Strategic Audit for Jaguar Land Rover

This report provides a strategic audit for Jaguar Land Rover, including internal and external audits, critical analysis of data gathering, and fact-finding for strategic decision making.

Strategic Audit

Table of Contents
INTRODUCTION...........................................................................................................................3
Internal Audit for strategic decision making..........................................................................3
External Audit for strategic decision making.........................................................................4
Critical analysis in data gathering and fact-finding which lead to strategic decision making7
CONCLUSION................................................................................................................................7
REFERENECES..............................................................................................................................9

INTRODUCTION
Strategic audit is determined as the in depth review of business organisation in order to
acknowledge that whether they are attaining their respective organisational objectives or not. It
also provides support to company in order to analyse that they are utilising resources in
appropriate manner (Choi, Choi and Kim, 2018). This report is based on Jaguar Land Rover, UK
based multinational automotive company. In this report, different framework like PESTLE,
SWOT and Porter's five analyses will be used for developing understanding over internal and
external audit towards strategic decision making. Furthermore, it will critical evaluate gathered
data for taking strategic decision making.
Internal Audit for strategic decision making.
In order to conduct internal audit of Jaguar Land Rover, its top management team
has made use of SWOT analysis for developing their understanding over core strength,
weakness, opportunity and threat of company which will further support them in taking
strategic decision. This framework has been explained as below:
Strength Weakness
Jaguar Land Rover owes strong brand image as
it is getting extent level of support from its
parent company that is TATA Motors.
Effective customer relationship management
unit has developed strong base of loyal
customers for themselves which maximises
their sales performance.
Product range of this company is low as
compared to its competitors which diverts
customers’ interest towards other companies
offering more variety in their product portfolio
(Casagrande and et. al., 2015).
Attrition rate is higher as compared to its
customers which directly increases requirement
of training and development for employees that
increases expenditure of company.
Opportunity Threat
Jaguar Land Rover can further go for market
expansion by entering into BRIC and Asian
nations which will develop higher
Increasing competition within the automotive
sector is becoming major threat for Jaguar
Land Rover.

opportunities for them.
The respected company can also acquire
success by collaborating with other companies
in order to attain number market opportunities
with one another support.
Increasing cost of raw materials can be seen as
another major threat for Jaguar Land Rover as
it will directly increase their expenses which
will reduce its profitability.
External Audit for strategic decision making
The surroundings of an organisation play a very crucial role in determining the overall
business process. In order to get the most effective and efficient outcome from business it is
necessary to consider all the essential environmental factors before carrying out the operations in
an organisation (Jeppesen and et. al., 2017). These factors can be evaluated by the help of
PESTLE analysis, as it is the only effective tool that significantly covers the major elements of
respective business environment, which certainly includes and determine the impact of political,
economical, social, technological, legal and environmental factors within the confines of a
respective region. Thus for the formulation of desired business strategies, in the context of Jaguar
Land Rover, the following analysis will be performed hereby:-
Political Factors: The first and major elements of external macro business environment
that is comprised of all the influential political powers within a nation. The trade policies, civil
and cultural rules, export or import trade laws, standards of business operations, labour laws,
employment and citizenship legislations etc. all these elements are a wide part of the political
factors in a country. The impact of political factor is compromisingly less negative on the
operations of Jaguar Land Rover in the parameters of United Kingdom. It is because of great
political stability in the nation.
Economic Factors: The economic factors within a country impact a business internally
as well as externally. These factors comprises of unemployment rates, GDP, economic
fluctuations such as inflation or deflection rate, foreign trade policies, rate of return on
investment, cash flow of particular state etc. Thus all these factors are quite developing and
economic in nature within the boundaries of United Kingdom. Being a most developed nation it
gives wide scope to the luxury auto mobile sector and its companies like Jaguar Land Rover to
segment and target the classic niche market at a high potential for the respective product.

Social Factors: The social factors include the essential elements of community, society
and a specific trade culture. The buying behaviour of consumers and the evolution of market
trends are determined in this sector (Brown-Liburd, Wright and Zamora, 2016). Thus it brings
quite complexities and a effective load of market competition to the Jaguar Land Rover as they
have to keep going with the consumer taste trends for the efficient sustainability in the market
areas of United Kingdom.
Technological Factors: The technological factors are the remarks that are a result of the
consistent growth and evolution in the procedures of business performance in a respective
region. Being a most efficiently technologically sound country there are certain technological
advancements are taking place within the confines of UK. The elements of IT sector in United
Kingdom are considered as in the highest position among the global level. Thus it became
necessary for Jaguar Land Rover to implement revolutionary techniques in the process of
operations to make the workings smooth. Whereas company can also take the help of AI
operating systems in upcoming cars to get the maximum coverage of the potential market shares.
Environmental Factors: The environmental factors are generally comprised of typical
weather conditions, climatic changes, all kind of natural resources etc. of a nation. The current
position of these factors are not in a very great condition in UK , so as to support the degrading
environment Jaguar Land Rover can enable a kind of environmental friendly measures such as
introducing electric cars and using energy efficient operation process. This will help in creating a
positive goodwill of the company in the market.
Legal Factors: all the crucial rules and regulations of a nation which are mandatory to be
followed by the small and big enterprises are the legal factors. The legal factors of UK are
determined in such a way to promote the industrialization and trading within the country under
respective guidelines (Dana, 2018). This helps Jaguar Land Rover to do the operations under the
legal frameworks of UK and increase the moral of its employees along with that it also
eliminates the chances of error and work restrictions.
Porter's five force analysis
Porter's five force analysis is an effective framework that supports in analysing overall
industry in effective manner.

Bargaining power of buyer (high): Influence of this force is moderate for Jaguar Land
Rover as there are lots companies offering similar kind of products thus its customer might
switch the brand while buying better car at low rates.
Bargaining power supplier (Low): Suppliers within the retail industry are huge in
numbers. Thus, companies like Jaguar Land Rover has lots of options in terms of supplier
therefore they can easily move to any of the supplier who cooperates with them and provides
them required material in timely manner (Jumbad and Chel, 2018). This directly reduces power
of supplier as in order to maintain their relationship with the company they have to agree or rates
offered by the company only.
Threat of new entrants (Low): Automotive industry has numerous of entry barriers
which makes it difficult for the new entrant to enter into the sector. Also, the industry requires
huge capital investment for establish business effectively. This ultimately depicts that threat of
new entrants is Low for Jaguar Land Rover.
Threat of substitutes (High): Influence of this force is very low for Jaguar Land Rover.
This is so because, there are very few substitutes available for this industry also if the any
substitutes takes place in the industry then its profit margin is very negligible which is so low for
the company to sustain longer in the automotive industry. This simply makes influence of this
force low for Jaguar Land Rover.
Competitive Rivalry (Moderate): Jaguar Land Rover owes huge proportion of market
share within the industry. This means that are very few competitors at marketplace who could
compete Jaguar Land Rover thus it is essential for the company to take some effective action for
attaining success within the industry (Malik, 2018). This simply shows that influence of
competitive rivalry is moderate.

Critical analysis in data gathering and fact-finding which lead to strategic decision making
On the basis of above specified sales image, it can be said that retail sales of Jaguar Land
Rover region wise is very high in North America. Whereas, when it is seen towards the
proportion of growth it can be said that retail sales performance of the company has declined by
almost 5.8% on yearly basis. From this, it can be said that performance of this company is
declining day by day. In order to overcome this in appropriate manner, it is highly important the
manager of the company to focus on introducing new models in their product range for serving
its customers in more effective manner. This will ultimately help them out in attracting more
number of customers towards them which will improve their sales performance as well as
profitability in appropriate manner.
CONCLUSION
On the basis of overall information provided, it is concluded that strategic audit is an
effective way of checking out business is meeting their predetermined objectives or not. PESTLE
and Porter's five force analysis has supported conducting external audit where SWOT analysis

has helped in analysing internal environment. Both the internal and external audit has equally
contributed in taking strategic decision making for the bright future of the company.

REFERENECES
Books and Journals
Choi, S., Choi, Y. S. and Kim, B. J., 2018. Auditors' Strategic Audit Pricing: Evidence from the
Pre-and Post-IFRS Periods. Auditing: A Journal of Practice & Theory, 37(4), pp.75-
94.
Casagrande, A. and et. al., 2015. The effect of competition on tax compliance: The role of audit
rules and shame. Journal of Behavioral and Experimental Economics, 59, pp.96-110.
Jeppesen, K.K. and et. al., 2017. The strategic options of supreme audit institutions: The case of
four Nordic countries. Financial Accountability & Management, 33(2), pp.146-170.
Brown-Liburd, H., Wright, A. M. and Zamora, V. L., 2016. Managers' strategic reporting
judgments in audit negotiations. Auditing: A Journal of Practice & Theory, 35(1),
pp.47-64.
Dana, C., 2018. A Strategic Audit of Tesla, Inc.: Electrifying our Future or About to Run out of
Energy?.
Jumbad, V. and Chel, A., 2018, September. Strategic use of control plan as a process audit tool
in automotive industry: A case study. In AIP Conference Proceedings (Vol. 2018, No.
1, p. 020006). AIP Publishing LLC.
Malik, R., 2018. an assessment of effectiveness of hr audit in automobile industries of haryana.