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The Five Competitive Forces That Shape Strategy
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In the heavy-truck industry, many buyers
operate large fleets and are highly motivated
to drive down truck prices. Trucks are
built to regulated standards and offer similar
features, so price competition is stiff;
unions exercise considerable supplier
power; and buyers can use substitutes such
as cargo delivery by rail.
To create and sustain long-term profitability
within this industry, heavy-truck maker Paccar
chose to focus on one customer group
where competitive forces are weakest: individual
drivers who own their trucks and
contract directly with suppliers. These operators
have limited clout as buyers and are
less price sensitive because of their emotional
ties to and economic dependence
on their own trucks.