Evaluation of Growth Potential of Audi in Indian Automotive Market

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This report evaluates the growth potential of Audi in the Indian automotive market and proposes growth strategies using frameworks such as value chain analysis, Porter's five forces analysis, and Ansoff growth matrix. The report includes data collection sources such as Audi's annual report, Ecomonitor passport, and IMF. The report also provides recommendations for the company to expand and improve its framework, create a culture of quality, work with suppliers, use technology to connect the supply chain, and more. The report is based on secondary collected data and qualitative methods.

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Contents
Contents...........................................................................................................................................2
1) Executive summary.....................................................................................................................3
2) Scope, aim and topic of the report...............................................................................................4
2.1 Scope of the report:..........................................................................................................4
2.2: Aim of the report.............................................................................................................4
2.3: Topic of the report...........................................................................................................4
3. Background to Audi.....................................................................................................................5
4. Data collection sources and analytical methods..........................................................................7
4.2 analytical techniques justification..............................................................................................9
4.2.1 Porters five forces:................................................................................................................10
4.2.2 Value chain analysis explanation and justification...............................................................12
4.2.3 Ans off growth matrix...........................................................................................................16
5. FINDINGS.................................................................................................................................16
5.1 RESULTS OF THE EXTERNAL ANALYSIS: PORTER`S FIVE FORCES.......................16
5.1.1 INTERPRETATION OF EXTERNAL ANALYSIS FINDINGS........................................18
5.2 results of internal analysis:.......................................................................................................20
5.3 RESULTS AND IMPLICATIONS BASED ON THE ANSOFF MATRIX ANALYSIS......21
6. RECOMMENDATIONS...........................................................................................................21
REFERENCES..............................................................................................................................22
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1) Executive summary
The present research has taken out information about the company AUDI. It has
conducted Porters's analysis, SWOT analysis, VRIO analysis and Ansoff matrix, these have
helped in finding out the opportunities, strengths and threat of the company. This helps business
to move towards growth and success.
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2) Scope, aim and topic of the report
2.1 Scope of the report:
The present report is focussing on the way a particular organisation is willing to expand itself in
some of the existing markets by application of some suitable growth and development strategies.
It is a critical process for the purpose of ensuring survival of a organisation in long in case of
various expanding industries.
Selected industry is automotive industry that is willing to expand itself in some markets. In the
time period of last 10 years there is increase in the ownership by 8 percent and the overall
sending on the motorised vehicles have also enhanced by 34 percent. It becomes important for
the industry to analyse the overall potential of growth with respect to the way there can be future
expansion. Audi is selected as the present automotive brand that has to be expanded to INDIA
that is a developing country. Audi is a German automobile manufacture brand that is designing,
engineering, producing, marketing and further distributing the luxury care vehicles. It is a
subsidiary of the Volkswagen group and is having its roots in Bavaria, Ingolstadt and Germany.
2.2: Aim of the report
The aim of the report is to make evaluation of the BMW’s growth potential and strategies in
Indian automotive markets for proposing growth strategies for expanding by using of framework
such as value chain analysis, porters five forces analysis and ansoff growth matrix.
2.3: Topic of the report
The report is based on evaluation of growth potential in Indian automotive market so that there
can be appropriate strategies that have to be formulated based on the analysis that will be done
by application of ansoff growth matrix.
With the changing external environment there are many emerging markets that are offering
opportunities of growth and expanding for may automotive brands. For this purpose it becomes
important to make an evaluation of the way these countries can offer some opportunities of
growth and development to such automotive brands. In the recent reports as per news articles
India has been rated as the second most attractive and emerge markets after china as per the
recent report. With considerations of the high visibility indicators across leading markets the
relative position of India has improved both selectively and overall. There are various indices
that are looking at reach economic activity such as financial reports, composite scores are

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reiterating a practioner of nation’s recovery and after that now India is one of the big countries
behind only turkey and china that has managed to achieve a positive GDP growth in the fourth
quarter of year 2020. With the proper capital outflow it can be said that the bond market of India
is concerned with the rising inflation and public debt. There is posting of higher inflation than
numbers that is leading to better prospective of growth for various other sectors.
3. Background to Audi
Audi is a German automobile manufacture that is engineering, designs, produces, markets and
distributes luxury vehicles, and it is a subsidiary of Volkswagen group. The origin of the
company is complex and is leading to foundation of auto union in 1932. The modern era of audi
essentially started in 1960 when Auto union was acquired by Volkswagen from Daimle Benz.
After launching of Audi brand in the year 1965 there was introduction of Audi F103 series.
Sales revenue and earnings:
The Audi brand sales revenue in year 2020 is amounted to 50.0 (55.7) billion. There is decrease
in volume and negative exchange rate reduced the operating profit before special items 2.7 (4.5)
billion Euros. There is reduction in the fixed cost there deconsolidation effect from
disinvestments of autonomous intelligent driving GmbH (AID) as well other effects from Audi.
The diesel issues has resulted in special items of €−0.2 billion in the reporting year. The overall
operating return on ales before the special item was 5.5 (8.1) percent, the financial key
performance indicators of Ducati and Lamborghini has include the financial figures of the Audi
brand. Audi is pursing clear goals for not only striving to secure the long term competiveness but
to meet the interest groups for conducting business in a more value oriented way by staying for
upcoming future time period.
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Source: Audi's operating profit from FY 2002 to FY 2020
The graph represents the operating profit of Audi from the fiscal year 2002 through the fiscal
year 2020. In the fiscal year 2020 he operating product of Audi amounted between 2.5 and 2.6
billion euros.
Business development: In the present scenario Audi can focus on “vourspring” which is Audi’s
global brand promise that is redefined b brand with four rings that moves away from the narrow
focus towards technical feasibility. The brand is willing to adopt a complete new approach where
customer is at the centre. There is development of innovative technologies where Audi is playing
an influential role in group. Audi has also created a an agile unit for some of the new projects
where the initial focus of the team is towards passionate specialists who are provide with large
degree of freedom. There is development of high efficient electric car. For instance AZrtemis is
tithe role model for upcoming future development of various vehicle projects in group. In the
reporting time Audi rolled out second model as part of e-term product line. Audi e –torn sport
back is a SUV coupe that is combined of the power of spacious SUV with elegance of four door
and there is a progressive character of electric car. This electric drive offers up to 300 KW of
power with a high performance version that is capable of delivering of 370 KW. The e-tron in
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digital matrix LED headlights is the new optional feature that is available for first time in large
scale production of vehicles. The legit can be broken in tiny pixels and that can be controlled
with exceptional precision. It makes the safe lane centring much easier on the narrow starches on
road and is growing the position of ceciles in lane. Production of all electric e tron GT
commenced at end of year 2020. The Q4 e-tron and the Q4 sport back e-tron can expand its
portfolio of vehicles in the year 2021. There are many new model generations that have been
launched in popular A3 series during his reporting year. In recent years it can be said that amid
all the difficult marketing environment AUDI brand has been able to deliver 1.7 million vehicles
to its customers in year 2020. The recovery is important for core markets in the second half of
the year as it was able to largely compensate for the volume losses that occurred in first half of
the year because of the pandemic. The overall unit sales that have been made in the reporting
period came to 1.0 million vehicles. The Chinese joint venture FAW-Volkswagen has sold a 656
thousand locally produced Audi vehicles. In year 2020 Audi has also produced 1.7 million units
worldwide. Lamborghini has manufactured 7,250 vehicles.
4. Data collection sources and analytical methods
The present report is based on using of secondary collected data that is acquired from
various multiple sources that is presented in the table mentioned below. For this purpose there is
use of qualitative methods in order to make a analysis of the BMW’s growth potential in the
Indian automotive industry so that further there can be determination of strategies in accordance
with the specific requirements.
Selected data source Justification
Annual report Audi Annual reports are the yearly reports of a
organisation that include all the specific
information with relevant figures, facts and
all the detailed information with respect to
particular organisation. It includes a
management report that is based on the
vision, mission strategies, risks,
opportunities operations and the overall
future outlook of a business along with
various financial statements it is on the

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interest of the organisation to present the
information positive manner so that it is
available to all the interested parties. There
must not be any type of misleading
information that is part of annual reports. In
case of present report the use of annual
reports is very helpful for the purpose of
having all the relevant specific information
that is related to the organisation. It helps in
determination of the correct strategies that is
required by Audi in order to expand its
position and market share in India. The
annual report of Audi is one of the most
reliable sources for the purpose of having
company specific information that can lead
towards formulation of strategies along with
all the information that is required in
quantitative or numerical form.
Ecomonitor passport Ecomonitor passport is a unbiased data base
that is use of the purpose of having a
strategic market research data that is related
with industries, countries, economies and
customers who are part of 781 cities and in
210 countries, it is used by analysts across
100 countries so that there can be
information related the industries, local
markets and companies, the global industry
is a specialist team that is used for the
purpose of ensuring that research is
consistent and is properly conducted. It helps
in having a reliable information base of the
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present opportunities of growth in the
markets of India as a growing sector for
luxury cars.
IMF The international monetary fund includes the
information and data that is related to 189It
is recommended that the company must
follow the proper growth strategies in order
to expand and improve the framework which
is already in use by the organization.
Creating a culture of quality is one of the
recommendation for the firm which states
that the company must focus on the operative
total quality management so that culture can
be formulated accordingly which helps the
management in smooth functioning of the
company. Working with suppliers is an
another recommendation for the firm which
states that it can assist the company
maintaining the long terms and loyal
relationship with the suppliers in order to get
the car services and spare parts reasonably.
Using technology to connect the supply
chain is also one of the recommendation for
the firm which states that adopting the
advanced technology can help the
organization in operating their supply chain
management process in a systematic and
strategic manner by saving time and energy
along with the cost as well. Demanding more
than an inspection report is also an another
recommendation for the firm which states
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that by analysing the report of inspection, it
is essential for the company to demand more
so that employees can also try to meet the
high expectations as per the inspection report
of the firm. Leveraging manufacturing
intelligence is one of the recommendation for
the firm which states that the company must
target the technology and its intelligence on
the manufacturing sector so that updated
technical devices can help the organization to
manufacture at its best with less wastages.
Drilling down through data to reduce
warranty claims and recalls is an another
recommendation for the firm which states
that data management as per the warranty
claims are significant for better effectiveness
of information systems and administration
used by the organization for better safety and
security of recalls and many more.
It is also suggested that the company
must also focus on the advertising strategies
along with the growth strategies so that more
and more people could get attracted towards
the brand by creating the awareness of new
features and product portfolio of the
organization. Building trust with customer
reviews is one of the suggestion for the firm
which states that the people who are
involved in the marketing domain must
analyse the reviews by customers and must
take the corrective actions in order to rectify

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the negative comments and improve the
positive comments by the customers. Search
engine optimization is an another suggestion
for the firm which states that it is highly
essential for the firm to use SEO strategy in
order to rank the website on the top of search
results which hep the firm to grow
effectively. Budgeting on the basis of car
buying trends is also one of the suggestion
for the firm which states that people who are
involved in the financial domain is
responsible for the right budgets as per the
current requirements of car trends in the
marketplace. Targeting right people is also
an another suggestion for the firm which
states that the company must use the
segmentation, targeting and positioning
business model for the same for better reach
to the target market. Using internet power is
one of the suggestion for the firm which
states that the company must market via
digital marketing such as social media
marketing, content marketing, google ads,
pay per click and many more. Effective
content featuring is an another suggestion for
the firm which states that every time the new
features are introduced by the company must
be presented in an effective content so that
customers can get attracted towards it.
countries who are working together for the
purpose of securing the stability of
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international monetary system that basically
includes the financial sector issues and the
macro economic issues that may possess a
impact on the global stability. It is offering a
country level that that includes information
with respect to inflation, population and
related with the growth domestic product of
the country relevant reports. The main
objective is to secure a monetary stability by
keeping a track of the global economy.
4.2 analytical techniques justification
For the purpose of completing the analysis of the AUDI growth strategies and potential in the
Indian market there is need to focus on analysing of various growth strategies that can help in the
process of aching the required growth for AUDI. There are lot of factors that are part of macro
and the micro environment which can posses a necessary impact on the long and short term
functioning of organisations especially in situations when they are willing to achieve a higher
market share in the target market (Perera, 2020). For this purpose it becomes essential to make
detailed assessments of the environment that is offering opportunities as well as threats and may
pose a impact on the overall expansion strategies of Audi. For this purpose presently there is
analysis of the overall growth strategies of porter that will lead to determination of the effective
technique that can be applied in the present scenario for achievement of higher market share.
4.2.1 Porters five forces:
Analytical
techniques
Porters five forces analysis
Description
and
explanation
Porter’s five forces analysis is used for the purpose of developing a detailed
understand of the various competitive forces that are posing an influence in
the industry in which a particular organisation is operating. This model
established for the purpose of understand the way various forces are posing an
impact on the strategic decisions of an organisation. (Coker and Porter, 2017).
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It includes major five forces that are part of the eternal environment and are
very crucial in order to understand its overall impact on the expansion
strategies of a particular organisation in long run. For the purpose of
maximisation of the long term profitability and survival of business it
becomes to position the business in such a way that there are weak forces that
may lead too minimisation of the negative impact of such external
environment forces. Each of the five forces is related with three major
characteristics that is high, medium and low threats.
Threat of new entrants: when the market is very profitable and there are low
entry barriers then there is always a threat of new entrants who are willing to
achieve a higher market share (Keller, Daronco and Cortimiglia, 2017).
Therefore, in terms of various business organisations it can be said that if there
is large number of entry barriers then it is profitable for business organisations
while they are willing to expand their present market positioning. These
barriers include the economies of scale, capital requirements respective place
of government, unequal access to various distribution channels, switching cost
of customers, incumbent advantages or product differentiation.
Bargaining power of suppliers: suppliers are powerful if the number of
suppliers in market is who and there is no availability of suppliers who can
offer the process as per requirements of the organisation (Coppenhaver, 2018).
This power gets enhanced of the suppliers make up to large part of the
organisations total cost because if there will be a slight increase in the prices
offered by suppliers then it leads to a large impact on the organisations
because there overall production cost gets increased which may possess a
negative impact on the overall organisation functioning.
Bargaining power of customers: customers and buyers are considered
powerful they are few in number or the purchases volume of various
individual buyers is high. Of the switching cost are low because of
undifferentiated or standardised products. Buyers can also be a threat for many
organisations if they are posing a threat to produce the industry product by
them. Buyers have to be price sensitive otherwise they will easily switch

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between brands (Leisen, Steffe and Weber, 2019).
Threat of substitutes: substitutes are the products that can lead to industry’s
product a high amount of threat because they are offering similar or same
function but in a different manner. Substitute products and services can be
easily posing a threat to the products and services. Organisations have to focus
on having a competitive advantage that can help them in dealing with the high
amount of threat of substitutes so that it does not affect the present market
position of the organisation. When there is availability of close subtitles then it
leads to customers having the option of forgo buying that may lead to
weakening of the power of customers in long run (Jäckering, Fischer and
Kehlenbeck, 2019).
Industry competitors: it is an element of the porter’s five forces that is related
with the rivalry between various organisations that are part of the same
industry. If the rivalry is greater and the number of competitors is high in
number then it may lead to high amount of industry threat for existing brands
if there are high exit barriers then it may lead to high rival bands which may
affect the overall competitive position of a particular organisation in long run.
Porters five forces analysis is a broad framework that is very helpful in
offering a broad overview of the industry and initial competitive strategic
analysis can be used for the purpose of making analysis of the overall strategic
development process (Marschinski and Turégano, 2019). As compared to
other frameworks porters five force model helps in getting a more detailed
overview of the major five forces that are posing a long term impact on the
overall functioning of organisations. As compared to other models such as
PESTLE analysis porter’s five forces is one such framework which helps a
organisation in having a position with limited or weak impact of other forces
which may affect their competitive positioning in long run. This is one such
framework that is very useful for the purpose of making evaluation of the
potential of growth in the automotive industry in the selected target country
that is India. For the purpose of understand the way various forces are going to
affect the functioning of Audi in long run and the way it can expand itself in
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coming time period it becomes very important to use porter’s five forces that
will help in determination of the amount of forces present in a specific market
segment (Chakomaand Chummun, 2019).
With the changing time the nature of industry is changing very fast because of
the highly dynamic macro environment. Porters forces is a static model that is
not offering any type of quantitative information because each factor is having
a relevant impact on the overall functioning of organisation but it does not
provide any type of standardise of quantitative information that can be
identified in specific numerical form (Shrestha. and Shrestha, 2018).
Therefore it may sometimes seem very difficult to analyse the exact impact of
such forces on the expansion and development policies of organisation in long
run.
4.2.2 Value chain analysis explanation and justification
Analytical technique
description and
explanation
Value chain analysis
Description and
explanation
The value chain model is used for dividing the organisations overall
operations into nine economically and technologically independent
activities. It is related with the amount customers are willing to pay for
the products that have been created through this value chain needs and it
exceeds the overall cost of the process to ensure that business is profitable
enough. An organisation has to create value by lowering of the cost so
that they are able to add higher value by having proper differentiation so
that they can get the required competitive advantage in long run. The
value chain of organisation is generally dividing into primary activities
those posses a impact on the creation of products directly through primary
activities that includes operations, inbound logistics, operations,
marketing & sales and last is services (Stein. and Barron, 2017). Another
aspect is the support activities that posses indirect impact on the creation
of products such as firm infrastructure, technology, human resource
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management, procurement) and other nine values that posses the linkage
between one other and the overall external environment that has to be
analyse independently.
Firm Infrastructure
The firms infrastructure is define as the support system and the various
units involved in the business that helps in effectively carrying out the
business related operation of the organisation(Ogunyinka and Oguntuase,
2020). The various units or the department included can be the finance
department, planning department, accounting, government, quality,
human resource and so on. Effective coordination and planning of the
infrastructure leads to creating effective value in the business
organisation.
Human resource management
This includes all the activities related to hiring, selecting, compensating,
training and motivating workforce of the organisation is related to the
human resource department of the organisation. This department helps the
business organisation to effectively manage the human resource of the
organisation and ensures that there is availability of human resource in
each and every department. Enhancing the performance of the employees
and supporting them helps in creating value in the business organisation.
Technology Development
This includes all the task and operations related to the software, hardware,
technical information, and other technology needed to convert the input
into the output process and also processing and maintaining the
information. It also includes the use of advance technology in the supply
chain and distribution network to effectively carry out the task. Under this
the value can be created through effectively maintaining technology
effectiveness, reducing the technology cost and also using well advance
technology as per the requirement also in the business organisation. It also
includes satisfying the needs and wants of the customers through the use
of effective technology (Hainzer, Bestand Brown, 2019).

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Procurement
This stage includes all the operations that are needed to make acquisitions
of outside resources or the material, also the resources that are needed by
the business organisation for the supply of required goods and services.
The various activities carried out under this stage includes the effective
management of the suppliers, price negotiations also funding required to
effectively carry out the activity. Under this stage the business
organisation can create effective price through finding the right vendor
who will supply the right raw materials required to get the finished
products also at the right price (Fozer and et. al., 2017). This will help the
business to create effective value in their business procedure.
Inbound logistics
The stage of the value analysis is the inbound logistics, this includes all
the operations related to the receiving, storing and distribution of the
inputs effectively. The various activities included in this stage includes
the getting required materials, parts and full inventories needed to
effectively carry out the task from the target suppliers which are later sold
in the stores (Ogunyinka and Oguntuase, 2020). Later it is stored in the
warehouse or merged into the production in manufacturing units. Under
this the business organisation can create value through maintaining and
creating positive and effective relation with their suppliers. As
maintaining relationship with the suppliers will helps the company to
effectively carry out their activity and enhance their performance.
Operations
It includes all the operations or the activities needed to convert their input
into output. The various activities that is needed to be considered by the
business organisation includes the assembly, production control, effective
packaging of the final product and ensuring the quality of the product.
Under this the business organisation can create value through maintaining
and ensuring efficient as well as cost effective operational system of the
business organisation. Maintaining the cost of company specially in the
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operational system will allow company to create value.
Outbound Logistics
It includes all the activity that is needed for the distributing, storing and
collecting the output or the finished product created by the business till it
reaches the final customers of the business organisation. The various
activity included are finishing the product, distributing to the final
consumers, delivering and so on. Under this the value can be created
through effective operating system in the business organisation.
Maintaining the operation system will allow the company to gain value.
Marketing and sale
It includes all the activities taken into consideration by the business
organisation to make their consumers aware of the product and services
using various marketing tools and techniques. The various activity
involved are market research, sales analysis, managing customers and so
on. Managing consumers and satisfying their needs will help the business
to create value.
Services
It includes all the extra services offered to thje consumers in order to
enhance their experience and satisfy their needs and wants. This can be
after sales services, customer’s education and training. The value can be
created through offering after sales services to the customers.
Justification Value chain analysis is very helpful in the process of identifying the
activities that organisations can use for the purpose of creating value.
These values lie in the process of differentiation or cost advantages. When
the strength is identified organisation can for the focus on business areas
to enhance the customer value. Further if the areas that are adding low
values are identified organisations can make evaluation whether these can
help in improving the operations. In the present report value chain
analysis will help in identification of the internal values of Audi that can
help in analysing its prospective in Indian automotive market with making
comparison to external environment by use of porter's five forces.
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Limitation Porter's value chain is a model that is suitable for organisations that are
active in manufacturing environment with unified production. It is
difficult to apply it to service provider because of lack of products
physical resources that organisations are producing in small amounts. The
value chain model is designed to fit as per strict planning and production
system by using customer centre the customer centred approaches. It may
not always possible to separate business process and then divide them as
per distinct categories. Application of present model can be sometimes
very time-consuming as information is not easily accessible.
4.2.3 Ansoff growth matrix
Ansoff Matrix is also known as Product Expansion method which is implemented by the
organisations to plan and analyse the growth strategies. It includes four strategies through which
company can grow and determine the risk associated with strategies. Ansoff Matrix was
developed by H. Igor Ansoff who was mathematician and business manager. There are four
different types of growth strategies such as market penetration, market development, product
development and diversification. Audi is one of the renowned automobile manufacturer company
which is situated in Germany. The activities which is conducted by Audi are designing,
marketing and manufacturing of different luxurious cars. Audi must implement Ansoff Growth
Matrix in order to identify the suitable strategy.
Market Penetration:
By implementing market penetration strategy, Audi sells their products on existing
market. Through market penetration strategy company can enhance its market share. If Audi
implements market penetration strategy they must decrease price to attract new customers,
increase promotion and distribution efforts and acquire competitor in same marketplace. Market
penetration strategy helps in securing dominance of growth markets, enhance usage by existing
customers and restructure the market by driving out competitors. Audi mainly focus on
increasing its product quality and producing innovative products that creates a barrier for entry of
new competitors in Marketplace (Dawes, 2018). Audi must focus on selling its luxurious car in
existing market so that they can grab the attention of existing customer and attract new customer.
The market penetration strategy is used to gain better market share and gain competitive

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advantage over its competitors. The technique helps in increasing the sale and customer base of
Audi which also helps in improving the growth of business.
Product Development:
In product development strategy company develops new product and sell it in existing
market. For implementing product development strategy, Audi needs extensive research and
development for producing the new car in existing market. The product development strategy is
implemented when organisation has strong understanding of the market and fulfil the needs of
customer. It is implemented in number of ways by investing in research and development for
developing new products n order to attract more and more customer towards the brand, forming
strategic partnership with other firm and acquiring competitors' products to create new product
that fulfil the needs of existing product. Product development helps in driving higher value
proposition and also grow professional network with customer.
Market Development:
Market development is one of the effective growth strategy which must be implemented
by Audi in order to increase their growth and profitability of business. Through market
development strategy company can enter into new market with existing product. Audi is focusing
on expanding their business in Indian Market so it is necessary to identify the market condition
and competitors in India. By implementing market development strategy company can increase
its revenue, gain new customer and enhance the growth of business. Market development
strategy helps in expanding its customer base in India and gain competitive advantage over its
competitors (Filippov, 2017). Audi focuses on operating business in various nations in order to
sell their luxurious cars. Company also have potential to expand their business in Indian Market
so that the sale can be increased. Audi may also face difficulty while expanding their business in
Indian Market due to high taxes of luxurious automobile that can reduce the price of cars in
target market.
Diversification:
Diversification is another growth strategy through which company can enter into new
market with new product. It is one of the riskiest strategy as the business is moving into the
market with no experience. Audi is focusing to expand their business in Indian Market it is
necessary to identify the risk which is associated by running their operational activities in India.
The diversification strategy helps in increasing the profitability of company and also safeguards
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against adverse market cycle (Chiang, Chen and Ho, 2016). It reduces the quality of products and
also too complicated for establishing business in new target market.
5. FINDINGS
Model Findings
Five forces analysis Audi is facing a situation in which bargaining power of suppliers is
low because of many reasons. As there is a lack of capability of
forward integration which limits bargaining power. As there can be
certain large firms which are holding a power of bargaining power
like Audi did not depending on particular one suppliers, they have
many of the suppliers. Then from above it can be analysis that
bargaining power of customers is growing because of increasing
competition and changing customer taste and preferences. As there
can be certain factors which is limited to bargaining power of
customers is switching cost, brand image and research and marketing.
Further, threat of substitute of Audi is coming from products which is
making rivalry brands (Bell and Rochford, 2016). As many of the
brands are selling their products globally and many of taxies and ride
sharing are becoming substitutes to the brand. There can be various
firms which re substitutes of Audi are Ford and Mercedes Benz etc.
next is threat of new entrants is low. Because entry and exit barriers
are high. Also, there is a high level of competition which limits a new
entries in a market. Then next is rivalry among existing players is
high because every brand is trying some technologies and latest
features in their products for that is why there is a high rivalry among
existing players.
SWOT analysis From the above discussion, it can be analysed that Audi is having
certain strength as it is using latest and updated technologies in their
products and services which becomes their strength. Then next is it is
having strong brand name. As this helps them in attracting more
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customer towards their brand. Then design of this cars is very good
and stylish so that they could attract customer for purchasing eagerly.
Another strength of company is that it is a auto mobile manufacturer
so it is varying in car models (Comino and Ferretti, 2016). Then
some of the weakness of company is that it is having less promotions
and messages. Further, it involves diseal issue. Then next from above
can be discussed that by targeting emerging markets, they create
opportunities from them. Then by making frequent innovation in their
products resulting in creating opportunities as well. Innovation can be
done in styles and designs of cars to enhance customers. This helps
them in gaining competitive advantage among competitors and they
develop opportunities. In addition, at last, the major threat for
organisation is creating competition. As there can be certain
competitors of Audi which are BMW, Ferrari and Mercedes Benz etc.
then also there international market risk. As within a home country,
Audi cannot survive, they have to handle it into various countries and
deals with different types of government.
VRIO analysis From the above discussion it can be analysed that there can be certain
valuable, rare, imitable and organisation resources which helps the
organisation in achieving competitive advantage within its
competitors. Some of the valuable resources of Audi is financial
resources as they are highly valuable, then next is company
employees are highly valuable because they are highly trained and
more productive as compared to any other organisation. On the next
hand, company is having some of a rare resources which are financial
resources and local food products. These are rare resources because
these can be easily provided in a market by any other competitors
(Chatzoglou and et. al., 2018). Then next is patents of Audi is a rare
resources which are being identified by Audi and they are not easily
available in market and not being possessed by competitors as well.
Then next is imitable resources which includes financial resources.

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These are costly and being identified by Audi. Then local food
products are not imitable because they could be acquired by
competitors easily. On the next hand, financial resources are
organised to capture value because they can be invested in right places
in right opportunities (Razmi, Mehrvar and Hassani, 2020). Then
next distribution of network can be organised because they are using
effective network for distribution of their products to customers as
well.
McKinsey’s
7S Model
It is been discussed that Audi McKinsey’s
7S Model performing well. As they can be the leaders of cost and this
is working well and effective. Further, there corporate hierarchy is
restructured well under their CEO. However, methods and approaches
which company is using when entering into a market still causing
some of the problems. Because this can be done by local companies
also which may be leading to rise in small competitors in local
markets. Further, strategy which company is applying is product
differentiation which helps them in growing frequently within a
market (Alghalibi and Hoshan, 2018). This will helps the organisation
in creating growth opportunities and making profits more as well.
Audi is coming with latest features and strategies which attracts new
customers and brings them high status as well. Company is
communicating well with their customers to target them and making
various marketing channels through they could communicate
effectively with their customer after providing them products also.
They take feedbacks and reviews after selling and if customer finds
any difficulty, then they work upon those improvement. In addition,
Audi is having highest strategic team and other members whoa re
being organised in four committees. These committees are Audit,
mediation, Personnel and nomination. Then company is following a
procedure which is relating with daily activities and procedures made
in a system. They are making use of robotics technologies and online
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platforms which helps them in attracting more customers and helps in
dealing with day to day operations of business.
5.1 RESULTS OF THE EXTERNAL ANALYSIS: PORTER`S FIVE
FORCES
Threat of new entrants:
In 2020, India is the fifth largest auto Market with having 3.49 million units combined with
passenger and commercial vehicles category. It was 7th largest manufacturer of commercial
vehicles in the year 2019. There is increasing domestic automobile production at 2.36 % CAGR
in FY16-20 with 26.36 million vehicles manufactured in country in FY20. New entrance find
market very attractive but there are several hindrances that include access to distribution, patents
learning cause economics of scale and brand recognition that may lead to restrictions for new
entrants. So threat of new entrants is moderate.
Bargaining power of suppliers:
Earlier the automotive industry has relatively little power because suppliers were high and
switching cost was low. In the time period of 30 years supplier contribution has proved by 26%
to 82% in the year 2015. Which higher dependency the development has increased the supplier
power. For Audi the switching cost for specific parts is very high because it cannot be produced
by multiple suppliers. But in some instances car manufacturers can access to global supplier
network and is not limited to domestic suppliers. So the bargaining power of suppliers is
therefore assessed as low moderate.
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Source: Production volume of vehicles across India from financial year 2011 to 2021
Bargaining power of customers:
The bargaining power of customer depends on the demand and supply relationship. The power of
customers is decreasing because in India car demand is increasing. The switching cost of
customer is also decreasing because the number of car manufacturers in India increasing at a
high rate. There is a shift towards higher customisation and flexibility. Individual customers are
not purchasing the products at a very large volume so established can manufacturers can rely on
brand reputation and resources. The bargaining power of customers is moderate.
Threat of substitute:
There are multiple alternative to car owners that are present in India that includes two wheelers
like scooters motorbikes or other public transports like buses, trains that are easily available. As
per reports of mintel only 24 out of 1000 people own a car in the country that is emerging lower
middle income market. Two wheelers also comprise of 80% of the sales with four wheel
passenger vehicles account only for 13%. So in the process of expansion of Audi two wheelers
market appear to be principal threat to classic cars. There is low threat of substitution because
Audi belongs to the luxurious car market that is a completely different segment of customers. So

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it is not possible for the customer segment of Audi to substitute their demand for cars with two
wheeler for the purpose of fulfilment of their transportation requirements.
Competitive rivalry:
There is increase in the number of car manufacturers in India that is anticipated to lead towards
strongest players in the automotive industry. Joint venture of Maruti Suzuki is also presently
dominating the passenger market that is leading to increasing share of 51% in the year 2018. The
Hyundai motors is also having 16.2 % share in the market. There are many brands that are
entering the Indian market and further established brands are also leading to higher market share.
Audi is an established premium brand in their existing countries but they may find it difficult to
compete with the already existing brands because they are having present market share of 1%.
Therefore it can be said that competitive rivalry is high.
5.1.1 INTERPRETATION OF EXTERNAL ANALYSIS FINDINGS
Automotive market is
expanding:
The main objective of the report is to evaluate the overall growth
potential of Audi in Indian automotive market. The data analysis
shows that emerging markets is having a future for automotive
industry. Audi can be a global leading player when the automotive
market is at expansion phase.
Overall threat of new entrants is moderate If Audi is willing to
get higher market share then they have to work towards
reducing the entry barriers.
Supplier dependency: Supplier dependency is high but global supplier network is also
enhancing: if the global supplier network becomes stronger
automotive industry can manage their demand for specific parts. Car
manufacturer show to purchase products at high prices and in some
instances switching to other supplies may result into higher cost and
they may not be able to produce the parts which may lead to high
dependency on suppliers.
Power of suppliers is low today for the purpose of managing the
power of suppliers by Audi it becomes crucial to analyse the
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different suppliers are properly managed. Before entering Indian
automotive market it becomes very crucial for Audi to analyse
and ensure that they are able to have a reliable supplier base to
manage their production.
Customer bargaining
power
Customer bargaining power is moderate in India the population is
having lower purchasing power because of high unemployment and
lower personal disposable income of people. For the target segment
of Audi there is high brand awareness but majority of the population
are not able to afford it as a luxury brand. Further with the covid-19
pandemic there is reduction in overall purchasing power therefore
Audi has to make adjustments as per the requirements of local market
to achieve higher market share.
Bargaining power of customers is moderate. With constant
assessment of customer demands and analysis of future trends or d
can work towards enhancing the customer loyalty.
Threat of substitution Threat of substitution two wheelers are one of the most popular mode
of transport in India because of its limited space and affordability
feature. The India's road infrastructure is running behind rapid
increase in cities because of the lower purchase prices. For the
purpose of serving Indian automotive market Audi has to work
towards producing two wheelers with addition to traditional cars so
that they are able to adjust with the classic four wheelers.
For the present market scenario the rate of substitution is low.
Audi is willing to work towards moving along with the local
market trends then work towards adjusting the Indian market.
Indian automatic market is dominated by Asian manufacturers
who are able to produce affordable cars.
Competitive rivalry It can be so that overall competitive rivalry is very high but Audi can
work towards getting a competitive advantage in terms of quality
brand reputation and expertise as compared to other local
competitors. They can work towards enhancing their market strength
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and complete without willing to risk their premium brand image.
5.2 Results of internal analysis:
In the present section, there will be analysis of value chain for Audi to determine the
level of value that is added to 9 business areas.
Firm infrastructure:
In the present scenario Audi is planning to change the infrastructure towards electric
vehicles. This plant is working towards having specialised loss to further invest 2 billion Euros to
enhance infrastructure for electric vehicles along with their National motorway network. By the
end of your 2023 Audi is willing to create 1000 charging stations that are to be constructed.
Human resources management
Audi is having one of the most attractive workforces across the world. The overall
employee turnover rate is low and the social responsibility towards employee is very important
to the organisation. They are offering vocational training internship, regular position value to
offer training to employees.
Technology development:
With the customer expectations, new market requirement and standards leads to
requirement for new technologies. Audi is working towards development of a new principal. The
long term goal of the brand is to adopt the principle in appropriate areas of series production.
They are anticipating that modular assembly enhance the productivity by at least 20% as
compared with the production line system. For the purpose of supporting their employees more
and more robots are also working towards service in assembly (The assembly line of the future,
2020).
5.3 RESULTS AND IMPLICATIONS BASED ON THE ANSOFF MATRIX
ANALYSIS
Audi must focus on implementing Market development strategy as it helps in increasing
the growth and sale of business. Through implementing marketing development strategy
company can improve their sale and profitability of business. The market development strategy
helps in gaining new customer due to which Audi can increase their market share and revenue. It
is suitable strategy as it helps in growing business and reaching to new customer. Market

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development strategy helps in increasing the customer base. Audi is focusing on expanding their
business in Indian market so market development strategy is one of the best strategy to
implement for increasing the growth of business. Market development strategy helps in gaining
competitive advantage as they focus on target market and conduct analysis in order to find out
the competitors in India. The main purpose of market development strategy is to find new
customer for existing products. Audi must implement this strategy as it can help in increasing the
growth and profitability of business. Burt for selling cars in India it is necessary to identify the
customer preference and their taste so that they can attract Indian customers. Audi must provide
unique services and features in its cars for grabbing the attention of customer and proving the
sale of business.
6. RECOMMENDATIONS
It is recommended that the company must follow the proper growth strategies in order to
expand and improve the framework which is already in use by the organization. Creating a
culture of quality is one of the recommendation for the firm which states that the company must
focus on the operative total quality management so that culture can be formulated accordingly
which helps the management in smooth functioning of the company. Working with suppliers is
an another recommendation for the firm whicIt is recommended that the company must follow
the proper growth strategies in order to expand and improve the framework which is already in
use by the organization. Creating a culture of quality is one of the recommendation for the firm
which states that the company must focus on the operative total quality management so that
culture can be formulated accordingly which helps the management in smooth functioning of the
company. Working with suppliers is an another recommendation for the firm which states that it
can assist the company maintaining the long terms and loyal relationship with the suppliers in
order to get the car services and spare parts reasonably. Using technology to connect the supply
chain is also one of the recommendation for the firm which states that adopting the advanced
technology can help the organization in operating their supply chain management process in a
systematic and strategic manner by saving time and energy along with the cost as well.
Demanding more than an inspection report is also an another recommendation for the firm which
states that by analysing the report of inspection, it is essential for the company to demand more
so that employees can also try to meet the high expectations as per the inspection report of the
firm. Leveraging manufacturing intelligence is one of the recommendation for the firm which
Document Page
states that the company must target the technology and its intelligence on the manufacturing
sector so that updated technical devices can help the organization to manufacture at its best with
less wastages. Drilling down through data to reduce warranty claims and recalls is an another
recommendation for the firm which states that data management as per the warranty claims are
significant for better effectiveness of information systems and administration used by the
organization for better safety and security of recalls and many more.
It is also suggested that the company must also focus on the advertising strategies along
with the growth strategies so that more and more people could get attracted towards the brand by
creating the awareness of new features and product portfolio of the organization. Building trust
with customer reviews is one of the suggestion for the firm which states that the people who are
involved in the marketing domain must analyse the reviews by customers and must take the
corrective actions in order to rectify the negative comments and improve the positive comments
by the customers. Search engine optimization is an another suggestion for the firm which states
that it is highly essential for the firm to use SEO strategy in order to rank the website on the top
of search results which hep the firm to grow effectively. Budgeting on the basis of car buying
trends is also one of the suggestion for the firm which states that people who are involved in the
financial domain is responsible for the right budgets as per the current requirements of car trends
in the marketplace. Targeting right people is also an another suggestion for the firm which states
that the company must use the segmentation, targeting and positioning business model for the
same for better reach to the target market. Using internet power is one of the suggestion for the
firm which states that the company must market via digital marketing such as social media
marketing, content marketing, google ads, pay per click and many more. Effective content
featuring is an another suggestion for the firm which states that every time the new features are
introduced by the company must be presented in an effective content so that customers can get
attracted towards it.h states that it can assist the company maintaining the long terms and loyal
relationship with the suppliers in order to get the car services and spare parts reasonably. Using
technology to connect the supply chain is also one of the recommendation for the firm which
states that adopting the advanced technology can help the organization in operating their supply
chain management process in a systematic and strategic manner by saving time and energy along
with the cost as well. Demanding more than an inspection report is also an another
recommendation for the firm which states that by analysing the report of inspection, it is
Document Page
essential for the company to demand more so that employees can also try to meet the high
expectations as per the inspection report of the firm. Leveraging manufacturing intelligence is
one of the recommendation for the firm which states that the company must target the
technology and its intelligence on the manufacturing sector so that updated technical devices can
help the organization to manufacture at its best with less wastages. Drilling down through data to
reduce warranty claims and recalls is an another recommendation for the firm which states that
data management as per the warranty claims are significant forIt is recommended that the
company must follow the proper growth strategies in order to expand and improve the
framework which is already in use by the organization. Creating a culture of quality is one of the
recommendation for the firm which states that the company must focus on the operative total
quality management so that culture can be formulated accordingly which helps the management
in smooth functioning of the company. Working with suppliers is an another recommendation for
the firm which states that it can assist the company maintaining the long terms and loyal
relationship with the suppliers in order to get the car services and spare parts reasonably. Using
technology to connect the supply chain is also one of the recommendation for the firm which
states that adopting the advanced technology can help the organization in operating their supply
chain management process in a systematic and strategic manner by saving time and energy along
with the cost as well. Demanding more than an inspection report is also an another
recommendation for the firm which states that by analysing the report of inspection, it is
essential for the company to demand more so that employees can also try to meet the high
expectations as per the inspection report of the firm. Leveraging manufacturing intelligence is
one of the recommendation for the firm which states that the company must target the
technology and its intelligence on the manufacturing sector so that updated technical devices can
help the organization to manufacture at its best with less wastages. Drilling down through data to
reduce warranty claims and recalls is an another recommendation for the firm which states that
data management as per the warranty claims are significant for better effectiveness of
information systems and administration used by the organization for better safety and security of
recalls and many more.
It is also suggested that the company must also focus on the advertising strategies along
with the growth strategies so that more and more people could get attracted towards the brand by
creating the awareness of new features and product portfolio of the organization. Building trust

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with customer reviews is one of the suggestion for the firm which states that the people who are
involved in the marketing domain must analyse the reviews by customers and must take the
corrective actions in order to rectify the negative comments and improve the positive comments
by the customers. Search engine optimization is an another suggestion for the firm which states
that it is highly essential for the firm to use SEO strategy in order to rank the website on the top
of search results which hep the firm to grow effectively. Budgeting on the basis of car buying
trends is also one of the suggestion for the firm which states that people who are involved in the
financial domain is responsible for the right budgets as per the current requirements of car trends
in the marketplace. Targeting right people is also an another suggestion for the firm which states
that the company must use the segmentation, targeting and positioning business model for the
same for better reach to the target market. Using internet power is one of the suggestion for the
firm which states that the company must market via digital marketing such as social media
marketing, content marketing, google ads, pay per click and many more. Effective content
featuring is an another suggestion for the firm which states that every time the new features are
introduced by the company must be presented in an effective content so that customers can get
attracted towards it. better effectiveness of information systems and administration used by the
organization for better safety and security of recalls and many more.
It is also suggested that the company must also focus on the advertising strategies along
with the growth strategies so that more and more people could get attracted towards the brand by
creating the awareness of new features and product portfolio of the organization. Building trust
with customer reviews is one of the suggeIt is recommended that the company must follow the
proper growth strategies in order to expand and improve the framework which is already in use
by the organization. Creating a culture of quality is one of the recommendation for the firm
which states that the company must focus on the operative total quality management so that
culture can be formulated accordingly which helps the management in smooth functioning of the
company. Working with suppliers is an another recommendation for the firm which states that it
can assist the company maintaining the long terms and loyal relationship with the suppliers in
order to get the car services and spare parts reasonably. Using technology to connect the supply
chain is also one of the recommendation for the firm which states that adopting the advanced
technology can help the organization in operating their supply chain management process in a
systematic and strategic manner by saving time and energy along with the cost as well.
Document Page
Demanding more than an inspection report is also an another recommendation for the firm which
states that by analysing the report of inspection, it is essential for the company to demand more
so that employees can also try to meet the high expectations as per the inspection report of the
firm. Leveraging manufacturing intelligence is one of the recommendation for the firm which
states that the company must target the technology and its intelligence on the manufacturing
sector so that updated technical devices can help the organization to manufacture at its best with
less wastages. Drilling down through data to reduce warranty claims and recalls is an another
recommendation for the firm which states that data management as per the warranty claims are
significant for better effectiveness of information systems and administration used by the
organization for better safety and security of recalls and many more.
It is also suggested that the company must also focus on the advertising strategies along
with the growth strategies so that more and more people could get attracted towards the brand by
creating the awareness of new features and product portfolio of the organization. Building trust
with customer reviews is one of the suggestion for the firm which states that the people who are
involved in the marketing domain must analyse the reviews by customers and must take the
corrective actions in order to rectify the negative comments and improve the positive comments
by the customers. Search engine optimization is an another suggestion for the firm which states
that it is highly essential for the firm to use SEO strategy in order to rank the website on the top
of search results which hep the firm to grow effectively. Budgeting on the basis of car buying
trends is also one of the suggestion for the firm which states that people who are involved in the
financial domain is responsible for the right budgets as per the current requirements of car trends
in the marketplace. Targeting right people is also an another suggestion for the firm which states
that the company must use the segmentation, targeting and positioning business model for the
same for better reach to the target market. Using internet power is one of the suggestion for the
firm which states that the company must market via digital marketing such as social media
marketing, content marketing, google ads, pay per click and many more. Effective content
featuring is an another suggestion for the firm which states that every time the new features are
introduced by the company must be presented in an effective content so that customers can get
attracted towards it.stion for the firm which states that the people who are involved in the
marketing domain must analyse the reviews by customers and must take the corrective actions in
order to rectify the negative comments and improve the positive comments by the customers.
Document Page
Search engine optimization is an another suggestion for the firm which states that it is highly
essential for the firm to use SEO strategy in order to rank the website on the top of search results
which hep the firm to grow effectively. Budgeting on the basis of car buying trends is also one of
the suggestion for the firm which states that people who are involved in the financial domain is
responsible for the right budgets as per the current requirements of car trends in the marketplace.
Targeting right people is also an another suggestion for the firm which states that the company
must use the segmentation, targeting and positioning business model for the same for better
reach to the target market. Using internet power is one of the suggestion for the firm which states
that the company must market via digital marketing such as social media marketing, content
marketing, google ads, pay per click and many more. Effective content featuring is an another
suggestion for the firm which states that every time the new features are introduced by the
company must be presented in an effective content so that customers can get attracted towards it.

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REFERENCES
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