Essay: Capital Intensive Industry

Essay: Capital Intensive Industry

Sample Essay

Furthermore, it can be said that there are two major entities that are associated with this industry and these two entities are known as the automobile market and the automotive components market. The core characteristic of this industry is that this is a capital intensive industry and the producers of this industry heavily rely on the sales of the automobiles.

That is the reason why if the purchasing power of individuals goes down than the producers would actually suffer in both the short and the long run (Datamonitor 2008). That is the reason why there are certain producers in the market that emphasizes on the economies of scale and in this way they can achieve their target in economic turmoil as well. In the similar manner strategists and analysts suggests that the capital structure of the industry results in fierce competition and the major players of the industry can easily be regarded as the fierce competitors of each other. The core manufactures of this industry are located either in Japan, Germany, USA, etc and all these manufactures rely heavily on brand building and building customer loyalty through different marketing and promotional strategies.

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