Auto Industry Business Analysis

This assignment delves into the complexities of the automotive industry by examining key strategic elements. It investigates global versus local Corporate Social Responsibility (CSR) strategies, analyzing their impact within this sector. Performance measurement systems are explored through a literature review and research agenda, highlighting crucial metrics for success in the auto industry. The assignment further examines business models, competition dynamics, and niche-width strategies employed by companies like those in the UK automobile market.

Introduction to the Business
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Table of Contents
INTRODUCTION................................................................................................................................4
Question 1.............................................................................................................................................4
Purpose of a SWOT analysis...........................................................................................................4
QUESTION 2.......................................................................................................................................7
Major functions of management......................................................................................................7
QUESTION 3.......................................................................................................................................8
Four main components of the marketing mix..................................................................................8
QUESTION 4.....................................................................................................................................10
Advantages and disadvantages of the partnerships........................................................................10
CONCLUSION..................................................................................................................................12
References..........................................................................................................................................13
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INTRODUCTION
Business refers to the organisations in which exchange of goods and services is takes place
for one another or for the money. For operating proper and effective business it is important to
conduct some analysis which includes SWOT, PESTLE, Porter's five force, etc (Martin and Sunley,
2006). This helps enterprises in understanding their real position and market condition. On the other
hand, organisations need to have enough customers for growing and developing their business. For
attracting and influencing consumers, companies can use different methods such as marketing mix,
promotional mix and many more.
The present study includes proper description of the SWOT analysis with its purpose. Along
with this, it involves functions of management, components of marketing mix and advantages and
disadvantages of the partnership.
QUESTION 1
Purpose of a SWOT analysis
SWOT analysis is used for evaluation of organisation's internal environment. In this, each
letter has its own meaning and importance. It is one of the structured planning method which
analyse and eventuates the all four elements of the business. SWOT can be used for a firm, product,
place and industry.
The main purpose of organisations behind conducting SWOT is to knowing their internal
working environment. This provides all the real and actual scenario of the company and helps it in
making appropriate changes for improvements and enhancement (Martinez Sanchez and Perez
Perez, 2005). With the help of this, enterprises aware about the favourable and unfavourable factors.
In this, S refers to the strengths which represents, strong points of the company. These are
the characteristics of the business which benefits it in various ways. By using them, enterprises can
make their position strong and gain various competitive advantages. W stand for the weaknesses
which represents the loopholes of an organisation and place it at disadvantage with respect to the
other firms (Miles, 2005). On the other hand, O refers to the opportunities which can help business
in developing and growing by accomplishing the objectives. And T represents Threats that can
cause trouble or problem for the enterprises.
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 Strengths are the areas in which company is very good and with the help of which, it can
expand its business (Muller, 2006). For example, if organisational policies are strong factor
of any firm then it can improve the performance and work efficiency of its employees. So it
is essential to understand the strong points of business for its growth and success.
 Weaknesses are those areas in which firm lacks. These can negatively affect the working and
progress of the organisation. It is also important to get information about all the loopholes
for improving them (Using SWOT to enhance personal learning. 2016). For example, if
enterprise is not using new technologies for the production of products and services then it
can affect the productivity. By installing new machines and technologies, firm can increase
the production of products.
 Opportunities are those benefits with the help of which an organisation can grow and
increase its market position, number of sales, customer number, profitability and brand
reputation. By analysing opportunities, a firm can use them for its development and
improvement (Neely, Gregory and Platts, 2005).
 Threats are the trouble causing factors which can harm the business badly. It is necessary to
know about the threats so that appropriate actions can be taken for resolving them. It also
helps in removing the threats before their impact on the enterprise.
Determination of the SWOT elements is essential for the companies as with the help of this,
they can plan the steps properly for achieving the objectives. After identification of all the elements,
decision maker of the companies first evaluate that whether the decided objectives are attainable or
not. If they are not, decision maker needs to change them as per the SWOT results.
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Illustration 1: SWOT Analysis
Source (Using SWOT to enhance
personal learning, 2016)

Along with this, those organisations which uses SWOT for the internal analysis should ask
questions and properly interact with their employees for collecting appropriate and useful
information with respect to the strengths, weaknesses, opportunities and threats (Dahlqvist and
Wiklund, 2012).
Following can be strengths and weaknesses for a firm:
 Human resource management
 Finances
 Physical resources
 Production and sales
Following cam be opportunities and threat for the business:
 New trends
 Social, cultural, economical and political factors
 Funding sources
 Current events
 Innovative and creative strategies
All the above elements are used by the organisations at the time of strategy formation for
accomplishment of objectives. The strong relation between the opportunities and threats aware
business about the potential warnings and advices for using defensive strategies (Davenport, 2013).
On the other hand, strong bonding between strengths and opportunities represents the good situation
of the firm and for this, it can use aggressive strategies. Along with this, SWOT is also used by the
companies in matching and converting process. Matching is used for building competitive
advantages and converting is utilised for conversion strategies.
There are both advantages and disadvantages of SWOT analysis, advantages are;
 Achievement of objectives
 Create vision for producing practical results
 Provides meaningful and useful information for increasing potential
Disadvantages are as follows:
 Gives present information only due to which it is not possible to achieve long term
objectives (Fawcett and Pearson, 2015)
 It is not possible to determine the significance of one factor of SWOT on the another.
 It leads to generate various ideas but does not help in selecting best from the all.
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QUESTION 2
Major functions of management
Management refers to the process of dealing and controlling individuals in the organisation.
It helps in coordinating the efforts and performance of the employees for achieving the goals and
objective properly by the use of available resources (Goss, 2015). Effective and efficient resourcing
includes the deployment and manipulation of the human, financial, technical and many other
resources. On the other hand, management also called as academic discipline of social science
whose main aim is to study the social companies.
There are four major functions of the management which helps firms in accomplishing their
goals and objectives properly. These functions are explained below:
 Planning: In this, company needs to decide what it wants to achieve and how. For this, first
manager s of the organisation needs to conduct SWOT analysis for getting all the
information about the various challenges which they are facing or will face in the future
(Grimaldi, Rafele and Cagliano, 2012). This will help in deciding and forecasting the future
operations and economic situations. After all these processes, objectives with their deadline
are decided by the senior manager of the firm. As per the objectives, all the stages are
planned properly and efficiently.
For example, if an organisation wants to increase its sales then firstly it has to decide some
objectives i.e. to what percentage it wants to rise sales. After this, firm will have to collect all the
information from both internal and external environment which are useful in achieving the
objectives (Hatten, 2015). Then all the activities and process will be needed to plan properly. This
planing will help enterprise in accomplishing its objective of enhancing sales.
Along with this, planning helps in understanding the risks or issues which can be occurred at the
time of implementation. With the help of this information, organisations can select appropriate
strategy for handling that risk. It later helps in reducing the wastage of money, time and resources.
 Organising: In this, higher authorities organise all the activities and processes by bringing
physical, human and financial resources together (Rhee, Kim and Han, 2006). This helps in
achieving the goals properly and effectively. For this, activities are determined, classified,
assigned to the group of employees with their roles and responsibilities. In this, it is
important for the companies to delegate the work to the workers as per their interest of area
and skills. All these results to develop a good relation between the responsibilities and
authorities.
For example, for increasing the sales, sales manager of the firm needs to distribute the resources and
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organise the activities as per the planning. For this, manager has to identify the roles and
responsibilities of the employees so that they can perform well. Along with this, it is responsibility
of sales manager to delegate authority, assign work and provide proper direction to the team
members (Rhys, 2005).
 Leading: In this, manager or the leader of the company needs to motivate the employees for
improving their performance and work efficiency. They use various motivational theories
for increasing confidence and motivational level of the workers. For this, organisation needs
to have skilled, talented and knowledgable leaders for influencing team members to achieve
the goals (Slack, 2015). A good leader also help workers in developing and improving their
skills and abilities which lead to grow their career as well.
For example, for achieving the goal of increasing sales, leader of the sales team needs to encourage
team members to perform well. He/ she will have to monitor the performance and work efficiency
of the employees for guiding them and helping them in accomplishing the objective.
 Controlling: It includes the measuring achievements against the planned objectives and
goals. It not only helps in accomplishing monetary goals but also leads to achieve non-
tangible objectives such as minimising the customer complaints (Cravens and Piercy, 2006).
For Example, after the implementation of the all the activities and processes for meeting the
objective of rising sales, manager needs to monitor whole process for taking corrective actions
whenever needed. This will help in managing and controlling the problems properly
Importance of setting goals by the management is as follows:
 It provides focus to the employees and helps company in its growing and development
 It increases motivation and confidence level of the workers which makes them to perform
well.
 Team management becomes effective after setting goals
QUESTION 3
Four main components of the marketing mix
Marketing mix is a type of business tool which is used by the companies for developing
their marketing strategies. It is used by various companies for taking essential decisions which tends
to formation of effective marketing plan. There are four components of the marketing mix which
includes product, price, place and promotion (Ivy, 2008). All these main elements help in taking
appropriate decisions for influencing customers to purchase products and to get a positive response.
With the help of marketing mix, firm becomes able to put right product in the right place, at the
right price and at the right time. It also helps in improving the mistakes and issues for developing
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proper marketing plan. The major four components of the marketing mix are as follows:
 Product: It is that item which helps companies in fulfilling the demands, expectations ad
needs of the customers. These are of both tangible and non-tangible type. Tangible goods
include those which have independent physical presence such as car, bicycle, razor, etc.
Whereas non-tangible are the services which are only felt by the individual such as services
of hospitality industry (Marren, 2007). These products and services needs to be according
the desire and requirement of the people for satisfying them and making them to purchase it.
Along with this, each and every product has a life cycle which includes growth, maturity
and decline phase as the sales of the goods fall. So it is important for the marketers to
conduct proper research before taking any decision or action. For example, organisation like
BT Group used to conduct market research before taking decisions related to its products
and services. Due to the effective research and analysis, firm is able to provide high quality
and innovative services to the customers. Due to this it is one of the leading firm of UK
which is satisifing the users from many years.
 Price: It is the range of amount which customer pays for the product. Price plays very
important role in the growth of the organisations (Marketing mix- The 4 p's marketing.
2016). It is the only means of earning profit and increasing market share. Any kind of
adjustments in the price of the product impacts on the marketing strategy which generally
affects the both demand and sales. It is essential for the marketers to decide such price
which complements other components of the marketing mix. There are three basic pricing
strategies which include market skimming, market penetration and neutral pricing. These
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Illustration 2: Marketing Mix
Source (Marketing mix- The 4 p's
marketing, 2016)

strategies help in selecting appropriate price as per the features of the products and demand
of the customers. Some companies keep the price of their goods low for increasing number
of consumers and sales whereas some uses high price. For example, Tesco plc offers its
products and services to the customers at affordable price. This leads to attract and influence
people of all segments which enhance the sales and profitability (Richardson, 2008).
 Place: It refers to that place which is convenient for the users to access the product or
service. At the time of deciding proper place various strategies are used by the organisation
such as intensive, selective, exclusive distribution and franchising. Marketing channels are
utilised by the firms for stimulating the demand with the help of information, proximity and
promotions. Majority of the enterprises uses retail shops for selling their product to the users
but nowadays some firms have started using websites and telephone call centres as well.
 Promotion: It includes all those communication methods which are used by the marketers to
provide product information to the diverse people (London and Hart, 2010). The elements
include in promotion are advertising, public relations, sales organisation and sales
promotion. In this, advertising is paid method of promoting goods among the customers
with the help of television, radio and internet. On the other hand public relations consists of
press releases, sponsorship deals, exhibitions, conferences, seminars, etc. For example:
Thomas Cook, one of the leading travel and tourism firm of UK uses exhibitions and trade
fairs for promoting their trips and tours to the diversified people.
QUESTION 4
Advantages and disadvantages of the partnerships
Partnership is a kind of business operated by two or more individuals who shares its profit
and liabilities. In this, partners agrees to cooperate and coordinate each other for achieving the
objectives of their mutual interest. Partnership can be between individuals, businesses, interest
based organisations, schools, governments, etc (Murray, 2015). In all, companies do the partnership
for enhancing the likelihood of each accomplishing their mission and to amplify their reach. There
are different areas such as business, politics, knowledge, etc in which partnership agreements can be
formed. Along with this, there are different kinds of partnership which is as follows:
 In General Partnership, there are only general partners involved in the business. Each and
every partner takes participate in the various activities and processes of the organisation. It
is responsibility of every partner to develop and grow their enterprise. All the partners take
participation in the management activities of the company and fulfil their role and
responsibilities for the liabilities of the organisation. In this, if any of the partner is sued then
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all other partners are held liable.
 Limited partnerships consists of both general and limited partners. In this, limited partners
do not take participation in day to day activities of the company, it is only taken by the
general partners (Reiss, 2012). Along with this, the liabilities of the limited partners is
restricted. In some cases, limited partners used to be only investors whose role is only to
provide investment and receive share of the profits. All other activities including managing
and developing of business are done by the general partners.
 Limited Liability Partnerships (LLP) is not same as limited partnership or general
partnership. In this, all the partners have limited liability towards the enterprise.
Characteristics of the partnerships and corporations are combined by the LLP. In this, if any
of the partner is involved in wronful or illegal act will be consider personally liable. Other
partners of the business are not included in that act, there rights remain protected.
There are both advantages and disadvantages of the partnerships which are as follows:
Advantages:
 Sharing of skills: Two or more partners works for the growth and success of an enterprise
which results to sharing of skills, abilities and knowledge (Needle, 2010). It helps in taking
effective decisions regarding development of the business. Sometimes, it helps in generating
new and innovative ideas which leads to increase the market position and brand value of the
firm.
 More capital: Due to the partnership, there is always more capital to invest on the business.
It leads to take advantages of different opportunities by investing appropriately.
 Flexibility: It is easy to manage and run business in partnership because it has less number
of restrictions. Along with this, less interference of the shareholders makes the management
of firm more flexible (Advantages and Disadvantages of Partnership, 2014).
Disadvantages:
 Disagreements: One of the major disadvantage of the partnership is danger of disagreements
between the partners of the firm. Different ideas, perceptions towards the operations and
functioning of the organisation causes conflicts or disputes between the partners which
results to disagreements.
 Liability: General partnership have unlimited liability to each and every partner, this means
that everyone shares the liability and financial risk with respect to the organisation. This
sometimes make individuals to leave the partnership.
 Profit Sharing: In partnership equal profit is shared by the partners which tends to
inconsistency. In this, one or more partners do not put fair share for the management and
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running of the business but gets equal profit share. This situation results to cause
disagreements between the partners.
CONCLUSION
It is concluded from the above study, that it is essential to follow various strategies and
approaches for the growth and success of the business. With the help of SWOT analysis, companies
can evaluate their internal environment and make appropriate changes. This helps in informing
organisations about their strengths, weaknesses, opportunities and threats. On the other hand, with
the helps of four components of the marketing mix, firms can develop effective marketing plan with
the selection of appropriate strategies. In addition, four main functions of the management helps
business in operating their processes properly step by step. With the help of partnership, companies
can gain advantages of sharing skills and flexibility but there are some disadvantage as well. So it is
important to maintain partnership properly for the growth and development of the enterprise.
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