Skoda: Business Strategy Analysis

Skoda Company and its business

1. 1 Advantages to Skoda Company

The two cyclists, who were known as Vaclav Laurin and Vaclav Klement, are considered as the founders of Skoda Company. Both cyclists were used to design and produce their own bicycles and finally it was set up as Skoda. In 1925, Skoda was set up in Czechoslovakia and eventually, it was expanded towards Eastern Europe by producing autos, plantation ploughs, and aero planes apart from bicycles. Skoda must cope with crisis in company history such as warfare, economic problems as well as the changes in the politics environment. While the Skoda is developed internationally, there was a requirement of a strong foreign spouse. By, 1990 Volkswagen AG acquired dominated by getting started with Skoda. Volkswagen AG is known as the primary car maker in European countries by manufacturing variety of top quality products such as Volkswagen, Skoda, and Audi (Skoda Car, 2011). The impressive thing is the Skoda UK is providing Skoda autos through its' indie network of skilled dealers.

1. 2 Business as a change process

In common, there can be an input and end result can be evidently identified in an enterprise. Input may consist of working make, entrepreneurship, capital and land. Output may be goods and services. Therefore, the procedure of change is common for all the organizations and most of the time, result can be considered as a blend of goods and services (Oxford School Press 2007). For a good example considering the hospitality as a company foods and beverage could possibly be the goods they serve and the lodging will be the service they offer. The critical thing is to be produce outputs which may worth higher than the inputs. In financial conditions, it is known as the profit with regards to the organizations which expect profits. But, regarding non profit focused organizations such as institutions and private hospitals other indicators are being used to gauge the progress. Transformation varies from business sensible. The critical thing is to implementing innovative methodologies of value addition for the products and services while cost reducing (Oxford University or college Press 2007). Value addition can be done by developing outputs that the clients are ready to pay money more than normal price. Since the brand may be offered with customers' lifestyle and choices, effective branding cause superior sales. For a good example, plain pair of shoe can be marketed to an increased price by branding it with brands like Nike or Addidas.

Chapter 2

Organizational audit and the business environment

2. 1 Organizational Audit

Organizational audit is critical for a small business to meet the following objectives.

  • To analyze their organizational framework, strategies and flow graph.
  • To check out the contest between the job descriptions, duties and the stream chart of the business enterprise.
  • To stress the unsatisfactory aspects of the current composition of the business.
  • To define development pathways for improvement of the business enterprise.

To gratify these objectives organizational audit is being done by analysis of existing data, overview reporting, individual interviewing processes and research of raw data accumulated through the surveys. Organizational audit is vital for a small business to handle the business enterprise environment.

2. 2 Business environment

It is believed that business transformation process may not occur in vacuum pressure. Firms are driven in particular frameworks and subjected by the business enterprise environment. Business environment can be divided in to two.

Micro

Macro

Micro environment consist of individuals or organizations that your business package with a normal basis. It may include customers, employees, marketers and suppliers which can be known as the stakeholders. That all components may hold the direct engagement of the business enterprise activities and it could be afflicted by the actions of the business. Therefore, it can be figured micro environment play a vital role in the success and the patterns of the business. The macro environment may contain factors that are lying outside of the immediate control of the business. It includes economy, policies of the government and also the public changes. Since these macro factors can generally change the environment of the business one individual business can rarely do much on its own to condition them. Theoretically, the macro environment can be examined by using PESTEL examination. (Scott, 1982)

Chapter 3

The PESTEL evaluation for Skoda Company

PESTEL Analysis

PEST examination is the technique of inspecting the macro environment in the majority of the countries. But, the widened Infestation model which is recognized as PESTEL is often found in UK (CIPD, 2009). PESTEL is stand for Political, Economical, Sociable, Technological, Environmental and Legal evaluation. It details the outline of macro environment in relation to the business enterprise environment.

Referring to the politics factors, it consists of policies applied by the government including the involvement in the economy. It also includes the type of goods and services to be produced and the priorities with regards to the business support. The political decisions may play a vital role for a few businesses that are related to education health and also in the infra composition facilities. Taking into consideration the Skoda Company, the changes in laws and regulations such as accounting requirements, taxation requirements and environmental regulations and legal power of the foreign states may influence on their business especially in the international trade. Therefore, it is advisable to monitor the governments' regulations and rules in a continuing manner. (Lynch, 1999)

Economic factors can include economic growth, interest rates, exchange rates as well as the inflation rate. Those are the factors which may have the potential to make results on procedures and decisions. Discussing Skoda, interest rate may have an impact on its' cost of capital. Therefore, it determines the amount of the expansion of the business enterprise and expansion. Exchange rates may have an effect on the expenses of exporting goods and the supply and price of brought in goods.

Social factors include social aspects, health perception, population development rate, age syndication, career behaviour and emphasis on safeness. Changes in public factors impact in the product demand and operation. For example, aging process may generate smaller and less-willing workforce. This may lead to increasing the labour cost. Therefore, referring Skoda to handle these trends there must be various management strategies to be used. For an example, it ought to be more concerned on age limit of the employees when recruiting new employees.

The factors such as rate of technical changes, automation and the complex inducements altogether regarded as technological factors. Those factors may influence with the outsourcing decisions, market entry barriers and reliable production level of a company. When contemplating the Skoda, it is producing branded motor vehicles. Therefore, technology should be their main concentrate. Because, it creates opportunities for services and product improvement with regards to the marketing. As the technology advancements, new products may start. (Scott, 1982)

Ecological and environmental aspects such as weather, local climate, and local climate changes can be viewed as as environmental factors. Those factors may especially affects industries such as tourism, farming, and insurance. Furthermore, growing knowing of the potential effects of weather change is affecting how companies operate and the merchandise they offer, both creating new market segments and diminishing or demolishing existing ones.

Discrimination rules, consumer laws, antitrust law, work law, and health and safety law can be considered as the element of the legal factor. These factors can impact with the operation process, cost of production and the demand for the merchandise. Legal aspect mainly targets the result of the countrywide and world legislation. The Skoda Company obtains all the protection under the law applicable in the type of these business and every inventions and product trends are always going into the trademarked process. I. e. Audi, Skoda.

The PESTEL factors are coupled with exterior micro-environmental factors and inner drivers in relation to the business. Furthermore, it could be discussed as opportunities and hazards in a SWOT examination.

Chapter 4

The SWOT analysis for Skoda Company

SWOT Analysis

SWOT is stand for Strengths, Weaknesses, Opportunities and Dangers. Strengths serves as a internal components of a company that lead to its' expansion. Weaknesses can be discovered as the features that can make disturbances business or make the business susceptible. The external conditions that may lead to future expansion are known as the opportunities in SWOT. Hazards are referred to as the exterior elements which could make negative effects on the business. (Lynch, 1999)

To recognize its strengths, Skoda accumulated information through studies from both customers and also from the reliable independent surveys. For a good example, annual JD Ability customer satisfaction survey had questioned the automobile owners about their feelings on their vehicle for previous half a year by using questionnaire for approximately 20, 000 owners. Based on the results Skoda dominated in the top five car manufacturers for previous 13 years (JD Power 2010). Not just that, in 2007, Top Gear's survey revealed that one of the 56, 000 visitors Skoda dominated as the main car company (Top Gear 2007). Matching to the people results, Skoda discovered that the business excelled at gratifying its customers when centering the owner experience rather than on sales only. Almost all of Skoda's customers would recommend Skoda top quality vehicle to others, means that Skoda acquired a distinctive strength. Because of this, Skoda manufactured cars that their customers could enjoy, rather than simply making the most of the sales. Therefore, Skoda brand themselves as a quality product that satisfies its customers.

Skoda's analysis showed that in order to grow the business required to address issues about how precisely the tiny company match the highly competitive market. An out-dated conception of the Skoda brand, related to the company's Eastern European roots, added to the business' small size. By 1999, Volkswagen AG ownership had evolved this negative attitude about Skoda. But, in 2006 brand Health Check unveiled that the weak and neutral image in middle market range is still existing when compare to the Ford, Peugeot and Renault like brands (UK Branding 2006). Though, Skoda still deficient of a solid appeal, it is recognized that the company needed to decrease the defensive campaigns exemplifying what the brand was not and commence new promotions illustrating what Skoda acquired to provide. The change was simple and Skoda recognized that its owners were satisfied with their autos.

Skoda had noticed that its competitors' marketing approaches are mainly focused on the merchandise itself. But in contrast, Skoda will focus its attention on emphasizing the owner's experience with their cars and the customers' satisfaction with Skoda vehicles. This SWOT evaluation may lead Skoda to distinguish its product from its challengers.

Considering the united kingdom market, there are 50 different car creators reselling around 200 vehicle models. To make it through in this large and competitive market, Skoda had a need to ensure that its message would not be lost or drowned out within the crowded environment. Because of this, Skoda had manufactured seven different vehicles such as city car, luxurious car, and family car dealing with different market sections with subsequent degrees of pricing.

Chapter 5

The arranging a business and implementation a new strategy

5. 1 Strategic planning, Tactical planning and Operational planning

Depending on the PESTEL and SWOT examination, the business arrange for the business should be created by the management of the business. Planning process can be discovered as three phases such as tactical planning, tactical planning and functional planning.

Strategic Planning can be viewed as as a long-term planning attempted by older management of your business. I. e. the executives. It includes making decisions that may work toward achieving an organizations quest and vision claims.

Tactical planning it the middle term planning. It may range from weeks up to about two years. This calls for middle management those who plan ways of achieve a business's' tactical goals.

In contrast, operational planning is boring planning handled by front brand managers. They may are accountable to middle management and enact the knee work of the strategies produced by middle management to achieve strategic goals.

5. 2 Implementation of the new strategy

Novel business strategies are made to enhance the overall utility of a business, its employees and increase success of the business enterprise. But change may be troublemaking and can be costly within its framework as employees offer with new methods, it, products or an organizational matrix. To reduce the cost, disruptions and unwanted effects of applying new strategies, it should implement a technique for implementation. Essentially, a planned and accomplished implementation plan can lead to reduce confrontation to the changes. The procedure of implementing a new strategy can be discovered as six major steps (Kaplan and Norton 2010).

  1. Split the new strategy into smaller servings.
  2. Aware the employees about the map of change
  3. Create and post a scorecard for the new implementation, supporting as a cheerleader to employees throughout the procedure that success is reasonable step wise.
  4. Acquiring the opinions about the new strategy at each stage by employee surveys.
  5. Request customer satisfaction.
  6. Doing the right changes in the new strategy, time scale and goals based on feedback and client satisfaction.

5. 3 Conclusion

With the focused research of the PESTLE, the Skoda Company will continue to emerge and develop if they manage to find solutions in different challenges that the whole business might face in the future. Since the external environment is extremely complex and powerful it's important to performing the PESTEL in a regular basis. Practically, it may well not possible to recognize virtually all the significant changes in the business environment. But, still they may in a position to find some of those critical changes through their assumptions and that will cause them to take the right decision in the foreseeable future. At the moment the PESTEL composition is further expanded as STEEPLE and STEEPLED by taking into consideration the honest and demographic factors. Therefore, it could be important to adhere to this latest model, because in a few businesses those factors regarded as critical. To boost its performance, it can be needed to execute a brand setting exam by obtaining general market trends data from both internal and external audits, allowing Skoda to perform a SWOT research.

Skoda's SWOT analysis may facilitate the business to show that customer satisfaction by purchasing their products. Not just that, it also reveals that the brand was no longer regarded as a poor, outdated car, the company was able to operate within a position in the market, and that a change in public understanding was very important to Skoda's capability to increase within an extremely competitive market.

SWOT evaluation makes the natural information which might compiled from a survey directly into an order therefore, it may support managers to investigate both internally and externally. Therefore, it may also highlight the key internal weaknesses of the business, and also the strengths what the management should be alert on the business. Depending on the SWOT and PESTEL research, it is required to implement a new business strategy. The critical thing is to use that new business strategy without disrupting the business enterprise.

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