Motor Manufacturing Company in the European Market - Case Study Example

Business Plan Strategic Management The following paper shall be developing a business plan for a company that produces motor manufacturing company in the European market. The recent past has seen a global recession, and the economies around the world are trying to recover from the global slump, and this time is ideal for companies to set up in the economy so that it can be ensured that the organization in question is able to grow as the economy grows. The company, Motor ways, aims at trying to provide services to the younger generations or families belonging to the middle class, and hopefully the company will be capable of achieving its goal of becoming established in the market in the long run. The long term strategic position which takes into account the various challenges and shocks that may be faced gives the company a certain amount of advantage over the others which are functioning in the market. Business Concept The various areas that need to be established when developing a program have been discussed and stated in the section below. This is important to develop as the organization that will be evolved will follow this structure. Vision for the Organization It has often been observed that there are various reasons that lead to the failure of profitable functioning of businesses in the country. The main reason for this is that the businesses fail to develop long term planning and there is a lack of vision (Berman S, 2000), but they, in the short run function properly. The main vision that the company is looking at achieving is that ensuring that the organization in question is able to grow as the economy grows in the European market where the focus will be on ensuring that the customer’s demands and needs are taken care of as per say through the functioning of the company met and also ensure that the company is prepared to face any slacks that may take place in the market. Core Values The core values that will be promoted by the organization include the following points which it aims at upholding: The focus will be on sustainability and stability of the organization; Ensuring the management of the various resources takes place in an economic manner; and Ensuring that the various needs of the customers are addressed efficiently. Objectives The main objective that the company aims at fulfilling is ensuring that the organization is able to carve a niche for itself in the EU by the end of five years; To develop a diverse employee base which draws from all source pool and is inclusive of all cultures which are present in society; Develop two models of cars Veltro (city) and Vexeis (medium) To develop cars which are affordable by students and medium class families and address their needs Unique Features and Benefits The company is looking at developing various new features thus ensuring that it can appeal to a wide range of customers. These are inclusive of features such as: The customers will have an option to put in an engine that runs of electricity or diesel or petrol engine. This will appeal to the customers who have a sense of environmental consciousness; The company will also ensure that the models that are developed have a wide variety of additional products that can be optional in nature, and if a customer has economic restrains then they can only avail of certain products which they deem necessary; Primary Customer Group The primary customer group which the company is aiming to cater to is middle class families and student groups. Environmental Impact The company will adopt a strong and active strategy thus ensuring that it can develop a strong sense of responsibility where the environment is concerned (Markus, M.L, 2001). Also the company will provide products such as fuel economy, controls that will regulate the emissions so that an efficient end product is develop. Management Team The role of the staff and the structure is very important thus ensuring that its functioning is carried out in an efficient manner. The organization will be headed by the chairman who is the owner of the organization (Berry, Leonard L.; A. Parasuraman 1991, pp 79-86). All the main decisions of the organizations are carried out by the board of directors which will comprise of organizational heads and the heads of the various departments of functioning including finance, marketing human resource management, logistics and operations and technology. Once the organization will reach a global level of functioning the staff will follow the following format (Khalifa, M. and Liu, V, 2003). The management at the top includes six senior executive officers, and then at the next level are the 36 corporate officers, of which six are ranked as executive officers. Thus, the total number of executive officers at the Motor ways would be 12, who look into the performance of the business at the central level. Market Analysis Industry Size In the year of 2010 the market saw a sale of 12.73 million units of sale Industry Status The market due to recession is facing a downward slope, and experts believe that it will only pick up after the next fiscal year and will increase in 2012. Growth Potential The market is looking at expanding in the future, and many believe that the market will pick up and grow from the year of 2012. Geographic Locations The European Market is a vast one which is based in countries such as Germany, France, Denmark, Italy, Netherlands, Sweden, Spain and United Kingdom. Thus the overall potential of growth for a new company is huge. Trends and Barrier Entries It is difficult for a new company to enter as Brands play an important role in the market but there has to be ensured that a strong marketing strategy based on branding is established. Profit Potential The potential of growth and profitability in the market is high if a company is able to establish itself in the market, and the potential for small cars is predicted to grow in the future. Market Segments Germany is the fastest growing economy under EU, followed by France and Italy and Western Europe. Russia too is climbing in on the market share, and it is important that the company focuses on these economies in the long run. Target Market Primary Target The primary target groups are the student bodies and middle class families Secondary Markets Our secondary market is the mass market Demographics of target groups The target audience will for Veltro are mainly the age groups of 25-35, and it is mainly meant for the student body, whereas the Vexeis model is meant for the age group of 25-45, and is meant for both sexes of people belonging to middle class families (Joby J, 2003). Customer Needs analysis The customer group that is being focused upon is looking for economic cars which are affordable and function in the basic form, and the size would be influenced mainly by the demands of the of the consumers in the market. The company allows for space for individual needs and this makes it more attractive to the customers. Entry strategy When setting up the company at the beginning the various factors that need to be focused upon are inclusive of the price of the product, the level of the eminence and which offers will be provided by the company to attract the customers. The other area of focus has to be the marketing where focus will be on advertisement and branding of the product in the market. Competitors Market share and Segment Indirect - Shares: The leading company in the Western European economy which has a share of almost 20 percent of the market to its name is Volkswagen. The second with almost 13.5 percent of the market share is PSA Peugeot Citroen, and this is followed by ford in the third position with a share of 11 percent in the market (Datamonitor, 2010) Direct (entry market) - Shares: The leading company in this is that of Fiat where the shares is almost 7 percent, followed by Chevrolet which has a share percentage of 2.6 percent and then by Hyundai with a percentage of 2.4 percent and this is closely followed by Kia and Seat in the market. Segments The maximum amount of sales that takes place in the Western European market in relation to the automobile sector is the passenger cars where almost 89.2 % of the sales that are total industry in the market. SWOT Analysis The strengths of the company that is coming in is that it will be able to avail of the latest technology for setting up the factory, and will be able to accommodate a number of varied factors which the already existing in the market. Also the company is going to set up when the economy is slow so it will not have to face much competition and the governments will also be providing subsidies so as to ensure that growth of the economies can occur (Grant, R.M, 1996). This will give the company an advantage over the other companies. On the other hand the weaknesses of the company is that although it will be developing city and medium based models it will not be able to launch luxury products (Verlag R H, 2009). Also the weakness that the company faces is that there is no brand recognition in the market and the customers need to be made aware. The opportunity that the company has is that a more data balance and technology to drawn upon where as the threat that it faces is from the competitors who are already well established in the market. Pricing Policy The pricing policy is one of the best advantages that the company has as it allows the company to cater to the people who need affordable rides. Discounting policy The company can adopt a policy of lucky draw during the festive season or developing a discount policy of 3 % for families and students. Value Process Analysis The core competencies of the organization is space for customer needs, customer services, pricing and technological advancement. The company has to focus on operational, managerial, logistics, productions and technological departments. R and D Plans The company has a strong base and can function in a logistical and effective manner through the implementation of the basic technology which is utilized to develop affordable, economic and attractive products for the customers. Organizational Plan Philosophy of Management The main objective of the organization is to excel in the motor manufacturing sector, and to ensure provision of quality service to the people. This is the basis on which the entire organization is based upon, and in fact the services of the Motor Ways are known for the excellence of quality of service that is proved to the customers in accordance to their requirements Gitman, Lawrence J.; Carl D. McDaniel, 2005). The organization was structured on these principles, where the model that is being constructed by Motor ways is based on the fact that it is believed that these services were required for economic goods in the economy. Thus, catering to the needs of the customers has been the prior objective of the business. The second important objective of the organization is ensuring that the concern of the share holders is realized and that the performance of the business is carried out in an efficient and economic manner. The last main objective of the organization is to gain a larger amount of control of the international markets (Griffin, R and M. Putsay, 1998). Board Responsibilities The responsibilities of the board is inclusive of the forming the agenda of the organization and look into its various functioning, establishing the mission and the values that are followed during the production and the manufacturing process. Marketing management                         When one is developing a new company is it significant that a sufficient marketing strategy is developed where the focus is on creating awareness among the people (Karger, D. W., & Malik, Z. A. 1975, pp 60-64). The company will have diverse staff base and this will allow it to have an insight in the needs of different pools of consumers thus helpoing it understand the market needs in a more conclusive manner (Zeithaml, Parasuraman & Berry, 1990). Thus the company will develop a marketing strategy which will focus on branding and advertisement. Branding will help the company develop a niche for itself the economy whereas the advertisement will allow the company to create awareness among the consumer group. Financial Plan The finances of the company are the key section of the business as it forms the basis of all operations. The business that is being developed will be based mainly on the finances that it will acquire from the market through various sources which is inclusive of financers who will be approached with the business plans (Cummins J G, Hubbard R G, 1994). The company will also look at collecting debts in the beginning of the year to finance its various ventures and operations where money will be borrowed from financial institutions including such as corporation banks etc. the company will be avail of various subsidies and tax rebates given its human resource pool where it will employ the minorities from various cultures as well as women. This will give it an edge over its competitors in the market and ensure better financial management in the long run. Reference Berman S (2000). How to craft business proposals that sway clients, Los Angeles Business Journal, Vol 37 (1), pp 57-69 Cummins J G, Hubbard R G (1994). The tax sensitivity of foreign direct investment, evidence from firm level panel data. National Bureau of Economic Research Working paper No. 4703 Datamonitor (2010) New Cars in Western Europe, accessed on December 21, 2010 at Grant, R.M. (1996) Toward a knowledge-based theory of the firm, Strategic Management Journal, 17, 109 – 122.  Griffin, R and M. Putsay (1998). International Business: A Managerial Perspective, 2nd edition. Reading, Mass.: Addison-Wesley, pp 37-62. Gitman, Lawrence J.; Carl D. McDaniel (2005), The Future of Business: The Essentials. Mason, Ohio: South-Western, pp 115-130  Joby J (2003), Fundamentals of Customer-Focused Management: Competing Through Service. Westport, Conn.: Praeger, pp 139-144 Karger, D. W., & Malik, Z. A. (1975): Long-range planning and organizational performance. Long Range Planning, 8(6): 60-64  Khalifa, M. and Liu, V (2003), Determinant of satisfaction at different adoption stages of internet –based services, Journal of the ass ociation for information systems, Vol.4 NO. 5, PP. 206-232 Markus, M.L (2001) Toward a Theory of Knowledge Reuse: Types of Knowledge Reuse Situations and Factors in Reuse Success, Journal of Management Information Systems, 18, 1, p.57 – 93.  Verlag R H (2009). Management Review, The International Review of Management Studies, Vol 20 (1), pp 5-14 Zeithaml, Parasuraman & Berry (1990), Delivering Quality Service; Balancing Customer Perceptions and Expectations, Free Press, 1990  Read More