Executive management: Automotive industry business

Résumé du document

Our company, Weila, is part of the Lambda group during five trading periods in the car industry.

Analysis of the external and internal initial situation in the automobile environment: In order to achieve this analysis we evaluated different tools. This work was done by the whole group on the real car market as we didn't know the other teams yet. The information in Part 1 was gathered regarding Matthias Holwe& al (2009).

PESTEL analysis

Political factors
The purpose of a big company is to find a stable country which still allow signs of sustainable development not to risk the investments.
Political and economic alliances: the policies of alliance of the government have a strong impact on the development of the company's activities. For example, they can help to further internationalization.
The European Union: the Eurozone policies aim to ensure the free movement of people, goods, services, and capitaland maintain common policies on trade.

Economic factors:
-Inflation:The car market prediction is the fall on inflation causing the increase purchasing power.
-Unemployment: denotes a decrease of the purchasing power which does not allow the population to buy a car.

Social factors: Connections between cars and people tend to be paradoxical. First, they confirm that being mobile is very important. At the same time, the nuisances attributed to the car (noise, pollution) push the people to neglect their car.
-Social mobility: The mobility is vital; it constitutes a need. This need is understandable through several arguments: It is felt on people's behavior which tends to be more eco-citizen. The choice of the car depends on the safety and the environment. On the other hand most of the cars are nowadays associated with pollution.
-Consumerism: The life cycle of a caris also changing; the average is of eight years, which explains a frequent change in buying a car. But since the crisis, people intend to keep their car on a longer term.

Extraits

[...] Finally, to become the number one in Hybrid cars, we could develop a new range of hybrid cars: the Sport Utility Vehicle which is basically a sophisticated and luxurious 4x4. It could highlight our strapline: “Drive Weila, Drive into your future” because of its increasing popularity and upmarket segment. APPENDICES Appendix1: PESTEL Appendix2:PORTER'S FIVE FORCES Appendix STRATEGIC SEGMENTS IN THE CAR INDUSTRY Appendix PORTER'S VALUE CHAIN (1985) Appendix ANSOFF GROWTH MATRIX REFERENCES European automobile manufacturers association, 2009-2010. European automobile industry report. [...]

[...] The company's power within the car industry is medium. They are lots of companies that suffer from the crisis therefore they try to develop new strategies to attract buyers. All the companies rely on their R&D in innovation to stay competitive, thus Weila has to do a lot of R&D too. SWOT To have a good understanding of the external environment we decided to do a SWOT in order to analyse not only the external but also the internal situation of the company. [...]

[...] It drives consumers to adopt in an easier way the new technologies. Environmental:Legislation determines the right to emit CO The Kyoto protocol aims at fighting against the climate changes by reducing carbon monoxide emissions. The signatory countries made a commitment to reducearound the greenhouse gas emission allowances for the period 2008-2012.The solutions regarding pollution in the cities are to limit the traffic. This could have a considerable influence on sales. Car industries should invest in GREEN technologies because the government proposes tax reductions and helps people when buying a GREEN car, which could enhance the sales.The Earth summit, in Rio in 1992, overviewed the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. [...]

[...] Competitive responses When building a strategy we need to consider the competitive responses within the environment. - Competitors start off with the same resources. - Competitors may want to target the same segments, which happened during the fourth year of trading. This led to high competition and was increased by the difficult economic climate. Consequently profitability was low for most of the competitors. - Under tight conditions, most of the competitors managed to increase sales and gross profit - ATG Motors shows an improvement in profits and ROCE in the final years. [...]

[...] Thanks to the R&D done during the first three years, we identified various market segments and their needs. We then decided to launch several cars in order to touch many segments because these had high disposable income. In order to increase our sales we decided to focus on the media channels, which generated income The following years, inflation was lowered for several models so we distributed the workforce according to the sales. The medium car was selling well so we launched another one. [...]