Skoda Company Case Study

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Skoda Company Case Study Introduction

Every company possesses certain frameworks that they are required to follow so as to understand the market they are serving. Thus, it becomes necessary for the companies to understand the latest market trends in order to stand in the competitive market. The trend of the markets are analyzed with the help of analysis methods, they are SWOT and PESTLE analysis. SWOT and PESTLE analysis allows the companies to acquire a deeper knowledge of the market and the surrounding environment. Therefore, this study sheds light on the SWOT and PESTLE analysis of Skoda Company in order to understand their position in the international market.

Table of the company

Company name

Skoda

Type of industry

Automobile Industry

Headquarters

Mlada Boleslav, Czechia

Sales/Revenue

10.154 billion Euros

Area Served

South America, Europe, Africa, Asia-Pacific, Middle East

Number of Stores

125 stores

Competition

Nissan, Chevrolet, Ford, Hyundai, Mazda Motors and Toyota

USP

Skoda offers cars which are comfortable, Spacious, Elegant, Smooth performer

Target Group

Urban families, Businessmen

Products

Cars and accessories

Website

www.skoda-auto.com

Skoda Company SWOT

Strengths

  • Availability in wide range of variants like Skoda Superb, Skoda Yeti and so on
  • Spacious interiors
  • Technological innovations like anti skid braking, telescope power steering and so on
  • Excellent branding and advertising

Weakness

  • Poor distribution channels
  • Poor pricing strategy leads to a loss of 1.4 million Euros

Opportunity

  • Cheaper variants than other competitors by 1.2%
  • Hybrid cars
  • Enhanced manufacturing capabilities
  • Expansion of automobile market

Threats

  • Stiff competition from Toyota; market share 9.46% (Palmer et al. 2018)
  • Poor market share of 1.7%

Table 1: SWOT Table

(Source: Based on the views of Phadermrod et al. 2019)

Skoda Company Analysis

Strengths

Skoda is a car manufacturing company that provides its customers with luxurious and comfortable driving. The company provides a wide variety of cars such as Skoda Superb, Skoda Yeti and so on (Skoda-auto.com, 2019). As per the case study of Skoda, they have incorporated innovative technologies in cars such as telescopic power steering, MSR, EBS, anti skid braking and many more. Moreover, as per the case study of Skoda, the excellent promotional activities of the company have made it recognisable in the market thereby opportunity for expanding its business.

Weaknesses

As per the case study of Skoda, it has been observed that the company possess poor distribution channels (Skoda-auto.com, 2019). The company has still not been able to reach to the local markets of countries like China and India. This has created a negative impact on their business to a large extent. Moreover, the company possess poor pricing strategies that have led to a loss of 1.4 million Euros. This has thereby decreased the market position of the company.

Opportunities

As per the case study of Skoda, it comes up with a wide range of variety of cars with unique styling that are available at cheaper rates (Skoda-auto.com, 2019). According to the views of Olson (2017), customers become more attracted towards unique styling at lower prices. The use of innovative technologies has further enhanced the manufacturing capabilities of the company thereby providing the passengers with highly advanced cars and comfortable driving facilities. As commented by Qureshi (2018), branding helps the company to gain loyalty and boosts awareness among the potential customers.

Threats

This thereby causes the company to face stiff competition in the market. As per the statement of Palmer et al. (2018), Toyota possessing 9.46% of market share is the leading automobile industry worldwide. Additionally, as per the case study of Skoda it has been analyzed that Skoda has poor pricing strategies and therefore possess a market share of 1.7%. This has further lead the company lag behind in the competitive market.

Skoda Company PESTLE

Political

Stable political background of Czech Republic possess 48 points in global ranking

Economical

Inflation rate increased by 1.9% in July 2019 (Ons.gov, 2019)

Social

Frequent alterations of demands that is around 52%

Technological

High technological driven economy thereby Skoda uses telescope power steering and anti skid braking in their automobiles

Legal

  • Finance Act 2017, income tax rates (Legislation.gov.uk, 2019)
  • Data Protection Act 1998, secure customers information (Legislation.gov.uk, 2019)

Environmental

  • Sustainable environment

Table 2: PESTLE Table

(Source: Influenced by Deb et al. 2016)

Analysis

Political

As per the case study of Skoda, it has been analyzed that Czech Republic acquires 48 points in global ranking for a stable political background. This could be advantageous for Skoda for its export and import of products (Deb et al. 2016). Further, stable polity provides the company to acquire economic support from government in order to enhance their business globally.

Economical

It has been further analyzed that the inflation rate of the UK has increased by 1.9% (Ons.gov, 2019). This would cause in fall of the wages of the employees of the company which is a disadvantage for the company. Moreover, this discourages the investment of the company for further manufacturing and import export business.

Social

The frequent changes in the demands of the customers have been observed due to multicultural nation. This further act as a challenge for Skoda Company and thus the company employs innovations in manufacturing (Skoda-auto.com, 2019). This would be helpful to meet the requirements of the customers.

Technological

Moreover, as per the case study of Skoda, it has been analyzed that the company makes use of different innovative technologies such as telescope power steering and anti skid braking (Skoda-auto.com, 2019). The company has made it possible because the UK is regarded as a high technological driven economy. This has thereby helped the company to gain attention as well as position in the market.

Legal

Apart from this, in compliance with Finance Act 2017 the company is bound to pay income tax to the government (Legislation.gov.uk, 2019). The company is bound to pay 20% of its annual revenue as income tax to the government of the nation. Additionally, as per Data Protection Act 1988 the company is bound to keep the data of its customers and clients safe and secure (Legislation.gov.uk, 2019). This would further help the company to attain the trust of the customers thereby this would be beneficial for the company to attract more customers.

Environmental

Additionally, as per the case study of Skoda, it has been observed that the company focuses on sustainable manufacturing of automobiles. This strategy would be added as an advantage towards green environment. It has been observed that the government focus towards providing the citizens with pollution free environment that would be beneficial for their health as well. Thus, the company manufactures automobiles that utilize environment friendly fuels that do not harm the environment.

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References

Deb, N., Li, B., Skoda, M., Rogers, S., Sun, Y., Gong, X., Karim, A., Sumpter, B.G. and Bucknall, D.G., (2016). Harnessing Structure–Property Relationshipsfor Poly (alkyl thiophene)–Fullerene Derivative Thin Filmsto Optimize Performance in Photovoltaic Devices. Advanced Functional Materials, 26(12), pp.1908-1920.

Legislation.gov.uk (2019). legislation.gov.uk. Available at: http://www.legislation.gov.uk/ukpga/1998/29/contents, [Accessed on 31 August 2019]

Legislation.gov.uk (2019). legislation.gov.uk. Available at: http://www.legislation.gov.uk/ukpga/2017/10/contents/enacted, [Accessed on 3 September 2019]

Olson, E.L., (2017). Will songs be written about autonomous cars? The implications of self-driving vehicle technology on consumer brand equity and relationships. Int J Technol Mark, 12, p.23.

Ons.gov (2019). Inflation and price indices. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices, [Accessed on 2 September 2019]

Palmer, K., Tate, J.E., Wadud, Z. and Nellthorp, J., (2018). Total cost of ownership and market share for hybrid and electric vehicles in the UK, US and Japan. Applied energy, 209(2), pp.108-119.

Phadermrod, B., Crowder, R.M. and Wills, G.B., (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44(5), pp.194-203.

Qureshi, S.R., (2018). EXPLORING FOCUS AREA OF CAR DEALERS AND CONSUMERS REGARDING 4C'S. SJIF IMPACT FACTOR=.912(5), p.45-47.

Skoda-auto.com (2019). SKODA. Available at: www.skoda-auto.com, [Accessed on 4 September 2019]

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