Situational Analysis Of Holden Australia: A B2B Product

Tasks

An Australian automaker having its headquarter in Port Melbourne, Victoria, Holden started its journey in 1856 and has become the subsidiary corporation of General Motors, a renowned US based company of auto making. Holden has strived hard and become one of the seven fully incorporated global operators of General Motors in performing the part of designing, edifice and vehicle selling in Australia and across the world. The organization comprises of an engineering on-site plant of manufacturing along with another vehicle operations of manufacturing in Adelaide. The organization takes into account a strong network of dealership comprising of 250 dealers assisting the company in channelizing 42 kinds of models of cars for its home and international customers (holden.com.au 2017). Holden accounts for the centre of proficiency in performing the design and procedure of engineering for General Motors on a global basis. Therefore, the manufacturing and circulation of motor vehicles, parts and constituents and engines become the nucleus of the company’ business that is being mainly done through the dealer networks of Holden having authorized dealers around 250.

Holden Australia’s vision has been to become the most flourishing automobile organization in the industry. Its mission has been to lessen the resource concerned with production of the product like establishing the most fuel-efficient car manufactured in the vicinity and continuous improvement of mono fuel LPG vehicle.

A brief evaluation of Holden Australia entails that this manufacturer of cars is mostly known for gratifying the car needs of both the international and domestic consumers. As a car manufacturer, the organization is in the habit of buying different components that are required for the manufacture of vehicles and the total buying of the raw materials for the process of car developing.  This total process depends on the Holden Global Purchasing & Supply Chain. Holden is hugely responsible in purchasing of the raw materials across all the four regions globally that offers the window of opportunity to the company’s suppliers in conducting business at exceptional capacity and performing the development of their own business globally. The significant raw materials purchased by the company is developing cars includes chassis, exterior body parts, HVAC, safety of interior parts and PCRM. These raw materials are being obtained by Holden from the different suppliers it has globally (holden.com.au 2017).

The raw materials that are being procured by Holden Australia are led to the augmentation of different sorts of vehicles like Sport wagon, Commodore variety of sedans and Ute along with the long wheel comfort vehicles of Caprice. All these vehicles are being made accessible to the final customers through the strong dealership network that the company has. The company has also put much focus on the export of the vehicles to the global markets for fulfilling the international customers’ needs. Therefore, the downstream customers of Holden vehicles takes into account the dealers that are authorized accounting for the sale of organizational vehicles in the international market.

Utes have been  considered for the comfort it provides along with the speed factor and designing excellence. Holden’s Ute comprises of a 6.2 liter V8 engine along with the power of operative work having 304 kw of power. Its safety issues lies in the features of Brembo performance brakes along with redefined tune deferral. Technologically, it is boasted by the 8” touch screen color display, voice-manage; navigate of satellite, blind spot alert and warning of lane departure. In Australia it is been considered that Utes believe in making statements.

Background of the Company

Three key situations of buying are available to organizations like straight rebuy, modified rebuy and new task. In case of straight rebuy, there is no requirement for any sort of fresh information, generally taking a customary progression for making requirement purchases. For the modified rebuy, there is a feeling among buyers to evaluate the alternatives for making decisions in purchase for making better purchase assessment. In case of new task, there needs to be a widespread search of new information that is essential for making buying decision (Soosay et al. 2016). The buyer generally lacks any sort of information regarding the products and requires fresh information for making the best purchase decisions. Holden Australia’s purchase of raw materials for manufacturing of its vehicles can be categorized as straight rebuy as they are being purchased in raw shape and designed according to the various models of vehicles at Holden’s manufacturing site. Raw materials like chassis, exterior body parts and PCRM are required for all sorts of vehicles and as they are being obtained in raw form, they do not require new and fresh information in making purchase decisions. It can be stated as the outline of routine purchase classified as straight rebuying decision.

Industry Analysis & Competition:

Australia has positioned a record in the third vehicle market of its in as many as four years with 1,180,135 passenger related cars, marketable vehicles and SUVs that were sold in the 2016, an increment of 2% from where the figure stood at 2015. The FCAI reported that in 2016 there has been an incessant shift in the preference of buyers and the various dynamics in the market with light commercial vehicles with Toyota Hilux at the pinnacle of the sales charts for a period spanning over twelve months in the history of Australian Automotive (Productivity Commission 2014).

The full year results of sales in 2016 illustrated the fact that the past few years has witnessed extraordinary changes in the customary concerto of  the Australian vehicle market as verified by the accomplishment of Toyota Hilux as Australia’s top selling motor vehicle with sales figure of 42,105 along with SUV’s growth. The Australian Automobile Industry witnesses stiff competition offering more than 400 models of cars, driving the value of the Australian consumer. Customers like being offered diversity in choices and value, united with 24 quarters of national growth in economy and low rates of interest creating a convergence of positive factors for encouraging sales of motor vehicles.

The year 2016 witnessed Toyota leading the market with a share of 17.9%, tracked by Mazda at 10%, Hyundai (8.7%), Holden (8%) and Ford (6.9%). In recent years, Holden has been demoted to the fourth position, overhauled by Hyundai. Holden’s policy of bringing in overseas manufactured vehicles might prove fruitful for the organization in regaining lost ground. The tough competition has made all the vehicle-manufacturing companies of Australia focus on important facets of car manufacturing like design, fuel compatibility, and safety mode (Cucchiella et al. 2016). Holden’s Commodore has been the best selling model for the organization with in November 2016 alone accounting for 2090 units.

Overview of Products and Services

In the year 2016, the automotive market in Australia practiced burly growth with the sales of cars on year-on-year basis showed an increment of 2% with the most prominent growth coming in the sales of commercial fleet vehicles. The upbeat SUV category displayed an annual increase of 8% in sales that has continued to be the driving force of Australia’s automotive industry, accounting for approximately 38% of the sale of all new cars in Australia. Toyota and Mazda have been playing it hard and outperforming other brands like Holden. The sale of Cars made in Australia has started declining with Toyota, Ford and Holden closing their facilities of production within Australia. The sales volume of passenger vehicles have declined over the years though it continues to be the leader of group, accounting for 42% of the sales of new cars in Australia. The light commercial vehicles saw an uprising in 2015 with their growth percentage standing at 9.4%, motivated by burly demand from the Ute business buyers. In 2016, there was decline in the sales of Ute (Barbaro, Spoehr and NIEIR 2014).

PEST Analysis:

Political Factors:

The political factors that are influencing Holden are the government’s continuous support for innovation in technology, though the Australian government has not shown much interest in the automotive industry of Australia. Holden has the opportunity to develop its operational factors based on the agreements in trade. However, government is coming up with new lighter tax policies in car usage that might see an increase in sales.

Economical Factors:

Holden has been closing its production facilities in Australia and shifting towards international suppliers that might affect the Australian economy with cutting of jobs. An increase in the price of fuel might also reduce the sale of cars in Australian market. However, with Australian dollar gaining much required strength it would not be a good idea to bring in raw materials that are produced outside of Australia (Visconti 2016). Holden must recover business competence in maximizing the opportunities that lies within the Australian market and outside of it.

Socio-Cultural:

`Daily life of Australian trades person assists the company in building the car as per their requirements. Holden needs to develop its services related to after sales for attracting more customers. Product innovation is essential in satisfying the ever changing preferences of consumers.

Technological Factors:

Holden has to enhance its mobile service support and the factors of mobile marketing. It can also take into account the improvement of its performance through improved online fulfillment. The probable growth of company lies in offering the substitute fuel vehicles because of limited different fuel stations. Holden needs to aim its focus on service augmentation and enhancement in technology for ensuring competitiveness (Kremer and Symmons 2015).

Segmentation can be defined as marketers diversifying their goods in order to attract various customer groups. Customers are divided into various group segmentations known as variables taking into account the common factors in customers that might feature in their buying behavior. These behavioral segmentations have immense impact in the decisions made by Holden Australia and the ways they position themselves and place their products in the market. There are four large segment variables, which are Geographic, Demographic, Psychographic and Behavioral.  The demographic characteristics take in consumer’s sex, age, income, ethnicity and household concerto. The Holden Australia Ute would be besieged towards males who are approximately of the age group between 26 to 38.

Product Details and Customer Benefits

The psychographic segmentation takes in the attributes related to personality and motives, standard of living, their VALS distinctiveness and the core values they have. Holden Australia Utes have been focusing their efforts on advertising segments that would be most productive featuring younger adults having active lifestyles requiring a strong vehicle for the purpose of work and leisure. The behavioral feature takes into consideration the frequent nature of customers buying this sort of products. In case of high value cars, people generally need to study and prepare themselves well before buying cars, as this is something that would not be bought repeatedly within few months time (Cucchiella et al. 2016).  

Certain benefits that can be stated with Holden Ute using segmentation are the need of effectual advertising. The Holden management can generate campaigns regarding advertisements focusing and targeting the segments where they want to sell their products. Targeted advertising is beneficial for latent buyers who finds relevancy in the advertising message. For instance, if Holden Australia puts in a sixty-year-old man as the spokesperson for Ute, it would not be as effective as the company would like it to be.

The company would also do well to save money on advertising with Holden Australia manufacturing exactly that is being targeted in appealing a particular segment of customers that can set the product’s image (Artog.com.au 2017). Efficiency would be increased as Holden Australia would look to waste less valuable time, funds of advertising and efforts. Australia consists of several tradesman and their lies enough benefits for them in buying a Ute. Ute is having another benefit for tradesmen where they can transfer large objects devoid of engaging a moving truck. The Holden Colorado Ute having four doors and two rows is enough for a family going in an adventure that can even bring their dog with them (holden.com.au 2017).  

Customers and suppliers form an integral part of the organization’s stakeholders and for that business are required to preserve good association with them. There exist different strategies related to relationship management that can be injected by business for managing their association with suppliers and customers. For instance, in handling suppliers, organizations can deem for approving the tactic for suppliers in tier-1 where the focus would be on supervision of relationships with few significant suppliers that accounts for foremost fraction of delivering the raw materials and element parts to organizations. In case of Holden Australia, the few key suppliers have been identified as Tenneco, Hirotec and Hetty Pty ltd (Wolstenholme 2016). It is imperative from the organization’s viewpoint to maintain good relationship with these few suppliers in tier-1 category. This strategy helps in effectual distribution of information with important suppliers, which facilitates better fulfillment of customer demands.

Holden Australia can also mull over the sharing of information about significant parts of components and raw materials that would help in attaining efficacy in resourcing raw materials required for production. Holden Australia should also look forward in enhancing their relationship with suppliers through augmentation of ‘Automotive eXchange Network (AXN)’ which can be considered as an imperative tool in linking manufacturers in automobile with numerous thousand suppliers. This tool would facilitate Holden Australia in attracting its relationship with every supplier that might associate them unswervingly with the company’s production procedure, facilitating them to transport innovative and high value products to the final consumers.

It is also essential in maintaining good relationship with consumers of the organization. There are certain strategic tools like customer relationship management allowing organizations in delivering modified services. For Holden Australia, the company mainly sells its products to final consumers and even other automobile companies like Chevrolet and Mazda with their level of satisfaction measured through the purchase and delivery survey (PDS) and service satisfaction survey (SSS).

As discussed by Wolstenholme (2016), online purchasing trend is increasing among the auto mobile buyer of Australia and consumers of international market. Online purchase behavior is increasing with the expansion of the digital world. It is seen in recent times that consumers are making faster decision and seeking details information regarding brands, price, technology and other convenience. Online purchase makes the availability of information easier about similar category products of multiple companies. Demand for car is shifting from the general commercial category to SUV category (Nuttall 2016). Use of internet is used by consumers for contacting dealers, searching car insurance and for fund collection (artog.com.au 2017).

Figure 1: Buying trend and market segmentation in Australian car market

(Source: acaresearch.com.au 2016)

Figure 2: Market share of Holden and its competitors

(Source: acaresearch.com.au 2016)

It can be stated from the figure 1 that demand for automobile is shifting from passenger vehicle to the SUVs in Australian market in terms of sale. Sales of Holden utes has been decreased in 2015 from 2013 by 3% as seen in figure 2. Moreover, consumer preference is shifting towards small and fuel efficient cars.

References

Artog.com.au. 2017. Recent trends in car purchasing behaviour. Available at: https://www.artog.com.au/FinAus/Products/CarFinance/Articles/tabid/149/newsid547/888/Default.aspx [Accessed 29 Mar. 2017].

Barbaro, B., Spoehr, J. and National Institute of Economic and Industry Research (Australia)(NIEIR), 2014. Closing the motor vehicle industry: the impact on Australia. Australian Workplace Innovation and Social Research Centre, University of Adelaide, Adelaide, South Australia. 

Cucchiella, F., D’Adamo, I., Rosa, P. and Terzi, S., 2016. Automotive printed circuit boards recycling: an economic analysis. Journal of Cleaner Production, 121, pp.130-141.

holden.com.au 2017. About. Available at: https://www.holden.com.au/about/our-company/our-heritage

Kremer, P.D. and Symmons, M.A., 2015. Mass timber construction as an alternative to concrete and steel in the Australia building industry: a PESTEL evaluation of the potential. International Wood Products Journal, 6(3), pp.138-147.

Nuttall, S. 2016. 2015 Vehicle Sales – Trends In The Australian Automotive Market. Available at: https://www.acaresearch.com.au/australian-market-research-blog/2015-vehicle-sales-trends-in-the-australian-automotive-market [Accessed 29 Mar. 2017].

Productivity Commission, 2014. Australia’s automotive manufacturing industry.

Soosay, C., Nunes, B., Bennett, D.J., Sohal, A., Jabar, J. and Winroth, M., 2016. Strategies for sustaining manufacturing competitiveness: comparative case studies in Australia and Sweden. Journal of Manufacturing Technology Management, 27(1), pp.6-37.

Visconti, R.M., 2016. Healthcare Public-Private Partnerships in Italy: Assessing Risk Sharing and Governance Issues with PESTLE and SWOT Analysis.

Wolstenholme, R. 2016. Consumers Take the Wheel: How Digital Is Changing the Australian Automotive Industry. Available at: https://think.storage.googleapis.com/docs/consumers-take-the-wheel-how-digital-is-changing-the-australian-auto-industry.pdf [Accessed 29 Mar. 2017].

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order