MARKETING COMMUNICATION

Marketing communication

Marketing communication

Introduction

The car industry represents an oligopolistic type of market with differentiated product features, unrestricted but hard to force entry barriers, strong competition and a few dominant firms that hold most of the market share. (Crouch, 2006, 117-136)

A general term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by the owner's funds versus the creditor's funds. (Inkpen, Beamish, 2004, 703-713)

External analysis:

'Business organisations differ in many ways, but they also have a common feature for example transformation of inputs into outputs. This transformation process takes place against a background of external influences which affect the firm and its activities. They are complex, volatile and interactive, but cannot be ignored in any meaningful analysis.' (Crouch, 2006, 117-136)A combination of strategic models and frameworks will be used to critically evaluate the competitive landscape of the car industry in order to identify the prevailing conditions in the wider environment and the dynamics of the industry that can ultimately impact and influence Skoda and BMW car manufacturers. (Crouch, 2006, 117-136)

PESTEL Analysis: Past events and experiences being used as a forecast of the future

Political: Car industry represents oligopolistic type of market with differentiated product features, unrestricted but hard to force entry barriers, strong competition and few dominant firms that hold most of market share. Governments rely on the car sector as well as related suppliers and services in terms of employment, taxation, GDP and balance of payments. (Crouch, 2006, 117-136) Car makers require growing economies with rising levels of disposable income and consumer confidence in order to succeed. Government is often balancing and restricting economic consideration with aspirations of consumers in terms of mobility and materialism. Political issues are a significant underlying factor although collaboration between manufactures, suppliers and national governments are becoming increasingly common.

Economic: Demand is predicted to increase in all world trading zones with production capacity will continue to exceed demand. Demand fluctuations are appearing between country markets. Increase in taxations of production which represents significant government revenue. (Crouch, 2006, 117-136)

Social-cultural: In 1980 there were thirty car manufactures, by 2000 this had fallen to thirteen (Case Study: The Global Car Industry) where smaller manufactures (Saab, Rolls Royce, Jaguar, and Volvo) were bought by larger companies (General Motors, BMW, Ford)Technological: Changing the upstream supply chain as component suppliers split into layers and become total solution providers. Full cell technology will replace safety as the number one technology issue (Crouch, 2006, 117-136)

Environmental: Concern over the environmental pollution generated by internal combustion engines which burn petrol and diesel fuel, encouraging product innovation to reduce toxic emissions and to develop more efficient engines. Ecological issues is a significant underlining factor and has a great effect on product and processes. (Barry, 2000, 52-60)

Legal: The volume of traffic in many cities around the world is forcing governments to consider a range of road pricing, congestion charging, and car and petrol taxation measures to encourage ...