Strategy in Practice

STRATEGY IN PRACTICE
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
A) Growth chances and emerging threats in automobile industry environment...................3
B) Automobile sector attractiveness......................................................................................5
TASK 2............................................................................................................................................7
A) Identification of unique resources for Maruti Suzuki .....................................................7
B) value chain analysis applies to identify organization’s activities.....................................8
C) Application of VRIO framework....................................................................................10
TASK 3..........................................................................................................................................11
A) Suggestions in form of set of new strategic options.......................................................11
B) Evaluation of chosen strategic option by using SAFE criteria.......................................13
REFERENCES .............................................................................................................................14
Appendix........................................................................................................................................15
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INTRODUCTION
Strategy refers to an activity taken by manager to gain one of more benefits and achieve
set goals and objectives. It includes setting priorities and aims, mobilizing key resource and
identifying actions to achieve an aim to execute plan or tactic. Strategy development for a
venture means to develop a procedure which guide companies in recent time to successful
further. The current assignment will be based on Maruti Suzuki, which falls under category of
leading auto mobile manufacturers in the world. It is a subsidiary of Suzuki Motor Company
establish in Japan. Brand is known as the biggest passenger car firm which account for over 50%
of domestic car market. It has operated its venture within auto mobile industry where number of
skilled workers and engineers are working and performing daily task or act together in order to
serve its best and excellent products or services to wide consumer base.
This study will be divided into three tasks. Task one will explains progress opportunities and
current emerging trends in chosen sector environment. It will define industry attractiveness and
justify unique resources for company. Furthermore, this report will clarify usage of value chain
and CRIO concept. It will explain possible suggestions in context of new strategic options for
chosen company and justification in regard to specific one.
TASK 1
A) Growth chances and emerging threats in global automobile industry environment
The Global automotive sector encompasses a wider range of organizations and businesses
included in development, design, manufacturing, advertising and selling of motor vehicles. It
begins in 1860s with a hundred of producers that pioneered horseless carriage. There are a lot of
barriers occurred in growth and success of chosen sector, which may define by using specific
models. The scope of this analysis is to determine threats and opportunities in the context of
global automobile industry.
PESTLE analysis-
Political factor-
In case of global automotive sector, increase taxes or tax rate, is one of the biggest
emerging threats for chosen industry (Pandit and et.al., 2018). As it put negative impact on
supply chain and production operation of firms in term of increasing products price and cost of
manufacture procedure (Kumar and et.al., 2020). Because of this element all the organizations
that have been operated under this sector may experience a lot of negative things in form of
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maximizing pressure for manufacturing vehicles under budget without comprise in quality. The
tax has increased recently in smaller level due to (Vital, Essential and desirable) VED rates being
linked to inflation via RPI (Mattioli, Wadud and Lucas, 2018). As it possess as threat, that
impact negatively upon financial performance of sector. When government increase charges or
tax rate, it directly impacts trading and outsourcing process of companies in term of increasing
cost of product purchase and production management. When tax rates increased in the context of
global automotive sector, they may pay extra charges on trading process which may decrease
profitability and bring challenge to manage everything accordingly.
Economic factor-
Due to COVID- many people losses their jobs which made them unable to manage their
living standards. It increase unemployment rate more than last certain years. In term of
opportunity, this issue give chance to global automotive sector to hire new people in cheaper rate
from talent pool. Unemployment rate within UK and other countries has getting higher because
of COVID (Bell and Blanchflower, 2020). Global automotive sector have chance to hire those
applicants who are ready to work within profitable sector by following terms and conditions.
Due to increasing competition within job market, unemployment rate within UK may affected in
form of acceleratory number of unemployed people.
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It may give the best chance to strengthen workforce by hiring and selecting experienced
new candidate. This factor make hiring cheaper, which is quite beneficial for sector as it may
save money. This issue may consider as opportunity because it provide chance to recruit skilled
people who are not working in any brand or company.
Social factor-
In recent time, people need and demands relate to cars and other vehicles are changes as
they want to buy cars which provide safety while driving and offer entertainment sources. It can
put negative impact on overall sector because it manufactures products by considering needs of
its target market, which get changed due to safety purpose and other reasons. It may occur in
form of threat that put negative affect upon automotive sector. Furthermore, it can be said that
global automotive sector is influenced by changing people preferences and socio cultural trends
(Lin and et.al., 2019). Fluctuation in social factors like these two may possess threat for entire
industry, which is not beneficial for it. In recent time, people demand and decision related to
vehicle purchase is changing, as they consider and follow varied market trends. It is fact that
restrictions affect people who love driving as it discourages them and impact in negative manner.
Technology factor-
Technology advancement is an external factor which provides the best opportunity to
global automotive sector. Industry may grab this chance by using advanced technologies in the
context of manufacturing or offering self-drive facilities to buyers, which is quite beneficial and
essential as well in term of increasing sales and productivity levels. Self-drive is one of the
emerging and most trending technology that many companies while operating under automotive
sector has been used to provide excellent experience to customers (Green, 2020). It allows
industry to add value for buyers by adding innovation in form of self-driven facility. Global
automotive sector in recent time has manufactures the best quality vehicles by self-driving
vehicle technology. It is one of the best opportunities, which sector has grab and implement in
term of manufacturing a self-driven cars that had capability to ride without input from a human
operator. This opportunity brings a lot of benefits to sector in term of increasing customer base,
profitability and productivity as well as sales.
Legal factor-
Change in government regulations and rules govern for automotive sector could impact in
positive manner because overall industry and its companies has followed excellent standards of
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business governance, they follow legal laws and policies in concern of consumers’ safety and
well fare. It is one of those issues that sector solve and grow even better. It can be said that
fluctuation in regulations and policies may emerge as an issue which is not good for global
sector.
Furthermore, global auto-motive sector also complies its own practices according to
equality act 2010 terms and conditions in order provide the best facilities to staff at workplace
which in return boost productivity and profitability even better. This factor also considers as
growth opportunity which give from power to take effective action. Changes in Equality act
2010 impacting sector in positive manner, bring create growth and success opportunity as it
boost the productivity even better than last years.
Environmental factor-
Consumer and government are concern for environmental safety and nature protection
and because of that they put pressure on global automotive sector for reducing carbon foot,
which really very essential. It can consider as current emerge opportunity for industry which
impact existing business plans and strategies in positive manner. Global automotive sector gets
affected positively due to this factor because it has introduced and manufactured number of
vehicles that protect environment (Settey, Gnap and Beňová, 2019). This issue may consider as
emission level. In London, it has introduced ULEZ zone and will charge drivers driving non
ULEZ cars in UK (Morganti and Browne, 2018). By grabbing this opportunity sector may grow
even better and get unexpected success.
B) Automobile sector attractiveness
Industry attractiveness can define as further growth and profitable potential of a market,
which can determine by using specific concept or model that is mention below-
Porter’s five forces model-
Bargaining power of buyers -
Degree of this force is high because dealers are more aware about advanced features and
valuable services offer by automobile sector that has been demanding by many customers
(Lapko and Trucco, 2018). With great awareness, they conduct bargaining activity that may put
negative impact on those who are not adopting and improving quality of vehicles by adding
excellent features as it decreases sales and profitability and also leads to minimize operational
efficiency of firms, which is not suitable for current business performances. There are several
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