BRIC Analysis Case Study Example | Topics and Well Written Essays - 750 words

BRIC Analysis - Case Study Example However, because the outlook for this industry is bright, multinationals are now eyeing the manufacture of the product. But none has targeted China yet, and the market concentration is US, Canada, and Japan (Annex C). There is a high growth potential in the market. Rivalry concentration is low since most of the electric car models of U.S. manufacturers are yet to be introduced in the years to come. The threat of substitutes to the electric car industry is fairly mild because people are now conscious of green environment, and the spiraling cost of gasoline. There are other types of automotive vehicles but none offers clean air and a reduction of energy consumption although models and design are comparable with regular cars. The electric car models offer the comfort of charging it at home and do not need to line up in gasoline stations. Popular electric car models are shown in Annex B. The inherent culture and attitudes kept people out from owning cars, and ownership is not yet spread out as discussed in density of ownership. But because of increasing rate of population and rise of income, the culture of car ownership in China is slowly changing; added to the fact that it is encouraged by the government, The barrier to entry in the automotive industry is significant. The start up capital needed for a new company to set up an efficient manufacturing capacity is prohibitive. The manufacture of electric cars needs expertise and specialization, and in case of failure is difficult to retool. Entry to market may not be so difficult because of the joint venture with a local Chinese automotive manufacturer. A joint venture is considered a better alternative in entering the Chinese market because Chinese partners have an insight into the local customs and traditions. A joint venture offers the opportunity of access to restricted market, and the advantage of the low