Marketing at Triumph Spares Limited - Essay Example

Case Study Report Table of Contents Case Study Report Table of Contents 2 Executive Summary 3 Introduction 4 Situational Analysis 4 The Market 4 Competitive Environment 5 Socio-Political Environment 6 Problem & Opportunities 6 Objectives 6 Strategy 7 Action Plan 9 Financial Analysis 10 Conclusion 11 Bibliography 12 Executive Summary Marketing is the life blood of any organization. The first section of the project deals with the short introduction of the case study. The case study is all about TSL which is family owned business dealing with spare parts of vehicles. The next section of the project deals with the situational analysis of the overall case. A short description of the TSL market has been explained as well the competitive and socio cultural environment has been taken for detailed study. Also, the case study deals with the problems and the opportunities of the TSL where the main hindrances have been identified. There is a detail description of the objectives that TSL is having. Objectives are goals for the organization. Also, the paper encapsulates the strategies as well as the action plans that must be implemented for effective operation of the company and to beat competition. Last but not the least financial figures have been analyzed in order to understand the company’s performance. The research paper ends up with a dedicated concluding section. Introduction Triumph Spares Limited (TSL) was established in the early 1980, as a small family owned business. The company deals with spare parts and the business is run from two sites, one is the factory and the other is the small shop. The factory deals with the spares that are assembled from subcontracted components. The prime stakeholders of the company are Mr. and Mrs. Brian Smith who are the main owners of the company. In the early 1990s, TSL developed mail order business in United States. From the very day of commencement of the business, it was found that TSL was successful in building strong reputation by providing quality spare parts. The license for preparing the spare parts was obtained from Standard Triumph Ltd (Triumphs, 2008). Situational Analysis The Market There has been steady growth in the business of TSL from the day of its commencement with turnover of £ 4000000. The profit margin for TSL is estimated to be 50% for those who buy in bulk from the factory. Triumph Spares Limited provides spare parts to other shops as well as commercial car restoration businesses. On the other hand, the profit margin for TSL is expected to be 100% for those who buy from the shops. The shop provides spare parts to small commercial purchaser and to the general public. The company turnover follows Pareto rule, where 20 % of the turnover comes from the shop and 80 % of the turnover depends on the factories direct sales. Although the main customers for TSL are Classic Components, Spare Parts, Classic Spares, and Spare Shops and Add components. Other target customers for the company can be automobile companies, automobile service center or the vehicle owners. Competitive Environment The main competitors of the company are as follows: Classic Components Spare Parts Classic spares Spare Shops ADD components. Classic components have outlets all over the world and it is the part of huge car Spares Company. Turnover of Classic Component is £ 9000000 and that of Triumph Spares Ltd is £ 3000000. Similarly, Spare Parts is of equal size in comparison to Triumph Spares but the only difference is that Spare Parts deals with spares for quantity of Classic Marques. Classic Spares has chain of 10 shops in UK that deals with spare parts of classic cars. Spares Shop has six shops and deals with old Rover/British Leyland brands. The business turnover for Spare Shop is estimated to be £ 15,000,000. ADD Component is another biggest competitor of TSL with annual turnover of £ 500,000,000. Socio-Political Environment The customer repurchases cycle for scrap component is seen to be slowing down at TSL. This is because of the fact that the usage of Triumph cars is slowing as people consider it as old model cars (Vintage Cars). This is one important factor that is affecting the business of Triumph Spares Limited. Problem & Opportunities The main problem that has been identified is that even though the competitors are going into receivership, these companies are being taken over by the large players and offer spare parts for different manufacturing vehicles and also such large companies have huge backup of resources which in turn is making the competition stiffer. Objectives The main objective of the company is to build strong reputation by providing genuine Triumph spare parts to the customers. The other important objectives for the company can be To increase the sales revenue and increase the profitability of the company. To meet the demands of the customers through constantly seeking and acting on their opinions regarding innovation, choice and service. To provide shareholders with progressive returns on investment. To work closely with the suppliers in order to build long term business relationship. To develop the talents of its people by providing constant training and by rewarding the employees for their performance. To work for the well being of the society and contribute towards the protection of environment. Strategy A marketing strategy is a process that permits an organization to concentrate on its limited resources in order to increase the sales of the organization and to provide competitive advantage. In order to meet the objectives, the company must devise such strategies which will help them to sustain in this competitive environment. TSL can opt for differentiation strategy by providing different products from those of their competitors. The products may be the same but can be with improved features so that it leads to customer loyalty. By following niche strategy companies can outperform its competitors. TSL can select small segment of the market and strive to be the best in terms of quality, cost and timely delivery in that market. By doing so, it will enable it to establish strong niche. By using growth strategy, TSL will be able to capture the market share, generate more revenues and it will be able to pull more customers. In the provided case study, it is found that TSL is a small family owned business owned by Mr. and Mrs. Brian Smith and there has been continuous decline in net profit as well as sales revenue of the firm in the past 5 years. So, in order to cope up with such problems what company can do is, it can opt for cost leadership strategy which implies that the company must have the lowest cost of producing the goods and services. It can also opt for entry barrier strategy by being innovative or unique so that new entrant is not able to enter the existing market. Customers as well as suppliers can be locked on so that they don’t switch on to the competitors by making it costly for them. Suppliers can also be locked on by growing large and then by building economies of scale and finally threatening them that if they supply the raw materials to the competitors then supplies will not be sourced from them. TSL can also opt for customer orientation strategy by providing better customer service or by designing the products keeping the customers requirement in to consideration. Joint ventures or partnership can be created so that TSL can better serve its customers, bargain with its suppliers in terms of price and it can create monopoly. These strategies if applied by TSL will help it to sustain competitive advantage. Action Plan In addition to traditional vintage cars, TSL can go for classic models or Classic Marques which will help the company to stay ahead of its competitors. It can open up its branches all over so that the sales as well as revenue of the company increase. It can go for selling of spares for all range of classic cars. It has been found that the fixed cost for TSL has been continuously increasing over the past 5 years. High fixed cost leads to economies of scale and ultimately increases rivalry. So, the fixed cost must be reduced to minimum in order to fight competition and sustain in the market. TSL must conduct SWOT analysis in order to understand where it stands in terms of competition. The major competitors for TSL are Classic Components, Spare Parts, Classic spares, Spare Shops and ADD Components. So a thorough SWOT analysis must be conducted of TSL as well as its competitors. Establishing the most effective distribution strategy is the key to success for any organization which helps to maximize the sales as well as revenue. Distribution strategy must be such that the goods and services reach the end user at the right time in the right place effectively. TSL can determine the customers channel preferences and compare if the required preferences are available or not. If it is not available then alternatives need to decide in order to cater to the needs and demands of the customer. TSL can also go for new channels if the existing channels are not up to the mark. After sales service is the most important thing which every customer looks for. TSL can improve its servicing facilities in order to attract the customers towards it. Financial Analysis Financial analysis helps us to provide factual information. They are fiscal years data’s which shows the performance of the company in terms of profit, sales revenue etc. In the case study a chart has been provided which shows the performance of the TSL for the past five years. From the chart, it is clear that the performance of TSL for the past 5 years has been very poor. There has been constant rise in the fixed cost which in turn is reducing the profitability of the firm. In the years 2003, the fixed cost for TSL was £ 1000, 000 which has rose to £ 1010, 000 in 2004 and £ 1030, 000 in the year 2005. Similarly, in the year 2006, the fixed cost rose to £ 1050, 000 and £ 1100, 000 in the year 2007. Hence, it is found that the fixed cost of TSL was rising every year. In the similar fashion, when the figures of net profit are taken into consideration then it is found that in the year 2003 the net profit for the company was £ 1501,000, and it declined to £ 142000 in the next year. Similarly, the net profit for TSL for the years 2005, 2006 and 2007 were £1340, 000, £1215000 and £1075000 respectively. So, it can be said that there is constant decline in the net profit of TSL. Conclusion TSL is a family based business which deals with spare parts. It bought license to deal with spare parts from Standard Triumph Limited. It’s developing mail order business through which it can cater to the needs of the customers. It is backed by customer relationship database as well as ecommerce websites. It aims at building strong reputation by providing customers with genuine spare parts products. It has been found that customer repurchase for scrap is slowing down. So in order to increase the sales various marketing strategies can be adopted which help to boost the sales of such products. It is very important for any marketer to conduct a SWOT analysis as well as PEST analysis so that it can keep track of its competitors and gain competitive advantage. It is also important to identify the target market and the potential customers in order to cater to the needs of each individual. Segmentation also plays a major role in marketing of any product. In order to compete with the large conglomerate TSL must effectively implement all the above mentioned strategies. Bibliography Bohm, A. The SWOT Analysis. GRIN Verlag, 2009. Danca, A.C. “SWOT Analysis”. August 02, 2010. University of St.Francis. No Date. Hooley, G.T. & Et.Al. Marketing Strategy and Competitive Positioning. Prentice Hall, 2008. Joyner, M. Integration Marketing: How Small Businesses Become Big Businesses and Big Businesses Become Empire. John Wiley and Sons, 2009. Read More