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Car Manufacturing: The Strategy of Land Rover Coursework

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Updated: Jun 5th, 2022

Introduction

Land Rover endeavours to gain a competitive advantage in the changing operational environment. It recognises the need to apply effective success strategies to remain relevant while gaining a sufficient market share that can enable it to remain competitive and profitable in its line of business. Land Rover has an objective of delivering value to its owners. It expresses this value in terms of returns on investment. The company’s management executives make decisions that are necessary to arrive at strategic decisions that enhance its performance. Land Rover’s success or failure is a function of its ability to select appropriate strategies. This paper first discusses the company’s background and its operational environment before analyzing Land Rover’s strategy, which has guaranteed its continued success in the car manufacturing industry.

Company Background

Established in the UK, Land Rover is an iconic global leading designer and manufacturer of a range of 4×4 SUVs. The company launched its first product in 1948. Since then, it has shown undying commitment to producing and delivering high-quality vehicles. Land Rover owns brands such as Jaguar Land Rover, Range Rover, Range Rover Sports, Defender, and Freelander (Jaguar Land Rover 2012). From 2008, it shifted its ownership to Tata Motors, an Indian automobile manufacturer. Land Rover’s strategy developers are aware of the need to remain innovative and creative to withstand the competitive force in the industry. Its key competitors include BMW, Ford, Audi, and Mercedes-Benz among other car manufacturers that target high-tech coupled with contemporary car markets. Its home country (the UK), market remains less challenged by competitors. The company has exclusive global dealership outlets and showrooms to ensure that it optimally reaches out to all consumers. However, amid this reach, the pricing policy focuses on an exclusive population segment.

Operational Environmental Analysis: SWOT Analysis

Land Rover has established a strong brand position in the automobile industry in both the home market and across the world (Sumer 2012). It has managed to build a good reputation for its products. The organisation has a strong selling position for its exclusive consumer market. Land Rover has successfully been able to increase its performance of vehicles through the deployment of technologies, for instance, the hybrid expertise and the use of materials such as aluminium, which reduces the total weight of its automobiles without sacrificing the overall strength. Innovation is a key aspect that has fostered the survival of Land Rover. For example, the company recently embraced product diversification by introducing a hybrid product. The Range Rover hybrid version features a power train that has three different modes. While the hybrid model can accelerate to a speed of 100 km/h in less than 7 seconds, it also delivers optimal performance while reducing Carbon II Oxide emissions by 26% and hence another strong point of the company’s products. It can operate successfully in an environment characterised by an increasing emphasis on environmental responsibility, innovation, and creativity. Land Rover’s products have lucrative interior designs and an integrated four-wheel drive technology (Jaguar Land Rover 2012). The products have an unrivalled performance in all terrains. The company has built a strong brand that requires no awareness. However, it has managed to create strong marketing campaigns through advertising and brand positioning via print media, online platforms, and television. Such a mix of marketing vehicles can reach a large number of the targeted audience (Micu & Pentina 2014; Stuhlfault & Yoo 2013).

Although Land Rover Company has the above strengths, it also has some weaknesses. Weaknesses entail the traits of an organisation that places it at a disadvantage in comparison with other businesses in the same industry (Hitt, Ireland & Hoskisson 2013). One of Land Rover company’s subtle weaknesses is that its spare parts are not readily available. The company faces a high competition from various companies such as Mercedes-Benz, Ford, Chrysler, Cadillac, and Infiniti that produce SUV brands (Jaguar Land Rover 2012). Hence, it intensively competes in a limited market share, which undermines its growth opportunities. Range Rover Evoque constitutes one of its brands that have shown the capacity to withstand competition. The brand features contemporary designs that are blended with high exclusiveness, which is just right for the target customer market.

The company has an opportunity to broaden its automobile market coupled with the space available to its competitors. Indeed, the shift in its ownership to Tata, an Indian-based automobile manufacturer, implies that Land Rover has expanded its market. It now has an extensive consumer market across the world, especially in the Asian sub-continent (Jaguar Land Rover 2012). Secondly, Land Rover is penetrating emerging markets, with the middle class experiencing an increased income per capita coupled with the rising purchasing capability (Jaguar Land Rover 2013). Therefore, the company has an opportunity of reducing buyers’ price sensitivity. It also needs to augment its service and distribution networks across all nations where it has established dealerships.

Land Rover needs to consider these opportunities in an operational environment that is characterised by threats such as the rising fuel costs and competition from various global giants that provide similar utility levels such as Mercedes-Benz and Ford. The company has established a brand image that reflects its products as an iconic symbol of the UK automobile luxury. Therefore, foreign partnerships may deter the UK’s loyal customers due to the weakening brand image. Competitors come up with innovative products while at the same time engaging in frugal engineering. Consequently, the success strategy for Landover lies in its capacity to harness its strengths and opportunities to overcome its weaknesses and threats. The table below summarises the above information.

Strengths
  1. A strong brand position
  2. A strong selling position
  3. Innovative products
  4. Products with optimal performance
  5. Products with lucrative interior designs and an integrated four-wheel drive technology
Weaknesses
  1. Spare parts are not readily available
  2. High competition from various companies such as Mercedes-Benz and Ford among others
Opportunities
  1. Broadening its automobile market coupled with the space available to its competitors
  2. The extensive consumer market across the world
  3. Emerging market
Threats
  1. The rising fuel costs
  2. Competition from various global giants
  3. Foreign partnerships that may deter the UK’s royal customers due to the weakening brand image

Strategy Analysis

The term strategy is coined from the Greek word, strategia, which means command or generalship. It constitutes a plan aimed at attaining specific goals and objectives while experiencing the conditions of uncertainty (Shaw 2012). A strategy deals with long-term directions coupled with the scope of an organisation. It reflects the manner and mechanisms deployed by an organisation in response to the environment and competitors. It spells out mechanisms deployed in maintaining an organisation’s competitive advantage (Slack et al. 2012). Freedman (2013, p. 11) defines it as ‘the art and science of planning and marshalling resources for their most effective and efficient use.’ To this extent, Land Rover’s strategy revolves around determining actions and mobilising the available resources to implement the specified activities. The strategy lays the foundation for achieving its goals through the deployment of various means or resources.

Proper decision-making is a fundamental concept in the strategic process adopted by Land Rover. At the company, strategic processes are important since they help to share the destiny of the business with its primary stakeholders such as consumers, communities, industry organisations, and opinion formers. Land Rover’s overall line of attack can be divided into corporate, business, and functional sub-strategies.

Land Rover’s corporate strategy, alongside its subsidiaries such as Jaguar, entails transforming its products and business operations by investing in people, environmental innovation, knowledge advancement, and paying attention to any deal that supports communities around the globe. It also aids in making decisions on whether to abandon certain product lines to focus on the most profitable ones (Hitt, Ireland & Hoskisson 2013). For instance, the company decided to make hybrid units such as the Range Rover P400e as a way of improving its existing products. In the derivation of such strategies, the views of the organisation’s owners are incorporated. The above strategy responds to the operational environment’s need to produce cars with less negative effects on communities and the surroundings. For example, through its innovative people, Land Rover produced its hybrid version of Range Rover that had 26% less Carbon II Oxide emissions. Indeed, Post (2014) argues that a reduction of greenhouse gas emissions is an important commitment to worldwide social and environmental responsibility. Global social responsibility, which targets 20 million people by 2020, focuses on creating opportunities that communities can tap into to develop skills and/or build talent potential to guarantee prosperity in the future workforce. The key objective for this strategy encompasses nurturing talent, improving performance, and developing technological skills. For Land Rover, the strategy entails ensuring that employees voluntarily support and/or develop a network of all its global operations and dealerships.

The key indicators for the environmental sustainability strategy entail a higher life cycle for Land Rover products and the lower Carbon II Oxide emissions (Land Rover 2013). Operations leadership or success in the supply chain demonstrates the suitability of business operations. The company invested heavily around 2 billion pounds in the 2012/2013 financial year in manufacturing, research and development, and engineering to ensure that its products remain sustainable (Land Rover 2013). It also produced environmentally friendly and fuel-efficient units such as the PHEV Range Rover with a 3-litre engine that is accompanied by 35kW electric motor and an integrated 8-speed automatic transmission system. The motor also operates as a generator. It collects kinetic energy that is dissipated when braking or slowing down in readiness for conversion into an electric power, which is then stored in a lithium ion battery.

Shaw (2012, p. 33) reckons that business-level strategy involves ‘an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets.’ Land Rover’s business-level strategy defines the company’s target customers, the necessary needs for delivering to the customers, and how such needs are satisfied. Based on these concerns, Land Rover places a high priority on customers as the source of organisational success and hence the company’s move to heed the call of producing high-end cars that are a mark of class, for instance, the current Jaguar Land Rover cars. In other words, clients form the fundamental foundation of deriving successful business strategies (Hitt, Ireland & Hoskisson 2013).

Land Rover responds to the question of the best and appropriate business strategy from the context of different success paradigms. Amid the current success of its business-level strategies, Land Rover can choose from an array of other plans to enhance its future success. Such options include the broad and narrow target strategy, the cost uniqueness strategy, the competitive advantage strategy, the competitive scope strategy, the integrated cost leadership strategy, and cost leadership (Sumer 2012; Lipczynski & Wilson 2004). Although its exclusive pricing strategy allows the company to remain profitable, the best future business level strategy is the one that will not only enable the company to cut on costs but also remain ahead of its competitors. Here, Land Rover may plan to produce the same classic units but ones that are affordable to the middle-class clients who are increasing by the day.

A functional strategy defines individual functions such as marketing and operations. The strategies describe how individual functions influence business operations. A functional strategy also determines a company’s strategic business objectives (Hitt, Duane & Hoskisson 2012). Land Rover’s functional strategies incorporate both top-down and bottom-up operational approaches. For example, using decisions and actions learnt from the actual operational experience, the company implements appropriate changes in its top decisional pillars.

Conclusion

Land Rover is a leading brand in the exclusive luxury car-manufacturing sector. It mainly produces SUVs that feature the four-wheel drive technology and with lucrative interior finishes. Through dealerships, the company has penetrated international markets, especially in Asia. While it endeavours to achieve global and environmental sustainability, the company risks losing its brand image in the UK home market due to its increased focus on global distribution and servicing. However, the increased competition from companies such as Mercedes-Benz and Ford compels the company to take the risk in an attempt to expand its market share.

Reference List

Freedman, L 2013, Strategy, Oxford University Press, Oxford.

Hitt, M, Duane, I & Hoskisson, R 2012, Strategic management: competitiveness and globalisations concepts, New York, NY, Cengage learning.

Hitt, M, Ireland, R & Hoskisson, R 2013, Strategic management: concepts and cases: competitiveness and globalisation, South-Western Cengage Learning, Mason.

Jaguar Land Rover 2012, Company information, Web.

Jaguar Land Rover 2013, Annual report, Web.

Land Rover 2013, Sustainability report, Web.

Lipczynski, J & Wilson, J 2004, The economics of business strategy, FT Prentice Hall, Hoboken.

Micu, A & Pentina, I 2014, ‘Integrating advertising and news about the brand in the online environment: are all products the same?’, Journal of Marketing Communications, vol. 20, no. 3, pp. 159-175.

Post, J 2014, ‘what is corporate social responsibility?’, Business New Daily, Web.

Shaw, E 2012, ‘Marketing strategy: from the origin of the concept to the development of a conceptual framework’, Journal of Historical Research in Marketing, vol. 4, no. 1, pp. 30–55.

Slack, N, Brandon-Jones, A, Johnston, R & Betts, A 2012, Operations, and process management: principles and practice for strategic impact, Pearson Education, Harlow.

Stuhlfault, M & Yoo, C 2013, ‘A tool for evaluating advertising concepts: desirable characteristics as viewed by creative practitioners’, Journal of Marketing Communications, vol.19, no. 2, pp. 81-97.

Sumer, K 2012, ‘Business strategies and gaps in Porter’s typology’, Journal of Management Research, vol. 2, no. 1, pp. 110-112.

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