E.K.J is a car manufacturing organisation - Essay Example

Ryden car manufacturing company Ryden car manufacturing company Ryden is a car manufacturing company domiciled in Europe. The company established, a decade ago, has established itself as a key player in the vehicle manufacturing industry in the European region. Part of the company’s success is attributable to exemplary strategies with regard to marketing and management that have allowed the attainment of consistent profits over the years. However, after the initial two years passed, Ryden decided to carry out an eight-year development strategy encompassing all areas of company operations.

Over the course of these eight years, Ryden has implemented a number of strategies aimed at augmenting the company’s market standing, as well as profitability. This paper explores Ryden’s current position after completing the entire eight years’ strategic development period. Since the initial year of strategic development, Ryden’s main mission has been centered on enhancing the sales of the company’s five car models namely Porsche, Audi, BMW, Mercedes-Benz and Volkswagen. The company applied intensive marketing theories throughout the eight years, aiming at enhancing the company’s sales of its five vehicle brands.

The intensive marketing strategies have facilitated Ryden’s grown in stark comparison to its competitors within the car manufacturing industry. At the moment, Ryden’s position can be detailed as follows: 1. The initially established gross profit maximization strategy was revised to encompass more acceptable and practical levels. This was especially done to determine the reason behind the dwindling market capacity of some of the car models and attempt to enhance this market capacity. From the eight years’ analysis, it is apparent that while certain car brands are doing exceedingly well in the market, others are fairing rather dismally.

The assumption with regard to the poor performing brands is the possibility that the brands are stale. Under the gross profit maximization strategy, the prices of some brands were increased by margins of 2-4%. However, the effects of these increments have not materialized in the final books of accounts. The reason for this might be the fact that it takes quite some time for shifts in pricing strategies to show effects on market share. 2. Ryden successfully increased its market base encompassing all its products and vehicle brands.

To do this, Ryden employed campaigns aimed at creating awareness of its products. These campaigns include among others running national and regional advertisements on the products, corporate promotion through advertising via radio and TV. This corporate, promotional mix ensured that the Ryden’s brand image, as well as product awareness, remains robust (Kotler, 1997). On the whole, the eighth year was notable for Ryden in terms of operational profit, revenue, as well as bank balances. Nonetheless, in spite of employing robust marketing investments, the company’s car production rose, but the market share faired dismally for one car model.

The future is bright for Ryden, but the company has to make numerous adjustments such as establishing another factor in another region of the EU and formulating a new car model. Ryden employed renowned strategies in examining its operations and standing. These mechanisms include SWOT analysis, analysis of the marketing mix and analysis of Porter Five forces (Liebeskind, 1996). SWOT Analysis The conduct of SWOT analysis assisted Ryden to employ effective, strategic decision making by analyzing the company’s strengths, weaknesses, opportunities and threats (Armstrong, 1996).

Strengths Over the last eight years, Ryden has employed intense strategies, especially with regard to its product particularly car models. Through the product strategy, Ryden was able to take note of consumer preferences and tailor its products to suit such needs. In addition, the price reduction in most of the company’s resulted in higher sales; hence high revenue earnings. Ryden was also able to tailor its promotional techniques to target specific customer groups, thereby appealing to a wider market share.

Weaknesses Despite Ryden’s improved capitalization, the company is still lagging behind some of main competitors such as Team 6 with regard to profit generation. In addition, as earlier cited, in spite of Ryden achieving greater revenues, market share percentages still remain low. The company’s financial standing is also marred by serious debts acquired in the sixth year of operation when the global economy underwent serious financial crisis. Opportunities Ryden enjoys immense opportunities to increase its product portfolio by increasing its range of car models.

The company’s strategic R&D strategies aim at establishing customer requirements and creating products that meet these requirements. Intense advertising also provides the opportunity to create a strong brand image and maintain it. Furthermore, through advertising and brand awareness, Ryden’s stands the chance of increasing customer loyalty and creating more relationships. Threats Ryden’s competitors pose the most significant threat to Ryden’s success, especially considering that some of the main competitors have lowered the prices of its car models rather substantially.

Recurring changes in customer taste trends also pose a significant threat as car models no longer meet the needs of the existing customer base. Porter Five Forces The analysis of Porter Five forces provides an analytic perspective of the industry and the realization of effectiveness of Ryden’s strategic development. Through the analysis of Ryden’s Porter Five forces, it became apparent that while the company has progressed impressively, Ryden needs to reorganize its strategies, especially with regard to coping with industrial competition.

In order to readjust its strategies, Ryden can apply the five forces namely: Supplier Power The European car manufacturing industry is engrossed by many car suppliers. This makes it rather easy for Ryden to switch its suppliers whenever a switch is necessitated. This ensures that Ryden’s production rate, as well as the company’s revenues, remain high. Because of the availability of suppliers, Ryden is not under threat of supplier power, which means that suppliers’ bargaining power is rather low.

Threat of New Entrants Ryden suffers the threat of new companies entering the car manufacturing industry. In order to ensure its survival within the industry, Ryden should ensure its strategies deter the incident of new entrants to deter such entrants from acquiring market share. By this virtue, Ryden will retain such market share for itself. Following its corporate strategy, Ryden endeavors to increase its competitive advantage through the reduction of competition (Porter, 2008). This exemplifies Ryden’s strategic techniques, which when employed effectively, will significantly lower the threat of new entrants.

From this observation, it is apparent that the threat of new entrants is quite low, but further reduction can be achieved if the market appreciates Ryden’s overall brand. Buyer Power The European automotive industry is highly competitive; therefore, market purchasing power is quite high. Ryden’s main strategy is to establish practical pricing strategies to ensure customer satisfaction. Threat of Substitutes Despite the existence of many competitors, the threat of substitutes remains low because no company has been able to develop an internal combustion engine.

Competition The automotive industry grows every year with new car models and designs. The company’s main competitor is Team 6, which enjoys high profits, but low revenues. These higher profits emanate from rich advertising and pricing strategies. Competitive Advantage Competitive advantage is vital for company success. To attain competitive advantage, Ryden engaged aggressive marketing and planning strategies by considering the results of Porter Five analysis. Porter’s Generic Strategy Ryden’s goal is to become a market leader by providing customers’ value for money.

Using Porter’s generic strategy, Ryden employs cost leadership strategy to ensure price competitiveness and gain competitive advantage (Porter, 2008). Ryden’s Marketing Mix From the sixth year, Ryden sought to reduce costs to attain its breakeven point. To do this, Ryden engaged in rigorous marketing mix strategies, as shown below (Kotler, 1997): Product Ryden’s product plan entails researching and developing all models to ensure consistent sales growth. This means that Ryden will be able to manage its inventory requirements.

Tailoring all products to customer requirements will also guarantee impressive product portfolio. Price Tyden’s strategy is to ensure reasonable and consistent pricing to maintain the attractiveness. However, in order to deal with the effects of the global financial crisis, Ryden had to increase product prices to cater for operational costs. Promotion Because of increased operational costs, Ryden had to cut its advertising budget. Through robust promotional strategies such as national TV and radio advertising and corporate advertising, Ryden has been able to create strong brand awareness for all models.

This will hold the products for a few years until the company rolls out another promotional campaign. In conclusion, Ryden’s current position is quite impressive taking into consideration its robust marketing, pricing and promotional strategies. However, in order to improve its market share, Ryden has to employ substantive pricing strategies aimed at price reduction for all its products. References Armstrong, M. (1996). Management processes and functions. London: CIPD. Kotler, P. (1997).

 Marketing management. New York: Prentice-Hall. Liebeskind, J. P. (1996). “Knowledge, Strategy, and the Theory of the Firm”, Strategic Management Journal 17. Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard: Harvard business Review.