Comprehensive Analysis of Proton Automotive Industry: PESTLE & CPM

This report provides a detailed analysis of the Proton automotive industry, focusing on its external environment and competitive position. The report begins with an introduction to the automotive industry and the Proton company, highlighting its size, scope, and corporate culture. A PESTLE analysis is then conducted, examining the political, economic, social, technological, legal, and environmental factors influencing Proton's business. The analysis explores the opportunities and threats presented by each factor, such as political stability, economic conditions, consumer behavior, technological advancements, legal regulations, and environmental concerns. Following the PESTLE analysis, a Competitive Profile Matrix (CPM) is presented, comparing Proton with its competitors based on critical success factors like advertising, product quality, pricing, market share, global expansion, and consumer loyalty. The CPM helps assess Proton's strengths and weaknesses relative to its rivals. The report concludes by summarizing the key findings and emphasizing Proton's ability to adapt to industry changes. The report utilizes references to support its analysis and findings, providing a comprehensive overview of Proton's strategic position within the automotive market.

EXERCISE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PESTLE ANALYSIS .................................................................................................................1
Competitive Profile Matrix.........................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Industry which is chosen in this report is Automotive industry. In this companies which
are involved in designing, developing, manufacturing of motor vehicles. It is considered as
world's most important sector in terms of revenue. The company which is selected in this report
is Proton which is a Malaysia based company working in automobile design, manufacturing,
distribution and sales. Its size can be determined from the following data -
1. Area of operations:- South-east Asia, Australia, United Kingdom, Turkey, Middle East,
Chile, Egypt, Cyprus
2. No. of employees: - 12000 all over
3. Sales:- 56,297 Units sold (12% hike from last year) (Size and Scope of Proton,2017)
Company is enjoying its growing phase although it was found in the year 1983 and is
very well established in market (Shende, 2014). But still they are coming up with new products
and growing in the market. The corporate culture that is followed in Proton is that:
1. They focus on performance whether it is of company or individuals.
2. They focus on quality of output that will be given to customers
3. According to Proton, work should be performed efficiently by using technologies and
tools.
The competitors of Proton that are available in market are Spartan Motors, Inc, Westport
Fuel Systems etc. In this assignment, a PESTLE analysis is conducted on Proton and will discuss
how these changes are impacting the business of Proton.
PESTLE ANALYSIS
It is a tool which is used by company’s managers to analyse the effect of external
environment on work performed inside company (Pestle analysis of Proton,2011). While
discussing the case of Proton, the external factors are vary significantly. By analysing all these
factors, Proton can improve its business performance and overcome its threats. Pestle factors of
Proton discusses the growth opportunities in Automotive industry. When company faces some
kinds of threats in its macro environment, it can achieve growth by focussing on product
innovation, new inventions, etc. The analysis is as follows:-
1. POLITICAL FACTORS:- The Malaysian domestic automotive industry is strongly
protected by government and is seriously thinking in further developing the business the
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domestic auto manufacturers such as Spartan Motors etc. The political factors that are
significantly affecting Proton's market are:-
 Political stability of different countries,
 Growing free trade relations
From the above points, it can be described that if Proton is present in a country that is
having political stability then it can be said that it is having more opportunities to grow in that
market. Political stability helps in minimising challenges for company (Srdjevic, Bajcetic and
Srdjevic, 2012). If political issues are present then company is having potential threat and should
work carefully.
2. ECONOMIC FACTORS – In order to develop the automotive industry imported cars
can be heavily taxed in country which will lead to increase in prices of cars. In a
developing country where wages of people are increasing, there company is having more
opportunities of increasing its sales and gain more profit. But company is having a threat
also from the increasing cost of products which can decrease its number of customers.
Proton can expect growth in such countries that are having good economic conditions.
3. SOCIAL FACTORS - The sociocultural factors are affecting the business environment
of Proton significantly. People have an habit of purchasing different car model and using
branded products as status symbol. If company is selling products in a country who are
having consumer who are very brand conscious so company should sell products of high
brand only in order to increase their sales (Social factors affecting consumer behaviour,
2017). Also, rising environmentalist behaviour also gives an opportunity to company to
increase its customers.
4. TECHNOLOGICAL FACTORS – With the increasing awareness towards negative
environmental impacts from auto mobiles , leading car manufacturers in Malaysia is
coming up with new technologies to manufacture fuel efficient cars . With the improving
technologies in market, Proton can increase its operational efficiency and produce
products at low cost and selling at high cost. But it is a threat also because it can increase
competition in the market.
5. LEGAL FACTORS – In Malaysia, if companies are supporting the green movement
then then there is no tax imposed on such car manufactures but only on their hybrid car
models (Jaksic and et. al., 2015). If company is doing well in corporate social
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responsibility and is also following laws and regulations impacted by government on
company then it can facilitate growth in the market . Consumers are also attracted
towards companies who work within laws and are not involved in any kind of illegal
activity (Porter, Cunningham and Sanz, 2015).
6. ENVIRONMENTAL FACTORS- Malaysian customers has become more aware
towards the environment so Proton should do some environmental activities to get some
benefits from society. Proton should improve its environmental programs so that they
contribute something towards environment. If it is actively working towards benefits of
environment then company will be able gain trust of society and get more and more
resources .
Proton are able to cope up with the changes that are happening in company and
accepting it also in a positive way.
Competitive Profile Matrix
A competitive profile matrix is also designed by company in which comparison is done
between company and its rivals in which its strengths and weaknesses are discussed
(Bhattacharjee and Dey, 2015) .
Critical
success
factors
Weight Proton Spartan Motors, Inc. Westport Fuel
Systems
Rating Score Rating Score Rating Score
Advertisin
g
0.1 3 0.3 4 0.4 2 0.2
Product
Quality
0.13 3 0.39 3 0.39 3 0.39
Price
competitiv
eness
0.12 3 0.36 2 0.24 2 0.24
Market
Share
0.14 3 0.42 4 0.56 2 0.28
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Global
Expansion
0.15 3 0.3 4 0.6 3 0.45
Consumer
Loyalty
0.12 3 0.36 3 0.36 3 0.36
In a competitive profile matrix, comparison is done between the cited company and the
other major players of the industry (Sohel and et. al., 2014). It is very useful in knowing the clear
picture of company by assessing its strengths and weaknesses. Its score is measured on the basis
of critical success factors. The main advantage of using CPM is that it gives the chance of
including other companies also along with the cited company.
CONCLUSION
From the above assignment, it can be concluded that Proton is working well in its sector
and able to satisfy its customers always. The impact that political factors are having on business
activities of Proton are accepted by them and they are using these changes to bring improvement
in company.
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REFERENCES
Books and Journals
Bhattacharjee, D. and Dey, M., 2015. Competitive Profile Matrix: A Theoretical Review. ABAC
Journal. 35(2).
Jaksic, L. and et. al., 2015. Application of the correlated competitive profile matrix for support
adjustment to SMEs in winemaking. Journal of wine research. 26(2). pp.136-152.
Porter, A. L., Cunningham, S. W. and Sanz, A., 2015. Advancing the forecasting innovation
pathways approach: hybrid and electric vehicles case. International Journal of
Technology Management. 69(3-4). pp.275-300.
Shende, V., 2014. Analysis of research in consumer behavior of automobile passenger car
customer. International Journal of Scientific and Research Publications. 4(2). p.1.
Sohel, S. M. and et. al., 2014. Competitive profile matrix (CPM) as a competitors’ analysis tool:
A theoretical perspective. International Journal of Human Potential Development. 3(1).
pp.40-47.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a
water intake structure. Water resources management. 26(12). pp.3379-3393.
Online
Size and Scope of Proton. 2017.[Online].Available
through:<http://corporate.proton.com/en/News-Events/2017/October/Proton%20sales
%20improved%20125%20percent.aspx>. [Accessed on 1 November 2017].
Pestle analysis of Proton.2011.[Online].Available
through:<http://www.managementparadise.com/forums/principles-management-p-o-m/
208687-pest-analysis-proton.html>.[Accessed on 1 November 2017].
Social factors affecting consumer behaviour.2017.[Online].Available
through:<http://www.managementstudyguide.com/social-factors-affecting-consumer-
behaviour.htm>.[Accessed on 1 November 2017].
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