Strategic Management for Competitive Advantage in Car Manufacturing Industry

Project B Strategic Management for
Competitive Advantage

TABLE OF CONTENTS
Project B Strategic Management for Competitive Advantage.........................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Round 1............................................................................................................................................3
Decision making..............................................................................................................................3
Forecasts & results-.....................................................................................................................4
Round 2............................................................................................................................................5
Decision making..............................................................................................................................5
Forecasts & results-.....................................................................................................................6
Round 3............................................................................................................................................7
Decision making-.............................................................................................................................7
Forecasts & results-.....................................................................................................................8
Round 4............................................................................................................................................9
Decision making-.............................................................................................................................9
Forecasts & results-...................................................................................................................10
Learning.........................................................................................................................................11
Finance decision........................................................................................................................12
Marketing decision....................................................................................................................13
Operational decision..................................................................................................................14
Human resource management decision.....................................................................................15
CONCLUSION..............................................................................................................................16
TEAM PERFORMANCE.............................................................................................................17
Critically evaluate performance of team and a personal reflection on my role in team............17
REFERENCES..............................................................................................................................19

INTRODUCTION
In this study, an organization which is a car manufacturing organization aimed to enter in
the European hybrid and electric automobile market. The major business objectives are
associated with the increasing the net profit, reducing the strike rate, reducing the Co2 emission
and increasing the market share.
In the four years, organization has mainly achieved the most of the potential objectives.
However, with respect to the emission of CO2 there was no KPI measure has been performed.
The company has earned effective profit in the four years excluding the first year. The total sales
of the organization have been effectively increased that has provided the higher value to the
shareholders of the firm. Furthermore, the company has sold its cars without having any stock.
Overall, the company has been proven effective enough in terms of achieving its objectives
within holding the effective cash position and within refunding the total loan at the end of the
round four.
Rounds Total sales
(£m)
Total unsold
stock
(£m)
Round 1 2408.96 0
Round 2 3809.25 0
Round 3 3809.25 0
Round 4 5112.85 0
MAIN BODY
Round 1
Decision making
The organization is a car manufacturing entity so for the first round in-depth attention have
been paid in order to make the plan successful and feasible. For the first round there were two
models of car were decided. For City model the name of car was Galore and for Large model
Xpress.

The work force was decided to be 1500 and 1000, at the same time for hiking sales in the
market the selling price was decided to be 16224 and 28295 so can attract the customers.
Since the entity is coming in the market very first time, keeping this point in mind the target
was decided in a range. For the Galore car 25-40 and for Xpress car 41-50 units were decided.
The decision with respect to finance the entity paid attention to the prevailing circumstance of
the market and raised around 180 million funds as loan Faria, et al. (2021)
If see some other realm where it was essential to fabricate proper plan so can guide the
business, such as expenditures in R&D, training cost etc. the main aim behind these decision was
brining competency in the organization so can give tough completion to the competitors in the
market.
Forecasts & results-
The entity had taken some decision and along with it forecasted KPMs, in order to make the
plan feasible. With this regard as it has forecasted target units and selling amount, these
components had been same as intended. The selling price was 16224 and 28295 for both cars
which was pre-decided.
But one of the biggest failure for the entity was its market share, it has planned to keep share
around 1.43% and 1.95% for Galore and Xpress cars but in reality they just found it 1.34% and
1.83%, this is a serious matter of contemplation.
Some other Key Performance Measures for instance salary, strike days were as same as
forecasted. But there was a bit shuffle in Gross Margin. For Galore, it surged to 35.68% whereas
it was planned to be 35%, and for Xpress car it came down to 24.63% in reality whereas it was
forecasted to be 28% so this was one of the salient jeopardy Brundage, et al. (2018, June)
The entity has forecasted its R&D expenditures to be around 20 million but resulted to
18.45% which is a severe issue since the market is very competitive and with less share of
market it is not possible to performance better with less investments in R&D.
At the end the warranty claim cost surged to 31.69 million in reality wears intended to be
28.02 but the profitability of the round 1 is admirable. Operating profits had been 195.15 million
in actual rather planned to be 190 million, on the other hands the Post Tax Profit was 139.8
million which was forecasted to 130 million. So altogether it can be concluded that the
performance had been satisfactory.

Round 1
Forecast Result
Model City Large City Large
Car Name Galore Xpress Galore Xpress
Target 25-40 41-50 25-40 41-50
Workforce 1500 1000 1500 1000
Automation Allocation 60 40 60 40
Effective Workforce 1560 1040 1560 1040
Productivity 46.67 45 46.67 45
Unsold Stock 0 0 0 0
Selling Price(£) 16224 28295 16224 28295
Market Share(%) 1.43 1.95 1.34 1.83
Salary 500 500
Stike Days 4 4
Gross Margine(%) 35 28 35.68 27.63
Sale Income (£m) 2408.96 2408.96
Net Cash Position(£m) 1652.03 1652.03
Fixed Overheads(£m) 156.63 156.63
Promotion(£m) 261 261
R&D(£m) 20 18.45
Training Cost(£m) 5 5
Automation Investment(£m) 20 20
Warranty Claim Cost(£m) 28.02 31.69
Depreciation(£m) 69 69
Operating Profit(£m) 190 195.15
Post Tax Profit(£m) 130 139.8
Loan(£m) 180
Round 2
Decision making
Keeping performance and trends of KPMs into focus, some radical decisions were made in
order to enhance performance of the organization and also hiking its profitability capacity.
Seeing better performance in the market it was decided that Galore cars would be kept
below 25 units and Xpress cars would be more than 55, it might have decided to raise market
share. Along with change in target unit the decision was made about price, in the first round the
prices were kept to 16224 and 28295 but this time it has been 18000 and 27990.

This time the aim of grabbing market share was also hiked so can guide the entity to attain
its potential. With this regard the market share for Galore was decided to be 1.95% and for
Xpress it was 3.2%, the decisions were made keeping notion of higher profitability in mind
Thompson, et al. (2018)
At the end this time it is decided by the adjudicating authority to keep the expenses of R&D
higher since the market share of the entity is very lower and it can be hiked by intensive
investments in Research and development of products. In round 1st there were fewer funds raised
as loan but this time the decision was taken to hike loan amount to 800 million, it might be to
reduce cost of capital.
Forecasts & results-
The decisions were made to pave the way forward and there have been less amount of
discrepancy between forecasted figures and resulted figures.
As it was intended to sell out cars, Galore less than 25 and Xpress more than 55 so the entity
achieved the aim in this round. On the other hand, workforce, automation allocations, effective
workforce these all components were as same as planned, there was no discrepancy.
The figures of productivity aware 47.5 and 41.67 for Galore and Xpress in both forecasted
and resulted manner. But despite making intensive efforts the entity faced issue of raising its
market share, this time it was predicted to be 1.95% and 3.2% for the cars but have been 1.83%
and 2.95%, so on the basis of the figures it can be concluded that there is still need to pay
attention in order to surge the market share in the market Pinna, et al. (2018)
For this round Operating profits and Post tax profits were forecasted to be 450 million and
300 million but resulted better and had been 486.61 and 335.24 million which is quite
satisfactory for the organization, but as it can be seen that the dependency was escalated on loan
funds which is having need to pay fixed amount of cost of capital so pour on burden on the
entity.
Round 2
Forecast Result
Model City Large City Large
Car Name Galore Xpress Galore Xpress
Target <25 55> <25 55>
Workforce 2000 1800 2000 1800