Will Mastretta Ever Reach the Reputation that the Current Top Car Companies Receive - Essay Example

of the Number Will the Mexican car company, Mastretta, ever reach the reputation that the current top car companies receive? 1.0 Terms of Reference The report seeks to inspect whether the Mexican car company, Mastretta, ever reach the reputation that the current top car companies receive. The project is written by an external consultant and is intended for the company to offer them some suggestions about how the company can gain reputation. The report is due by the end of this month. 2.0 Procedure Comprehensive secondary research has been carried out to explore the issue and find relevant solutions for the same. The resources that have been mainly consulted are consumer brand awareness reports of the automobile industry and also reports pertaining to the automobile industry of Mexican automobile industry. 3.0 Findings 3.1 Industry Outlook Similar to the discovery of airplanes, the materialization of automobiles has a profound impact on the everyday life of human beings. The automobile industry is critical constituent in the fabric of global economy (Kazmi 6). The global automobile industry enormously contributes to the wealth and health of millions of inhabitants of the world. Hence, it is important that the automotive sector retain its innovative edge and competitiveness. It has been found that the auto manufacturing industry is highly labour intensive and capital. Some of the major costs associated with manufacturing and marketing of the automobile products are labour cost, cost of procuring raw materials and cost associated with advertisement and distribution. A large proportion of the industry is driven by revenues generated from selling of automobiles. However, the equipments and parts market also offer lucrative opportunities to the players. In the North American market, the industry is principally dominated by three major players namely Ford Motor Co., General Motors and Chrysler. In addition, the foreign players such as Honda Motor Co and Toyota Motor Co are other major players (General Motors, “Annual Report: Financial Highlights”) According to several industry analysts, the automobile industry depends heavily on the tastes and trends of consumers (Adair 6-10). Although, a large segment of the overall sales of automobiles generates from the business to business selling and car renting companies, but the end consumer always has the highest priority as they are the one who drive the growth and progression of the industry (Bhushan and Rai 12-18). Another vital caveat for analyzing an automobile company is the intentions of the company pertaining to their planning and redesign. In this rapidly changing business environment companies, irrespective of the nature and business line are continuously trying to bring changes into their system of operation and product design. As a result of that, it is noticed that every year companies come up with either a new car or modify their existing car. These changes have massive impact on the success or failure of a company as consumers are directly influenced by it. In addition, there are certain other factors such as the price; the variation of models as well as the status it reflects in the social world is also a major factor (Hicks 14-21). Therefore, the discussion makes it evident that there are several factors responsible for the success of an automobile company as well as for gaining reputation in the market. In the context of the automotive industry of Mexico, it is characterized by steady growth and high potential. The industry accounts for 3.6% of the overall GDP of the country and is growing at a steady pace (Esenaro, “Luxury Car Manufacturing on A Roll in Mexico”). Despite the economic crisis, where majority of automobile players were seriously affected, and resulted in minimization of various expenditures, have once again occupied the emblematic position in the national economy of the country. As of latest figures the country ranks among the top 10 car manufacturing countries of the world. Figure 1 – Largest Car Manufacturing Nations (Source: PWC 4) Reports have suggested that the Mexican automotive industry is fairly competitive as some of the well known and reputed brands operate in Mexico such as Ford, Honda, Toyota, Nissan, Volkswagen and General Motors among others. Thus, it is evident that in this fiercely competitive market, gaining market reputation is of utmost importance. Figure 2 – Year by Year Sales in the Mexican Market (Source: PWC 14) In the context of Mastretta, the car manufacturing and marketing company of Mexico, their position in market is a cause of concern. However, Mastretta does not compete directly with the aforementioned players, as it actually belongs to the sports car industry of Mexico and has a niche customer base. Moreover, it is the first ever sports car to be manufactured in the Mexico. Despite a number of positive signings from the part of the company, there is an apprehension over the reputation of the firm. In the subsequent sections of the study, the study will try to explore the research question: Will the Mexican car company, Mastretta, ever reach the reputation that the current top car companies receive? In this regards, a primary research regarding the consumer perception would have provided with the desired result, but due to certain limitations the study has undertaken secondary research. On the basis of the findings of the study, the report will draw a conclusion and at the same time, it will also recommend certain strategies by which the company can create a strong brand name for themselves. In doing so, this piece of the report will encompasses qualitative analysis of the data accumulated from the secondary source. It will mainly focus on consumer preferences and perceptions about an automobile company and factors that are considered important by the consumers while valuing a company. These factors ultimately lead to greater market reputation. Furthermore, it is also important to carry out an in-depth analysis of the company so as to identify its areas of weakness and strengths to underpin the opportunities and threat it may face externally. 3.2 SWOT Analysis The SWOT analysis will be carried out to underpin the strengths, weaknesses, opportunities and threats for the organization. A detailed SWOT analysis is carried out below: - Strengths The biggest strength of the company materializes in the form of strong financial situation. The company being a part of reputed design and engineering consulting firm Tecnoidea SAPI de CV enjoys strong back up support (“About Us”). Another evident strength of the company is the design of the cars. The company with its sporty looks targets a niche segment. The company has a wide range of products and thus has the ability to target and satisfy the need of mass customer base. Weaknesses The major weakness of the company is their absence in commercial car market. As a result of this, the company is facing a number of opportunities of the market and suffering from low visibility. Opportunities The company has the opportunity to come out with commercial cars and target individuals. This will not only increase the market size but will also provide new revenue generation opportunities. Another opportunity for the company to increase its market reputation is to expand and explore the US market with their sports car (Hill and Jones 11-13). Threats The biggest threat to the firm is the intense rivalry within the automobile industry of Mexico. Some of the established players such as Ford, Honda, Toyota, Nissan, Volkswagen and General Motors give stiff competition. Moreover, overseas players such as Ferrari, Rossion and Panoz also affect the industry. 3.3 Factors Responsible for Market Reputation A key factor towards the achievement of organizational goals and fulfilment of its objectives depends upon the reputation of the company in the marketplace. A company with good market reputation has greater chances of success and on the other hand, a company with poor market reputation will have limited opportunity to achieve success (Bracey, “The Importance of Business Reputation). A report suggests that consumers give strong values to some factors before actually classifying a company as reputed and valuable. The report made it evident that consumers considers and value a lot of attributes. Some of the most obvious ones are the ethical stance of the company, the employee behaviour or the workplace culture, financial performance, management, leadership, customer focus and orientation, quality of the product or services, social responsibility, emotional appeal as well as the reliability. Although, a number of factors seem to be internal to the organization, these factors reflect in activities of the company. In the context of Mastretta, the company lacks in many of the areas aforemntioned. For example, Mastretta does not have any well defined social responsibility plans and also has limited external communication activities. This leads to poor reputation. Another major loophole identified in the study is the lack of promotional activities. As a result of that, the visibility rate of the company is miserably low. Furthermore, to add to that, the Mastretta only manufactures and sell sports cars that only appeals to a certain section of customers. Therefore, it is obvious that apart from focusing on the core areas, they must concentrate on the development or enhancement of product line such as commercial vehicle. Hence, due to the lack of certain capabilities of inactiveness in these fields the company has not been able to reach the reputation level that the current top car companies have received from the market. Another, report has suggested that consumers are greatly influenced and deems a company valuable if an eminent personality endorses the brand. Again, Mastretta does not employ any celebrities to endorse their brand and this leads to low visibility and reputation. 4.0 Conclusion Since the recent past, the significance of reputation in the field of business has become apparent. Companies such as Toyota and British Petroleum, at times had to encourage their responses so as to maintain and mange their reputation. In the previous decades, organizations have heavily relied on word of mouth promotion of the stakeholders to build, establish and manage the reputation. Although an intangible concept, but embracing a good reputation will actually offer heaps of benefits to the company such as support from the government during the time of crisis, high consumer preferences and develop the future value of the organization. In the context of Mastretta, the company has comparatively less market reputation than the other established players of the automobile industry in Mexico. The study has made it evident that the reason behind such occurrences is the low visibility of the company and their inactiveness in the field of promotion. As a result of that the company is failing to reach the reputation that the current top car companies are receiving. However, studies have shown that some of the reputed companies of today had started from the scratch and now reached their desired position. Hence, it can be concluded that with proper strategy and timely implementation of the tactics, Mastretta, can reach the reputation that the current top car companies are receiving or can even surpass their reputation levels. The following are the recommendations to the firm by which the issues of reputation discussed can be surmounted. 5.0 Recommendations 1. Reputation of a company is everything in this high globalised competitive environment. Hence, to manage the same the company is strongly recommended to make use of social media, press and broadcasting media to streamline their communication process with the consumers. With better communication, the company will be able to generate a sense of trust among the consumers and this will in turn play effective roles in enhancing the reputation of the firm. 2. Rewarding the public is new strategies that are being followed by companies around the world. Hence, Mastretta is strongly recommended to reward the existing customers and make them loyal and word of mouth promoter for the firm. Moreover, better crisis control will also lead to increased reputation. 3. Lastly, Mastretta is advised to nurture their basic strength of being a sports car. In this context, the company is suggested to offer quality Sports cars to customers and it must ensure that it offers prestige and high value to the owners. Works Cited “About Us.” Mastrettacars. Mastretta MXT, 2013. Web. 13 Nov. 2013. Adair, John. Decision Making and Problem Solving Strategies. 2nd ed. London: Kogan Page Publishers, 2010. Print. Bhushan, Navneet. and Kanwal Rai. Strategic Decision Making: Applying the Analytic Hierarchy Process. London: Springer, 2004. Print. Bracey, Leon. “The Importance of Business Reputation.” Businessinfocusmagazine. Business in Focus, 2013. Web. 13 Nov. 2013. Esenaro, Alberto. “Luxury Car Manufacturing on A Roll in Mexico.” Mexicanlawblog. WordPress, 2012. Web. 13 Nov. 2013. General Motors. “Annual Report: Financial Highlights.” General Motors Corporation. 2005. Web. 21 September 2012. . Hicks, Michael J. Problem Solving and Decision Making: Hard, Soft and Creative Approaches. 2nd ed. Connecticut: Cengage Learning EMEA, 2004. Print. Hill, Charles W. L., and Gareth R. Jones. Strategic Management Theory: An Integrated Approach. 10th ed. Connecticut: Cengage Learning EMEA, 2010. Print. Kazmi, Azhar. Strategic Management and Business Policy. 3rd ed. New Delhi: Tata McGraw-Hill Education, 2008. Print. PWC. “Doing Business in Mexico Automotive Industry.” 2012. PDF File. Read More