Running head: AUDI ANALYSIS 1

Audi Analysis

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Audi Analysis

Introduction

Audi is a German-based motor vehicle manufacturing firm, identified worldwide as a member of

the big three luxury vehicle manufacturers. Alongside BMW and Mercedes, Audi is the leading

luxury car-manufacturing firm globally. The Audi Group is among the most successful

automobile manufactures for an extended period in the supercar and premium segment.

Additionally, Audi Group’s sales subsidiaries supply vehicles of different Volkswagen Group

consumer brands. With an obligation to applying progressive technology, the organization is a

respected global producer of cars, lately in the luxury segment. Presently, Audi focuses on

satisfying the needs of its consumers by creating a brand, which exemplifies excellence,

individuality, as well as exclusivity. In this regard, this text is an Audi analysis of the

organization’s current and potential consumer demographic as well as relates it to the Porter’s

Five Forces Analysis Model.

Current and Potential Consumer Demographic

Audi oversees every international production from the business’ headquarters in Bavaria,

Germany (Bhasin, 2017). As an organization, Audi classifies its cozy and luxury vehicles on

behavioral and psychographic factors. The business targets consumers from the upper-class

social group, executives and professionals from wealthy families. Audi considers these

individuals since the organization produce luxury vehicles and they can afford the car (Bhasin,

2018). Moreover, the wealthy will acknowledge the technological innovation and advancement

that comes with the vehicle. In addition to that, the cars are identified for their beautiful design,

high-quality materials as well as build quality, which speaks class.

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A positive image and strong brand are significant for the success of a premium car company.

Additionally, the manufacturer targets young clients who enjoy driving. The vehicle emphasizes

style and design rather than speed. Identified as a well-engineered stylish vehicle, Audi's tagline

is in German, ‘Vorsprung durch Technik,’ which means ‘Lead by Technology,’ (Bhasin, 2018).

Audi's potential consumers include the upper class or the upper-middle class social groups who

have a successful career and probably within the 30-50 year age group. The firm aims to enhance

its high- quality products and keep improving different factors and innovative product portfolio

to delight consumers and tie them to the Audi brand emotionally (Bhasin, 2018).

Porter’s Five Forces Analysis Model 

Porter’s Five Force approach refers to an investigative instrument, which uses the five powers in

an industry to decide the rivalry force within a markets as well as its level of efficiency. The

model seeks to identify how five primary strengths that influence an industry. In simple terms,

the approach is a simple framework, which a business can use to evaluate and assess its

competitive position and strength (CGMA, 2019). The model is established on the foundation

that five forces determine a market's competitive intensity as well as attractiveness.

Porter’s five forces assist a business in identifying where power lies. In this regard, Audi can use

this approach in understanding its strength on the current competitive position, as well as the

force of the position that it looks to move (CGMA, 2019). Often, strategic analysts use Porter’s

five forces to learn whether new services or products are conceivably effective (CGMA, 2019).

By knowing where power lies, Audi can use Porter’s five forces theory in identifying areas of

strength, which the business can use to improve weaknesses as well as avoid mistakes.

In Audi’s Case, the five forces include:

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1. Supplier power; is an analysis of how easy it is for suppliers to drive up prices. The number

of suppliers of every significant input drives up supplier power. In addition to that, Audi’s

services and product uniqueness, relative strength and size of the organization, as well as the cost

of switching from a supplier to another, increases supplier power.

2. Buyer power; refers to the review of how easy Audi’s consumers drive the prices down. It is

driven down by the amount of customers within the industry; the significance of every client to

the company; including the charge to the consumer of shifting different a suppliers (CGMA,

2019). When a firm has merely a few influential buyers like in Audi's case, they can dictate the

terms.

3. Competitive rivalry is the primary driver in the capability and number of competitors within

the market. BMW and Mercedes as Audi's main rivals, offering similar services and products,

will decrease market attractiveness.

4. The threat of substitution is an additional approach where close alternate products are in an

industry, it enhances the possibility of buyers turning to alternatives responding to price

increases. It decreases both the suppliers’ power as well as the market's attractiveness.

5. The threat of new entry; distinguishes profitable markets to attract different players, which

disintegrates profitability. Administrators ought to have durable as well as strong entry barriers,

for instance, patents, government policies, or economies of scale, then productivity ought to

decrease to cutthroat prices (CGMA, 2019).

Following the analysis, an individual cannot merely fabricate a car. Rather than risking to buy

another vehicle, an individual ought to consider alternative transportation, for instance, the train.
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Conclusion

With an obligation to applying progressive technology, the organization is a respected global

producer of cars, lately in the luxury segment. Presently, Audi focuses on satisfying the needs of

its consumers by creating a brand, which exemplifies excellence, individuality, as well as

exclusivity. In this regard, Audi ought to use Porter’s Five Force approach to evaluate and assess

its competitive position and strength, which will allow the business have a competitive advantage

in the automotive industry.

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References

Bhasin, H. (2017). Marketing mix of Audi. Retrieved from

https://www.marketing91.com/marketing-mix-audi/

Bhasin, H. (2018). Marketing strategy of Audi – Audi marketing strategy. Retrieved from

https://www.marketing91.com/marketing-strategy-audi/

CGMA. (2019). Porter’s Five Forces of Competitive Position Analysis. Retrieved from

https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html