The Launch of New Heavy Motorcycle Segment by Vauxhall Motors - Research Proposal Example

Business and Project Management Table of Contents Project Name 2 Overview 2 Discussion 2 A Project Rationale 2 Analysis of the Context 4 The Project Outline 10 The Case for Project Implementation 12 A Feasibility Assessment 13 References 15 Project Name The project can be titled as “Business proposal for the launch of new heavy motorcycle segment by Vauxhall Motors” Overview The provided context describes about Vauxhall Motors, as a well reputed British automobile company. This company works as an affiliate of ‘Adam Opel AG’ a German automobile brand and is a subsidiary of the General Motors, the US. The company has been actively involved in the manufacturing along with distribution of light weight passenger vans since the period of 1903[5]. In the present scenario, due to the stagnating condition of the market and deteriorating demand of its manufactured automobile products, the brand has intended to introduce a new segment of heavy weight motorcycles in the market. In alignment to the intention of the brand, the statistical report regarding the market share of motorcycle manufacturers in the UK also appear in favour [4]. Discussion A Project Rationale A close evaluation of the brands’ performance reports revealed about its positive growth figures in the present market scenario. If seen from the statistical perspective, one can say that this brand has successfully attained a growth figure of 12 per cent in terms of product and service sale by the end of 2012. Justification regarding this aspect can be provided depending on the fact that each of these growth reports was released by the ‘Society of Motor Manufacturers and Traders’. In an associate manner the sales figure attained by Vauxhall Motors during the period of 2013, hiked the previous year sales figure by 1.93 per cent. The financial year (2013) of this brand was accompanied with the release of multiple new models of commercial cars and passenger vans [6]. However, despite the slight drop in the sales figures of 2014 (11.14%), still Vauxhall Motors succeeded in turning the UK as its fourth largest profitable market. In addition, implementation of innovation within the provision of financial and comprehensive customer services have further helped in terms of boosting up the sales figures of 2014. Taking reference of all these aspects, one can easily say that Vauxhall Motors will have a profitable business opportunity in context to plunging its feet in the heavy two wheeler segment [6]. However, within the forwarding initiative Vauxhall Motors will have to make significant amount of investments to determine its potential and expertise of penetrating the over flooded two wheeler manufacturing and distribution segment within the UK. Likewise, the brand will also have to strategise and formulate effective marketing and customer convincement techniques in order to turn its heavy motorcycle manufacturing initiative into a success [6]. In addition, one identified shortcoming that the brand is most likely to face is the level of competition from other major motorcycle manufacturers such as Harley Davidson, Polaris and Yamaha. A perception can also be made regarding this brand facing issues related to pricing of its product. Taking consideration of the fact that Vauxhall Motors has always projected its expertise in the areas of manufacturing economically priced passenger vehicles. Thus, in alignment to this fact, the general exception of the customers might remain rigid on one notion that the heavy two wheeler products manufactured by this brand will also be priced at an economic level. However, with the practice of effective marketing and product position techniques, the brand does have a chance of pricing its new line of two wheeler products at profitable rates [6]. Analysis of the Context Present Scenario Analysis of the Two Wheeler Market in the UK Source: [7] The provided graph elaborates the market share possessed by top motorcycle brands during the first quarter of 2014. Clearly one can understand about the level of competition that will be faced by Vauxhall Motors as imparted by Japanese motorcycle brand ‘Honda’. This brand has been posing challenges against other brands both in terms of volume sales and product quality. Taking all these aspects into consideration, it can be asserted that Vauxhall Motors will have to structure high level of innovation techniques in alignment with the heavy motorcycles variants it is willing to launch in the UK market. Vauxhall Motors will also have to analyse every detailed aspect of the type of motorcycle segment they intend to target. The below projected graph depicts a detailed elaboration of sales of motorcycles in the UK depending on their models [7]. Source: [4] Although, the report is not up to date, it projects the sales figures of the majorly liked motorcycle types in the UK. It can be seen, that the motorcycle sales figure is highest for the super sports variant. Depending on these facts, one can clearly state that Vauxhall Motors’s expansion plan in the areas of motorcycle manufacturing might turn up as a big success in case it goes for the super sports segment. Moreover, being an old automobile manufacturing contender of the UK market, it will not have to undergo high level of struggle in terms of attracting customer attention [4]. SWOT Analysis of Vauxhall Motors in Alignment in Alignment with Heavy Motorcycle Manufacturing Strengths Weaknesses Subsidiary of the US based parent brand (General Motors) Appreciable financial stability Largest customer base in the UK market Active engagement in motor sport activities Adherence with the economic perspective Maintenance of good communication network with the local authorities of the UK Confined only within the UK market Presence of strong global motorcycle manufacturing competitors such as Honda, Yamaha and Harley Davidson Lower level of expertise in the areas of two wheeler manufacturing Opportunities Threats Introduction Of A New And Effective Product Type In The UK Market Growing Pace Of The Heavy Two Wheeler Segment In The UK Markets Opportunity For Expanding The New Product Availability To Other Geographic Locations Such As US Increasing Demand For New And Efficient Variants Of Super Sports Bikes Determination Of Target Customers Strategizing Of Appropriate Product Pricing Lack Of Superior Technology In The Two Wheeler Segment Source: [10] Porter’s 5 Force Model Analysis on the UK Motorcycle Market Explanation Bargaining Power of the Suppliers (Low): Justification regarding this aspect can be provided depending on the fact that Vauxhall Motors already possesses an effective network of raw material suppliers such as alloys, steel and many more. Thus, the threat associated with this aspect can be considered as low [1]. Threat from New Entrants (High): Since, being highly confined to the areas of four wheeler manufacturing, Vauxhall Motors from direct or indirect perspective can be brought under the category of being new entrants in the two wheeler market space of the UK. Thus, multiple chances arise where Vauxhall Motors might face high level of challenges from similar types of new market entrants [1]. Bargaining Power of the Buyers (High): This factor might turn out to be high, depending on the high demand of super sports bikes in the market and the availability of multiple pre-existent two wheeler manufacturing global brands. Thus, it will be necessary for Vauxhall Motors to tactically price their two wheeler automobile products, failure to which might result in loss of the expected market stance and reputation associated with the parent brand [1]. Threat from Substitutes (High): This factor can also be categorized as high due to the pre-existence of huge number of domestic and international motorcycle manufacturing brands in the present automobile market of the UK [1]. Competition within the Same Sector (High): This factor also appears justified due to the presence of strong global two wheeler manufacturing contenders and high level of competitive intensity within them in term sufficing the expectation and requirements of the UK customers [1]. The Project Outline Project Objectives and Activities: The objective of this project is to find high alignment with the product mix expansion plan as proposed by Vauxhall Motors with the prime intention of penetrating the heavy motorcycle segment within the UK market. The objective also aims towards analyzing the patterns in which Vauxhall Motors will be competing with the global giants such as Harley, Yamaha ad Honda. Estimated Timeframe: 1 year Possible Sources of Funding: Vauxhall Motors and General Motors, US Estimated Costs: £ 30 million Potential Income: £ 10 million (1st year of sales), £ 19 million (2nd year of sales), £ 25 million (3rd year of sales), Potential Partners and/or Stakeholders: Local distributors, global advertisement organisations, local financial organisations and local/ global raw material suppliers, Vauxhall Motors & General Motors. The Role of Vauxhall Motors in the Project: New product related to R&D, concept manufacturing, mass production, product promotion, and distribution. Suggested Timetable Product R&D- 6 months Concept model testing- 2 months Machinery and mass production facility establishment- 2 months Advertisement and promotion- 1 month Pre booking analysis and delivery- 1 month Impressionistic Drawing The Case for Project Implementation The new designed hyper spot motorbike (RT 979) will be expected to attract the interests of the younger generation of customers who want a mix of thrill, power and futuristic design in their motorcycles. This motorbike will benefit the organisation in terms of customer loyalty and market share in the global arena. In addition, Vauxhall Motors has also planned of conducting multiple long ride adventure campaigns where the owners of this new hyper spot motorbike will be invited for active participation and showcase their products. The starting variants will be available at an appreciable price of £9, 900.00, which might eventually vary with higher capacity and displacement measure of the engine as demanded by the customer. The motor vehicles will pose various additional features to attract the young generation customers with high Cubic Centimetre. Through all these, Vauxhall Motors intends to attain a higher proportion of customer preference that will eventually help the brand in capturing an appreciable portion of the UK’s motorcycle market. In an eventual manner, the brand also perceives of expanding its two wheeler product base depending on the intensity of market response it attains through the launch of this hyper spot motorbike (RT 979). All these activities and strategies taken by the company will help in getting more market share and help the brand to gain more customers. This aspect will benefit the organisation by expanding its reach in the global market and also in the motorbike segments [8]; [9]. A Feasibility Assessment Associated Risks Financial risk:- None Market Exposure Attainment Risk:- High New product malfunction:- Minimal Risk related to customer satisfaction:- High Attainment of effective sales in the perceived time bound framework: - High Strategic Issues Currently, there might not arise multiple strategic issues due to high level of expertise and knowledge of Vauxhall Motors regarding the customers and automobile demand within the UK market. Gaps Lack of knowledge in motorcycle designing Unavailability of mass production machinery High manufacturing cost of the prototype models Lack of knowledge of technical staff regarding motorcycle designing and engineering [2]; [3] It has been ascertained that Vauxhall Motors is taking steps towards expanding its business and brand name by developing a new segment in its heavy vehicle automobile product mix. It has been understood that this brand does posses significant knowledge of the market but lacks the technical expertise of developing its new line high speed two wheeler automobiles at a faster pace in comparison to that of the other global two wheeler automobile giants. Thus, in the long run, Vauxhall Motors might face high level of competition and survival risk as a result of its attempt towards penetrating into the UK’s two wheeler segment. However, with the market support provided by its parent brand General Motors, the US, this brand in an indirect manner might perceive towards expanding its targeted two wheeler market to multiple other nations. This will eventually help the brand in attaining a competitive leap over other global giants such as Harley, Ducati and Honda. Moreover, the market penetration under such situation will be much more intense in comparison to that of the saturated market of the UK. References [1] Bridge, S., 2013. We Will Overtake Ford By 2016 And I Expect Vauxhall To Be UK's No 1 Car Brand': Motoring Boss - Who Also Works At Opel In Germany - Lays Down Gauntlet. Money Home. [Online] Available at: http://www.thisismoney.co.uk/money/markets/article-2420763/Well-overtake-Ford-2016--I-expect-Vauxhall-No-1.html [Accessed October 21, 2014]. [2] Cross, B. & Bonin, J., 2010. How to Manage Risk in a Global Supply Chain. Strategy. [Online] Available at: http://iveybusinessjournal.com/topics/strategy/how-to-manage-risk-in-a-global-supply-chain#.VEZchfmUeM0 [Accessed October 21, 2014]. [3] Durrani, A., 2010. Peter Hope Takes Top Marketing Role at Vauxhall. Marketing. [Online] Available at: http://www.marketingmagazine.co.uk/article/1012823/peter-hope-takes-top-marketing-role-vauxhall [Accessed October 21, 2014]. [4] Export.gov, No Date. Motorcycles European Market Briefs 2013 – 2014. U.S. Commercial Service Resource Guide for the European Motorcycle Industry, pp. 1-68. http://www.export.gov/build/groups/public/@eg_main/@byind/@autotrans/documents/webcontent/motocycles066908.pdf [5] General Motors UK Limited, 2014. About Vauxhall. Reviews. [Online] Available at: http://www.vauxhall.co.uk/about-vauxhall/index.html [Accessed October 21, 2014]. [6] General Motors UK Limitedb, 2014. Vauxhall Finishes 2013 with a Flourish. About Us. [Online] Available at: http://www.vauxhall.co.uk/about-vauxhall/vauxhall-news/2014/01/vauxhall-sales-flourish-in-2013-.html [Accessed October 21, 2014]. [7] Statista.com, 2014. Number of Motorcycles Sold In the United Kingdom (UK) In the First Half of 2014, By Motorcycle Brand. Home. [Online] Available at: http://www.statista.com/statistics/312532/motorcycle-brands-sold-in-the-united-kingdom/ [Accessed October 21, 2014]. [8] Sije, A. & Oloko, M., 2013. Penetration Pricing Strategy and Performance of Small and Medium Enterprises in Kenya. European Journal of Business and Social Sciences, Vol. 2, No. 9, pp. 114-123. http://www.ejbss.com/data/sites/1/vol2no9december2013/ejbss-1314-13-penetrationpricingstrategyandperformance.pdf [9] Spann, M. & et. al., 2009. Skimming or Penetration? Strategic Dynamic Pricing for New Products. Abstract, pp. 1-53. https://business.ualberta.ca//media/business/departments/mbel/documents/marketingseminars/2008-09/strategicdynamicpricingpaper.pdf [10] Vauxhall, 2014. Vauxhall’s Parts Warehouse Attains Landfill-Free Status. News. [Online] Available at: http://media.vauxhall.co.uk/media/gb/en/vauxhall/news.filter.html/Europe/GB/NewsTab/Company.html [Accessed October 21, 2014]. Read More