<p align="justify">Volkswagen is known to be one of the biggest car manufacturers across the world. The company has more than 590,800 employees and has its production plants in more than 31 countries around the world (Yan, 2019). Volkswagen Group deals in designing, manufacturing, and distributing the commercial and passenger vehicles, engines, motorcycles, and the turbomachinery. It also offers the services like leasing, financing, and the fleet management (Volkswagen, 2019). It has to maintain the position and the market share as there are big giants present in the international automobile industry like Toyota, Ford, Honda, BMW, etc. The porter five forces analysis helps the company in determining the external factors related to competition in the market and helps the company in revising its strategies. Here is the detailed analysis of the Volkswagen group according to the five forces of porter;</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The bargaining power of buyers in case of Volkswagen is low because of the determinants of cost, and easy to switch option. It is not easy for the consumers of Volkswagen to switch to other brands like Ford, or Toyota because of the prices. the bargaining power of consumers also depends on the information they have about the market and the cars. Volkswagen also manufactures premium products which attracts premium buyers who are not price sensitive because of the differentiated products. Volkswagen’s differentiated cars have helped it in gaining customer loyalty, which gives it a power to increase the prices of the cars (Nanjekhe, 2018).</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">Bargaining power of suppliers are relatively low in the case of Volkswagen group. Because suppliers ae specialize and produce the parts and raw materials for limited number of automakers in the industry, and completely reliant on those automakers. Supplier sin such scenarios cannot afford to lose any of its buyers or automaker contract. However, for other parts and items, there are numerous suppliers available in the market, and the suppliers of Volkswagen does not want to stop working with such a huge group. This gives more power to the company and it can buy products on lowest possible prices for increasing their profit (Zhang, 2014).</p>
<h2 align="justify">Threats of New Entrants</h2>
<p align="justify">The automobile industry has usually large entry barriers for new companies to stop them from entering in the market. Therefore, threat from the new entrants is usually low. This is mostly because of the high start-up cost and difficult for the companies to achieve economies of scale which is very important to operate in the industry. It is difficult for the new firm to develop the strong distribution channels, and maintain it, because of high cost involve in it. It is necessary for the new companies to develop strong brand image because customers are already very loyal to their current brands they are using, to attract to new brand, it is necessary to have strong brand name (Yan, 2019).</p>
<h2 align="justify">Threats from the Substitute Products</h2>
<p align="justify">Threats from the substitutes are medium in the case of Volkswagen group, because of the increment in the prices of gas, and initiatives of government for promoting the environmentally friendly products, many consumers are availing the options of public transportation, cycle or walk (Zhang, 2014). However, there are consumers who prefer to use their own cars rather than substitute options because of the convenience. Customers find electric cars more suitable as compare to diesel cars because of the ease and price (Yan, 2019).</p>
<h2 align="justify">Rivalry of Existing Players</h2>
<p align="justify">Competition level from the existing competitors in the industry is very intense in case of Volkswagen group and faces price muted rivalry due to other rivals like Nissan, Ford, Toyota, etc. tries to grab the market share in the industry. It has become important for the Volkswagen to invest more in the product innovation and advertising. The barriers to exit from the industry are high, and cause extreme losses for the company that has forced other rivals to stay in the business and intensify the rivalry level. For example, Toyota exits from the Australian market, and causes the loss of about 2500 jobs, wide market, and resources (Nanjekhe, 2018).</p>
<h2 align="justify">References</h2>
<p style="text-align: left;" align="left">Nanjekhe, P. 2018. VOLKSWAGEN PORTERS FIVE FORCES ANALYSIS 2018. [Online], Available at: <a href="https://www.123writing.com/sample/volkswagen-porters-five-forces-analysis-2018">https://www.123writing.com/sample/volkswagen-porters-five-forces-analysis-2018</a>, [Accessed on: 19th April, 2019].<br />
Volkswagen, 2019. About the company. [Online], Available at: <a href="https://www.volkswagenag.com/en/group/history.html">https://www.volkswagenag.com/en/group/history.html</a>, [Accessed on: 19th April, 2019].<br />
Yan, K. 2019. Vw&#8217;s background and five force analysis. [Online], Available at: <a href="https://www.academia.edu/30299309/Vws_background_and_five_force_analysis">https://www.academia.edu/30299309/Vws_background_and_five_force_analysis</a>, [Accessed on: 19th April, 2019).<br />
Zhang, W. 2014. Volkswagen AG – Porter’s Five Forces Analysis. [Online], Available at: <a href="https://blogs.ubc.ca/willzhang8/2014/11/08/porters-five-forces-volkswagen-ag/">https://blogs.ubc.ca/willzhang8/2014/11/08/porters-five-forces-volkswagen-ag/</a>, [Accessed on: 19th April, 2019].</p>