External Factors That Influence Audi - Case Study Example

Service Blueprint Name Institution PART A: INDUSTRY ANALYSIS External Forces These are factors outside direct control by an organization. It is not possible for an organization to put in place strategies and policies that can help deal with these issues because they are externally castigated (Kotler, 2001). It is upon the organization to strengthen further its internal resources in order to resist the negative pressure brought about by external factors. Audi as an internationally recognized company operates in an environment where such influences are felt all through. This partially explains why the company is continually involved in service and product differentiation is the main strategy of creating a competitive edge over other players in the market (Kotler & Keller, 2011). Amongst the many external factors that influence Audi, competition is the most notorious one. PEST Analysis Political While this is one of the factors that are often ignored, political landscape of a country is likely to affect businesses operating within its borders. While such factors may not very direct and pronounced, they may end up affecting the businesses. In the specific example in Australia, there are a number of policies that have been formulated by the political class that have had an impact on the locomotive industry. One of such laws is the regulation by the federal government to limit the carbon dioxide emission by vehicles to 140g/Km. this is likely to have tremendous and far reaching consequences on the entire sector. Economic In assessing the economic factors that are likely to affect Audi, careful analysis of the recent economic trends is very critical. For instance, the global economy is still struggling to recover from the effects of the 2008 Global Financial Crisis. This comes down to haunt individual players like Audi because most of its products are sold in the international market. The financial crisis experienced during that time ruined the international market and it is now struggling to recover. Social In marketing of cars, it is imperative to understand the social paradigm of each market well. The reality is that the trends are changing in relation to tastes and preferences of consumers around the globe. Whatever the market is experiencing might not have been mentionable in the past decades at all. People are moving towards customized products in order to meet their needs. Audi has a huge challenge of trying to understand the dynamic social needs of consumers around the globe in order to be successful. It is interesting to realize that customers for luxurious cars like Audi are thrilled by features like GPRS, internet connectivity and other modern inventions. Technological There are a number of technological trends that seem to be influencing locomotive industry in some way. For instance, the idea of electric cars as the solution to highly costly fuel is one of its kinds. It cannot be ignored because the entire world seems to be pondering over this. Audi ought to position itself in a way that will make it strategic to such new discoveries. Competitor Analysis Locomotive sector is perceived to be one of the most competitive sectors on the face of the earth. In the last two decades, the market has witnessed the influx in this market both by the new entrants as well as through expansive strategies by the incumbent players. Audi specializes in luxurious cars and faces direct competition from other manufacturers like Ford, BMW, Toyota, General Motors, Mercedes, etc. The above are the main players using different strategies to dominate the market. Like Toyota, the company sells cheaper cars and hence is able to sell volumes of products in order to dominate the industry. On the other hand, brands like BMW sell premium cars. Likewise, companies like Ferrari manufacture high-speed cars. Every locomotive company has its positioning strategy and this makes it possible to appeal to a particular segment in the market (Kotler, 2001). Audi, which also sells premium prices, has to deal with stiff rivalry from the above big players. Porter’s Five Forces Analysis This is a tool that has been used extensively for analysis of the level of competition in an industry. The model enables businesses to have an in-depth understanding of their competitive position in the market. The Porter’s Five Forces consists of the following forces: Threat of New Entrants In a monopolistic market, competition is likely to increase if new entrants find it very easy to enter that given market. In the locomotive industry, while there are no regulatory and legal barriers to entry, the high cost of initial investment is a huge impediment. In order to enter and successfully penetrate an already saturated market like the locomotive industry, a firm must have a lot of money for that. Even after successful entry, it is very difficult for a new comer to compete with incumbent bigwigs like Toyota and BMW. This is to imply that the threat of new entrants is quite weak. Bargaining Power of Suppliers In trying to gather some information about the relationship between Audi and its suppliers, I had to do some background checks and researches. The basic information that I gathered from a few sources points to a positive relationship between Audi and its suppliers. Based on the conversation I had with one of the staff members working with Audi, the company has a very good relationship with its suppliers. Bargaining Power of Customers Customers in the current locomotive industry have a wide range of choices to make in relation to which car they want to buy. Since customers have so many options before them, they have very strong bargaining power. Threat of Substitutes This is definitely a concern to Audi. This is because there seems to be a series of substitutes in the current market. While a car is meant to facilitate the transportation of people from one place to a different destination, there are other sources which can be used to perform the same role. Some of these sources include buses, airplanes, electric trains, etc. Individuals may opt to use these others as substitute for cars like Audi. Customer Analysis Audi sells premium cars as already explained before. The main segment targeted by the company consists of premium individuals. These are individuals who are in the middle and upperclass. They are mainly young people between 25-40 years of age. They represent the techno savvy generation who are keen on embracing technology even in their private cars. Currently, the company has not managed to differentiate its products to the level that it can appeal to other segments of consumers like the lower class individuals. Therefore, the price of products has made it difficult to be bought by just any individual. As a matter of fact, the company’s positioning is on the basis of the quality cars. Internal Analysis of the Organization Brief History Audi has undergone tremendous transformation since the company was originally established in 1932 in Chemnitz Germany. The company has entered a number of mergers and different business partnerships in order to attain the kind of milestone the company has achieved. The company has been growing on the slogan ‘advancement through technology’. Ever since, the growth in market and share and overall brands has been quite robust.Increased sales have motivated diversification as well as expansion strategies by the companies. Currently, the company is keen to take advantage of the market in emerging economies. SWOT ANALYSIS Strength Audi is a household name for most customers. The name of the company is much known and this is a very big strength. The company’s positioning which is based on quality has helped the company build its brand. Internationally, the company has a good reputation and good percentage of brand loyal customers. Weaknesses The company has failed to come up with other cheaper models in order to appeal to a wider market. Instead, the company has created the perception that this is for those earning huge sums of money and hence weakening its market share. Opportunities There are a myriad of opportunities that Audi is exposed to. There are new opportunities in the emerging economies like china, Singapore, Malaysia, Indonesia, etc. The company simply needs to be strategic in venturing into these markets to explore the available opportunities. In addition, the company is in a position to broker acquisition deals that will enable it bolster its market leadership in different markets. Threats There are a number of policies that have been passed not just in Australia, but also in other countries that may have a huge impact on the productivity of the company. For instance, the limit put upon the rate of emission of carbon dioxide is likely to have dire consequences on cost of production. In addition to that, it is true that countries are yet to fully recover from the economic crisis experienced in 2008. This shows that many consumers are a bit strained. In the same way, another threat is high competition. As discussed earlier on, automotive industry is very competitive and therefore players must be sensitive to be innovative enough in order to remain viable in the organization. BLUEPRINT The blueprint depicts the various phases through which services are offered to the clients. It is clear that one of the main services offered by Audi Gold Coast vehicle service is servicing of cars. The clients simply make a call when their cars require servicing and the next thing is the Audi management sends one of their staff to pick up the vehicle. Upon completion, the vehicle is returned to the customer at the designated place. Physical Evidence In a service blueprint, physical evidence is a depiction of the environment within which services are delivered to the customer. This setting definitely includes the machines that facilitate delivery of the service to the customers. Car lifting machine This is one of the common machines that are found in almost all car serving bays. In the Audi service department, this was one of the machines that I spotted in the bay. This is a simple device with multiple protection enhancements. Such machine provides a lot of confidence on the part of the customers knowing that the car shall be handled with a lot of care. The presence of the machine speaks of an ambient environment for the servicing of the car. Tire Changers Another element that was seen in the servicing bay was the tire changer. This is an essential element that is used to change tires whenever there is need for that. These were several of them probably for the sole reason of attending to many cars at the same time. This is critical in reassurance of the customers that their cars shall be serviced within the shortest possible time. In the same way, the technology involved in this is quite influential to the customers since it creates a feeling of high-tech services. Car oil recycling machine The machine is used to recycle oil in the customers’ cars. The machine has the capacity to restore the oil that has been used to its required volume. From the information I gathered, the machine is smart when it comes to getting rid of filtration elements that have been trapped as well as the fabrics. In addition, I was informed by one of the service managers thatthis machine uses air backwash technology for pipe cleaning. All this points to a great experience on the part of the customer because of the technology being used is an indication that good servicing is done on his car. Potential Fail Points From the service blueprint above, there are points where failures are likely to take place. Such points depicts weaknesses on the part of the service blueprint and the organization ought to seek ways of ensuring that indeed such areas are properly reinforced in order to guarantee the best customer experience all the time. The following are some of the fail points that require proper reinforcement: Locating the customer In some cases, it may be challenging to locate where the customer is. Considering the fact that the company usually collects cars for servicing from the customer and returns the same cars to them, location is very important. Situations are likely that the customer fails to provide accurate information of where he is or wants the car returned. This can be challenging to return the car within the promised timings. In such cases, the company is expected to put measures in place that can help in locating the customer. Such measures include the GPRS locating devices which uses the internet to help locate where the car is. Inability to meet the demand It is obvious that the number of cars requiring service is not constant. There are days when the company has to deal with unexpected number of cars. One of such contributing factors is the drastic changes in weather conditions. Therefore, in simple terms, there are days when the company has to struggle dealing with a fleet of cars. This can be a challenge in meeting the demands of the customers including delivering to them at the right time. Manpower will always be an issue since this is a service providing department. Therefore, the company must do its estimation well in order to put in place measures that will help it meet all the needs of customers. Some parts running out of stock It is clear that sometimes parts may run out of stock. If this happens, the scenario created is that a client’s vehicle has been picked for servicing only to realize that the parts that require changing are not in stock. This means that meeting the client’s expectation of the car being delivered to him within the set time can be close to impossible. This can happen because different cars require different spare parts which may not be in stock at that time. This can be disastrous so to say. In this case, it is important for the organization to put in place measures that will cushion it against all this. Application of Service Blueprint Using service blueprint in marketing In analyzing this, it is important to realize that service blueprint is a tool of marketing strategy. It can be used by the organization in its positioning strategy in the market. An organization is able to position in the market based on its capability endowments which can be reflected in the service blueprint. The service blueprint can provide a visual image of what the marketer is expected to communicate to the target audience. The blueprint communicates the optimal customer experience that the organization offers to the market. Using service blueprint in human resource management In a service offering organization, most employees are in constant interaction with the customers. For this reason, they benefit in diverse means from the service blueprint. The service blueprint will help the employees understand what the customers expect at any given point and put in place measures to ensure they meet such expectations. In the same way, this blueprint can be used for employee appraisal which is very important to the human resource arm of the organization. Using service blueprint in operations One of the key functions of the operations team in an organization is managing fail points. The operations team ought to have a deeper understanding of the various points where failures are more likely to occur. With this in mind, they can put in place methodologies to control or minimize possible failures. Therefore, they benefit a lot from the service blueprint since it provides details concerning the same. The Audi services Location and physical evidence Audi automotive repair and maintenance specialist who mainly offer services from their retail shops and service centers located in most major cities in the world ensures that the shops are located at strategic places to capture their customers as easy as possible. The retail centers are also furnished in way that they are able to capture the attentions of many passersby as shown in the photo. In addition Audi retail and repair centers ensure that the shops are stocked with as much customer demanded requirements as possible. For example in an Audi center you will find tire replacements, puncture repairs, general Audi services among others. They are a one-stop-shop center where they provide all the Audi service needs. (Audi, Burgess, Kajitani, Kamishima,& Sperry, 1999) Technologized services Audio cam video services Before one visits the Audi center for a service the service provider makes a call to the customer and enquires more about the work that the client expects to be done. They ask the customer whether there could be any other extra service that they may need. This helps the company to plan ahead and be prepared to offer quality services according to the customer’s specifications. It also enables the service provider not to make unnecessary guesses concerning the vehicles’ problem, thus saving on time and energy (Zhi-hong, 2008). Audi also offers Audi cam video services. This is done by the well trained technicians; if during the service or repair they discover another previously undiscovered problem with the vehicle, they send the owner an audio cam video. This helps the customer to know what needs to be done to his/her vehicle wherever and whenever they may be. The video shows the client what exactly is needed for the problem without any exaggeration or forged information.(Denton, 2011) Telephone confirmation Well trained technicians Online booking and pricing Audi services are booked online so that at any time and at any place the clients can access the services at the time of their need. This also enables the client to clearly state and specify what he/she needs to be done. To make the online marketing more pleasing and easy to the clients Audi centers offer fixed prices for the various services and repairs. The customers all over are guaranteed to pay the same price for any given specific job done for them. This service price match also makes it possible for the company to advertise and market its services efficiently. Client are also aware of the costs even before the service is offered, this gives them more confidence on the services offered to them.(Denton, 2011) Delivery and courtesy car services Audi services makes their services more convenient by going to collect the car from their premises and deliver them back immediately the car is repaired. Moreover Audit services offer a courtesy car to the client as they repair the client’s car.(Schretzenmayr,1999) An all-inclusive quote Audi gives its customers an accurate quote, every time and charges no fee for that. Since the prices are fixed at all audit centers the price quoted is normally the final and has no hidden charges. This further helps the clients to remain as loyal consumers for the company’s services. Audi also gives offers frequently to its consumers so as to encourage them remain for the services.(Zhi-hong, 2008) References Audi, A. E., Burgess, L. E., Kajitani, M., Kamishima, K., & Sperry, R. H. (1999). U.S. Patent No. 5,995,723. Washington, DC: U.S. Patent and Trademark Office. Bitner, M.J., Ostrom, A.L. &Morgan, F.N. (2008).“Service Blueprinting: A Practical Technique for Service Innovation,” California Management Review, 2(10): 12-17. Denton, T. (2011). Advanced Automotive Fault Diagnosis: Automotive Technology: Vehicle Maintenance and Repair. Routledge. Gallas, V. (2012).Blueprint for an Escort Service. New York: CreateSpace Independent Publishing Platform. Kotler, P. (2001).Kotler on Marketing. London: Free Press. Kotler, P. & Keller, K. (2011).Marketing Management. New York: Prentice Hall. Shostack, GL. (1984) “Designing Services That Deliver,” Harvard Business Review, 62, pp.133- 139. Schretzenmayr, H. (1999). Technical report: the aluminium body of the Audi A8. International journal of vehicle design, 21(2), 303-312. Zhi-hong, Y. A. N. G. (2008). The Red Flag Car of ABS Detection and Repair. Technology & Economy in Areas of Communications, 4, 031. Read More