Analysis of Business Strategy in Bentley Motors: A Case Study

This document provides a comprehensive analysis of the business strategy in Bentley Motors, a luxury car manufacturer. It covers topics such as the impact of macro environment, analysis of internal capabilities, application of Porter's five forces model, and the formulation of effective strategies. The analysis helps Bentley Motors in attaining competitive advantage and achieving long-term business goals.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
Application of appropriate framework to analyse impact and influence of macro environment 3
Critical analysis of macro environment to determine and inform strategic management
decisions.......................................................................................................................................5
Analysis of internal environment and capabilities of the organisation.......................................5
Critique of internal environment to assess strengths and weaknesses of entity..........................7
Application of Porter's five forces model for the evaluation of competitive forces....................8
Appropriate strategies to improve competitive edge and market position based on outcome....9
Application of theories, concepts and models to interpret and devise strategic planning for
company.......................................................................................................................................9
Application of environmental and competitive analysis to produce strategic directions..........12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is a technique which is used by organisations to attain competitive
advantage within the market where all the operational and executional activities are performed.
With the help of effective strategies, a company can improve its performance, attain long term
business goals and increase competitive advantage (Afuah, 2014). The way in which operations
are required to be carried out is also analysed by it. In order to complete this project, Bentley
Motors is selected which is a marketer and manufacturer of luxury cars. It is established in
Crewe, England, United Kingdom. This project covers various topics such as analysis of macro,
micro environment, capabilities of enterprise with the help of specific frameworks. Along with
this, porter's five forces model and application of theories to find strategic direction are also
covered under this assignment.
Application of appropriate framework to analyse impact and influence of macro
environment
Macro environment: It can be defined as the environment which is available outside of an
organisation and leave negative as well as positive impact upon functionality of business. Junior
strategy manger in Bentley Motors uses PESTLE analysis which helps it in formulating effective
strategies.
PESTLE analysis: It is a combination of six different elements which are required to be
focused by business entities to run all the operations appropriately. These are political, economic,
social, technological, legal and environmental. All of them are analysed by junior strategy
manager of Bentley Motors in detail (PESTLE analysis of Bentley motors, 2019). The description
of them is as follows:
Political: There are various types of political involvements in the business operations
which are known as the part of such factors. Different components of it are trade restrictions,
policies etc. All of them are affecting strategies of Bentley Motors and the whole organisation
because of political instability in UK. Managers have to make modifications again and again in
policies of business as changes in government results in changes in rules (Brinkschröder, 2014).
As organisation is operating business all around the world but the trade barriers in India are very
high for it which are affecting it to sale its vehicles there. For this purpose management have to

reformulate all its expansion strategies according to the trade policies of the country so that
growth could be acquired for business.
Economic: All the elements which are related to changes of economy are considered as
the part of such factors. These are exchange, inflation, deflation, interest rates etc. All of them
are impacting and influencing strategies of Bentley Motors because slight fluctuation in them
leaves direct impact upon businesses and purchasing power of clients. For example, if inflation
or deflation fluctuates then it will affect the purchasing power of customers. Due to this the
company may have to face an issue of decreased sale which could be dealt by formulating
strategies such as keeping detailed information of economic changes. In order to ignore negative
effect of economic factors such as Brexit, it is very important for management to be aware of
changes in political situations.
Social: All the factors such as taste, buying behaviour, culture, belief etc. which are
related to society are known as social elements. Demand and preferences of customers regarding
cars changes with time and due to this strategies of Bentley Motors get affected because
managers have to form new decisions to meet their expectations. Now a days fully autonomous
cars are highly in demand in the market but Bentley is not selling them. In order to reduce the
negative impacts of this social factor it is very important for the management to formulate
strategy to launching new cars in the market so that attention of customers could be grabbed.
Technological: Advancement in latest techniques, latest ways to engineer cars etc. are
technological factors which are required to be focused by all the large as well as small
organisations to maintain their presence in the market. Bentley Motors is spending money in
research and development activities which helps it to meet the latest technology in automotive
market. It positively influences and impacts organisational strategies as all the latest techniques
in the market are used by Bentley to manufacture luxury cars (Ceglińska and Cegliński, 2014).
Legal: There are various types of laws, acts and regulations which are imposed by legal
authorities of United Kingdom for all the businesses which are running its operations within it.
Some of them are employment law, consumer right, advertising standards etc. All of them may
get modified with time because market conditions may bound government to alter them. If the
changes which are made in them are frequent then, it may impact and influence strategies of
Bentley Motors adversely because it is very difficult to make change in organisational policies
frequently.

Environmental: All the rules which are related to environment protection, climate,
carbon foot print are the part of this component of PESTLE analysis. For companies such as
Bentley Motors, it is very important to pay attention toward all of them so that operations could
be executed appropriately. Strategy of the company may get influenced by such elements
because if a car which is manufactured by the organisation is leaving negative impact upon
environment then the policies are required be changes to reduce the effect.
The above analysis shows that all the elements in PESTLE analysis are leaving impact
and influencing strategies of Bentley Motors. Junior strategy manager pays attention toward all
of them in order to form decisions for future so that possibility of their negative affect could be
reduced.
Critical analysis of macro environment to determine and inform strategic management decisions
Bentley Motors is considered as one of the biggest companies in automotive sector which
is operating all around the world. In order to determine the factors which are affecting business
and formulate strategic management decisions, it is very important to conduct macro
environment analysis. It may guide junior strategy manager of organisation such as Bentley
Motors to form strategies for future. Social elements such as buying behaviour, demand of
customers etc. changes with advancement in technological factors. If these are not focused by the
company then, it will result in decreased profits and sales. In order to reduce the negative impact
of them, organisation is focusing on research and development activities that helps it to be aware
of all the latest trends which are taking place in automotive sector. Political regulations are
modified by the government if the ruling party changes. In order to minimise negative impact of
them it is very important for Bentley motors to be aware of such situations so that strategies
could be formed accordingly.
Analysis of internal environment and capabilities of the organisation
Internal environment: It can be defined as the analysis of all the insider factors of an
organisation. All the components which are assessed with the help of it are human resources,
culture, production activities, management etc. The best suitable model for it is SWOT analysis
which determine all the negative and positive elements which may leave negative impact upon
functionality of business.
SWOT analysis: It is a model which is used by business entities such as Bentley Motors
for the purpose of determining different aspects of operations. These are strengths, weaknesses,

opportunities and threats (Finney, 2014). With the help of all of them strategic decisions for
future are taken by the junior strategy manager of the organisation. All the elements of this
model are described below in context of Bentley Motors:
Strengths Weaknesses
 Bentley focuses in differentiation
strategy in which it offer unique cars
to customers which differentiate it in
the market from other rival
companies.
 Top level management of Bentley
focuses on research and development
activities which helps to be aware of
technological advancement in the
industry.
 Bentley have showrooms in limited
countries which affects its market
share.
 The price of all the cars which are
sold by Bentley is very high that
affects interest of customer in them
(SWOT analysis of Bentley Motors,
2019).
Opportunities Threats
 Bentley can acquire small car
manufacturers in order to enhance its
market share by offering cars to lower
and middle class customers.
 Bentley do not focus on promotion of
its cars and if it advertise its products
then, it can help to attract more and
more customers.
 Fuel prices are continuously
increasing which may affect the sales
of Bentley in future.
 The level of competition in
automotive sector is very high which
may affect the sales and revenues of
Bentley in future.
VRIO analysis: It is a business tool which is used to determine capabilities of available
resources which are used by companies such as Bentley motors to reach all the long as well as
short term business goals (Inghelbrecht, Dessein and Van Huylenbroeck, 2015). With the help of
it, junior strategy manager in the enterprise can determine the factors which are resulting in
strengths and weaknesses for the company. All the resources of the organisation are analysed
below:

Capabilities Valuable Rare Inimitable Organised
Market share ✔ ✘ ✘ ✘
Human
resources
✔ ✔ ✘ ✘
Brand image ✔ ✔ ✔ ✘
Research and
development
✔ ✔ ✔ ✔
Valuable: The above table shows that all the four major resources which are used by
Bentley Motors to execute all its operational activities are valuable for the company because with
the help of them predetermined objectives are achieved. Market share, Human resource, research
and development and brand image are also beneficial to carry out operational activities in
systematic manner (Milovanovic, 2015).
Rare: All the resources which are listed in the above table are rare for Bentley Motors
except market share because there are various other rival companies which have captured larger
part of marketplace. Rest of the capabilities such as brand image, human resource research and
development activities are rare for the enterprise because organisation uses different strategies to
manage them (Patz, 2014).
Inimitable: These are the capabilities which could be copied by rival companies. Human
resources of Bentley Motors are not inimitable because other organisations can attract them by
offering higher compensations. Brand image and research and development activities of Bentley
Motors are such resources which could not be imitated by other enterprises because higher
attention are paid by top management towards them.
Organised: The table which is formulated to determine capabilities of Bentley Motors
shows that brand image is not organised by the company in appropriate manner because of high
level of competition in the market. Research and development activities are having proper
organisation because it guides management to create new design for the cars (Ritter and
Andersen, 2014).
Critique of internal environment to assess strengths and weaknesses of entity
For the purpose of analysing internal environment and capabilities, SWOT and VRIO
analysis could be conducted. VRIO is showing that the resources which are being acquired by

Bentley Motors are market share, brand image, human resource and research and development
activities. The company is having very low presence in the international market that affects its
market share and a weakness for it. Apart from this, organisation is spending very high monetary
resources on research and development activities which helps it to be aware of technological
advancements. It is a strength for the company.
Application of Porter's five forces model for the evaluation of competitive forces
Porter five forces model is an analytical tool used by the business entities with the
motive of gaining extensive knowledge about the extent of rivalry prevailing within a certain
corporate sector. In this regard, this model is taken into use by the management of Bentley with a
view to examine and determine its competitive position within the confines of automotive sector.
The forces pertaining to this framework are briefly explained as follows:-
Competitive rivalry: This force determines the extent of rivalry prevailing within the
confines of automotive industry. In this regard, it has been determined that there are a large
number of top notch companies that are operating within the vehicle market of United Kingdom,
such as Volkswagen, Aston Martin, Jaguar, Tesla etc. This implies that the magnitude of this
force is high for Bentley thereby inflating the risk of substitution for the entity.
Bargaining power of suppliers: This aspect determines the power possessed by vendors
to negotiate with companies for prices on which they deliver the raw materials. In this regard, it
has been determined that the magnitude of this force is low within automotive sector owing to
the presence of a large number of vendors. Bentley is a large scale automotive company which
tends to provide it with a number of alternatives for procuring raw materials to develop high
quality and stylish cars and other auto-mobiles. Thus, whereby a supplier raises the price, the
entity can easily switch to other vendors.
Bargaining power of customers: This force determines the power possessed by buyers
to negotiate with the company about the pricing of products and services offered by it at market
place. In this regard, automotive sector consists of end number of clients thus making the
magnitude of this force for Bentley to be high. The customers have the power to make an entity
lower its prices as the risk of substitutions always threatens the companies belonging to the
respective industry. Further, the switching cost within this sector is acknowledged to be low
which increases the threat of substitution for Bentley Motors.

Threat of new entrants: This force ascertains the ease with which an entity can gain
access into a sector. In this regard, the magnitude of this force is determined to be low in
automotive sector owing to the huge capital and resource requirements that need to be met by
new entities. Only those organisations are able to gain entry into this sector who possess high
capital and all the desired resources to execute the manufacturing and selling operations in an
effective manner. This tends to deflate the threat of this force for Bentley. For instance: An
entity intending to gain access into automotive sector having excess capital can easily enter the
market owing to the availability of resources. On the other hand, an enterprise which does not
have much funds to raise a new venture may find it difficult to sustain within the hyper
competitive automotive industry.
Threat of substitutes: This force ascertains the extent of threat posed by the companies
belonging to a certain sector owing to their products and services which are similar to the
primary organisation. In this regard, the magnitude of this force is determined to be high for
Bentley as there are various car manufacturers who offer electric, automatic, AI driven and tailor
made vehicles. This tends to inflate the rivalry for respective organisation thus enhancing the risk
of substitution in long run. Yet another substitute which can be taken into consideration can be
public transport which is being highly promoted by government of UK with a view to reduce
harmful environmental impacts in terms of vehicle emissions or pollution.
Appropriate strategies to improve competitive edge and market position based on outcome
On the basis of above discussed model, it can be said that the management of Bentley
needs to take into due consideration the substitutes available at marketplace. In this regard, it is
important for the entity to carry out extensive and regular market research in order to identify the
key trends and technologies pertaining to automotive sector. This helps in coming up with
differentiated and stylish designs of cars that can aid the respective entity in enhancing its
competitive edge and market position.
Application of theories, concepts and models to interpret and devise strategic planning for
company
To successfully analyse the various types of strategic directions available to a company,
organisations make use of Ansoff Matrix. Through this, the management of Bentley devises an
effective strategy with which the market positioning and profitability of entity inflates. The
description of this model is given below:-

Ansoff Growth Matrix
This is an analytical framework which provides assistance to an organisation to decide
and devise a powerful and effective business strategy which can used by a company to facilitate
growth and development in the long run. The strategies of this model are described in detailed
manner as follows:-
Product development: Hereby, companies launch a new product in existing market
place with an aim to gain the attention of more number of persons. This strategy if adopted by
Bentley would result in inflating the goodwill of the entity as unique and innovative offerings
would be launched by corporation at domestic market place. This will enhance the profits and
sales of organisation in near future.
Market development: Hereby, an entity expands its business within a new market by
launching existing products. To grab a larger market share, this strategy can be adopted by
Bentley. The risk involved is high as the entity does not possess any knowledge about the
consumer purchase behaviour of people in new location. Thus, Bentley would have to carry out
market research if it uses this strategy.
Market penetration: This strategy witnesses the sale of existing products within existing
market to inflate the existing level of profits. This strategy can be used by the corporation to
enhance the reach of its existing organisational offerings. To facilitate this strategy, Bentley can
make use of loyalty schemes or discount offers with the help of which it can increase its sales in
existing market.
Diversification: Hereby, organisation can launch new products in new markets to
facilitate business expansion. This strategy if applied within Bentley would be risky as the
chances of failure and success are equal here. Apart from this, huge funds are required to execute
this strategy making it unsuitable for Bentley for the launch of new car.
Horizontal and Vertical Integration
Apart from above discussed strategies, Bentley Motors can also take into account the use
of horizontal and vertical integration to facilitate business growth and expansion. These are
discussed as follows:-
Horizontal integration- This can be defined as a process whereby a company acquired
another business functioning at same level of value chain within the same or different corporate

sector. If this strategy is adopted by Bentley Motors, it would lead to expansion of market share
and reduction of rivalry as a result of inflated customer reach.
Vertical Integration- This can be deciphered as a procedure whereby a company
primarily carries out the expansion of its operations by way of acquisition of another
organisation pertaining to upstream or downstream level of supply chain. In case Bentley Motors
adopts this strategy, it would lead to significant reduction in cost related to transportation as well
as enhancement in coordination within the supply chain.
Justification and recommendation: On the basis of above discussion, it can be said that
the respective organisation should adopt product development strategy as it would aid the entity
to inflate its market share as well as sales at market place. Further, hereby, Bentley can launch
tailor made cars with a view to attract prospect customers towards its new market offering. This
will result in accomplishment of corporate goals and objectives within due course of time. As a
result, increment in sales and profits would take place for the entity.
Strategic Management Plan
It can be defined as an overview of the strategies, tactics and objectives devised by an
entity to accomplish a long term vision. In this regard, the strategic management plan devised by
the top management of Bentley is given underneath:-
Mission: “To offer stylish and innovative products to customers to gain maximum
contentment from them.”
Vision: “To become the leader within global automotive sector.”
Objectives: “To enhance the UK market share of Bentley by 8.25% by end of 1 year
through launch of tailor made cars.”
Strategies: To effectively launch tailor made cars within the confines of United
Kingdom, Bentley would be emphasizing upon 2 key strategies, explained in brief below:-
 Market research: The strategic manager of the respective corporation would ensure that
regular market research is carried out by the entity. This will provide aid to the respective
corporation in determining the latest trends and technologies prevailing in market place.
 Extensive marketing: The entity would indulge in extensive marketing post the launch of
new car into the market as this will provide aid to the organisation in inflating its reach
and thereby satisfying a larger base of audience. This would create awareness among
customers about the features and characteristics of the car.

Tactics: To effectively attain the objective in a timely manner, Bentley would make use
of 2 tactics, namely, value addition and usage of technological advancements. Through the
application of these, the organisation would inflate its market positioning and attain maximum
satisfaction from customers. In addition to this, the management of Bentley Motors has applied
marketing mix to the proposed product to be launched by company, i.e., tailor made cars to
illustrate the tactics being applied by the firm.
Marketing Mix of Tailor Made Cars
Element Description in relation to Bentley Tailor Made Car
Product Bentley Motors has proposed to come up with tailor made cars which would
provide opportunity to customers to make changes in standard model of company's
car as per their requirements.
Price The estimated price of Tailor Made Cars of Tesla would be approximately $86000.
Place The new car of Bentley Motors would be available at brick and mortar style stores
of this organisation together with online booking via company's website.
Promotion Bentley Motors would create awareness about the new car through social media
and digital marketing.
People The staff of Bentley Motors would be provided with adequate training so that they
can design and develop the new tailor made car with precision and efficiency to
derive high contentment from customers.
Process The manufacturing of new tailor made cars of Bentley Motors would be done
through application of lean principles and Just In Time.
Physical
Evidence
The physical evidence for the new tailor made cars of Bentley Motors would be
the entailment of high level of satisfaction from customers as a result of purchase
and usage of car.
Evaluation of Strategic Plan
KPI would used by Bentley Motors to analyse the performance and success of project
related to launch of new tailor made cars. KPI would provide the comparison between actual and

budgeted performance so that if there is any deficiency, corrective action can be taken on time by
the organisation.
Application of environmental and competitive analysis to produce strategic directions
(Source: Bentley car sales in United Kingdom (UK) from January 2016 to July 2019, 2019)
As per the above pictorial presentation, it can be said that Bentley sold 154 vehicles in
July 2019 within UK marketplace. Further, it can be interpreted that sale of cars for this entity
peaked in March as well as September of every year, as those were the months when Driver &
Vehicle Licensing Agency (DVLA) issued new registration plates.
On the basis of PESTLE analysis, it can be said that political and economical stability
tends to facilitate the development of effective corporate strategies through which Bentley can
enhance its present market positioning. The social trends demonstrate that the buying behaviour
of customers keeps on changing which adversely impacts upon business operations. Further,
Porter Five Force model reveals that there is extensive rivalry in automotive sector. To deal with
this, company is recommended to adopt product development strategy through which it can
inflate its current market standing. The tactics that can be applied by the company are utilisation
of technological advancements and value addition. Through this, entity would be able to achieve
its objective in due course of time.
CONCLUSION
On the basis of above stipulated report, it can be said that business strategy gives
direction to a company in the manner that it is able to achieve corporate goals and objectives
within due course of time. Further, on the basis of PESTLE, it can be analysed that the political
and economical environment of the respective nation support the growth and development of
corporations pertaining to it. Apart from this, the SWOT analysis reveals that the biggest threat
faced by the automotive corporation is extensive rivalry. As per Porter Five Force model, it can
be said that the bargaining power of customers is high while that of suppliers is low in vehicle
industry. These tend to generate varied opportunities and threats for the company. In addition to
this, through the application of Ansoff Matrix, it has been recommended that the entity should
make use of product development strategy.

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