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BRABUS

Strategy simulation
by

Ahmed Aljalis

on 29 September 2012

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Transcript of BRABUS

BRABUS Vision The power to perform ''To provide luxury automobiles to the market , shape its future and delight our costumers" Agenda About us
Vision
Mission
Objectives
Environmental Analysis
Initial Strategy
Future Strategy
Corporate Social Responsibility Organizational Objectives Our Strategy Formulation Implementation Evaluation Pontential Entrants Buyers Suppliers Substitutes Industry
Competeitors Five Forces analysis Market Share High Low High Low Market Growth The Boston Matrix Objectives:
1- To maximize return of value to shareholders

2- To proactively and re-actively fulfill market needs

3- To be an image leader - self-directed symbolic brand

4- To maintain remarkable quality Initial Strategy Keys to success Strategy formulation Implementation Portfolio Diversification By well positioned to compete in high margin product segments. Continuous Growth Superior Financial Strength The aim is to continue financing investment from self-generated cash flow. By providing attractive, feature packed and fresh range products. By investing and allocating resources to grow our market share in each of the targeted segments. Future strategy Maintain existing strategy and continue to invest and expand in high income market segment

Maintain maximum awareness level of brand image

Using Strategic Corporate Social Responsibility to develop a competitive advantage "To be the number one premium automobile brand" Mission: What is our mission? Strong brand image Existing Market New Market Existing Products New Products Market Penetration Market
Development Product
Development Diversification Ansoff Matrix Board Narrow Low Cost Product
Uniqueness Cost Leadership Strategy Focus Strategy
(Low Cost) Differentiation Strategy Focus Strategy
(Differentiation) Competitive Advantage Target
Scope The Corporate Reputation Quotient Products And Services

Vision and Leadership

Financial Performance Social Responsibility

Workplace Environment

Emotional Appeal Strategic Corporate Social Responsibility
CSR in BRABUS is to generate sustainable competitive advantage

Investing in the development of eco-friendly technology to generate sustainable competitive advantage and promote environmental awareness

Thus BRABUS would gradually move on to use the ability to develop such eco-friendly solutions as a core resource/competence.

This move would enable us to remain in the green zone of stakeholder salience, uphold our brand image and move towards a blue ocean strategy. Highest Return on Investment Largest Market Share Performance measurement “The Social Responsibility of Business is to increase its Profits”
- Milton Friedman External Environmental Analysis Intense competition
First mover advantage will exist Availability of plenty of suppliers for raw materials

Maintain contractual agreements with more than one supplier to reduce their dominance Buyers of luxury cars would not be affected by substitutes to transportation such as public transport or purchase of second hand cars. Luxury car buyers will not have an issue with payment modes or with the issue to frequently change their car models

Luxury car buyers will bother more about an image to transport them. The car manufacturing industry is quite saturated but it does not prevent new entrants as industry is attractive

It will take an elongated time and effort for entrants to establish a brand image in the luxury segment (Grant, 2010) Automobile manufacturing firm focused on the premium segment with sales of £3,000 million and 3.5 billion Market value.

Our product segments and markets
> Large cars
Age groups: 25-40 and 41-55

> Luxury cars
Age groups: 25-40 and over 55 Values of BRABUS To manufacture exceptional and unique cars of superior quality.

To appeal to customers for our discerning taste, sophistication and refinement.

To enable our customers to be distinguished.

Offering safe and appreciable work environment to our employees.

To be a socially responsible player in the car industry.

To persistently increase the value of our shareholders over time. About BRABUS Porter’s 5 forces Entrants Suppliers Buyers Substitutes Industry
Rivalry Our Strategic Corporate Social Responsibility Main focus is on three factors/players for success:

1. The corporation itself: BRABUS
> Selectivity and sequencing – At BRABUS we focus on the luxury segment alone.

2. The customer
> Segmenting by objectives – At BRABUS we differentiate customers based on their purpose of usage. E.g. Private cars, Company Usage, Rentals

> Segmenting by customer coverage – We aim to sell our premium cars to people at the working age group and beyond. Thus our customer coverage would be between the age groups of 25-55.

> Segmenting the market once more – Fierce competition and thus vertical expansion.

3. The Competitor
> The power of an image - Luxury brands demand a strong brand name, heavy marketing of both brand name and models.

> Capitalization on profit/cost structure differences – Premium cars will be sold at higher profit margins.

> People, Money and Things – Luxury cars will be produced in less numbers so will reduce pressure on people and things. At BRABUS the introduction of new product lines will be from surplus cash. Strategy Creation 3C’s: The strategy triangle. BRABUS has the following resources and capabilities:
Brand image
Reactive and pro-active responsiveness to customer demands
Maximised market share and return on investment

Combine the resources and capabilities with the strategic CSR perspective of eco-friendly engine to attain competitive advantage. Strategic CSR = CSR + RBV (Internal Resources & Capabilities) Other Competencies and Results Retail and After Sales Services
Biggest potential for optimization.

Result:
Adding value to the customers. Customer Value
Truly customer driven by familiarizing with customer preferences.

Right products at each stage of the life cycle at particular customer touch points.

Result:
Loyalty, retention and customer acquisition. 1. Technology is universally available, thus one of our core competence would be brand management.

2. Product creation and technology innovations.

The Result:
Strong identification of our brand across various models in relation to competitors. Internal Environment Analysis Two Core Competencies Other Competencies and Results Future Strategy 1- BRABUS initially introduces new premium cars in new markets. 2- BRABUS goes on to introduce new products in existing markets. Concentric
diversification (Fleisher & Bensoussan, 2007) Presented by:
Ahmed Aljalis
Shakeeb Nazrudeen References Collis, DJ and CA Montgomery (2005) “Resources and the Scope of the Firm: A Resource-based approach”, McGraw-Hill: New York, London

Collins & Montgomery (2005), Corporate Strategy: A Resource-Based Approach, p.35, McGraw-Hill Irwin

Johnson, G; K Scholes and R Whittington (2006) “Exploring Corporate Strategy: Text and Cases”, FT Prentice Hall: Harlow, England

Meldrum & McDonald (2007), Marketing in Nutshell, p.126, Elsevier Ltd.

Mintzberg, H; B Ahlstrand and J Lampel (2005) “Strategy Safari: A Guided Tour Through the Wilds of Strategic Management”, Free Press: New York, London

Prahalad & Hamel (1990), The Core Competence of the Firm, p.81, HBR, May-June (Porter, 1998) (Meldrum & McDonald 2007) BRABUS 3.5 billion 500 million Constant maximum profit margin in the car industry. Building brand image as a core competence. Highest increase in share price in the car industry. Evaluation of Strategic results
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