Scenario Analysis for Proton Holdings Bhd and Geely Holdings Group

This article discusses scenario analysis for Proton Holdings Bhd and Geely Holdings Group, including diversification, new drive technologies, and large investments in productive capital and R&D. The article also includes an impact matrix on Proton, as well as an environmental impact analysis. The subject is Business Management and Strategic Management, and the course code and college/university are not mentioned.

1
Business Management and Strategic Management

2
Scenario Analysis
According to Erdmann & Hilty (2010), scenario analysis is defined as a procedure that helps to
estimate the expected portfolio value after a provided time. In order to protect the local
automotive industry, it is imperative to measure diverse reinvestment rates that will provide with
expected profits. This will help to provide a shift in the portfolio values thus helping to evaluate
the probable financial results. The collaboration that has taken place between Proton Holdings
Bhd and Geely Holdings Group will help to accomplish higher market share in the Malaysian
market.
Scenario 1
The scenario analysis that will help the company to gain in the future and maintain its market
share is diversification. In other words, greater diversification is regarded as an imperative
slogan in the automotive market. Diversification will initiate the introduction of biogas,
hydrogen as well as electricity that will be provided as a new energy sources. This could also
include a broad range of hybrids that will be combined with two sources of energy in the same
automobile (Qian, 2011). In order to deal with the competitors, the local car industry requires to
focus on using lighter materials in order to diminish weight as well as save energy.
Diversification will help to increase the green engine technologies that will diminish the overall
pollution. This will also help Proton Holdings Bhd to become a part of most profitable segment
that belongs to Mercedes Benz. Due to diversification, the customers will move to green
technological automobiles thus shifting from high-end automobiles such as Mercedes Benz.
Figure: Impact Matrix on Proton

3
Scenario 2
In order to predict the portfolio value, it is required to differ from the competitors in terms of
diffusion of new drive technologies. The new mobility concepts should also be introduced that
will help the company to dominate the Malaysian local car market. This will also help to develop
technological edge thus leading highly competent combustion engines (Liesiö & Salo, 2012). If
it makes Proton commercially successful, it will help to initiate imperative share of the value
added. The value added scenario analysis will provide a diverse assumption regarding the
imported share of electric mobility-pertinent elements. The new drive technologies will turn the
local car industry into hybrid car market. The market will include fossil fuelled engines that are
almost semi-autonomous. This will make the market highly sustainable thus persuading the
company to introduce energy saving electric automobiles.
Environmental
drivers
Impact
+5, -5
(A)
Probability
of factor
(B)
Potential as
opportunity
or threat
(AxB)
O or T Remarks
Political 3 4 12 O Government is

4
supportive
over national
car projects
Economic 5 5 25 O Consumer
buying power
is good, large
opportunities
Social 2 2 4 O People
sentiments on
the need for
cars are good
even with the
existence of
public
transportations
( GRAB,
LRT, MRT,
etc)
Technological 5 5 25 T People
appetite high
for full new
features and
cutting edge
technologies
Ecological 5 1 5 O Green engine
technologies
to reduce

5
pollution i.e
electric cars
are expensive
Legal 1 1 1 O No strict
regulations
Scenario 3
This scenario aims to make large investments in productive capital as well as research and
development (R&D). The company requires to make all probable efforts to make sure that their
investments that will help to maintain viability over the long-term. Scenario analysis will help to
examine the political and dictatorial surroundings, the probable attitudes of customers as well as
other pertinent aspects to endeavor to make sure that their investments persist to be lucrative as
circumstances change (O’Neill et al., 2014). The earnest desire of the customers will be easily
shifted towards Proton from Mercedes Benz due to advancement in technology. This will help
the company to evolve the technological giant at par with the competitors. The market share of
the company will as a result increase from 68 percent to 75 percent thus providing tough
competition to major car companies (O’Neill et al., 2014).

6
References
Erdmann, L., & Hilty, L. M. (2010). Scenario analysis: exploring the macroeconomic impacts of
information and communication technologies on greenhouse gas emissions. Journal of Industrial
Ecology, 14(5), 826-843.
Liesiö, J., & Salo, A. (2012). Scenario-based portfolio selection of investment projects with
incomplete probability and utility information. European Journal of Operational
Research, 217(1), 162-172.
O’Neill, B. C., Kriegler, E., Riahi, K., Ebi, K. L., Hallegatte, S., Carter, T. R., ... & van Vuuren,
D. P. (2014). A new scenario framework for climate change research: the concept of shared
socioeconomic pathways. Climatic Change, 122(3), 387-400.
Qian, E. (2011). Risk parity and diversification. Journal of Investing, 20(1), 119.