Strategic Management Analysis
The first question must includes a matrix by plotting Key trends and uncertainties in order to create four
possible scenarios, this is followed by a six hundred word explanation of the two of the scenarios (Key
trends and Uncertainties) NOTE: Each quadrant must have a name however only the above mentioned
topics must include pointers on the matrix.
The second question nclude a stakeholder map or a (power/interest matrix)followed by four hundred
words explaining the impact to the organization both positive and negative.
STRATEGIC MANAGEMENT ANALYSIS 2
Strategic Management Analysis
1.0 In the automobile industry, key trends on the habits of consumers towards the purchase of
automobiles have been identified. To survive in the increasing global automobile markets,
automobile companies are looking at the increasing demand for cars in the expanding middle
classes in the developing nations for market share and profits since demand in the mature global
markets are beginning due to factors such as the global recession and the high fuel costs. Market
growth in developing nations has become a new trend in the current automobile landscape and
many big companies. This has led to the development of corporate partnerships between many
automobile companies making diversification into emerging markets and corporate mergers as
the key to success, while automobile suppliers are focusing on expanding their logistics and
distribution as they build new plants in the developing markets (Prideaux, 2011).
Another key trend in the automobile industry is the increasing demand for
environmentally friendly hybrid cars. Eighty five percent of automobile companies are
increasing investments in research and development in order to produce better innovations in
power electronics, battery technology, better fuel efficiency, and lower carbon dioxide
emissions. This is because the e-mobility of cars is beginning to be an important global goal in
order to reduce the increasing cost of fuel and fuel consumption. The craze for pure electronic
cars has gradually reduced to the acceptance of hybrid cars and the internal combustion engine
improvement (Bishop, 2005). The customers in the mature markets are also getting rid of less
fuel efficient cars and focusing their attention on more fuel-efficient cars and hybrids. Fuel
efficiency and the improvement of the internal combustion engine have resulted from the
STRATEGIC MANAGEMENT ANALYSIS 3
changing urban environment. In the developing world, sixty-six percent of the rising middle
class is more comfortable with owning bigger cars such as SUV’s (Plunkett, 2003).
Uncertainties still exist as to the increased excitement of hybrid and fuel efficient
technology from the customers. Customers on a global level are increasingly demanding fuel
efficient cars that will reduce their fuel costs. However, a recent trend has been arising where a
quarter of automobile companies are reducing their ICE research and development budget with
China leading at 40 percent (Graves, 2003). 24 percent of the companies are continuing to invest
in plug in hybrids, which have also proven to be cost effective in terms of fuel efficiency and
consumption. Only eight of the automobile companies in the survey were keen on enhancing
their battery technology while 12 percent did not know their research and development budgets.
The use of cars in urban centers and the increase of traffic jams in many of these areas will lead
to serious legislative agendas towards the use of cars in urban centers. Eighty three percent of the
respondents who were interviewed in the KPMG global automotive executive survey for 2013
identified that the impact of vehicle design is likely to impact greatly in the new urban city
development and design.
Cash cows are viewed as the products of a company that have a high market share in a
slow growing market. The slow growing markets are mature industries and hybrid and fuel
efficient cars are the most demanded for cars in this market. Hybrids are the new thing with cash
generating properties and therefore should be incorporated in the growth strategy for better place.
Cash Cows Dogs
Question Marks Stars
STRATEGIC MANAGEMENT ANALYSIS 4
Dog products in the industry include investment on battery technology and as much as this
business unit provides social benefits and synergies that assist other business units’ better place
should not consider investing in battery advancement unless they are directly related to the
production of more efficient hybrid vehicles for the mature markets. The high market growth
sectors in this industry are the developing world but vehicles especially those that sell for a
higher margin have a low market share (Brown & Flavin, 1979). Due to their potential to sell
more cars in the emerging and growing middle class market and gain the market share to grow
the business. Therefore, the emerging markets need to be penetrated well to determine if these
markets are worth investing in order to grow the market share to become stars.
2.
HIGH POWER –
Customers
HIGH INTEREST –
shareholders
LOW POWER –
employees
LOW INTEREST –
government agencies
Power
Interest
The stakeholders in the automobile industry are made up of various groups including the
shareholders of automobile companies, the employees of these companies, the customers,
dealers, communities, government agencies and regulatory bodies and suppliers. The success of
every company depends on employee involvement and support. Positive relationship between
employees and the owners of the company who are shareholders help improve efficiencies, cost
effectiveness and increases on the quality of the products. It also allows for more development
and innovations as these stem from environments that foster and enhance inclusivity. Effective
communication with customers helps to deliver the products that customers want and they are
therefore high interest stakeholder groups (Eskerod & Jepsen, 2013). The suppliers are also
STRATEGIC MANAGEMENT ANALYSIS 5
stakeholders with a high power and low interests as the company largely rely on them for vehicle
parts. Supplier involvement is also important in the development of competitive global
advantage for these companies. Engaging suppliers in the production and distribution processes
also ensures that they identify and implement safety measures as well as determine quality cost
and productivity improvements. The dealers are also important stakeholders for the companies
they are involved in the sales and distribution areas. They need support from the company in
many ways including programs that impact positively towards the environmental impacts in the
supply chain. Community groups, the local police and other safety organizations are
stakeholders with low power and low influence. However, they still matter as stakeholders
because they live and work in the communities from which the automobile companies operate.
They also make up the customers who buy automobile products. Companies also need to partner
with road safety initiatives and organizations including the local traffic police in order to market
their products as safe and also ensure that they deliver and communicate to the local
communities about the dangers of not pursuing safe driving behavior and following traffic rules
(BPP Learning Media, 2012).
The state governments from which these companies operate are also key stakeholders in
the operations and running of these companies. Usually, they provide the basic framework in
which these companies operate and usually provide tax laws and government incentives on tax
payments. A positive relationship and support from the federal and state governments as well as
other governing and regulatory bodies by the company, together with goodwill from the people,
impact the success of a company. Governing regulatory bodies include environmental agencies
that deal with carbon dioxide emissions.
STRATEGIC MANAGEMENT ANALYSIS 6
References
Bishop, R. (2005). Intelligent vehicle technology and trends Boston, Mass.: Artech House.
Brown, L., & Flavin, C. (1979) the future of the automobile in an oil-short world Washington:
World watch Institute.
Buckley, P. (1999). The global challenge for multinational enterprises: Managing increasing
interdependence. Amsterdam: Pergamon.
Eskerod, P., & Jepsen, A. (2013) Project stakeholder management Farnham, Surrey, England:
Gower.
Graves, A. (2003). International competitiveness and future trends in the world automobile
industry Brussels: EC.
Media, B. (2012). CIM 4 Stakeholder Marketing 2012 Study Text London: BPP Learning Media.
Plunkett, J. (2003). Plunkett’s automobile industry almanac Houston, TX: Plunkett Research.
Prideaux, B. (2011). Drive tourism: Trends and emerging markets. London: Routledge.
