Environments Models and Strategic Decisions for Jaguar Land Rover

This report analyses the impact of macro environment on Jaguar Land Rover, analyses the internal environment and capabilities, and applies Porter's Five Forces model and VRIO framework. It also includes the application of various theories, concepts and models for strategic planning.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1. Impact and influence of the macro environment..............................................................1
P2. Analysing the internal environment and capabilities.......................................................3
3.Analysis using Porter's Five Forces model .........................................................................6
4.Application of range of theories, concepts and models.......................................................7
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
A Business strategy involves the decisions and actions taken to accomplish business
objectives and gain a competitive advantage in the firm. It is considered to be the backbone of
the business which helps to achieve desired goals. With continuous increase in competition, the
importance of business strategy is increasing day by day. The organization chosen for this report
is Jaguar Land Rover. It is a British multinational automotive company founded in 2008
headquartered in Coventry, United Kingdom. The company mainly deals in sport utility vehicles
and luxury vehicles. In this report, it includes how the macro environment impacts and influence
an organization and its strategies. In addition to that, it includes organisational capabilities and
outcomes of analysis using Five forces model with models and theories in order to interpret
strategic decisions in organization.
MAIN BODY
P1. Impact and influence of the macro environment
In order to analyse the impact and influence of the macro environment, PESTEL analysis
need to be carried out. Jaguar is popularly known as the world class manufacturer and reflects the
best in terms of design and cost in auto mobile industry.
PESTEL Analysis (Jaguar Land Rover) -
PESTEL analysis stands for Political, Economic, Social, Technological, Environmental
and Legal factors that affects and influences the macro environment of an organization. In
context to Jaguar, the company is focusing on expanding its core capabilities and competencies.
The use of PESTEL analysis will help in achievement of long-term objectives and development
of effective strategies(Anderson, 2019). Political factors: Political factors creates a strong influence on profitability and
sustainability in long run. Its presence in international stage results in increasing the
company's sensitivity in order to deal with political environment. Instability and growing
tensions can affect the industry growth and results in limiting the opportunities for
growth. Jaguar operates its business worldwide and the political factors affects the
working and business operations of the company. The various political factors that affect
the Jaguar Land rover includes Democracy, Transition of government, changes in policy,
Political Governance system etc.
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 Economic factors: Economic factors involves factors such as profit price, demand and
supply factors. Slowdown in economic environment can affect the business operation
which can turn into the risk factors for the company (Brønn and Brønn, 2018).In context
to Jaguar, it’s important for the company to understand various economic factors
including inflation, savings rates, conditions, labour market and foreign exchange. Social factors: The social factors involve changes in society and culture which plays a
very important role in any organization. Due to various social changes and trends, the
business operations are affected. In order to handle these changes, the company need to
be well aware of religious beliefs and value of people living in various regions. In context
to Jaguar, the Muslim workers have been given relaxation to pray during day at Jaguar
and when it comes to Christian workers they are specially allowed to take an off on
Sundays.. In order to perform its operations smoothly, the company need to meet up with
ethical procedures and maintain a healthy relation between customers and
suppliers(Galpin, 2020). Technological factors: There is a major impact of technological factors on an
organization. Innovation and advancement of new technology helps to bring success and
development to the organization. In context to Jaguar, it is known for cutting-edge
innovation in its manufacturing and car design. With its expertise in aluminium
technology, the company has provided efficient cars with light weight features. The e-
performance models optimize the cars efficiency. In order to save both resources and
time, the company has also established an Automotive Virtual Reality testing workshop Legal factors: The operations of the company are directly influenced by government
legislatives and policies. In order to survive in a new consumer market, it’s important to
study the legal environment. In order to save it from various legal laws and factors, the
companies need to fulfil the employee rights and trade laws stated by government in
order to carry out business operations successfully. The companies need to register its
copyrights and patents to avoid selling of Commodities.
 Environmental factors: The company gives importance to address the issues related to
environmental factors. The environmental factors affect the business operations. In
context to Jaguar, the organization is working their best to create a fuel efficient car with
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use of recyclable materials. They are also taking initiatives by focusing on promoting the
renewable energy resources.
There are various factors related to macro environment that affects that the business operations.
It involves drastic changes which can affect the working of organizations which can result in
complexity, competition and increase in revenues. For effective operations of any business firm
its important to have a detailed knowledge of all the macro environment factors including
Political, Economic, Social, technological, environmental and legal (Jain, Pal and Gupta, 2017).
P2. Analysing the internal environment and capabilities
In order to analyse the internal capabilities and environment, an organization conducts
SWOT analysis to identify a company's strengths and weakness and its external threats and
opportunities. SWOT analysis is a tool used to help an organization to understand and identify
the various internal factors related to business competition.
Strengths
 The company is operating since
decades and has a significant market
share in auto mobile industry.
 It has a strong online media presence
through TVCs including marketing
activities and strong advertising.
 The company has its presence in over 5
continents making it a global player in
auto mobile sector. The company operates in various bath
verticals including water heaters,
wellness range, showers, steam cabin,
sanitary ware and spa.
Weakness
 The companies products are high in
terms of prices as compare to its other
competitors.
 The company being a market leader
might act as a negative aspect because
it will always be under the public eye
for any activity it does.
 The company offers limited products as
compared to other competitors.
 The company also faced issues related
to labour union due to acquisition with
Tata.
Opportunities
 The company is already doing very
well in the auto mobile sector and has
the exposure to explore more in the
Threats
 The company can be affected by
various government regulations and
policies related to fuel prices and spare
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SUV segment.
 The company can explore more and can
enter in producing hybrid models of
luxury cars.
 For Jaguar, its a beneficial time to uplift
and boosts their revenues and make
money as there is rise in people's
disposable earnings they are tend to
spend more on luxury. The company can target countries that
have developed market such as China
and India in order to take benefit of
consumer's untapped capacity.
part prices which effected the
manufacturing of luxury cars.
 The company's cost of production can
be affected by expensive raw materials.
 Jaguar's competitors are giving tough
competition to the company and all of
them are well-settled players in target
demographic including car
manufacturers such as Audi, Porsche,
Mercedes.
VRIO Framework-
It is a tool that involves the formation of a firm's strategic schemes. The process begins
with a vision statement and involves continuous objectives through internal and external analysis
and implementation of strategies. In context to Jaguar, the strategic analysis provides
opportunities to build a sustainable advantage over its competitors. It can help the company to
enjoy more than average profits and thwart competitive pressures (JUNIAR, 2019).
Resources Value Rare Imitation Organization Competitive
Advantage
Successful
implementatio
n of Digital
strategy
Yes No Imitated by
competitors
Leading player Critical in the
industry.
Intellectual
Property
copyrights,tra
Yes Yes Risk of low
imitation
The firm has
not utilized
Provides
strong
competitive
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demarks and
rights.
advantage
Brand
awareness
Yes Yes No Utilized its
brand position
in various
segment
Sustainable
competitive
advantage
Pricing
Strategies
Yes No Limited in the
industry
Yes Temporary
Competitive
advantage
There are two categories in the resources of an organization which includes Tangible and
Intangible Resources. In context to Jaguar Rover its physical entities involves Plant, land,
buildings, equipment, inventory and money whereas the Intangible resources of the company
involves brand names, sills and administrative level of mangers, goodwill, copyright, trademarks
etc(Lawton, 2017).
The components of VRIO in Jaguar Land Rover includes-
Value : The Bond Valuation VRIO Analysis depicts that the Jaguar Land Rover's patents are
highly valuable resource as it allows the company to sell its products without interference of its
competitors. These patents also helps the organization to get licensing revenue. According to the
S. Veena Iyer there are various resources that are critical to the firm which includes operations
management, financial resources, marketing expertise and human resources.
Rare : The company need to ask whether its resources are valuable to the company and are
costly to attain or rare in nature. In case the resources are not rare in nature, both the new entrants
and present competitors can able to get easy access and enter the competitive landscape.
Costly to Imitate: According to the company, its core differentiation is difficult to imitate and the
imitation of products can be only done in two ways which includes Duplication of company's
products and company's competitors coming up with substitute products.
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Organizational Competence : It measures how company has able to harness the valuable, rare
and difficult to imitate resources in the market place. The exploitation level analysis of the
company can be done through two perspectives. The exploitation level is dependent upon
execution strategy and execution team of the firm.
3.Analysis using Porter's Five Forces model
It is a framework that analyses and identifies five competitive forces that help to
determine an industry's strengths and weaknesses and shaping the industry. It is used to identify
the structure of industry and determine the corporate strategy. In context to Jaguar, it will help
the firm to understand and provide solutions to cope up with the competition. There are five
forces that determine drivers of profitability for each industry(Maritan and Lee 2017). Threat of substitute products and services : In case of the company, if the threat of
substitute is high as compare to customers than it need to continuously invest in R&D. Its
important for a company to develop products and services and make sure they are made
up of high standard quality. Consumers can easily switch to new alternatives and
substitutes where it does not make a difference and requires any input. Various factors
that can result in customer shift to other substitutes includes reduction of quality,
switching costs of buyer, close substitution, price performance of substitute. Bargaining power of suppliers : In this context, if the company have suppliers having
strong bargaining power then it will result in extracting high price from customers. It
refers to suppliers ability to decrease or increase prices. In case of few alternatives of
suppliers it will be a threat to the company and it need to purchase its raw materials
according to the supplier's terms. Bargaining power of suppliers can be affected by few
potential factors which includes Strength of distribution centre, input differentiation,
input substitute availability etc (Mishra, 2017). Bargaining power of buyers: In context to Jaguar, if the buyers have strong bargaining
power it can result in driving prices down and limiting the potential of consumers to earn
sustainable profits. It involves the customer's ability to take down prices. If the consumer
switches to another products due to level of cost it depicts the Bargaining power of
buyers. The bargaining power of buyer is high if there are various alternatives available
to the customers.
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 Threat of new entrants: In context to Jaguar, there is high chances of threat because of
new entrants as compare to current players who are willing to earn profits in order to
reduce the threats. In case of industries it involves high profits and as the result of that
there are chances of entry of new competitors. The entry of new entrants will impact the
overall profits of the industry and cause a reduction in profits. In order to deal with the
new entrants the company need to block the entry of competitors in the industry. Rivalry among existing players: In context to Jaguar, if the competition is tough then it
will be difficult for players in the existing market to earn sustainable profits. There will
be a high chance of competitors if the resources and money are limited. It will also result
in weaken the position of the company. The potential factors that influences the
company's competition involves Sustainable position in competitive advantage,
continuous innovation(Purkayastha, 2018).
In case of various industries, it seems to be difficult to analyse from outside but when it comes to
analysing it closely these five forces helps the organization to determine the drivers of
profitability. In context to Jaguar, in order for the firm to achieve above average profits in
comparison to the other players in the industry. The company need to develop sustainable
competitive advantage.
4.Application of range of theories, concepts and models.
In order to devise the strategic planning for Jaguar Land rover, the company uses various
theories, concepts and models to devise planning of strategies for the organisation. In context to
the company, it uses Ansoff Matrix which includes four dimensions. Ansoff Matrix is strategy
involving competitive analysis. In context to Jaguar, it uses Ansoff Matrix to understand various
strategies which includes Market Development, Market Penetration, Product Diversification and
Product development strategies. The company's leaders can employ these strategies in building
more sustainable margins(Shen, 2018).
Market Penetration : It involves promoting existing products of the firm in existing market. In
context to Jaguar Land Rover the company does market penetration in various ways. The
company uses various strategies to promote their current products by conducting sponsored sport
events. It helps the company to promote its products. In auto mobile sector, promotion through
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sporting events plays an excellent strategy in promoting company products. Another effective
strategy that Jaguar uses is to offering new innovations and variants of existing products with
better performance and greater functions. This helps the company to attract more and more
customers and offering after-sale services and various forms of maintenance. The company also
does strategic alliances to promote its products and to reduce competition and increase its market
share. This strategy is effective when the organization has the potential to grow its market share
in the present industry. In the present environment, it involves approach related to sales driven.
In market penetration, it can be achieved through various methods which involves reaching
directly to consumers, increasing sales touch points, improving dealer network, increasing the
market share of customer total spending etc(Valenti and Horner, 2020).
Market Development: It involves promotion of existing products in new markets. In context to
Jaguar Land Rover, it uses various strategies for market development and expanding its business
geographically. In the present scenario, the organization has total number of five production units
in the UK and one in India. The company can further establish its manufacturing units in North
America and Australia. This will result in reducing product prices as the company will not be
required to export to India or United Kingdom. Various other strategies that company can use
involves vehicles in various variants and developing vehicles for those who have limited budget
but are desiring to purchase a sports vehicle or luxury car. It will help the company to create new
market segments in existing markets. In order to develop market, it requires strong promotional
campaigns. It also involves efforts relating to create new markets and channels for current
products. It involves tying up with complimentary companies in order to boost sales of current
products, entering new markets and entering international markets(Varadarajan, 2018).
Product Development : It involves launching a new product in existing market. In order to
launch a new product a company attempts to go for product development. The main strategy that
company uses in product development is to launch new products. It can be done through
launching new models of earlier vehicles, offering new models with improved specification,
better performance and higher creativity. In terms of luxury, when it comes to auto mobile
industry, the new models are welcomed with much interest and enthusiasm by brand lovers.
Under this category of product development, the products went through various quality checks,
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tests and development steps before they are launched. In product development, each product
launch is supported with marketing campaigns to achieve growth and success. In addition to that
it involves adding new features to the existing product or developing new products to the existing
market. In this scenario, the products and the customers remain same but the organization keeps
launching better and improved products to target existing market(Yucel, 2018).
Diversification: The company operates in single industry and involves great potential to
diversify in various methods. In context to Jaguar, it can establish its boundaries and other units
in various parts of the world. The company can develop its logistics system in order to deliver
units to retail outlets. Doing product diversification, will help the company to increase its supply
chain performance, the company also has the potential to diversify its operations in various
industries which involves smartphones, non-luxury vehicles, heavy machinery and consumer
electronics. The company's ability to innovate and run a successful brand name can result in
winning a advantage and winning factor resulting in successful diversification. Under this
scenario, it uses various diversification strategies which involves both the market and product
being new. It is used when a company see an opportunity in a completely different industry
(Yuan, Xue and He, 2021).
Shareholder Analysis:
It is the first step in the stakeholder management and is a important process which
involves successful people who get support from others. In Context to Jaguar Land Rover, the
company need to manage its stakeholders in order to ensure success. Shareholder analysis is
important as it helps in getting the project into shape, building understanding among
shareholders and getting ready for future scenarios. The stakeholder analysis involves various
steps :
Identification of Stakeholders :
It is important to identify your stakeholders which involves customers, community,
interest groups, suppliers, contributors etc.
Prioritize Your Stakeholders :
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After identification of stakeholders it is important to prioritize. In context to Jaguar Land
Rover, the company need to prioritize its stakeholders in terms of Manage closely, keep satisfied,
keep informed and monitor.
Understand Key Stakeholders:
After identification and prioritizing it is important to understand key stakeholders. In
context to Jaguar Land Rover, the company need to understand its stakeholders to work out and
engage and communicate with them.
CONCLUSION
From the above report, it can be concluded that a business strategy involves various
actions that helps a company to achieve its business objectives and helps to gain a competitive
advantage. In context to Jaguar land rover, the company uses various business strategies to
achieve its objectives. In the present report, in order to analyse the external environment
PESTEL analysis is done with SWOT analysis used to understand its internal environment. In
addition to that it involves VRIO framework and all the five forces used to analyse the
competitors, buyers and suppliers nature and behaviour.
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REFERENCES
Books and Journals
Anderson, M. A., 2019. The business case for CSR: A supply chain management
strategy (Doctoral dissertation, Capella University).
Brønn, C. and Brønn, P. S., 2018. Corporate strategy. The International Encyclopedia of
Strategic Communication. pp.1-18.
Galpin, T., 2020. Nudging innovation across the firm–aligning culture with strategy. Journal of
Business Strategy.
Jain, I., Pal, A. and Gupta, A., 2017. Business strategy simulation development.
JUNIAR, A., 2019. The Application Of Sustainable Competitive Advantage As A Culinary
Business Strategy" Depot Ayam Gephok Pak Giek" In Jember-East Java.
Lawton, T. C., 2017. Cleared for take-off: Structure and strategy in the low fare airline business.
Routledge.
Maritan, C. A. and Lee, G. K., 2017. Resource allocation and strategy.
Mishra, S., 2017. Integration of talent and mobility function: strategy for HR to manage
business. Strategic Hr Review.
Purkayastha, A., 2018. Performance of business group affiliated firms in emerging markets:
Causal mediation analysis of internationalization and investment into innovation
strategy. International Journal of Emerging Markets.
Shen, N., 2018. Family business, transgenerational succession and diversification strategy:
Implication from a dynamic socioemotional wealth model. Cross Cultural & Strategic
Management.
Valenti, A. and Horner, S. V., 2020. Leveraging board talent for innovation strategy. Journal of
Business Strategy.
Varadarajan, R., 2018. Innovation, innovation strategy, and strategic innovation. In Innovation
and Strategy. Emerald Publishing Limited.
Yucel, S., 2018, December. Estimating the benefits, drawbacks and risk of digital transformation
strategy. In 2018 International Conference on Computational Science and Computational
Intelligence (CSCI) (pp. 233-238). IEEE.
Yuan, C., Xue, D. and He, X., 2021. A balancing strategy for ambidextrous learning, dynamic
capabilities, and business model design, the opposite moderating effects of environmental
dynamism. Technovation, 103. p.102225.
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