Skoda Automobile Company - Essay Example

 Skoda Automobile Company Abstract The discussion entails an evaluative survey of Skoda Automobile Company. It draws the critical incidents in the history of the business entity. The introduction stipulates the foundation, products, development, and shifts in business. Thereafter, it focuses on the SWOT analysis, which highlights the company’s strengths, weaknesses, threats, and opportunities. The discussion intensifies to focus of the company’s evaluation approach towards strategic planning in addressing the internal and external variables. Introduction Skoda automobile company started its operations in 1925 after a lengthened period of producing customized bicycles for the founders, Laurin and Klement who were cyclists. The company based in Czech Republic advanced gradually in producing bicycles and cars for the Czech market. The profits accumulated during the initial stages of stages served as propellants since the management adapted them for capital in its advent to globalization. Skoda automobile engaged in the production of cars for the European market despite the presence of competitive rivalry from the German and British manufacturer. After the initial staging of globalization, the company’s management evaluated the importance of diversification of the business portfolio by the inclusion of other product categories. Therefore, the company started to manufacture farm machinery and airplanes as additional products to the main product. Chronological accounts ascertain that the company’s production and sales competence enabled the company to survive through the difficult environmental forces prevailing in the mid 20th century. Scholars derive that Skoda car manufacturing company faced the threat of the great depression, a situation that halted most industrial progresses in Europe (Kreitner, & Cassidy, 2011). This period coincided with the Second World War whereby bombers from rival sides targeted industries. Further, Skoda managed to survive the eventual period of economic restructuring during the postwar period despite the presence of the German and British car models in the target markets (Roberts, 2013). Eventually, Skoda observed that by sourcing for stable car investors, the business would propel immediately as the investors would provide capital equity for the company thus they chose Volkswagen AG due to its wide brand network. The SWOT analysis Strengths of Skoda Automobile car industry Skoda produces its machinery in view of presenting the best machinery to the global markets. Mainly, the company boasts over dominance of a profitable market share in the European market despite the presence of stronger competitors. The company’s diversification of investment plan engages the acquisition of mergers and taming other market leaders to invest in the plans. The company’s research and development team engages in evaluation of alternatives in order to reach the desired market segments. Therefore, the management stipulates its long-range plans in the market and order for a survey over 20,000 clients in the global market. Arguably, many companies lag behind Skoda in undertaking customer surveys in order to bear the ability to produce automobile in reflection to the present needs in the consumer markets. Skoda’s strengths further emanate from the extent of independence in undertaking direct and unbiased surveys. In this case, the management ensures that potential customers reveal the needs and wants and stipulate their perceptions concerning Skoda car models in order to undertake fast improvement of the products with inclusion of customer’s stipulated variables. The company rests assured that achieving the desired competence through its research body, the JD surveys to be partial since customers would not hold back their feelings about the company given that the researcher is independent. Such approaches serve as strengths to Skoda motor company since it accrues the best and well informed feedback from the thus the management understands that 98% percent of Skoda drivers are loyal customers. Skoda is always certain of progress as the market growth and maintenance of market prevails through strategic planning management to set plans and objectives that enhance competence, growth, and profitability. Weaknesses of the company Every global enterprise may draw weaknesses in their operations while perceiving that they are reaching and the conducting the market for profitable and growth purposes. The company’s franchises and authority that enables Volkswagen motor company to produce vehicles under the Skoda brand as they focused on increased production and utilization of capital basis through engaging the new investor served as a weakness for the company. Arguably, Volkswagen is a globally renowned brand in its efficiency thus whenever the company produces a vehicle, its potential clients awaits the model with undoubted knowledge that the model will deliver increased benefits over those of other relatives (Kreitner, & Cassidy, 2011). On the contrary, Skoda Company perceived that its vehicles would gain similar significance by producing under the Volkswagen trademark but it was never the case. Arguably, the company influenced a brand weakness since production of the vehicles under the Volkswagen since the target consumer markets and other interested groups would perceive that Skoda is an inferior brand of a declining company that found refuge through Volkswagen’s investment (Martocchio, & Liao, 2009). The company also understands the ill approach that emanated from unplanned bid for globalization through outsourcing and focusing of successful companies. Arguably, the company identifies that the ill approach served as the reason to growth inconsistency as it continues to own a 1.7% share of the total European market. Threats encompassing Skoda Automobile Company Skoda faces threats of decline in market share due to lengthened period in the market with unrealistic market share growth. The European market consists of both high end and lower end customer groups thus it would be profitable for a company to define the exact segment that it seeks to serve profitably. Similarly, the UK and other European markets contain 50 car-manufacturing companies and they presumably produce up to 200 models and 2,000 model derivatives. This presence of other companies in the market threatens Skoda unto a point that its 1.7% market share may stagnate or decline instead of reflecting any significant growth. The company’s focus on the high-end market stirs different feelings since the customers are unable to ascertain the exact values of the company citing that Skoda’s level of incompetence proves its level of performance and the lack of significant capital denotes its production value. Therefore, the company faces threats from the customer segments as well as the competitors. However, the company survives all these challenges and continues to grow profusely despite the presence of competitors such as Bavaria Motor Company, Skoda Company Limited, Volkswagen, and the Jaguar Land rover company among others. Skoda manages to counter the threats by producing cars for the demographic market niches since the research and development team engaged in the production of cars with a view of serving different niches profitably. Opportunities of Skoda Motor Company Skoda bears advantages and equal opportunities over competitors in the global approach since it is able to define the present niches in each market segment to ascertain the exact needs of the customers before engaging on any production of the vehicles. Similarly, the management perceives that the other companies engage on marketing their products through the provision of the aspects that they deem fit after undertaking in-house decisions and innovative approaches thus they force the customers to acknowledge the efficiency of the vehicles and buy them (Leggett, 2013). Therefore, Skoda seizes a valuable opportunity after undertaking a survey and ascertaining that the salient customer needs in the different subdivisions of the market segments and planning the execution plan of producing automobiles to serve those needs profitably. Evaluation of SWOT analysis Skoda Motor Company operates in globally with all its services seeking to deliver competent automotives in the transport industry of the global economy. The company perceives that the battle to accrue success is only possible through establishment of stringent approaches, which will in turn restrain the factors that may halt the company’s competence globally. Therefore, the managerial resolution of dividing the projects in different portfolios serves to ease the congestion of responsibilities in the company (Martocchio, & Liao, 2009). The most important responsibility is management of the company, which entails prescriptions of the global operations, factors to achieving sustainability, enhancing the company’s heritage, amassing and managing funds for the company’s operations, and managing the company’s premises. Skoda ensures competence in pursuing progress as it ascertains other competitors’ weak points in production and marketing of their products (Kreitner, & Cassidy, 2011). Consequently, it produces those vehicles that extensively serve the needs of the neglected niches in the markets. Secondly, the product management and development team evaluates the entrepreneurial effects of Skoda Motor Company’s vehicles, for example, the Skoda Fabia models, the Superb, and Octavia Estate models. Further, the company’s administration oversees the investors’ business dealings in the following categories: Accounting and remitting the financial reports, evaluating the stocks and delivering information about the desired projections, and luring new clientele into purchasing the stocks. Similarly, the human resource ensure globalized outreach to alert investors on new development while still overseeing the company’s corporate governance (The Times, 2009). These involvements serve to stimulate the company’s zeal to achieve successful and competitive edges in the various categories of markets in the automotive industry. through the practices, Skoda Company is able to ascertain perceived future challenges and establish competitive measures to restructure the its product portfolio and change the external threats into opportunities. The Skoda Motor Company produces a range of highly recommendable SUVs, luxury cars, and crossovers. Skoda Motor Company assures its clientele of beneficial exchanges upon purchasing any of the vehicles in the various categories on offer. Most of its famous cars are the Skoda Fabia, the Superb, and the Fusion models. In addition, the company markets the Skoda Roomster, Rapid, and Yeti in the luxury up-scale market clients. Lastly, Skoda manufactures the Vrs models and the Stripped Chassis models for the global markets. In a second account, Skoda Company owns other subsidiary plants for example, the Skoda-Letchworth Motor Company that produces luxury vehicles for the Hertfordshire and Letchworth markets (Leggett, 2013). Such an investment decreases the company’s liabilities as it appears in the car market in two distinct entities that giving the customers a priority of choosing the products on perceiving the company’s perseverance to avail the production utilities on proximity in order to deliver better products. The characteristic approach of diversifying the company’s investments to produce different brands is soundly unique and a contributing factor to the company’s success in selling over 500,000 cars per annum. Skoda Motor Company accrues the globalization and profitable benefits from its sales because of the strategic evaluation of the main factors to success in the European and global market. International human resource management in the company engages all the company’s affiliates as a team in ensuring that all projects prevail in accordance to the set of long-range plans. The department stipulates that all its workforce demands equal attention as its engagement is a stake towards the intended success. The product development team purports that the company’s designers, vehicle builders, and the global marketers demand for equated attention since their services to the company are salient to ensure a profitable future, and competitive edge in the automotive industry. Skoda’s long-range planning embeds a company’s lending and financing subsidiary to increase the demand for its products since clients are able to secure loans and purchase their intended Skoda vehicles (Martocchio, & Liao, 2009). These attributes enable the company succeeds in its programs after suppressing any possible rivalry from the internal environment, which poses weaknesses to competitive production. Skoda shall be able to accrue beneficial exchanges after changing those weaknesses into strengths. Conclusions Skoda Company values the global markets both from the demand of its second hand vehicles to the sales of the new vehicles. Arguably, the company’s management critically observes that the alternated approach of reversing the presence of threats in the market to represent opportunities to the manufactured vehicles. For example, the company’s resolution to implement a competitive approach to the production process such that its cars seek to sell abundantly to clients predefined in the market segments, which other competitors pursue with equated products. Skoda’s operations in the automotive industry date to the 1925 initial production in the Czech Company (Leggett, 2013). Since its establishment, Skoda grew profusely throughout the decades and it currently operates in large scale despite the environmental challenges that threaten to halt competitive development. Through the capital intense operations, Skoda’s research and development team is able to acquire profitable segments by suppressing the threats to opportunities, and the weaknesses to strengths. Contents Contents 9 References Kreitner, R., & Cassidy, C. (2011). Management. Mason, Oh, South-Western Cengage. Leggett, D., (2013). Czech Republic: Skoda starts production of Rapid Spaceback. Retrieved on 14 October 2013 from, http://www.just-auto.com/news/%C5%A1koda-starts-production-of-rapid-spaceback_id137306.aspx Martocchio, J. J., & Liao, H. (2009). Research In Personnel And Human Resources Management. Volume 28 Volume 28. Bingley, UK, Emerald Jai. Roberts, G., (2013). India: Skoda brings Octavia back. Retrieved on 14 October 2013 from, http://www.just-auto.com/news/skoda-brings-octavia-back_id138984.aspx The Times 100. (2009). SWOT analysis and sustainable business planning. 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