Cameron Auto Parts Threats

One particular threat concerning the automobile industry contains competitive price pressures. In Cameron's price strategy, various couplings were priced above the competitors. The price variation will allow the competitors to gain the pricing advantage. The growth in technological environment in foreign markets is threat. As competitors accelerate in tech advancements it increases production and lowers inefficacies, allows them to move forward and gain greater market share. Also, the rise of low cost production in Japanese Plants forms a great risk and increases the Japanese market share within the automobile industry.

The demographic change in Cameron's take over in the UK market is a financial risk and cultural barrier, which Cameron must adjust to. Cameron correspondingly has lost power in expanding to the UK and the Big Three partnership. The Big three contracts are designed to have large control of Cameron Auto Parts' Decisions and Productions, such that the Big Three specifies product changes. The automobile industry is very standardized that it limits the innovation and advancement in product production, losing potential market expansion with new products.

The economic conditions that affect Cameron and any potential market expansions into the UK are as follows. The United States have encountered an economic downturn due to two hurricane catastrophes, Katrina and Rita. These environmental events caused resources to decrease dramatically, and negative effect on consumer spending causing a decline in auto sales.

The European economic conditions consisted of a growing real GDP of 2%, lowest levels of unemployment since 1970s and stable monetary policies. In addition the new creation of VAT, value added tax regulation in the European union at 17.5% as of 2004 in the UK. Moreover, this will not only increase the cost of Cameron's products, but the tariff free trading within the manufacturer belonging to the European union will have a decreased production and transportation cost.

Globally there was a large increase in oil prices and a growth of inflation. Also the unstable currency fluctuations between the Euro, Canadian and American dollars reflects on the price of the goods towards consumers and producers. Furthermore, the increased cost of products due to freight and insurance charges in need of exporting goods. Overall the auto industry was taking a large hit as the economic conditions worldwide take a large downpour.