Business

Today, the automobile industry is undergoing drastic and unexpected changes. New ideas are coming up in the design, manufacture, assembly and marketing of automobiles. Similarly, the automobile industry is now delivering more value to their customers than ever before. As such, the world is increasingly seeing more reliability and advancements in the manufactured automobiles. However, it has not been smooth sailing for the automobile industry especially in balancing value delivery and achieving profitability. According to business experts, increased global competition, technological advancements, new product development, product differentiation, supply chain management as well as marketing and distribution pose serious threats to the survival of the world automobile industry. These threats arise mainly because the automobile industry is not able to control these challenges. This paper is therefore a discussion of the external threats facing the world automobile industry and the ways in which they can be rectified.

Introduction
The automobile industry has come a long way. It began around 1770 in France with the discovery of the steam wheeler. Since then, the world has seen the discovery of the steam engine, gasoline driven machines and finally the invention and consequent assembly of the first car by Henry Ford in 1896 (Highfill et al, 2004). However, the growth of the global automotive industry has been marred by several external threats. Experts observe that these external threats continue to hamper the efforts of the global automobile manufacturers to achieve efficiency and financial profitability (Evans and Associates Valuation Advisory Services, 2008, p. 1).

External Threats
The first external threat that has affected the global automobile industry is globalization (Consumer and Engineered Products, 1998, p. 1). Today, automobile manufactures are beginning to shift their focus to emerging markets in the hope of tapping the benefits of economies of scale a process also known as bundling (Evans and Associates Valuation Advisory Services, 2008, p. 1). This trend has had a negative effect because the emerging markets are auctioning their growth potential only to the largest automobile manufacturers. This has led to overproduction and increased prices along supply chains as automobile manufacturers outdo one another in order to occupy the market share.

The global automobile industry has also faced the threat of production development. As indicated in Consumer and Engineered Products (1998, p. 2), the process of manufacturing a new automobile is not only costly and elaborate but it also involves a lot of risks. This implies that automobile manufactures face the threat of losing their brands in the course of developing new products. In as much as the automobile manufacturers are making efforts to tailor their products in line with the needs of the customers this process has occasionally misled the customers. Therefore, automobile manufacturers should strike a delicate balance between developing new and unique products that meet the needs of the final consumers without necessarily loosing their brand identities (Keller, 2004 Berthon et al, 1999, pp. 53-65).

The other external threat that has affected the global automobile industry is supply chain management. For long, automobile manufactures have grappled with the challenge of reducing the way they are vertically integrated and that of minimizing their suppliers (Consumer and Engineered Products, 1998, p. 1). This has an implication that automobile manufactures have not yet found the best way in which they can optimize their supply chains in order to achieve maximum profitability in their engagements. Thus, global automobile manufacturers should capitalize on specialty channels of distribution in order to ensure the timely availability of products to their consumers (Bowersox et al, 2005).

The global automobile industry has also faced challenges in differentiating their products (Consumer and Engineered Products, 1998, p. 4). Studies indicate that today, competition in the automobile industry is very complex given the fact that automobile consumers have a variety to choose from. This poses a challenge to the automobile manufacturers in offering differentiated products in their quest to meet customer needs and expectations. Thus, if they are to consolidate their market share, maximize their returns and utilize their full capacity, automobile manufacturers need to strengthen their product differentiation strategies in order to attain brand uniqueness that would not only attract but would also retain customers (School of BBA and MBA, 2006).

The other threat that the automobile manufacturers have endured is marketing and distributing their products (Consumer and Engineered Products, 1998, p. 4). With heightened competition and the need for product differentiation, global automobile industry is faced with the challenge of developing new ways of achieving value addition. With national franchises with large marketing and advertising powers on an upward trend, automobile manufacturers do not have a choice but to implement strategies that can convince their customers that their product offerings are the best (Evans and Associates Valuation Advisory Services, 2008, p.1). This calls for branding, strong competitive advertising and effective market promotions (Kotler, 2003 Berthon et al, 1999, pp. 53-65).

Conclusion
This study has established that there are various external threats facing the global automobile industry. These include globalization, product differentiation, supply chain management, marketing and distribution as well as new product development (Consumer and Engineered Products, 1998, pp.1-8). Perhaps as a way of rectifying these external threats, the global automobile industry should first recognize all the threats they are faced with. It is only after identifying these threats that they can possibly make efforts of creating barriers to entry as a way of protecting their business ventures (Highfill et al, 2004). According to Keegan (2002), global automobile industry can also withdrew their operations from other markets if they realize that those market areas are not profitable. Similarly, global automotive industry should strive to consolidate their competitive edges through effective product differentiation, competitive pricing and unique new product offerings (Barney  Hesterly, 2008).