Main focus is to sell the cheap cars as basic rides since the major car market in the emerging market comprises of middle class society. But this low cost cars are not getting popular only in emerging world but even in premium market they are getting enough market. This has been the cause of worry for the big car maker like Toyota. Now even Toyota trying to come up with budget car to get hold of emerging market. Apart from budget car market premium car market is moving towards sensible motoring. German car makers have positioned themselves in the wrong sides of both these budget and premium car markets. This is the external environment in which Daimler Chrysler operates.
Key factors and trends in this environment can be identified by using Porter’s five forces model. Here, world car market is divided into cheap and cheerful market and premium market depending on the nature of the demand of the customers. So buyers bargaining power is the key. Chrysler’s sales are not rising because today buyers have different options, each of which is equally good. Although there has been rapid improvement in terms of design and production lines, Chrysler still doesn’t have enough competitive product line as compared to its rivals. Customers have more bargaining power because they have better options from other car makers.
Competition among the car makers are intense in nature as every company is coming up with new inventions, new strategies to establish those inventions. Chrysler has to come up with new better product lines in terms of technology, features and design to stay ahead of the competition.
Suppliers have more bargaining power because there is more number of substitutes as all the big players are coming up with their new inventions to grab the emerging market. Suppliers are more powerful when the company is not financially sound. .This is exactly the situation in case of Chrysler as it is struggling both in terms of financial condition and product lines. Company has failed to come up with new product lines, keeping the pace with market trend. .