Jaguar and Land Rover Brands Success Story - Case Study Example

hеСаsе of Jаguаr and LаndRоvеrBrаndsSuссеssStоry Name Course title Date Table of Contents Table of Contents 2 Introduction 3 Background 3 JLR international success 4 Global drivers of its success and emerging cultural and ethical issues 5 Contributions of foreign markets in growing economies 8 Conclusion 9 References 10 Introduction In the history of automotive industry United Kingdom is known for production of famous cars like Bentley, Mini, Lotus, McLaren, Daimler, Aston Martin, Jaguar, Land Rover and Rolls Royce among other brands. Moreover, there are car producers operation significantly in Britain with mass production that includes Nissan, Toyota, Honda, and GM (Blewitt, 2008, p.15). There are also producers of commercial vehicles namely Ford, Leyland Trucks, Adam Opel AGand Alexander Dennis. The UK motors vehicles industry produces over 2.5 million vehicle engines and 1.5 million auto motives. By 2017, the sector plans to break world records in car production volumes where 80 per cent are exported (Griffiths, 2012). Background The root of the UK automotive industry can be dated back in 1893 when Frederick Sims and Gottlieb Daimler collaborated to form Daimler Motor Syndicate. This car company was able to sign deals for production of official royalty cars in 1896. However, Jaguar Companybought it in 1960. Rover Company in 1904 started manufacturing cars and motorbikes. The Land Rover car models were invented in 1947. Rolls Royce Company was started in 1906 on a partnership by two businessmen (Gunn, 2006, p.28). Furthermore, GM was introduced to the car market in 1908 and by 1925 its market presence had grown after acquiring Vauxhall and a German carmaker called Opel.Henry Ford started production of Ford vehicles in 1913 and it became successful to top production in UK automotive sector. By 1945, Harold Macmillan, the Prime Minister by then, introduced hire-purchase strategy to the sector and this increased production because many could afford the cars.Additionally, in 1969 Richard Beechingwho served at the British Transport Commission as chairperson declared that railway transport was uneconomical and underutilized resulting to closure of some stations. This move meant that transport focus was shifted to the auto motives. The Mini car model was invented by then to solve the transport challenges in the market (Blewitt, 2008, p.21). In 1970s the car sector in UK was faced with various market issues such as labour disputes, limited creativity, insufficient steel production, supply issues and underutilization of new machineries for car production. Rolls Royce Limited that had started manufacturing aerospace engines went bankrupt and through government intervention the company was nationalized. Rolls Royce Motors was created from the company to concentrate on car production while the mother company to deal with aerospace. In 1986 Nissan, aJapanesecompany launched a production plant in Sunderland. In 1989 the FordCompany in a bid to expand his empire acquired three major companies namely, Jaguar, Aston Martin and Land Rover.The company later sold Jaguar and Land Rover to Tata Motors in 2008 (Riley, 2012). JLR international success In Tata Motors strategy to achieve internationalization and globalization in British automotive industry it obtained assets by purchasing Jaguar and Land Rover. These acquired companies are luxury car producing carmakers in the British market and the Indian car maker saw the need to combine the two marques to form one brand that they named Jaguar Land Rover (JLR). This company has successful taken over the market and ever since 2008 the company has been recording profits with high profitability potential in the future (Griffiths, 2012). The Ford Company sold off their two companies to Tata Motors at a price tag worth 1.3 billion pounds. This price was slightly lower than the initial price Ford had paid to acquire them; it was a strategy to avoid more losses to the Ford Company. Given that BMW had bought Land Rover Company in 1994 from Ford but later in 200 sold it back, Tata Motors buying Jaguar and Land Rover companies was a great risk. The two companies had not successfully to triumph in the Britain automotive market since their acquisition (Hawes, 2014, p.3). However, Tata Motors has been able to rebrand the companies to creating a successful portfolio ever since the acquisition to creating an appealing range of vehicles into the market. The company has been able to produce and sell over 360, 000 cars of Jaguar Land Rover, with 80% being sold to foreign markets. This has earned Tata Motors a name as well as respect in the car market worldwide for being able to do what Ford and BMW faced challenges doing (Gribben, 2013). Global drivers of its success and emerging cultural and ethical issues Ever since the buy off, JLR has been able to self-finance its operations and this has helped Tata Motors from seeking funding from financial institutions. In their previous financial year they reported a pre-tax profit that amounted to approximately 1.6 billion pounds after investing about 16 billion pounds into the business. The company has been able to open 3 plants to handle JLR production, creating over 9,000 jobs and more are expected to come up with the on-going profitability trend. In their internationalization and globalization bid the company is planning to launch a plant in China and they have partnered with Chery Automobile. This joint venturing will play significant role in enabling JLR to gain access in the Chinese market which they claim will be their most important target market segment. The company seems to understand the aspect of volume of sales that is contributed by the population size (Gribben, 2013). The setting up of foreign production plants will have impact on those countries car industries and create a culture of excellence. Socially it will create more job opportunities that will improve the living standards of the population. One of the main factors that have helped JLR to achieve their prolific performance in the market at its hardest times is speed and scale of change. The speed at which Tata Motors implemented after buying JLR Company was swift and spontaneous. This move helped the continuous planning and production of several brands into the market. The major challenge of many companies that occurs after acquisitions is dragging plans for the new addition to the portfolio of their existing products. This takes much of time and resources planning and gauging the market to identify what needs to be dome for productivity to be achieved. However, Tata Motors seem to have fore-thought about the acquisition of JLR Company. This can be proved by the ability to produce approximately half of the automotive in the last four years of operation (Gribben, 2013). This increased production has stimulated the British Car industry with its effects being felt worldwide. Hence, its plans to open foreign plants that will streamline the working culture of locomotive sectors and give key players a case study on how improving work approach can transform business. Furthermore, the company invested in acquiring highly experienced engineers in the market to conduct their business. The team has shown excellent performance in the market by the evident growth that the company has been able to gain in the car market. Research has shown that Ford made mistakes by investing much money into the companies previously because they wanted to be the leading producer of upmarket vehicles. This caused them to run out of cash before their plans could be achieved. The result was to sell the company off instead of crippling as they watched (NDTV, 2014). Also, Ford has less skilled labour force that created strains in the market ain additional to slowing down the production pace. Therefore, when Tata Motors took over they were able to address these issues and spurred the production process to completion. Hence, the company enjoyed some of the previous inputs and plans that Ford had for JLR. Moreover, the company has started empowerment programmes by enrolling about 1000 graduates to their engineering programmes as well as training 250, 000 youthful individuals to conduct market surveys of engineering needs. This will help the company to create cutting edge vehicles in the market with high sustainability after understanding the consumer needs (Gribben, 2013). Such undertaking helps business to understand that business ethics needs to be addressed so that profitability can be achieved even when the market is struggling. Hence, understanding that taking care of business work ethic has sustainable benefits in the long run. In addition, another factor that has helped JLR to significantly dominate the British car industry is the innovative market survey and production programmes. Given that Tata Motors is an Indian company that decide to acquire JLR that are British high brands shows how it had plans to go global. This shows they had to have effective market so that they could predict how profitable the venture would be. Moreover, research has identified that the company invest a significant portion of their revenues into market survey. In their previous financial year, the company set apart 2.75 billion pounds for undertaking of market research and production of new technology products. This strategy helps them to understand the current market need as well as being able to accurately predict future consumer needs (Riley, 2012). This reaps any company significant revenues because their products are viewed by the market as relevant and able to relate with easily. Moreover, they have 24-hour production programmes that help the production process to be continuous throughout the year. This strategy has been able to satisfy the market needs of the Land Rovers that currently have high demand in the market. This wins customers’ loyalty because the company is able to deliver on their promises to deliver new models timely. The company claims the waiting time for production of a car ranges from 6 months on the lower end to 10 months on the upper end, the deterring factor is engine used in production (Bajaj, 2012). Contributions of foreign markets in growing economies China and Indian markets have played a key role in transforming JLR into huge brand due to their huge market that has high buying potential. Given that Tata Motors is an Indian carmaker that has translated the British automotive industry the Indians are supportive to the brand and Chinese claim that JLR are producing more efficient and innovative luxury cars than BMW and Mercedes. The JLR Company claims that the company is dedicated to producing dream cars that gives their customers an experience that the market has never been able to provide. It states that it produces cars based on various existing market groups. Moreover, the company uses almost all the existing media platform to conduct a media mix that utilizes current platforms such as tablets, mobile phones, internet, social media in additional to television to reach their customers and raise awareness. This culture that they have established has been able to interact and connect them to their large portion of their customer base (Betros, 2014). Moreover, JLR in their internationalisation and globalization policy plans to open plans in India, Brazil and Middle East. They claim to have found potential market in South American and they want to be the first UK carmaker company to invest in that region. This opens up the British car industry in the new market making it stronger and increasing their dominance in many parts of the world. With the current status and achievement of JLR, the British carmakers are receiving recognition after many years of being unnoticed after the industry flopped in 1970s (Lee & Lieberman, 2010, p.155). Conclusion It can be concluded that the process of internationalisation has been utilized by JLR Company in their bid to become the largest British producer of automotives. Depending on foreign markets for their products is a hard task to achieve but JLR has proved to the carmakers that it is possible. This business culture blended with observation of ethical issues has helped transform a company that was headed to being bankrupt into a great profitable company. Under the guidance of the Tata Motors in their internationalisation and globalization policy, the JLR has been able to stimulate the UK car industry to regaining its prominence like it did in 1950s. Opening plants n different parts of the world will increase the prominence of the British car industry. Finally, it can be concluded that understanding the market and investing in skilled labour force has played a key role in making JLR a profitable empire. References Bajaj, V., 2012, Tata Motors Finds Success in Jaguar Land Rover, Available from NY Times [Accessed on 14 March 2015]. Betros, C., 2014, Jaguar Land Rover drives to success in Japan, Available from [Accessed on 14 March 2015]. Blewitt, J., 2008, Understanding Sustainable Development. London: Earthscan, ISBN 98-1-8440-454-9. Gribben, R., 2013, Jaguar Land Rover: £1.3bn Tata gamble pays off as big cat purrs at last, Available from Telegraph Accessed on 14 March 2015. Griffiths, B., 2012, Jaguar Land Rover reveals record breaking car sales: Brand sees 19% increase on 2012. Available from Daily Mail [Accessed on 14 March 2015]. Gunn, R., 2006. Trucks & Off-Road Vehicles.Motorbooks.ISBN 978-0-7603-2569-8. Hawes, M, 2014, “The UK Automotive Industry and the EU: An economic assessment of the interaction of the UK’s Automotive Industry with the European Union”, KPMG Europe LLP Lee, G. K., & Lieberman, M. B., 2010. ‘Acquisition vs. internal development as modes of market entry’. Strategic Management Journal, Vol.31, pp. 140–158. NDTV, 2014, UK proud of Indian investment in Jaguar Land Rover: Cameron, Available from [Accessed on 14 March 2015]. Riley, J., 2012, 6 Essential M&A Cases: Tata Group buys Jaguar Land Rover, Available from [Accessed on 14 March 2015]. Read More