Human Resource Management and Business Management of Skoda - Case Study Example

Proffesor: Skoda's Case Analysis Introduction Skoda is a car manufacturer which was first founded by Vaclav Laurin andVaclav Klement in 1895 (The times 100 133). The company's initial activity involved development and production of bicycles. However, the business expanded and began to manufacture cycles, cars, farm ploughs and airplanes in Eastern Europe. Within sixty five years, Skoda had managed to overcome various challenges such as conflicts, financial depression and political change. In 1990, the Czech management of Skoda sought for a strong foreign partner to work with (The times 100 133). It joined forces with Volkswagen AG (VAG) due to its reputation for strength; quality and dependability hence became the fourth element in the Volkswagen group. Volkswagen's experience assisted in fixing most of the mechanical problems that Skoda had initially experienced. Skoda UK sells Skoda cars through its network of independent franchised dealers and its most current popular models are the frabia, octavia, superb and the roomster. Its' market share is at 1.7% making it a very small player in the market for cars (The times 100 134). However it has managed to fit in the highly competitive market and fragmented market. It attributes this on it's concentration on owners experience rather than making large sales. It has regarded 'the human touch' from design through to sale. One of its identifiable and quantifiable strength is the willingness and ability of the Skoda's driver to recommend Skoda to a friend. It utilizes this strength to market its brand image as well as laying plans for future strategic development. According to the audit report in the times 100 (134), Skoda faced a crisis due to the oudated perception of the brand. The car had an image of low quality, design, materials and assembly which negatively affected its owners. This is due to the fact that people associated car ownership to the image. In 1999, Skoda managed to change its negative image and Skoda cars were no longer considered of low quality. Despite its effort of improving its image, the vehicle did not have a strong appeal ot the public. Analysis of case To improve its performance in the competitive car market, Skoda UK's management needed to assess its brand positioning. Brand positioning means establishing a distinctive image for the brand compared to competing brands. Its by so doing that it would manage to grow from a small player to a bigger player. From the audit report it obtained after a market research, Skoda UK was put into a good positionto take advantage of new opportunities and respond to threats. According to JD Power survey, Skoda has been in the top five car manufacturers for the past thirteen years. In Top Gear's 2007 customer satisfactionsurvey, 56,000 viewers gave their opinions on 152 models and Skoda was voted as the number 1 car maker (The Times 100 134). Skoda's Octavia model aloso won the 2008 Auto Express Driver Power best car. Skoda attributes the results to its strategic management strategy which foccused on building cars that their owners would enjoy. This was different from simply maximising sales of a product. Strategic management is a process in whih it guides a business so that it can compete and grow in its market. According to the Audit report provided, Skoda has a 1.7% market share making it a small player in the market for cars. The weakness was partly due to outdated perceptions of the brand. This can be attributed to its poor marketing strategies that it used. The company should have therefore focused on improving its image to improve the clientele base. Recommendations Skoda should focuss on the Niche segment by developing a B plus or economical cars which are financially friendly to customers earning below 3000 RMB. This is due to the fact that, most customers are not in a position to afford the car at its current price. It is therefore advisable that, the company considers the low income earners by developing and producing economical cars. Skoda should also apply differentiation strategy by making the business or product models different and more appealing. This will assist in catering for the different tastes of the buyers. Individuals normally have a diverse and different preferences and tastes brought about by various factor such as age, sex, social class among others (Kloel 56). For example, a teenager may prefer a clasy and cool car without paying much attention to its durability or reliability on the other hand, an adult may put more concentration on the durability of the car and paying little concentration on the appearance. Therefore, it is important that the company creates diverse models so as to cater for the different tastes and preferences To increase its market share, Skoda UK should consider expanding its markets to other places in the world. According to the audit report provided, Skoda's market share is at 1.7% which is a small market share. This has been attributed to the overcrowding in the UK market. To overcome this and enlarge its market, the company should expand its markets and create more retail outles so as to reach out to a large number of potential buyers. It shold also consider establishing more partnerships with other car manufacturing companies. The company should also put in more branding efforts so as to crown everything it will have implemented (Peter 101). This can be done by use of intense advertisement by use of media, personal selling, billboards and press. In the advertisements, critical and appealing features of the products should be clearly stated so as to create the desired impact. Eventually, the promotion will create awareness among the public regarding its products and the new brands which will be intoduced in the market. Consequently, great sales will be experienced. In summary of the recommendations, the 4ps should be applied. Conclusion Skoda Company has gradually grown since its establishment in 1895 despite the many challenges. The company's management has deployed a variety of strategies so as to overcome the high competition in the car market. The strategies have played a critical role in its expansion. However it is not yet at its peak. Works cited Allan, Blair. Strategic Management. New York: New York university Press, 2001. Benard, G. Management in the 20TH Century. Darwin, Bristone press, 2008. Charles, Griffins. Business Administration. London: Penguin, 1998. Flair, B. A. Promotional Strategies. Essex: Pearson Education,1996. Geoffrey, Johnson. Strategic Planning in Business. London: Jessica Kingsley, 2002 Harrison, Berditt. Business Planning. UK: .WadsWorth, 2000. Ian, Peter.Human Resource Management. London: Harvard University Press Kloel, G. M Business Management. Cambridge: Cambridge press Read More