HI6006 Competitive Strategy Report: Car and Airline Industry

This report analyzes the competitive strategies of Toyota, Holden, Airlink, and Airlines of Tasmania, focusing on target market and global market strategies within the car and airline industries. It examines business models, including how Holden targets the youth market with innovative designs and how Airlink adapts its services to different markets. The report explores factors influencing target market attractiveness, modes of entry like joint ventures, and how companies like Toyota and Airlines of Tasmania tailor their approaches to specific regions. It also discusses the importance of business model selection for achieving sales goals, the segmentation of markets, and the strategic implications of choosing various entry modes. The study highlights how these strategies impact market penetration and revenue generation, emphasizing the importance of adapting strategies for global expansion.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
Name of the Student:
Name of the University:
Author’s Note;

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Executive Summary
The modern day business is largely dependent on its strategies. A good business strategy is
needed for the overall smooth functioning of the any and every business organization. Two of the
most important strategies are target market strategy and the global market strategy. It is with the
help of these strategies that the business organizations determine the working of their overall
functioning. This paper will mainly aim at dealing with the target market and the global market
strategies of two companies that is Toyota and Holden from the car industry and Air link and
Airlines of Tasmania from the airlines industries.

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Contents
Introduction......................................................................................................................................4
Global Strategy as Business Model.................................................................................................5
Car industry.....................................................................................................................................6
Holden..............................................................................................................................................6
Airline industry................................................................................................................................7
Airlink Airline..............................................................................................................................7
Target Market and Mode of Entry.................................................................................................10
Conclusion.....................................................................................................................................12
Bibliography..................................................................................................................................14

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Introduction
It is a very common fact for any and every business enterprise to have a proper marketing
strategy. This marketing strategy involves the formulation of several plans and policies that
would help to achieve the goals and objectives of the company. There are different kinds of goals
that the company needs to attain, both in the long term and in the short term as well. This paper
will mainly deal with two of the important strategies that are required in each and every business
organization. These two strategies are target market strategy and global market strategy1. The
aim of this paper will be to analyze and see the impacts or the usefulness of these two kinds of
strategies in two industrial sectors that are the car industry of Australia and the airlines industry
of Australia. The two companies that have been selected from both the two organizations are
Toyota and Holden and Air Link and the Airlines of Tasmania respectively. Through this paper,
attempt will be made to see how the target market strategy and the global market strategies have
come into these two organizations and what kind of impacts these strategies are having on the
overall working of the said industries.
1 Frynas, Jedrzej George, and Kamel Mellahi. Global strategic management. Oxford University Press, USA, 2015.

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Global Strategy as Business Model
Every business organization works on the fundamentals of a business model. It is a
commonly used phrase that refers to the process by which a business enterprise operates on a
daily basis so as to achieve the aims and objectives set by the company. Two factors that impact
the building and analysis of a business model are pricing and cost. Business model explains the
day to day operations of a business unit in a visual and analytical way sometimes the business
model are also not explicitly articulated. It is basically a conceptual framework that summarizes
how a business enterprise produces, conveys, and gain monetary value in exchange for the
products or services it has to offer to the target market2.
One of the objectives that all small or big business organizations have is to create a global
presence and to expand the company so that business can grow. In order to do this it must
reconsider the business model the company was following and mould it in accordance to the
impact of global expansion, this change should reflect in every aspect of the business model.
Global strategies of company change with the expansion and the country it is expanding in to as
a lot of external business environment changes in the industry and the market when the country
of operation changes3.
2 Bocken, N. M. P., et al. "A literature and practice review to develop sustainable business model
archetypes." Journal of cleaner production 65 (2014): 42-56.
3 Andersen, Torben Juul, and Ulf Andersson. "Multinational Corporate Strategy-Making: Integrating International
Business and Strategic Management." The Responsive Global Organization: New Insights from Global Strategy and
International Business. Emerald Publishing Limited, 2017. 13-34.

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Car industry
Holden
One of the important aspects of the business strategy is to determine what Holden offers
to provide to its customers. It mainly aims at providing quality vehicles to its customers. Holden
takes very much care about the fact that there should not remain any loopholes on their part in
providing full satisfaction to the customer satisfaction. It takes care of the fact that the quality of
the raw materials used for developing the final vehicles are of superior quality. It is also evident
from the business networking model that there exists a very strong connect ion between the
suppliers and the purchasing unit4.
Holden mainly aims at the new generation of Australia that is the youth. As this particular
sector of customers are always in search of the most innovative and modern car designs. Holden
brings them just what they look for.
To attract a global target market emerging leaders of business suggest cultivating
and harnessing the endless possibilities of social media. Social media has to be a part of the
business model that the company was traditionally using as it can attract people from diverse
location towards the Products or services that the company is offering. Being farsighted by the
company is a good approach to understand and analyze the global market. For a company like
4 Timmer, Marcel P., et al. "An illustrated user guide to the world input–output database: the case of global
automotive production." Review of International Economics 23.3 (2015): 575-605.

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Holden whose target market is the youth of Australia should consider the segmentation if they
were to lunch in India. As driving or owning a car in India by the youth is a low possibility5.
Price and cost are two important aspects in a business model, while expanding in to other
nation states a company should understand the economic environment and the market
environment of the country while setting the price limit. The competitors already present in the
market are also a point of price determination.
Airline industry
Airlink Airline
Small airlines companies merged to form the Airlink now it is a member of The
International Air Transport Association. The company is committed to the optimization of
regional air transportation by offering high performance As a part of expansion strategy in the
business model the company has come together with government of Switzerland to launch
Switzerland Airlink. Keeping mind the population of Switzerland and the market environment of
the airline business the price is set to a reasonable standard. There are several facilities that are
customized according to the target market of the company in Switzerland6. The company has
several agreements with interline agreements that provide the flyers with services in Africa,
South Africa and also the rest of the world. The company has a reputation and goodwill of
5 DaSilva, Carlos M., and Peter Trkman. "Business model: what it is and what it is not." Long range planning 47.6
(2014): 379-389.
6 Borenstein, Severin, and Nancy L. Rose. "How airline markets work… or do they? Regulatory reform in the airline
industry." Economic Regulation and Its Reform: What Have We Learned?. University of Chicago Press, 2014. 63-
135.

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punctuality and accountability which has been adopted in the expansion strategy as well.
Goodwill not only impacts the business form the consumer end but also from the business to
business aspect as other partners of the company always wants someone they can rely on. The
partnership strategies in airline business models, have full association or have supportive
agreement, have proven to become an influential instrument for expanding networks,
maximizing the revenue, improving the services provided and reduction of the price quality of
service to the flyers. Over the years the company has gathered goodwill in term of safety and
precautions; punctuality dependability through the quality of professionalism exhibited by
every dedicated employee as well as improved productivity. For the stakeholders, the company is
committed to deliver high performance in order to increase the profitability of the venture7.
In terms of business model the company offers quality service at reasonable price, there
are several offers for regular flyers and the price of the flights are keeping in mind to be used by
people from the middle income group of people to high income group of people. The company
doo not promise business class services but they do promise to deliver in time and high quality.8.
7 Grant, Robert M. Contemporary Strategy Analysis Text Only. John Wiley & Sons, 2016.
8 Casadesus Masanell, Ramon, and Feng Zhu. "Business model innovation and competitive imitation: The case of‐
sponsor based business models."‐ Strategic management journal 34.4 (2013): 464-482.

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Target Market and Mode of Entry
The target market selected by car company Toyota and airline industry Airlines of
Tasmania are analyzed in the report. There are four factors which measure the attractiveness of
the target market. These factors are the size of the market and the growth rate, institutional
contexts of a particular country and the competitive environment of that country. The target
market selection is of paramount importance for a business organization and the different modes
of entry are exporting, strategic alliance and joint ventures, licensing and foreign direct
investment.
TARGET MARKET AND MODE OF ENTRY OF TOYOTA
In the year 1937, the Toyota Motor Corporation was established in Japan. The Japanese car-
maker have highest market share in Australia and in 2008, the Japanese car maker was the top
car manufacturer and seller in the entire world. Toyota has adopted different strategies for target
market and this strategy changed from time to time to increase sales of the company.
Initially Toyota manufactured subcompact cars which were targeted to the middle-class
and upper middle class sections of society. These cars were economical were preferred by
consumers who required small cars for transportation. However, the strategy preferred by Toyota
is Adjacent Segment Strategy and thus the company started manufacturing large sedan cars for
sections of society who crave for luxury and have good purchasing power.
Toyota uses Differentiation Strategy and thus the company adopts multi-segment target
strategy by offering different prices for cars targeted for different sections of the society.

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The target market of Toyota also includes sections of society who are looking for
premium sports car like Land Cruiser, Sequoia, Rav4, 4Runner. The cars are priced differently.
Thus Toyota adopts multi-segment target market approach by targeting different sections of
society in countries like the United States, Australia and Japan by manufacturing tailor-made
cars and customizing the price for each target market.
The company started its operation in Russia where domestic market was growing and
established 8 factories in UK, France and other parts of Europe. The company targeted Europe
to become the leading player in global market. In Australia Toyota manufactures hybrid cars
powered by gas and electricity so that it can address concerns like increase in price of fuels.
Toyota has a Joint Venture with GAC Toyota Motors Company headquartered in China,
recently the company has established a joint venture with Mazda to develop electric vehicles in
the United States. Toyota has also acquired ownerships in manufacturers like Central Motors Co,
Kanto Auto Works Ltd.9
AIRLINE INDUSTRY
The airline of Tasmania targets the regional market and is based in Hobart, Tasmania.
The target market of the airline company is the regional market of Launceston, Tasmania
and Cape Barren Island. The company provides services for business, leisure and scenic flights
in Tasmania. Thus the target market of the airline is tourists and locals for sightseeing and the
company provides only chartered flights. The target market of the company is also the section of
9 Aghdaie, Mohammad Hasan, and Maryam Alimardani. "Target market selection based on market
segment evaluation: a multiple attribute decision making approach." International Journal of Operational
Research 24.3 (2015): 262-278.

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the society who seeks training for flying. The company also provides services to New South
Wales and targets domestic passengers in the country.
The mode of entry of the Australian airline is joint venture with Par Avion. The company
received tourism award from Tasmanian Tourism hall of fame for proving services related to
tourism. The joint venture helps the company to serve the tourism demands of the Launceston
Airport and Cape Barren Island. The company has also started partnership with Sharp Airlines. A
new service was introduced by airline of Tasmania from Hobart to King Island via Wynyard.
Partnership with University of Tasmania for the study of training and has a registered training
organization.10
Conclusion
The choice of business model is important for an organization to achieve its sales goals and
profits. Company also aims to expand and the business model in the home country may not be
suitable in foreign markets. The proper selection of business model helps a company to achieve
the customer base in foreign market and plays pivotal role in revenue generation. Proper choice
of business model can increase the operational efficiency of an organization. The target market
selection is also important for an organization. At first the market needs to be segmented on basis
of variables like the demographics, geography and psychographic variables and the target market
of the company is selected after market segmentation. The attractiveness of the market is
analyzed before the target market is selected by a company. Some companies follow targets a
multi-segment market for greater penetration in the market. The choice of mode of entry is also
important for a company. There are several modes of entry like export, import, Joint Venture,
10 Mudambi, Ram, Lucia Piscitello, and Larissa Rabbiosi. "Reverse knowledge transfer in MNEs:
subsidiary innovativeness and entry modes." Long Range Planning 47.1 (2014): 49-63.

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Licensing, Franchise model and Market Acquisition. The choice of proper mode of entry is of
paramount importance for expansion in the global market. Company often acquires competitors
in the same industry which helps them to secure their position in the market.

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Bibliography
Aghdaie, Mohammad Hasan, and Maryam Alimardani. "Target market selection based on
market segment evaluation: a multiple attribute decision making approach." International
Journal of Operational Research 24.3 (2015): 262-278.
Andersen, Torben Juul, and Ulf Andersson. "Multinational Corporate Strategy-Making:
Integrating International Business and Strategic Management." The Responsive Global
Organization: New Insights from Global Strategy and International Business. Emerald
Publishing Limited, 2017. 13-34.
Casadesus‐Masanell, Ramon, and Feng Zhu. "Business model innovation and competitive
imitation: The case of sponsor‐based business models." Strategic management journal 34.4
(2013): 464-482.
Frynas, Jedrzej George, and Kamel Mellahi. Global strategic management. Oxford University
Press, USA, 2015.
Mudambi, Ram, Lucia Piscitello, and Larissa Rabbiosi. "Reverse knowledge transfer in MNEs:
subsidiary innovativeness and entry modes." Long Range Planning 47.1 (2014): 49-63.
Timmer, Marcel P., et al. "An illustrated user guide to the world input–output database: the case
of global automotive production." Review of International Economics 23.3 (2015): 575-605.