Buyers in the automotive industry hold more significant power due to the scale of purchases and market dynamics, as compared to the more fragmented buying groups in the lawn and garden equipment sector. Overall Comparison : The automotive manufacturing industry tends to have higher levels of rivalry, stricter barriers to entry, and more substantial buyer bargaining power than the lawn and garden equipment manufacturing sector. However, both industries experience medium threats from substitutes and have to manage the influence of suppliers carefully. Summary of Findings The original problem was whether diversifying from the automotive manufacturing industry into the lawn and garden equipment manufacturing industry would be a viable strategic move for the company. Findings : 1. Rivalry : ·In the automotive sector, there is intense competition with constant innovations and strategic alliances. On the other hand, the lawn and garden equipment industry has competition, but it's less fierce, providing a relatively less saturated marketplace for newcomers. 2. Entry Barriers : ·The automotive industry has substantial barriers, from capital requirements to regulatory challenges. Meanwhile, the lawn and garden sector has moderate barriers, making it somewhat more accessible for companies with manufacturing expertise. 3. Supplier Power : ·Both industries encounter supplier influence. However, the automotive industry's broad supplier base and high-volume needs can reduce any single supplier's dominance, whereas, in the lawn and garden sector, specialized components can give certain suppliers significant clout. 4. Substitute Threat :

20 ·The automotive industry is experiencing rapid changes with the rise of electric vehicles and other transport alternatives. Conversely, the lawn and garden industry's substitutes are less disruptive and evolve at a slower pace. 5. Buyer Power : ·Automotive buyers, especially large entities, hold significant bargaining power. In contrast, the lawn and garden equipment sector's buyer base is more fragmented, leading to relatively balanced bargaining dynamics. Recommendation : Considering the intense competition, high entry barriers, and rapidly emerging substitutes in the automotive industry, diversifying into the lawn and garden equipment industry could provide a strategic advantage. The latter offers a comparatively less aggressive competitive environment and moderate barriers to entry. While there are challenges, such as managing supplier relationships and understanding a new customer base, the company's manufacturing prowess can be leveraged to carve out a niche in this new domain. Diversifying into the lawn and garden equipment industry could serve as a strategic hedge, providing an alternative revenue stream and reducing the company's complete reliance on the volatile automotive market.

21 Porter’s Five Forces Analysis Chart—New Industry Rivalry among existing competitors Effect High: High competition among established players results in aggressive marketing and Threat of new entrants Effect Medium: Initial investment requirements and brand loyalty present moderate barriers to new entrants in the market. Threat of substitute products Effect Medium: Innovations in landscaping and DIY tools present a moderate threat of substitutes to traditional garden equipment. Bargaining power of buyers Effect Medium: A mix of individual consumers and larger institutions creates a moderate level of buyer bargaining power. Bargaining power of suppliers Effect Medium: A diverse supply chain minimizes individual supplier influence, leading to moderate bargaining power.

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22 Porter’s Five Forces Analysis Chart—Automotive Manufacturing Industry Rivalry among existing competitors High/Intense competition among major automotive manufacturers leads to constant innovation Threat of new entrants Low/The high capital requirements, regulatory barriers, and brand loyalty make it challenging for new entrants to penetrate the Threat of substitute products Medium/ With the rise of alternative transportation methods, such as electric vehicles and public transit, there's an increasing threat to traditional gasoline-powered Bargaining power of buyers High/Major automotive manufacturers possess considerable bargaining power due to their volume of purchases and significance in Bargaining power of suppliers Medium/Suppliers of specialized raw materials have significant power, but the presence of multiple suppliers for general components dilutes

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23 References Alliance For Automotive Innovation. (n.d.). Transforming Personal Mobility. https://www.autosinnovate.org/NADA. (n.d.). NADA Data. https://www.nada.org/nada/nada-dataMarketLine. (n.d.). [Homepage]. https://advantage-marketline-com.ezproxy.snhu.edu/HomePageIBISWorld. (n.d.). [Homepage]. https://libguides.snhu.edu/IBISWorld Producer Price Index by Industry: Lawn and Garden Equipment Manufacturing: Primary Products . (2023, September 14). https://fred.stlouisfed.org/series/PCU333112333112P IBISWorld - Industry Market Research, Reports, and Statistics . (n.d.). https://www.ibisworld.com/industry-statistics/market-size/lawn-garden-equipment- manufacturing-united-states/ Lawn & Garden Equipment Market Size, Forecast | Growth, 2028 . (n.d.). https://www.fortunebusinessinsights.com/lawn-garden-equipment-market-106385 Transforming Personal Mobility | Alliance For Automotive Innovation . (n.d.). https://www.autosinnovate.org/

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