Assessment Of Holden Motors: Strategic Position And Analysis Of The Australian Automobile Industry

Holden Motors: A Brief Overview

Holden Motors which was formerly known as General Motors Holden which is an Australian automobile based importer which has its headquarters in Port Melbourne, Victoria. The organization was established in the year 1856 as a manufacturer of Saddles. The company thereby moved its operations towards the automobile sector. The organization was thereby later on renamed as General Motors Holden in the year the 2005. The company had further sold its stock to other organizations and imported the model from General Motors (Holden.com.au, 2018). The vehicle based line up of the company was thereby based on different models of the company that included GM Korea, GM and GM Thailand. Holden had also started distributing its products all over the world with the help of its effective supply chain. The Australia based vehicles of Holden Motors were thereby developed in Elizabeth, South Australia from the year 1994 to the year 2017 (Holden.com.au, 2018).

The report will be mainly developed on the study of the strategic position that has been developed by Holden Motors in the automobile industry with the help of its wide variety of products. The industry in which the firm functions will also be examined in the report. The internal environment of Holden will be an important part of the analysis.

Holden is an important part of the automobile industry of Australia. The firm has been able to develop its position with the help of its management based style and the products that are offered to the consumers. The industry of the company will thereby be an analysed with the help of the Porter’s five forces framework. The diverse forces that are able to influence the processes of Holden in the country will be examined with the help of this framework (Barros, Hernangómez & Martin-Cruz, 2016).

Competitive rivalry in the industry – The influence which the different organizations have on each other is thereby considered to be an important part of the industry. The organizations in competitive automobile based industry thereby provide tough challenges to each other with the help of their aggressiveness. The aggressiveness of force is thereby depicted with the help of different marketing based campaigns that are organized by Holden (Chienwittayakun & Mankin, 2015). The exit related barriers in the industry are quite high which is able to impose a huge force on effective operations of Holden. – Strong

Bargaining based power of the customers – The decisions that are made by the consumers of Holden are able to play a major role in its effective operations in the industry. The customers in the automobile industry are able to determine the levels of profitability and the revenues that can be earned by them. Different exterior factors also essential to be considered by the company in order to control the bargaining power of these customers (Cosenz & Noto, 2016). The important factors that are able to affect this force in a huge manner mainly include, moderate availability of the substitutes, moderate levels of the switching based costs and the small size of the individual buyers. – Moderate

Strategic Position of Holden Motors

Bargaining power of the suppliers of Holden – The power of the suppliers of Holden who exist in the industry is an important force which is able to influence the processes of the firm. The availability of the materials is thereby built on the methods by which suppliers are able to provide them in an active way. The different factors that are able to influence this force include, moderate levels of population of the suppliers, low levels of forward integration based process and high levels of overall supply. A moderate number of suppliers are accessed by the company which include the steel producers (Durand, Grant & Madsen, 2017). This factor is thereby able to affect the company in a moderate way. The low number of suppliers can increase their power of bargaining. The suppliers are thereby able to affect the productivity and operations management of Holden. – Weak

Threats related to the substitute products – The substitute products of Holden are able to influence the operations and profitability based levels of the firm. The revenues of the company and its opportunities are thereby reduced by the availability of the substitutes. The different external factors which are thereby addressed in an effective manner by the company based on substitute products include, the moderate levels of the switching costs, the lower variety of the substitutes and moderate availability of substitutes (Ethiraj, Gambardella & Helfat, 2017). The intensity of this force has been reduced due to the low levels of availability of the substitutes of products that are offered by Holden. – Moderate

Threats related to the new entrants – This force which is a part of the Porter’s framework is able to affect the entry of new organizations within the industry. The new organizations also have the capability of reducing the levels of profitability and the revenues of automobile organizations. The different external factors which are considered by the company in this case include, the high levels of competitive potential of the new entrants, high scales of economy and moderate costs based on switching. Some of the organizations that enter the industry are able to affect the profitability levels of Holden (Fratri?ová & Rudy, 2015). The moderate costs related switching is also an important factor which leads to the decrease of the shift of consumers of Holden. – Moderate

The three major main key success aspects that are an important part of the operations of Holden include,

• The positive image which is developed by the organizations that operate in the industry. The levels of trust and safety which are formed by the companies act as an important factor that is able to influence the processes of the industry in a huge manner.
• The distribution based network which has been developed by the company is also considered to be highly important for the automobile based industry of Australia (Gallus & Frey, 2016).
• The cash flow levels in the automobile industry of Australia are important factors that are able to affect the ways by which the organizations operate. The companies can thereby develop effective profit based margins with the help of sustainable levels of cash flow. The sustainability of cash flows is the thereby considered to be a major factor which is able to affect the organizations in Australia (Gans & Ryall, 2017).

Analysis of the Australian Automobile Industry

Primary activities

Inbound logistics – This factor is considered to be the most important step that is related to the line of production of Holden. The suppliers who are a part of industry are mainly considered to be an important factor related to logistics.

Operations – The production process of the automobile based products are considered to be important activities that are conducted by Holden. This process is based on the ways by which the raw materials of the company are converted into products in an effective manner (Hanson et al., 2016).

Outbound logistics – The distribution and transportation based network that is used by Holden in order to provide the products to different locations is considered to be an important part of the process. The showrooms of the company are considered to be a major part of the outbound logistics.

Marketing and sales – Marketing and effective sales of the products is considered to be highly important for the operations of Holden in the automobile based industry of Australia. The company is thereby to reach its target segment with the help of proper distribution based strategies (Hill, Jones & Schilling, 2014).

Services – This is considered to be the last part of the primary activities of Holden that is able to effective levels of value to the company. The support that is provided by Holden after the sales of the products is considered to be a significant aspect which is able to influence the revenues of the firm.

Support activities

Infrastructure – Holden has been able to develop effective infrastructure in Australia with the help of its showrooms and production based facilities.

Human resource management – The human resources and leadership of Holden have been able to play a main part in the processes of the company over the years. The number of employees which still remain in the operating areas of the company in the Elizabeth based factory is more than 1000 (Hill, Jones & Schilling, 2015).

Technology – Holden has used many innovative technologies in the products that are manufactured in the industry. The safety based levels and use of high levels of technologies is considered to be an important factor that affects the operations of Holden.

Procurement – Holden Global Purchasing and Supply Chain is mainly responsible for the procurement of the services and the goods that are used by the company (James, 2016).  

Primary and Support Activities of Holden Motors

Figure 1 –  Value chain analysis

Source – (James, 2016)

The core abilities of Holden are mainly built on the methods by which the company is able to operate with the help of its resources. The brand value of the company is thereby used in an effective manner in order to manufacture the products and further providing them to the customers. The huge distribution based network that has been developed by the company is considered to be a major factor which can be considered to be a part of the core competencies (Johnsen, 2015).

Strategic issue 1 – The first issue which is being faced by the firm is built on the lack of revenues of the firm due to the increase of competition in the Australian automobile industry. The customers are thereby provided with huge number of choice which has been able to play a major role in the processes of Holden in the country.

Strategic issue 2 – Another major issue that is being faced by Holden in the automobile industry is based on the process of transition that has taken place in the company from a manufacturer to an importer. This transition has thereby been able to affect the operating processes of the company and the adjustment with this process is an important factor.

Targeting the issue 1 – Holden Motors has facing been issues based on the lack of revenues and high levels of competition in Australian automobile industry. The development of proper advertising and promotional approaches in order to function in the industry in an effective way. The advertising strategies need to include the unique features that are offered by the products. The timeline which can be selected for proper implementation of the plan is six months. The different activities that are thereby considered to be a part of the process include,

• Development of promotional strategies in order to reach the consumers.
• Providing attractive discounts to the customers in order to attract them towards the company.
• Provide effective training to the employees in order serve the customers who visit the stores.

Targeting the issue 2 – The transition based process that is implemented in Holden is also an important issue that is being faced by the firm in the procedure of its operations. The major goal of the company in this case is to change the perceptions of the consumers based on Holden in an effective manner. The company thereby needs to implement the customer first based policy in order to increase the levels of consumers. The company cannot only concentrate on the market share. The development of effective perception is also considered to be important part of the strategic plan. The time frame which has been selected for the implementation of this plan is 12 months.

• The training provided to employees based on the ways by which they can take part in the transition.
• The employees need to informed and further made an important part of the operations that are related to the transition based process in Holden.
• The transition process needs to be completed effectively with the help of the employees and the methods by which they are able to offer their services to the consumers.
• Designing workshops for the employees.

Financial objectives

• The total sales that were made by Holden in the year 2017 had amounted to 12,179 units. The sales have thereby increased by 57.7% from the year 2016. The target that can be set by the company within the next 18 months is an increase of 60% in the sales.
• The company also aims at increasing its shares in the Australian market to at least 8% which has fallen to 5.3% in the first part of 2018.

Strategic objectives

• The main aim of Holden is to increase its shares in the Australian automobile based industry as compared to its competitors including, Toyota, Mazda, Mitsubishi, Nissan, Ford and many more.
• The company also aims at increasing the rates of customer retention in an active way with the support of services that are provided to them.
• The development of the products will be improved within the next two years.
• The distribution based strategy will be enhanced in order to reach more number of consumers within a shorter period of time.

References

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