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Jaguar & Land Rover
Transcript of Jaguar & Land Rover
Threat of substitutes
Increasing liklihood of customers switching to public transport
Post-recession; customers switching to a cheaper, volume car manufacturer
Threat of new entrants;
Emergence of foreign competitors
High barriers to entry
Large ecnomies of scale
Key Performance Indicators
Bargaining power of suppliers;
Suppliers are very fragmented
High impact from switching suppliers
Increasing durability of car parts
Bargaining power of buyers;
Consumers are very price sensitive
Customers in the luxury car market are more demanding in their search for excellance and service
Analysis: Porter's Diamond
Five operational sites in the UK that sell to 178 countries
Sales have risen 19% since 2012 with 425,006 separate units sold:
UK sales up 14%
$2.87 bn joint venture into Chinese operations/R&D facility (with Chery Automobile Co Ltd)
Grow as a global competitor
Maintain strong brand/reputation
Committed to environmental innovation
Create long term shareholder value
2008: Tata motors paid £1.3bn for JLR
Small issues with new suppliers - building new relationships
Small injuries from new employees if a new production department is necessary
Later than other manufacturers to begin producing hybrid vehicles
New proceedures within manufacturing plants may cause operational delays
Cost of the investment
Risk of low-priced car not being accepted into an already well-established market
Production errors could lead to a mass recall
A lot of high impact press and public relations
Political meltdown abroad affecting any future manufacturing plants or relations
Destruction of production plant
Strong sales figures indicate good time for growth investment
No 'star' product
Small product portfolio in established markets
Diversification by expanding product range
Introduce different marque?
Focus on Growth;
Framing the Choices
In relation to its competitors, JLR's market share is low.
There are 5 options to help JLR retain competitenvess;
Maintain and build upon luxury market
Develop a fully electric car
Diversify products within the luxury car market
Diversify products into affordable car market
Expand into other industries, e.g. motorbikes
Strategy viewed through design lens
a change in approach towards business
growth of luxury car markets
Strong investment in R&D
Integration of other innovations into cars
Emmission's Regulation EU Directive
JLR's total market share: 3.27%
Key Competitors include Mercedes, BMW, Audi, Toyota / Lexus and Porsche.
Market segments they are competitive in include Dual-Purpose, Luxury and Executive.
Automotive groups competing aginst JLR often have diverse product portfolios
Often produced under a range of brands/Marques - E.g. Volkswagen (Audi), Toyota (Lexus), BMW (Mini)
Likelihood vs. Severity
Mitigating the Risk;
A strategic analysis
c = time taken for hybrid introduction
b = small injuries to new staff
a = new supplier issues
d = new procedures causing production line delays
f = well-established affordable car market
e = high cost of investment
j = expanding the product porfolio
i = political meltdown abroad
g = mass recall
Build on existing portfolio
Alternative energy/concept cars
Jaguar Land Rover benchmark through their own experiences based the impact of previous models.
This helps them to carry out self analysis and identify best practices.
However this can also lead to the production of similar products.
Jaguar Land Rover should look to benchmark externally against a competitor like Mercedes
- To create three new concept cars by 2017.
- To identify process and production savings by 2018.
- Maintain reputation in luxury car market.
- Produce 2 upper medium cars by 2020
- Maintain and improve luxury car sales year on year
- To continue worldwide expansion into new markets.
- To launch a new brand by 2019 ahead of the new car launch.
Diversifying into new markets
risk of not being received by consumers
consider the high cost of investment
recommend continuous review