Research Korner: Auto Industry Essays

Business Report (Case Analysis - Autoliv Australia)

Introduction             Autoliv is an Australian manufacturing company that manufactures safety occupant restraint systems such as seat belts, airbags and child restraints for car manufacturers like Ford, Holden, Toyota and South Korea. Autoliv’s workforce is highly diverse. The company achieved success because it was able to integrate its human resource policies and practices with the organization’s ultimate goals and objectives. In order to do this, the company has restructured its human resource management policies and practices.   Question 2: Schuler and Jackson’s Contingency Framework             Schuler and Jackson (1987) were among the researchers who promoted the contingency approach to human resources management. According to these researchers, a firm can be effective if its HR practices and strategy are aligned with other aspects and strategies of the firm.              Another argument that favors the fit perspective was presented by Baird and Meshoulam (1988). They argued that HR must be closely integrated into the planning process of the firm. In addition, they also advocated the idea that a firm can achieve success if it is able to develop HR policies and practices that compliment and support other HR policies and practices and other elements of the organization’s strategic plan. The contingency perspective according to Radcliffe (2005) assumes that business performance will be improved when there is consistency or fit between the business strategy and HR policies.   SHRM at Autoliv                 The first step that the company took was making its HRM department a strategic partner in the business process. The company took a strategic human resource management perspective. Strategic human resource management (SHRM) is a philosophy of people management based on the belief that human resources are uniquely important to sustain the success of a business. SHRM can be defined as the process of linking the human resource functions with the strategic objectives of the organization in order to improve performance (Ahmed et al, 2006). Strategic human resource management involves the linking of HRM with the strategic goals and objectives of the organization in order to achieve a progressive business performance and achieve an organizational structure that promotes innovation and flexibility (Buyens and de Vos 1991). Strategic HRM according to Burke and Cooper (2004) has emerged as a major approach to improving the competitive advantage of the firm. The goals and objectives of HRM are aligned with the strategic objectives and plans of the organization.             Autoliv aligned HR practices with organizational strategies. Autoliv developed HR strategies and policies that support the organization’s strategy. 1. Performance Management             The company applies an integrated performance management model where in the company identifies its objectives and then measure the performance indicators. The company’s objectives are sustainable growth, customer focus, employer of choice, world class manufacturing, and social responsibility. The company developed a performance management system wherein these objectives are linked to HRM objectives and outcomes. The company uses benchmarking in its performance management. HR at Autoliv benchmarks practices across industries and globally to give the company a clearer insight on how it compares to others as a means of performance improvement. 2. Work Design             Autoliv also sought to initiate changes in the area of work. This was done by changing the way work is done in the company. The company designs its work by focusing on quality, flexibility, and the customers. 3. Staffing             Recruitment and selection are important HRM practices. Recruitment is an HR practice where the company attracts job applicants while selection is the process of identifying the most qualified job candidates. The company designed its staffing process in order to ensure that it attracts qualified applicants, has mechanisms to identify the best candidates to fill its jobs and has the appropriate strategies in place to motivate employees to perform and to satisfy and retain them. 4. Education, Training and Development             Training is the HR practice wherein employees are equipped with the knowledge, skills and abilities that they need to perform their current responsibilities. Development is the process by which employees are trained to fulfill future responsibilities. The company pays significant attention to human resource development (HRD). Human resources development according to Sims (2002) coordinates the organization’s efforts to provide training and development experiences for its employees. The company invests large amount of money, time and effort in developing the skills of its employee. Autoliv ensures that its education, training and development strategies are in alignment with the organizational goals and strategies. 5. Career Development             Autoliv initiates and makes sure that career development opportunities are available to everyone in the organization. The management partners with the employees and the HR department in making sure that career development takes place. 6. Reward and Recognition             Managing rewards in a way that it aids in the reinforcement of the behaviors, attitudes, and work ethics that the company seeks to promote is very essential to the success of Autoliv 7. Equal Opportunity and Work-Life Balance             Autoliv is committed to diversity and is considered as an employer of choice. The company has introduced diversity policies and is active in promoting equal opportunities for everyone. As part of the company’s commitment to its female employees, Autoliv developed a work-life balance strategy that benefits its female staff.   Question 3:             The change initiative at Autoliv aimed at making the organization more flexible and achieving high quality in manufacturing. The company also aimed to become more consumer-focused.             The change initiative from the design process to the implementation was headed by the CEO and the top management. The CEO is the one responsible for identifying the goals and objectives of the company. The CEO creates a vision and communicates this vision to the people of the organization. The leadership style taken by the CEO at Autoliv can be considered as transformational leadership. The focus of transformational leadership are the people and their relationships. Transformational leadership aims to transform feelings, attitudes and beliefs. Transformational leadership occurs when one or more persons engage with other sin such a away that leaders and followers raise one another to higher levels of motivation and morality. Transformational leadership leads to the transformation of the leader, the followers and the social system in which they function.  The changes that took place in Autoliv are developmental in nature, wherein the organization sought to achieve more. As change take place in the organization the leader according to Williams (1998) must have the ability to create and sustain excellence. He must posses proactivity and a capacity for anticipatory thinking, envisioning and action. They must recognize the importance of innovation and must have the skill to tap into all available sources of creativity. Lastly, leaders must integrate competence and the ability to co-ordinate the constituent parts and strengths of an organization into cohesive and effective production and delivery.   Leading Change             The organizational leader (CEO) is the one that leads change. The CEO creates a vision and communicates this vision to the people in the organization. In leading change, the leader takes different role. Chartier (1985) identifies the different roles that leaders must fulfill in facilitating change. 1. The Leader as Catalyzer – The CEO and management of Autoliv challenged the status quo and wanted to change how things are done in the organization. The leader was the one who envisioned the goals for the organization. 2. The Leader as Process Helper – The CEO as the change leader, was the one who is in-charge with the problem solving and innovation processes of the organization. 3. The Leader as Solution Giver – The CEO created solutions and effectively communicated them to the employees. 4. The Leader as Resource Linker – The CEO was able to bring the organization’s resources together. 5. The Leader as Stabilizer – The CEO was able to build interdependence and cohesiveness on all sides of the organizational change. In order to ensure the success of the change initiative, the management did the following: 1. Built a Climate for Change             Successful change in the new economy will result from a climate that welcomes, initiates, and manages change. In such a climate, risk is accepted as a natural part of doing business. A premium must be placed on innovation and creativity. Employees have to be encouraged to try new and different approaches to the job and other work processes (Sims 2002). 2. Communicated the Changes to Everyone in the Organization             Effective communication is important in managing change. Effective communication is a key tool for managers seeking to drive successful change. Organizations that can communicate effectively about change increase the odds that changes they undertake will be successful, and that the environmental changes they encounter will be understood. Organizations that mismanage communication about change or simply ignore the need for it when change is necessary, help guarantee their own struggles and failure to change (Axley 1996, p. 194; Kotter 1995). Organizational change needs commitment from both the employee and management. Managing change is not a simple task. The management needs to make sure, above anything, that the employees understand the reasons for change. The employees must realize the importance of change and how they can contribute to the success of organizational change. Below are some strategies that can help the organization to be successful in its change efforts.   References Baird, L and Meshoulam, I 1988, ‘Managing Two Fits of Strategic Human Resource Management’, Academy of Management Review, vol. 13, pp. 116-128.   Burke, R and Cooper, C (Eds) 2004, Reinventing Human Resources Management: Challenges and New Directions, Routledge, New York.   Buyens, D  and De Vos, A 1999, The Added Value of the HR Department. In C Brewster and H  Harris (Eds), International HRM: Contemporary Issues in Europe (pp.31-47), Routledge, New York.   Chartier M R 1985, Functional Roles for Facilitating Organizational Change. In L D Goldstein and  J W Pfeiffer (Eds), The 1975 Annual Handbook for Group Facilitators, San Diego CA University Associates.   Schuler, R S and Jackson, S E 1987, ‘Linking Competitive Strategies with Human Resource Management Practices’, Academy of Management Executive, vol. 1, no. 3. pp. 207-219.   Sims, R 2002, Organizational Success through Effective Human Resources Management, Quorum Books, Westport CT.   Radcliffe, D 2005, ‘Critique of Human Resources Theory’, Otago Management Graduate Review, vol. 3, pp. 51-67.   Williams, M R 1998, Mastering Leadership: Key Techniques for Managing and Leading a Winning Team, Thorogood, London.

Business Report (Case Analysis - Autoliv Australia)

Introduction Autoliv is an Australian manufacturing company that manufactures safety occupant restraint systems such as seat ...

Harley-Davidson Motor Company

In 1903, Harley-Davidson Motor Company was launched by William Harley and his friends Arthur and Walter Davidson in the year. Their first intention of building a quality engine was to be established in races. But later on their plans took a different course. The bike that was supposed to race only became a transporting vehicle.             The first officially Harley-Davidson to be exported was distributed by a merchant by the name of C. H. Lange. It was distributed to Chicago, a city who was famous for motoracing and auto touring. Another of the Davidson brothers, William, joined the company, which soon burst the seams of its first manufacturing center and, by 1906, had to move to larger quarters in Milwaukee, Wisconsin.             Harley-Davidson’s encountered a lot of problems when they were just starting their business. This is a normal occurrence to all business that started from scratch. They need to establish themselves in the business and at the same time they need to prove the quality of their product.             In 1990, they have 31 percent of international sales which costs $268 million from the total of $864 million. Harley-Davidson bike became famous to Japan, Germany, Australia and Canada. This great achievement was followed by a problem. Foreign distributors and dealers needed two things to grow more and to expand in the market share. The first was the local pricing of currency. As their distributor and dealers from different countries they need to stabilize a price that they would all agree to. It was difficult to do so because of their need to cover currency exposure. Harley needed to sell its motorcycles to foreign dealers and distributor with the local currency. They have difficulty in finding solution to benefit them all.             Then the manager of international finance John Hevey had an idea. It was to introduce the idea of risk-sharing to their system. This idea was not new during their time. The thought of risk-sharing is plain. They need to maintain the exchange rate from the quotes Harley have given as price of foreign currency. This allowed the foreign dealers and distributors to be assured of predictable and stable prices.             Harley-Davidson should continue with this arrangement as long as the dealers and distributors conform to their agreement.                      After several years of hardwork Harley-Davidson achieved their goal. They went international and became famous to many places as manufacturer and distributor of the bike. The Harley-Davidson came to be America's most recognized motorcycle.

Harley-Davidson Motor Company

In 1903, Harley-Davidson Motor Company was launched by William Harley and his friends Arthur and Walter Davidson in the year. ...

Japanese Culture and Leadership: a case of Honda

Japanese Culture and Leadership: a case of Honda   Honda Motor Company, Limited or popularly labeled as Honda was established in 1948 by Soichiro Honda and tagged as the world’s largest motorcycle manufacturers and one of the leading automakers. Their present domain reports that Honda comprises of more than 400 subsidiaries and affiliates that make their global network headed by Takeo Fukui as CEO and significantly recorded a total of US$94.24 billion revenue in 2007 while employing more than 160,000 people. With visions of value creation, ‘glocalization’, and commitment for the future, they offer a wide variety range of products ranging from small general-purpose engines and scooters to specialty sports cars. Up to the present, their consistency in providing products of highest quality that creates new values and reasonable price makes them outstanding in terms of worldwide customer satisfaction. These two attributes also serve as their competitive edge – high quality and reasonable in price. Japan is considered as among the highly industrialised countries in the world, recognised as second largest business affiliate of US, leader in innovations, and uses participative leadership. Although the Japanese are considered to be quite diverse as compared to Americans in terms of cultural values, Japanese leaders appear to use an array of leadership styles (both task-oriented/autocratic and relationship-oriented/participative) in a manner similar to American leaders (Gibson and Marcoulides 1995). In most research literatures, the participative nature of leadership style is clearly employed by Japanese leaders and managers (Fukushige and Spicer 2007; Chan 2004; Jenkins 2004; Kustin and Jones 1995; Taka and Foglia 1994). The case of American leadership styles is also evident on the case of Japanese. Japanese leaders are also directed to achievement of organisational goals but not to the expense of the members of the staff (Sarros and Santora 2001). Unlike Americans, Japanese criticise themselves while Americans keep away from criticism (Robie et al. 2005; Pasa 2000). However, there are identified cultural similarities and differences in terms of other factors or aspects of leadership. In reference to Japanese culture, a degree of masculinity is high while medium on collectivism (Fukushige and Spicer 2007). This is predominantly associated on their paternalistic tradition and history. Referring to Hofstede’s research, Japan is moderate on power distance and individualism while high on masculinity and uncertainty avoidance (cited in Fukushige and Spicer 2007). The unique cultural values of Japanese include consensus decision making, loyalty to firms, and lifetime employment. However, it is argued that such values may have changed considering the various global occurrences affecting the world and different people. Amidst the extremely structured and ordered organisational design, Japanese leaders and managers give employees the freedom to achieve goals, as reflected in the phrase omasake or “I trust you, you can do it” (Sarros and Santora 2001; Kustin and Jones 1995). Japanese also establish an atmosphere of respect and obedience from their subordinates (Sarros and Santora 2001) but they do not impose more rules and laws that affect overall working relationships and conditions. Their paternalistic history emerges on the manner they manage their subordinates (Dorfman et al. 1997). While most Japanese organisations – like Americans, are highly and rigidly structured in terms of hierarchy, they have an outstanding concern for the personal lives of their subordinates (Fukushige and Spicer 2007; Sarros and Santora 2001; Wu et al. 2000). Human relationships extend beyond organisational standards as Japanese leaders tend to be caring and friendly (Sarros and Santora 2001). There is increased emphasis on harmony with others where symbol of respect, guidance and consultation is prioritised. Relationships are mainly supported by high level of respect, trust and commitment as rooted on Confucian ideology, which contains a valuable degree of respect and obedience to figures of authority. Trust plays a vital role, for example, most Japanese leaders leave their subordinates set of instructions and it is up to them to carry out the works. In terms of decision making, they similarly acknowledge the consensus of everyone particularly during extensive consultation. This is also seen on cases of working in a specific project where teamwork is high and keeping satisfaction is vital (Wu et al. 2000). Mainly most leadership studies (e.g. Chan 2004; Wu et al. 2000; Bass 1990) construe Japanese leaders as advocates of equality and group harmony. Charisma is shown by leaders when they set up overall organisational theme, develop strategy, and employ high-level outside relations (Bass 1990). Taking risk is something that is very improbable because a Japanese leader is flexible, fair, empathetic listener, active, and accountable. Accordingly, the leadership style used by Japanese leaders is effective especially in achieving superior levels of employee motivation, commitment, delegation in terms of decision making and intrinsic job satisfaction (Keys and Miller 1982 cited in Wu 2006). Like American leaders, the encouragement for collective decision making and extensive consultation among Japanese leaders towards the members of staff is highly regarded (Yukl 2002; Kustin and Jones 1995). In communication, Japanese leaders have been able to act as efficient communicators in their respective companies because they are natural lovers of harmony at workplace. Group harmony is critically acknowledged all the time (Wu et al. 2000; Bass 1990). They are bounded by human relationship as they needed to know their subordinates’ lives so as to provide understanding on the manner in which they behave and from here, leadership techniques are developed. Aside from the given traits in relation to leadership styles, Japanese are identified not to have more analytical tools to analyse workplace situations because they are much into many fields of expertise rather than specialising into single area.             On the case of Japan’s culture, Honda is the world’s largest motorcycle manufacturers and one of the leading automakers. Honda maintains their high quality through sticking to their philosophy as determined by founder Soichiro Honda. Honda’s philosophy revolves around four major specifications namely: (1) high expectations set for itself and its suppliers, (2) willingness to apply whatever resources necessary to get the job done, (3) commitment to cooperation and collaboration, and (4) unrelenting attention to detail. The leadership style of Honda reflects the performance of the company especially on the execution of its marketing and management strategies. Honda is different from other automobile companies because of the aforementioned philosophy that guides them in every decision and action at every level in the Company. With those, the success and market reputation of the brand is unquestionable.             The willingness to apply available resources to get the job done provide cost efficiency to the Company. Today, the increasing amount of raw materials is one of the most unsettled problems of business organizations. As prices increase, the suppliers also go with the flow. The supply and demand chain affects the overall conditions of the business. As Honda cling to their available materials, financial stability is guaranteed. In terms of human resources, Honda management wants multi-talented individuals that are able to work in various positions and perform activities in high expectations. Training and development opportunities are thriving. Also, the value of open communication, positive attitude and teamwork is proliferated. Honda perfected the art of cost management. The sharing of resources both at raw materials and semi-finished products leads to additional cost reduction for the Company, at least to its consolidated financial costs.  With this, benefits and incentives are far greater than the actual and potential (risks) costs of strategic alliances and FDI (Vernon 1996).             Honda’s commitment to cooperation and collaboration allows that whole company to explore wider horizons that will lead them to productive economic ventures and human knowledge acquisition. Their given importance to affiliation and networking contributes to the continuous expansion of their branches and dealers. The expansion activities of Honda can be considered as optimal strategies with greatest amount of risks (Shrivastava 1995). Optimal because economies of scale, scope and cost-efficiencies are eminent although huge investments post risks. Further, the establishment of subsidiaries, regional offices, and joint-plants made it possible for exports and licensing grants to be possible due to location advantages (Mauri and Phatak 2001).              The unrelenting attention to detail of the Company still proves to be effective. For instance, in addressing the global call of environmental friendliness in all automobile products, Honda worked hard in enhancing the environmental and safety aspect of their products. With this, it has direct impact on brand recognition and loyalty (Kotler 2003). In relation to their products, Honda implements continuous research and development, studies emerging trends and technology innovations, and at the same time plans their future products and operations.             Honda is different from other automobile companies because of the aforementioned philosophy that guides them in every decision and action at every level in the Company. With those, the success and market reputation of the brand is unquestionable. Additionally, the capability of the Company in addressing issues that concern the environment and customer satisfaction is always prompt and remarkable. The advantages in maintaining an international viewpoint are wider market scope for sales and production operations, brand awareness and development, international recognition, and ability to compete globally. The disadvantages, on the other hand, are stiff competition, diversity of location and managerial functions, and unstable economy of a region. But then again, with the proper implementation of the managerial functions, marketing strategies, and the dedication of supplying products of the highest efficiency yet reasonable prices and guaranteed worldwide customer satisfaction will make the Company more successful. Meanwhile, cost reduction is not a problem to the Company. Since it is indicative in their basic philosophy, Honda has all the necessary means to have high quality products yet cost efficient and effective. In some cases cost reduction is strictly implemented when there are economic and financial difficulties, production barriers, and onset changes in the trends of the industry. In building and sustaining supplier relationships, Honda and its management can easily refer to the existing culture of supply chain management being utilized by their Company throughout the long years of operations. Integration and acquisition are potential methods to retain good supplier relationship. Also, increase awareness to the conditions of affiliates and subsidiaries will somewhat determine the potency of the Company. With this, training and retention are deemed crucial to international success of subsidiaries (Hitt, Hoskisson and Ireland 2003). Quality improvement in Honda is crucial. In aggregate, Honda is there not only to produce quality products but also affordable, safe and environment-sensitive ones. This makes the brand competitive in both private, industrial and public utilities’ needs.  Due to this, the firm had always aspire to be approached by the society as a “must” brand to exist (Honda 2008). Improvement is seen on the implementing research-based activities of Honda. Innovation and research findings need not be strictly established in every subsidiary office (Anders 2002). Honda’s action to intensify R&D may not just suggest that it would try to personalize models in each country instead such strategy could be suitably suspected to maximize sharing of resources. The findings of one country can be applied to global operations since safety and environment issues are of general concerns. In such case, the firm had settled to invest heavily on R&D not to disqualify this claim but to prove its financial capability supported by joint-ventures. Technology improvement is linked with the environmental-friendliness of the brand. Innovations are also designed in the manufacturing, distribution and research mobile. The improved integration combines the expertise of local associates into global spectrum that will hasten improvement of technology.  For instance, the launch of “Green Factory” not only makes Honda “green” in its products but on manufacturing as well.  A global strategy suited to create value-added components and brand loyalty to customers.  In addition to this, safety is also an ingredient in its produced with the commitment of “Safety for Everyone” scheme (Honda 2008). Some of the product innovations that ultimately held local market are the introduction of flagship luxury sedan, supplying fuel cell vehicle to private companies for sub-freezing temperatures and innovation of fuel economy/ low emission motorcycle engines below government regulation levels.  Production technologies become mobile wherein the developed technology within the regional and local research facilities was transferred to a specific plant that has high requirement for such technology.

Japanese Culture and Leadership: a case of Honda

Japanese Culture and Leadership: a case of Honda Honda Motor Company, Limited or popularly labeled as Honda was established in 1948...

General Motors

General Motors Multidivisional Structure             The multidivisional structure represents an opposite structure to functional structure. In a multidivisional structure organizational activities are grouped on the basis of products, services, customers, programs, technical process, or geography. All or most of the resources necessary for the accomplishment of specific objectives are set up as a self-contained unit headed by a product or division manager (Sims 2002).             General Motors chose the multidivisional structure because it supports diversification of products. Each product line has its own divisional hierarchy complete with support functions.             The advantages that General Motors can reap from adopting a multidivisional structure are: 1. Increased Effectiveness – because of the division of labor between divisional managers and corporate managers. Divisional managers are responsible for day-to-day operations while corporate managers are responsible for long-term planning. 2. Increased Control – managers can monitor the performance of divisional managers. 3. Profitable Growth – allocation of corporate resources can be strategically planned since each division can be viewed as its own profit center. 4. Internal Labor Market – corporate managers can be hired from the pool of divisional managers, providing an incentive for effective behavior among divisional managers (Riahi-Belkaoui 1995; Volberda 1999).   Matrix Structure             A matrix design is based on multiple support systems and authority relationships, whereby some employees report on two supervisors rather that one. Every matrix organization contains three unique and critical roles: the top manager who heads and balances the dual chains of command; the matrix bosses (functional, product, or area) who share subordinates; and the two-boss managers who report to two different matrix bosses. Each of these roles has it own unique requirements (Sims 2002).   The matrix structure is used by General Motors in areas where there is string environmental pressure and  there are large amounts of information to be processed. The benefits that General Motors can gain from Matrix structure are: 1. Enhanced organizational flexibility 2. High motivation and increased organizational commitment 3. Team members have opportunity to learn new skills 4. Promotes decentralization (Riahi-Belkaoui 1995; Volberda 1999)   Potential Communication Problems Multidivisional Structure             Communication problems occur in tall hierarchies. Multidivisional structure is considered the tallest hierarchy. There are a number of potential communication problems. 1. Distortion of Information by Divisions – each division does not communicate with others because they are concerned with the hierarchy of their own division. As the hierarchy gets taller, the chance for unintentional information distortion is greater. 2. Possibility for Conflict and Misinformation – since divisions compete for resources, they may not cooperate cause coordination problems. Also, divisional managers may not always present a true picture of the sate of their division in a bid to attract more resources. 3. Transfer Pricing – problems between divisions often revolve around the transfer price such as the price at which one division sells a product or information about innovations to another rdivision. Matrix Structure 1. Unclear Roles – due to the lack of a clear control structure, expectations are not stable across teams. People resist change and they avoid conflict, or role ambiguity. 2. Group Behavior – the dynamics of group behavior may lead to slower decision-making, one-person domination, compromise decisions, or a loss of focus. The lack of a clearly defined hierarchy of authority can lead to conflict between functions and product teams. 3. Relationships – Employees are uncertain about reporting relationships. The member so the team are called ‘two-boss employees because they report to two superiors.   Degree of Centralization Multidivisional Structure             The multidivisional structure is partly centralized and partly decentralized. Although each division manager is allowed to decide for day-to-day activities, strategic and long-term planning remains the role of the top management. Matrix Structure             The matrix structure is highly decentralized. There is no clear control structure.     References   Riahi-Belkaoui, A. (1995). The Nature and Consequences of the Multidivisional Structure. Westport CT: Quorum Books.   Sims, R. (2002). Managing Organizational Behavior. Westport CT: Quorum Books.   Volberda, H. W. (1999). Building the Flexible Firm: How to Remain Competitive. Oxford England: Oxford University Press.

General Motors

General Motors Multidivisional Structure The multidivisional structure represents an opposite structure to functional stru...

The Automobile Industry

The Automobile Industry Introduction Cars have become the most important form of transport since their widespread use after the Second World War. In the last century, the were considered to be the most important invention since they have affected more lives and have changed the world in more ways than any other invention such as computers, the internet, mobile phones or any other piece of technology. They have become a part of our daily lives and help us continue our existence and provide us with the services which are required for civilisation. However, it must be noted that automobiles do not exist in a vacuum and there is an extensive and expansive global industry which supports this essential method of transport. Therefore an understanding of this industry is very important for any student of business, politics and even sociology. Along with an understanding of the relevant issues of the automobile industry, it is also important to understand what can be done and what is being done by the players in the market to overcome these issues.   Fundamentally, the automobile industry is a textbook example of an industry where economies of scale pay a very important role. While there may be dozens of players around the world who produce, support and work with the industry, there are only a few producers who can claim to have a significant share of the market. Similarly, even though cars are produced in almost every developing and developed nation, only a few countries contribute in a significant manner to the global car production and consumption statistics.   This can be attributed to the fact that the first automobiles were produced and developed soon after the industrial revolution by countries that had the required infrastructure and engineering skills. For example, the first steam powered three wheeler was built in France in 1769 and the first internal combustion engine was built in Belgium while the Germans made the predecessor of the modern car in 1885. Ford started his assembly line plans in 1896 and the mass production of motor vehicles was created as an established industry (2004). In the modern world, there are just a few companies who define the overall structure of the automobile industry. They are: GM, Ford, Daimler-Chrysler, BMW, VW, Volvo, Toyota, Mazda, Mitsubishi and Nissan. These companies also formed an industry alliance which is called the Alliance of Automobile Manufacturers. In the last two decades, the industry has seen a spike in mergers and acquisitions which has consolidated many different brands of cars under the same company (2006). Very recently, technology and innovation has come to the forefront of car manufacturing since the pervasive nature of technology has motivated car producers to accept it as a given focus. Competitive Challenges For the present companies in the automobile industry, there are several different challenges which must be addressed. The first and most important challenge is the continued profitability of the company in an environment where competition from equally advanced and competitive players is always a threat. In addition to that, smaller players from countries like China and Malaysia e.g. Proton are working hard to become big players by resisting takeovers and competing in similar segments of the market ( 2004). The sector of the auto mo Worldwide, competition has also driven consumer’s expectations about performance, styling, technological innovation, comfort levels as well as reliability upwards while the expectations of costs have been going downward. International agreements like the WTO and local trade associations mean that giant car manufacturers can produce cars in one country where labour and services are cheap and sell them in another where labour may be more expensive. In fact, the process of global sourcing and international business is directly and most visibly connected to the automobile industry (2004).   For example, BMW is a global brand and it has to position itself according to the global market requirements for high end cars. In many places, the demand for luxury cars may not be as significant as others and since BMW is primarily a manufacturer of luxury cars, it should consider making inroads into areas like China and the Asia Pacific region where market growth is expected to boom in the coming years.   Moreover, economic competition for BMW is rather difficult since it competes more on the idea of luxury and style which is often much better than the other producers in the market. However, for markets where the buyers are seeking to economise on their cars, the MINI brand can work quite well if the market segmentation is handled effectively ( 2001). Additionally, cars running on alternative fuels such as hydrogen and cars running with hybrid engines can also be created for markets where there is an adequate support network for both.   This means that current producers are continually challenged to find ways in which they can lower costs while increasing the attractiveness of their products for various market segments. Even in the current scenario, industry experts expect that there will be few car manufacturers left in the world in a few decades ( 2006). The rest will either close down, be absorbed by other companies or simply cease production due to losses. It must be noted that car manufacturing and the industry itself affects millions of people around the world therefore the closing of a production plant or even the change of the location of a production plant can have serious political and economic consequences which are also a significant public relations challenge for the current players ( 2004).   Perhaps the most structural challenge for the automobile industry and the larger players in the industry is getting to grips with new technology. The challenge does not come from automotive technology but from other areas of technology like digital communications. For example, J.D Power and Associates studied nearly 30,000 car buyers in 2002 to discover that more than half the buyers look at the internet before making a buying decision about a car. Additionally nearly 90% of car buyers visit the car manufacturer’s website to get a better idea about the look and feel of the car. Therefore, the use of technology in this area is an essential requirement for car manufactures of today (2004). The current players would do well to learn the lessons taught by retailers like Wal-Mart and other industrial giants who have learnt to optimise their supply chains with the use of technology. This use of technology is more important for car manufacturers since increased efficiency of the supply chain would mean reduced costs, increased productivity and improved cost figures. These things would in turn lead to greater profitability. Of course they might not directly connect with political or social challenges but they might help in improving the solutions which can be given.   This is because the automobile industry as a whole has come under a lot of pressure from environmentalists, governments as well as special interest groups to reduce carbon emissions and the creation of greenhouse gasses which result from the use of their product. At the same time, vehicles form the basis of our civilisations since ambulances, fire engines and even the engines for air planes would not function without the products made by car manufacturers. There is a very delicate balance between the requirements of the economy and the requirements of the environment and things like hybrid engines and alternative fuel cars can help this balance from a technological standpoint (2004).   Toyota and Honda for example, are Japanese manufacturers who have been very successful with their hybrid engines since they can work with the present fuel and supply networks around the world. A car running off hydrogen alone is difficult to sell since there are not too many operational hydrogen pumps in the country. Similarly, cars running on solar power or pure electric power come with their own technical challenges even though they may be cheaper to run than other cars.   Outsourcing It seems that the most important factor for success in the automobile industry is the profitability of a company which can be maintained by taking a manifold approach to both the production and the sales process. The first step for any company in the automobile industry would be to set their own houses in order by establishing their production facilities in low cost countries. Locations like China, India and even Pakistan can offer facilities for production where the labour costs are comparatively low and the end product quality remains high (2006).   In fact, the opportunity for obtaining the low costs comes with the threat that a company would also experience the negative effects of outsourced production. In many cases, proper training, established manufacturing procedures and company guidelines can tackle these problems but for some situations i.e. the design and evaluation of the product itself, it might be better to conduct these exercises in the home office ( 2006).   Similarly, the future successful motor company will have a global supply network for parts and other equipment to get the most benefit in terms of cost and production efficiencies. At the same time, this brings the threat of failing suppliers and individuals who may not be able to produce a quality product. In these cases, a company would do well to look into multiple suppliers with excess capacities to handle the requirements of the company ( 2006).   Successful companies would also realise that technology is a friend of the car manufacturer and not something which should be taken out of lower end cars. In fact, it is perhaps more advantageous to put some technological innovations available in high end cars in low end cars since it ads a lot of value for the person who is seeking a small car but still looking for creature comforts and amenities (2001). Additionally, by producing and sourcing more of the same technology a company would also gain economies of scale that reduce costs of the technology.   Moreover, carrying the same DNA in terms of technology would bring some form of standardisation to the entire production line-up which would be extremely beneficial to both the buyers and sellers of the car ( 2001). Not to mention, maintenance of the mechanical object would be simplified if repairpersons and service providers at all locations of the company understood that certain parts and components have been standardised across the production line ( 2006).   Any company who is currently in the automotive industry or plans to enter into the automotive industry must understand that good business practices in relation to outsourcing and continued customer support/services for all locations where the company operates are very important in ensuring that a relationship can be established with the customer base. Without having such an established, loyal and comfortable base of customers no company can hope to continue for long in this competitive business.   Outsourcing can also be done with the setup and launch of a new production facility which always requires careful planning and a complete analysis of the given situation before any move is made towards the establishment of an automobile production plant. The external environment in some cases can be slightly hostile since some localities may be opposed to the pollution levels or tax breaks given to such plants. Additionally, HR related problems may also be faced by the company due to the lack of local availability of key players or highly skilled labour which is needed for automobile production today.   Despite these problems, a company can handle all of their issues if they plan the new plant carefully and HR from other locations within the same country or from other countries as outside consultants. Similarly, local partnerships and strategic alliances can also help improve relationships with local communities which would eventually be beneficial for all parties rather than create an air of hostility. Additionally, automobile producers can also be advised to keep a continual check on the progress of the situation for their outsourcing needs at least during the early stages of the development and operations of the plant.   Since a new plant requires key decisions to be made on a daily basis, it is highly recommended that one or more of the board members with top decision making powers be delegated to work onsite until the plant is stable enough to be managed as a day to day operations by delegated individuals. This would be a temporary move and would only be necessary until the board itself decided that a delegated authority could now handle the operations of the automobile production plant.   The strongest recommendation goes for a board member who has had a certain level of experience in operations management, PR, or recruitment in relation to outsourcing since all of these departments would need a heavy presence at the new plant during the time it is being setup and while it is operating with a skeleton crew. As more members are added to the plant as layered middle managers, senior managers or higher executives, the requirement for the presence of a board member is diminished as duties can be delegated and passed on to those individuals (2005).     Outsourcing can also be a considered politically as a socio-cultural factor which can hurt or help the position of a company. However, with effective placement of their production plants a company can acquire a global image instead of being considered a German car maker, a French producer or an American car manufacturer. Effective use of outsourcing can help companies such as BMW to use the repute for German car making as a given in the car industry ( 2006). With outsourcing a company can gain the advantage of being a global brand while maintaining the image associated with the home country.   The Structure of the Industry The strategic importance of the automobile industry makes it a perfect case to examine how different factors interact to bring about broader changes in the organizational structure of the automobile industry in America. In order to survive and maximize profits, auto makers must comply with structural rules or the “who-gets-what” rules in the automobile industry. Structural rules are derived from production technologies (hard and soft technologies) that are successful in producing cars efficiently (1986). Automotive is a complex product, which consists of over 10,000 parts and requires multiple and complex processes for its manufacture. Mass production proved successful in efficiently producing automobiles, which explains that for almost seven decades, it determined the structural rules for the automobile industry. The automotive industry is not an easy one to enter. First of all, it is a prime example of how economies of scale and costs to entry act as a barrier to entry for new manufacturers and it is unlikely that too many companies in the world would have the finances to take on the giants in the industry. However, I think that entering into the market as a niche producer of super luxury, super utility or super cars for that matter might be possible. This is because establishing a niche in the market where everyone else is factory producing their cars could be one of the only ways in which brand differentiation can be established. Even then, a company would need to establish itself as a brand over time and custom produce cars until they could get to a point where mass production is possible. Companies like Porsche, Ferrari, and Lamborghini are all ancient names but they do not sell as many cars as Honda, Toyota or Ford. On the other hand, a company could position itself as a regional or local car manufacturer and limit itself to a particular country or region. In both cases, the investment would probably be a lot less than the required amount of money to compete with a global player like General Motors.   The structure of the industry can also be affected by legal implications since the laws concerning automobiles are certainly putting pressure on the industry to produce cars which run cleaner, are more fuel efficient and follow other requirements as per the laws laid down in the country. Internationally, some countries are more car manufacturer friendly than others but for the most part, in the coming future the legal environment will get tighter for the entire car industry. All manufacturers have to watch out for such laws coming into place and comply with them to the maximum extent in order to prevent fines or lawsuits from the government or civil unions.   Again, even if the company positions itself as a player in the niche market, it must stand out from amongst the crowd by giving some innovation, technological marvel or another unique selling point which makes it better than the rest. There are plenty of fast cars in the world, but manufacturers like Ferrari and Lamborghini dominate the scene for super cars. Similarly, Maybach, Rolls Royce and Bentley are names which are synonymous with luxury and opulence. Therefore, for any new entrant into the market, the situation can quickly become very bleak if they do not offer something which is tremendously better than what the established companies are already offering to the public.   It is not likely that the structure of the automobile industry will change significantly in the coming years since over the last fifty years the industry has shown a trend of mergers, acquisitions and expansion of the same players towards new markets. Smaller players will likely be taken over in time by others and as the industry develops, the automobile industry itself may move towards being transportation services providers when alternative fuels and modern technology becomes more economical than petrol or other fuels which are currently being used by the majority of cars.   Market Concentration of Automobile Industry           Industrial organization economists typically include measures of market concentration in their analysis of market performance in order to capture some of the difficulties that firms in an industry will encounter if they attempt to collude. More directly, concentration measures how large the largest firms have become relative to the whole industry. This will be, in part, a function of the stringency of antitrust enforcement policies such as merger regulation and monopolization restrictions. Since the competition in the automobile industry are too stiff, market concentration in these industries can be considered as powerful and strong. The major competitors for this kind of market include General Motors, Honda, Nissan, Toyota, DaimlerChrysler, Hyundai, Maruti Udyog, Shanghai AIC, and Volkswagen. These industries have been able to compete well in the market place all over the world.   Accordingly, it can be noted that there has been an increase in the number of industries selling cars in matured markets like Germany, Japan and United States. Figure 1 presents an analysis of passenger vehicle sales in the mentioned countries according to Hefindahl Index market of concentration.         It is said that the Herfindahl index would result to zero if the market share was evenly distributed among the manufacturers of automobiles. Moreover, the index will be equal to the number of manufacturers if a single company had been able to have a 100% national market share. Hence, the lower the index, it is considered to be in a more diverse market. In the figure below, it shows a across-the-board raise in market diversity in Japan, United States and Germany, prevailing the cause of the heightened and increasing competitive pressure that automobile industries have been facing in terms of home market. Germany has long been considered to have a diverse automobile market because of the interpenetration of European automobile markets by the European automobile industry as well as the existence of American Industries.    However, the strong sales of the Japanese automobile industry have brought the index down further since the later part of the 80s. On the contrary, the sales of Japanese automobile industries have increased the competitive pressure in the United States during the early 80s. And in Japan, the market diversity increase has been achieved from the success of smaller Japanese automobile manufacturers and the decline of the dominance of Nissan and Toyota as they hollow out local production by alternating exports with domestic production in European nations and North America.           For the automobile industry, the trend for market concentration has gone beyond every target market would imagine. In some automobile industry like those based in the United States, a few assemblers divided up the domestic market into segments. They made comfortable profits by selling a few car models in each and sitting on stable life cycles and secure price markups. From time to time, the assemblers introduced cosmetic changes in product design and styling, which they buffed up with marketing and advertising. More importantly, they got away with fat and easy profits by manipulating short-term atomistic price competition among their parts and components vendors.   The profits were so fat and easy; in fact, these auto makers did not mind imports chipping them away a bit beginning in the late 1950s. It was not until after the foreign brands had taken away more than one quarter of the American market following two oil shocks that they started to look around for ways to revitalize their past competitiveness (1990).   With its market power, however, the United States was able to bargain time for American auto builders to make improvements, With its market power, however, the United States was able to bargain time for American auto builders to make improvements, particularly by soliciting voluntary export restraints from Japanese car makers. Initially, the American assemblers sought to obtain this objective by pouring money and technology into it. But continued problems in quality and costs compelled them to look beyond procedural changes and at the critical impact of structural relations on competitiveness in products and manufacturing processes (1986). They had to move away from antagonistic and uncertain relations with their vendors and build long-term teamwork, directing the vendors to compete in product design and process superiority like the Japanese, who had now transplanted production to this country, lengthening the contract period, and adjusting the criteria of vendor selection as well as working together to improve quality and cost competitiveness (1991).   In the automobile industry, teamwork was adapted by Toyota as early as the 1930s to support its self-help approach to market entry and technological development in competition with Nissan which had followed a strategy of technology transfer (1985). Toyota enlarged its corporate identification circle by first including the parts makers in its neighborhood of Nagoya as members of the Toyota group. It offered long-term contracts to those who collaborated in quality improvement and product specialization. It also used its market power to discipline them when it saw fit. The assembler formalized supplier cooperative associations, started initially by the parts makers, as a voice mechanism to guide and support competition among the suppliers and as a forum for them to discuss problems, share information and find solutions.   These contrasted with the market competition which Nissan was pursuing, like most other Japanese manufacturing houses of the day (1991). Toyota continued with the teamwork approach to competitiveness, both in-house and with the suppliers in its group, when it shifted from truck to small car production from the early 1950s onwards. It implemented procedural improvements according to the suggestions of certain American experts (  1986) while integrating them with the fundamental changes it was introducing in the production process to develop a system capable of handling production on a smaller scale yet in greater variety than built into the imported manufacturing process, one that could genuinely meet the requirements of domestic consumer markets. Conclusion In conclusion, I feel that the automobile is quite an interesting one to watch because of the nature of the industry and the historical background associated with the rivalries between various companies. However, I believe that the future of the industry leads towards cooperation and sharing of information as more companies realise how they can benefit collectively rather than be in constant negative competition against each other. BOOKS CITED   Word Count: 4,137

The Automobile Industry

The Automobile Industry Introduction Cars have become the most important form of transport since their widespread use after the Second...

Operations and Logistics Management of Auto Sueco Angola

Operations and logistics management of Auto Sueco Angola   Auto Sueco Angola is part of Grupo Auto Sueco. Auto Sueco Angola markets, provides and distributes after sales service for Volvo products in Angola. Auto Sueco Angola focuses on gathering data to manage its inventories. The company makes sure that it has a complete record of logistic and operation procedures (Bassett 2003).  Within the context of a firm's strategy, operations seek to enhance the competitiveness of the business. For years, the role of operations was simply to get the product or service out the door. The major voices in corporate strategy were in finance and marketing. However, the oil embargo of the mid-1970s helped change all that. Rising prices of gasoline sent customers all over the world in search of automobiles that optimized fuel consumption. The Japanese automobile manufacturers, especially Toyota and Nissan, had such vehicles available, and when customers flocked to try them, they noticed that the Japanese automobile was of superior quality. An operation strategy of Auto Sueco Angola is to make sure its cars would create auto parts that would entail lesser manufacturing cost. Operations strategies are functional strategies that support the firm's overall strategy. It is infinitely easier to produce a limited product line at a plant than a broader line (Nie& Young1996).   Auto Sueco Angola makes sure that all its products are sturdy and durable and will not easily fall prey to the short product life cycle.  Today's reality is that the product life cycle is shorter than ever and customers are fickle. This requires a manufacturing configuration that can adapt quickly to changing demand patterns. Machinery and equipment should be considered for purchase that can not only manufacture the current product but also be retooled for future changes in the product. It is to operations' advantage to limit the number of options a customer can buy. Options mean more time. All customers do not have the same needs and wants, and companies that have the operational capability of offering customers exactly what they want; when they want it, have a competitive edge. Those that compete from a cost perspective may find it advantageous to limit options (Vernon 2002). The focused factory, one that specializes in a narrow product mix, thereby smoothing the production process by improving quality and productivity, makes sense for long product life cycles. The new factory must be both focused and flexible. At one time, it was true that firms could compete within an industry on the basis of offering superior quality to the customer. Quality movements across the world succeeded in improving the quality of all products and services to the point that all companies must have superior quality merely to survive. As a result, the one way companies can gain an edge is to introduce new and innovative products faster than competition. The product design cycle has been diminishing as a reaction to increased competition and quality and decreasing product life cycles. New product introductions are a primary area where speed matters. Research and development, marketing, and operations must work together to determine which markets will be served and who will serve them (Tayeb 2000).   Product life cycles vary globally. But this phenomenon still exists to some extent from one country to another and will influence the global staggering of new product introductions. Auto Sueco Angola makes sure that all products undergo a good layout design that will cater its quality management processes. Most firms in capital intensive industries have implemented quality management programs by 1996. It is also true that the management commitment to quality varies. Companies must produce to the needs of the most discriminating customer. A global customer-service network is imperative to maintain success. A product that has no locally-established service is asking for trouble when a problem occurs. It is not a simple question of choosing to sell a product. A service network must also be established. As part of customer service the company makes use of all available facilities to communicate with clients. Customer service entails giving the appropriate information about a product including its characteristics, capacity and component. The quality of customer service is as important as the actual quality of the product itself, because future customers can be gained or lost through customer service. There are two aspects to the operations management of technology. The first aspect concerns process: every industry has a unique state-of the-art process technology. For the manager, this involves a mastery of all possible process technologies that are either in use, or show potential for use, in the production of a product. The second aspect concerns product technology. Firms must sell the technology that customers want. This means that managers must predict technological shifts. The managers make sure that the products would pass the quality and safety requirements. Managers must stay current in new layouts and equipment that might increase productivity, quality, and profitability. This necessitates a life-long commitment to the study of industry trade journals, scientific periodicals, general business publications, and any other sources that may offer technological information. The managers have an inadequate scientific and mechanical educational background, which they must remedy if they intend to master their field (Agmon & Hekman 2000).   References Agmon, T & Hekman, CR 2000, Trade policy and corporate business decisions, Oxford US, New York.   Bassett, G 2003, The evolution and future of high performance management system, Quorum Books, Westport, CT.   Nie, W & Young, ST 1996, Managing global operations: Cultural and technical success factors, Quorum Books, Westport, CT.   Tayeb, MH 2000, The management of international enterprises: A socio-political view, Macmillan, New York.   Vernon, M 2002, Business: The key concepts, Routledge, New York.

Operations and Logistics Management of Auto Sueco Angola

Operations and logistics management of Auto Sueco Angola Auto Sueco Angola is part of Grupo Auto Sueco. Auto Sueco Angola markets, pr...

Strategic Management of Proton, Malaysia

Strategic Management: Proton, Malaysia   Table of Contents  TOC \o "1-3" \h \z \u 1.    Introduction. PAGEREF _Toc226437728 \h 3 2.    Background of Proton. PAGEREF _Toc226437729 \h 3 3.    Macro-Environment Analysis. PAGEREF _Toc226437730 \h 5 3.1      Political PAGEREF _Toc226437731 \h 7 3.2      Economic. PAGEREF _Toc226437732 \h 8 3.3      Social PAGEREF _Toc226437733 \h 8 3.4      Technological PAGEREF _Toc226437734 \h 9 4.    Micro-Environment Analysis. PAGEREF _Toc226437735 \h 10 4.1      Strengths. PAGEREF _Toc226437736 \h 11 4.2      Weaknesses. PAGEREF _Toc226437737 \h 11 4.3      Opportunities. PAGEREF _Toc226437738 \h 12 4.4      Threats. PAGEREF _Toc226437739 \h 13 5.    AFTA Compliance Problems. PAGEREF _Toc226437740 \h 13 6.    Industry Analysis. PAGEREF _Toc226437741 \h 15 6.1      Threats of New Entry. PAGEREF _Toc226437742 \h 16 6.2      Threat of Substitution. PAGEREF _Toc226437743 \h 16 6.3      Buyer Power PAGEREF _Toc226437744 \h 17 6.4      Suppliers Power PAGEREF _Toc226437745 \h 17 6.5      Competitive Rivalry. PAGEREF _Toc226437746 \h 17 7.    Recommendation. PAGEREF _Toc226437747 \h 18 8.    The Strategic Triangle. PAGEREF _Toc226437748 \h 18 9.    Aligning Organization Wide Strategies. PAGEREF _Toc226437749 \h 19 10.      Adaptive Processes. PAGEREF _Toc226437750 \h 20 11.      Metrics/Performance Measures. PAGEREF _Toc226437751 \h 20 12.      Conclusion. PAGEREF _Toc226437752 \h 21 13.      References. PAGEREF _Toc226437753 \h 23 14.      Appendices. PAGEREF _Toc226437754 \h 25 14.1       Appendix A: Strategic Triangle. PAGEREF _Toc226437755 \h 25 14.2       Appendix B: Balance Score Card Dimension of Proton. PAGEREF _Toc226437756 \h 26 Table of Table  TOC \h \z \c "Table" Table 1 PEST Analysis. PAGEREF _Toc225758233 \h 6 Table 2 SWOT Analysis. PAGEREF _Toc225758234 \h 11   Table of Figures  TOC \h \z \c "Figure" Figure 1 Porter's Five Forces. PAGEREF _Toc225758249 \h 16     1.      Introduction   The automotive industry in Malaysia is considered as one of the most vital and significant strategic industries in the manufacturing sector (ESCAP 2009). Malaysia is predominantly a passenger car market and the industry is considered as a domestic market-oriented (ESCAP 2009). The primary reason why passenger care market is prominent in the country is because of the economic status of the country. The objective of this paper is to focus on the case of Proton in terms of facing different dilemmas in the local and global automotive industry. Furthermore, it will use the Delta model in order to analyze the performance and recommend different actions to be done in order to maintain the position of the company in the market. 2.      Background of Proton   Proton or synonyms for Perusahaan Otomobile Nasional Berhad was incorporated on May 7, 1983 in order to manufacture, assemble and sell different motor vehicles and other related products which include different accessories, spare parts and other important components (PMProject n.d.). Based on the technology and parts from Mitsubishi, the production of the first model or the Proton Saga began in September 1985 at its first manufacturing plant in Shah Alam Selangor by the Malaysian Prime Minister Dato’ Seri Dr. Mahathir Mohamad (Histomobile n.d.; PMProject n.d.). At first, all of the components of the car were entirely manufactured by Mitsubishi, but the local part has been able to be used, as technologies were transferred and skills were gained. In January 1989, the 100,000th of Proton Sage was produced (Histomobile n.d).      At the end of 1990s, the logo of the car was changed from the Malaysia’s coat of arms and a fourteen-pointed star to a stylized tiger head. In 1993, a new model called Proton Wira was introduced that was based on the design and engineering of Mitsubishi Lancer/Colt where in more than 220,000 units were sold from 1996 to 1998. Together with that, the Proton Perdana that was based on the Mitsubishi Eterna was produced in 1994 that was intended for higher market (Histomobile n.d.). In 1996, an acquisition of Lotus technologies form Bugatti, Proton helped the company to have an additional source of engineering and automotive expertise which enables the company to produce the Proton Gen-2, to become the first of cars to be manufactured and assembled at the new manufacturing plant in Tanjung Malim, Perak which is part of Proton City development project, which was opened in 2004 (Histomobile n.d.). In 2004, the company purchased a major stock in MV Agusta of Italy which is the manufacturer of MV Agusta, Husqvama and Cagiva motorcycles. Later on, the company sold off its 57.7% share to MV Agusta to another Italian company for a token of one Euro. Because of the heavy debt by MV Agusta, the selling gives Proton the opportunity to write off the losses off its book. During the same year, the company announced about their planned partnership with the Volkswagen AG of Germany. Under the said partnership both of the company will be able to take advantage of both their strengths. For the company, Volkswagen will be able to share knowledge, expertise and technologies, while the company can offer spare capacity at the latter’s Tanjung Malim in order to assemble cars for export o the South East Asian market, where in the German auto giant has a weak presence. However, on January 13, 2006, Volkswagen had announced that the negotiation of the partnership has failed due to the different reasons, primarily the fact that the plans of the company were different and clashes with the terms and conditions that are being offered by Proton (Histomobile n.d.). In 2002, Proton held a high market share of more than 60% in Malaysia. However due to the different factors such as the economic and social aspects, the said share was reduced to 30% by 2005. The said number will further reduce in the next years due to the AFTA which mandates reduce tariffs to maximum of 5% (Histomobile n.d.). 3.      Macro-Environment Analysis   Every industry is being affected by the developments in the macro-environment. Fundamentally, all organizations are affected by the same developments; however, the extent to which organizations successfully cope or take advantage of these developments differs in substantial manner. Furthermore, developments may potentially influence one industry more severely than other. Therefore, it is vital for organizations to identify or anticipate the macro-developments in order to assess their potential impact on the industry and the organization (Nijssen & Framback 2000, p. 53).         Table  SEQ Table \* ARABIC 1 PEST Analysis   	 		 		 		  		 		PEST Analysis 		 		  		 		  	 	 		 		 		Political 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			AFTA;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			different environmental Policies</li> 		</ul> 		 		  		 		 		Economic 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal" style="text-align: justify"> 			global 			and local economic crisis;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal" style="text-align: justify"> 			 			slowing growth of Malaysian economy;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal" style="text-align: justify"> 			poor 			consumer sentiment and changing buying behavior of the consumer;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal" style="text-align: justify"> 			 			increasing competition;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal" style="text-align: justify"> 			huge 			total labor force;</li> 		</ul> 		 		  		 		  		 		  	 	 		 		 		Social 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			huge 			population;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			car 			ownership (1:5);</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			set on 			big-ticket items;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			growing knowledge and concern of the people towards the environment;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			impact 			of the image of the brand;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			slowing/decreasing buying pattern of the consumer. </li> 		</ul> 		 		 		 		Technological 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			competing development in technology;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			maturity of technology;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			intellectual property;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			potential for innovation and development;</li> 		</ul> 		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			maturity and capacity of manufacturing</li> 		</ul> 		 		  		 		  		 		  		 		  	               Table 2 shows the different factors which affect the operation of Proton and other major players in the industry in the country. Thus, all of the factors can be grouped into 4: political, economic, social and technological.   3.1      Political               One of the important factors to consider is the presence of AFTA or ASEAN Free Trade Area. Currently, most of ASEAN region are free trade or 96% of the entire ASEAN trade. AFTA was established in January of 1992 in order to eliminate tariff barriers among the Southeast Asian countries. It planned to reduce tariffs to zero to 5% in 15 years among the six nations through a common effective preferential tariff (Ghani & Zainuddin 2008). Because Malaysia has two national carmakers which are Proton and Perodua, and the government wants to protect their interests. Unfortunately, the said development could prove to be a temporary solution. If we are going to check on the high selling prices of the national cars of Malaysia because of high production costs and lack of vendor efficiency, there is a big possibility that the local market will be ruled by imported cars. As a result, there will be increase in the number of the vehicles on the road and there will be a glut of used cars in the market, because people will tend to trade their cars for cheaper and imported brands (Frost & Sullivan 2002). On the other hand, the issue regarding the environment is vital because it is considered as one of the most talk about topics in the world. The environmental regulation in Malaysia can be traced back during the colonialism of British which introduced the environmental standards about the mineral and agricultural resources to Europe.       3.2      Economic               The vehicle sales in the country is expected to fall by 12.4% in 2009 due to different economic aspect, primarily the issue of global financial crisis, which affected the local financial status of the country (AseanOneMonitoring 2009). As a result, the government of the country is expecting a slow economic growth for the country, which can affect the buying behavior of the customers. Furthermore, due to the AFTA, it had increased the competition, which will impact the performance of Proton. However, the performance of the automobile industry will be maintained and managed due to the huge total labor force. Despite of the slower economic growth in 2003, the unemployment rate was only 3.5%, which shows an almost full employment (PriceWaterHouseCooper 2005). 3.3      Social               The growing population in the country is one of the factors which can affect the automobile industry. In 2008, the country has a total of 27.5 million citizens (US Department of State n.d.). This will give a greater number of markets. Furthermore, the ratio of car ownership in the country is somewhat high or total of 1:5, which signifies that people are considering cars as important things in their lives. Furthermore, people will also set on big-ticket items or consumers are expected to put off buying different motor vehicles because of the employment market uncertainty because of the global and local financial crisis (AseanOneMonitoring 2009). Another factor to consider is the growing knowledge and concern of the people regarding different environmental issues. Furthermore, the impact of the image to the loyalty of the customer is also another factor. 3.4      Technological               Technology is considered as one of the most important factor in the automotive industry. Due to the increasing competition, the development in technology is growing and affecting the performance and position of each and every company in the automobile industry. It is also important to consider the maturity of technology, together with the maturity and capacity of manufacturing, which affect the innovation process of any company. The intellectual property is also important factor, because it is considered as a sign of authenticity and uniqueness. Due to the different technologies, primarily the help of computer and the Internet, the potential for innovation and development is increasing.    4.      Micro-Environment Analysis   Table  SEQ Table \* ARABIC 2 SWOT Analysis 	 		 		 		  		 		SWOT Analysis 		 		  		 		  	 	 		 		 		Strengths 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			strong 			support from the government;</li> 			<li class="MsoNormal"> 			strong 			brand;</li> 			<li class="MsoNormal"> 			 			reputation;</li> 			<li class="MsoNormal"> 			 			flexible manufacturing capability</li> 		</ul> 		 		  		 		 		Weaknesses 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal" style="text-align: justify"> 			lack 			of R&D;</li> 			<li class="MsoNormal" style="text-align: justify"> 			over 			reliant on the government;</li> 			<li class="MsoNormal" style="text-align: justify"> 			not so 			competitive;</li> 			<li class="MsoNormal" style="text-align: justify"> 			higher 			costs than competitors;</li> 			<li class="MsoNormal" style="text-align: justify"> 			lack 			of international operations;</li> 			<li class="MsoNormal" style="text-align: justify"> 			lack 			of original products/services;</li> 			<li class="MsoNormal" style="text-align: justify"> 			 			limited product line;</li> 			<li class="MsoNormal" style="text-align: justify"> 			 			existing quality issue;</li> 			<li class="MsoNormal" style="text-align: justify"> 			human 			resource issue</li> 		</ul> 		 		  		 		  		 		  	 	 		 		 		Opportunities 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			 			“Green” Cars;</li> 			<li class="MsoNormal"> 			 			available government support;</li> 			<li class="MsoNormal"> 			 			available technological innovations;</li> 			<li class="MsoNormal"> 			 			entering new markets;</li> 			<li class="MsoNormal"> 			gain 			online/e-commerce presence;</li> 			<li class="MsoNormal"> 			 			strategic alliances and joint ventures</li> 		</ul> 		 		 		 		Threats 		 		  		<ul style="margin-top: 0in; margin-bottom: 0in" type="square"> 			<li class="MsoNormal"> 			slow 			growth of automotive market;</li> 			<li class="MsoNormal"> 			change 			in the consumer lifestyle;</li> 			<li class="MsoNormal"> 			 			changes in regulation (AFTA);</li> 			<li class="MsoNormal"> 			 			changing technology;</li> 			<li class="MsoNormal"> 			 			competition from the foreign markets;</li> 			<li class="MsoNormal"> 			new 			competitors entering the market;</li> 			<li class="MsoNormal"> 			price 			war between competitors</li> 		</ul> 		 		  		 		  	             Table 2 shows the internal and external factors that are important for the growth of the company such as its strengths, weaknesses, opportunities and threats. 4.1      Strengths               One of the important strengths of the company is its reputation or strong brand image due to the long years it had stayed in the industry. Because of that, the Malaysia people have become familiar and loyal to the brand, aside from the fact that Proton had become the national car brand in the country. Due to that, the car manufacturer has a strong support or back-up from the government, which is considered as an important entity in any business environment. Above all, the company has a manufacturing capability at Tg. Malim to consolidate all models, as well as the existing tariff structure (BuildBoard n.d.). 4.2      Weaknesses               There are also different weaknesses which must be improved by the company in order to maintain their position in the government. First is the lack of R&D or innovation as well as lack of original products and limited products because of the inability of the company to introduce real new models, which lead them to cannibalize their screwed up line of products (BuildBoard n.d.). This is because some of the products or models of Proton were based on the model of other international leading brand. It is also important to consider that the company is lacking in international operation, due to the different factors, primarily because of huge competition in the global market. The reputation or image of the company is also facing difficulties because of the current quality issue due to active service units and low plant utilization (BuildBoard n.d.).Furthermore, company is having different human resource issue due to their inability to retain and cultivate talent. Because of all these reasons, the company is lacking in international operations. Above all, due to it’s over reliance to the government, without the strong support from the government, Proton could lose out to major players in the industry that can cause serious impact on the different supply chain (AseanAffairs 2009). 4.3      Opportunities               The support of the government to the company is an important opportunity, because the government considers the company as their partner, therefore majority of cars needed by local and national government will be Proton. Furthermore, the company can also take advantage of the different technological developments, particularly the different Information Technology (IT) or Information System or IS which can help the company to manage their information that can help them in the decision-making process. Entering new markets will also help the company to expand their business in terms of size; therefore can help to gain more turnovers. It is also important to consider the ongoing popularity of e-commerce or online selling of goods. This will help the company to target more market in more reliable, fast and cost-effective manner. Furthermore, the changing perspective and concern of the people towards the environment also created opportunities for different automotive industry, and that is to offer different “Green” cars or hybrid cars.   4.4      Threats               The most crucial threats to be faced by the company are the global financial crisis which affects the economy of Malaysia, and affect the lifestyle and buying behavior of the consumer. As a result, as of October of 2008, new-vehicle deliveries slipped by 13% from 42,915 of last year to 37,512 units (Chrysler 2008). The changing and maturing of the technology is also another important factor to consider, together with the growing number of competitors who are entering the market, which result to the price wars. The main reason behind this situation is the AFTA which focus on reducing tariffs from zero to 5% in 15 years among the six nations through a common effective preferential tariff It planned to reduce tariffs to zero to 5% in 15 years among the six nations through a common effective preferential tariff (Ghani & Zainuddin 2008). 5.      AFTA Compliance Problems            The ASEAN Free Trade Area or AFTA is a collective effort by the member countries in order to eliminate tariffs on intra-ASEAN trade in the goods sector. The main target is to achieve tariff between 0 – 5% in 2003 for the six original member countries, Vietnam by 2006, Lao PDR and Myanmar by 2008 and Cambodia by 2010, at the same time remove quantitative restrictions and other non-tariff barriers. The reduction or elimination of tariff is undertaken through the Common Effective Preferential Tariff Scheme (Ministry of International Trade and Industry 2008).          The main impact of AFTA to the economy of Malaysia is the increase intra-ASEAN competition from lower cost producers; declined competitiveness of traditional export industries which include the high labor cost, lack of resources and expertise and technology obsolescence; removal of protection such as quota system and monopoly status; complying with 40% local content rule; develop competitive local small and medium industries which will focus on the domestic market, dependent on single or few buyers and lack of expertise and backward technology. As a result there are different sectors that might face strong competition primarily the ceramic tiles, cement, plastic products and automotive industry (Ghani & Zainuddin 2008).          AFTA will result to higher economies of scale in the automotive industry in Malaysia. Higher economies of scale will mean lower unit production costs. This will help to translate into lower retail prices and a bigger market. Therefore, AFTA could translate into price cuts of about 20% to 50% on vehicles. Competitive producers can export their products throughout the region at very low import duties and pass on cost savings to consumers. As a result, consumers can exercise a wider and better product choice at very competitive prices (Dey 2002).     6.      Industry Analysis Figure  SEQ Figure \* ARABIC 1 Porter's Five Forces                                                                                                   Figure 1 shows the industry analysis of the automotive industry in general. According to Porter, there are 5 important factors which show the attractiveness or value of the structure of the industry: entry of competitors, threat of substitutes, bargaining power of suppliers, bargaining power of buyers and rivalry among the existing players. 6.1      Threats of New Entry               The threats of new entry pertain on how easy or difficult for new entrant to start competing (12Manage n.d.). The primary barriers of new entry are the high capital and investments that are needed in order to enter the industry. This is because it mainly focuses on the different technologies that are needed in order to come up with the quality and services that are being offered by the long time players in the industry. Aside from that, it is also important to consider the availability of the distribution channel which is very important in connecting with the customers. Furthermore, because there is long time player in the industry, brand loyalty of the customers is considered as inevitable. However, due to AFTA, the government offers friendly entrance policies for the possible new entrants. 6.2      Threat of Substitution               The threats of substitution pertain on the ability of the customers to go for substitute products that might be cheaper and accessible. In terms of the passenger car industry, the growing demands for bikes and motorcycles. More and more people are switching from using the passenger cars into using bikes and motorbikes due to two reasons, first is that it helps them to save money because of gasoline, at the same time, the consumer are becoming more aware of their environmental benefits. Thus, the quality of the substitute’s products, the willingness of the customers and the low costs of switching enables the threats of substitution high. 6.3      Buyer Power               The bargaining power of the customers in this industry is somewhat high due to the homogenous or almost the same products, which divide the number of sales from huge number of competitors. But it can be maintained due to the huge number of buyers, primarily in developed countries, aside from the fact that the buyers are fragmented. Above all, the importance of quality of the products and services are important factors which affect the power of the buyer. 6.4         Suppliers Power   The supplier has a neutral power over the industry. This is because there are few dominant suppliers in the industry who are well known for quality and brand image. This is affected by the high role of quality and service in the industry, because the industry is directly connected to safety and quality of life of the customers. The most important factor which add up to the influence of the suppliers is the high cost of switching. 6.5      Competitive Rivalry   The competitive rivalry pertains on the intensity of rivalry among the competitors in the industry. it is important to consider the improving product differentiation due to the extensive effort of each and every automobile company in the world to become unique and have the stronger market position in the industry. This is the major impact of the large number of firms of organization competing in the global market including local players from Korea, China and Japan which result to diversity of cultures and organizational behaviors of the rivals. The low switching cost from one brand to another intensifies the competition in the market and pushes all of the major and minor players to focus on R&D and innovation processes in order to improve their overall performance in the market. Above all, the competition is increased due to high exit barriers due to the human resource and facilities. 7.      Recommendation   It will be important for the company to focus on the Delta model in the process of planning and implementing their strategy. The Delta model is a strategy framework that was developed by Dean Wilde together with the members of Dean & Company and Arnoldo Hax of MIT/Sloan School of Management (Value Based Management.net n.d.). 8.      The Strategic Triangle   There are three options that are represented in Triangle which are considered as the starting point o the dialogue for the development of a strong vision (see Appendix A) (Hax & Wilde II 2003). Due to the current condition of the company regarding their competitive advantage which pertains on the quality of their products, it will be important to focus on the Best Product positioning. This is because of the fact that the best way to attract, satisfy and retain customers is through the inherent characteristics of the product itself. The position is rather inward and narrow, based upon the prevailing product economics. Thus, the major strategic driving forces are the development of an efficient supply chain that will guarantee low cost infrastructure; a proven internal capability for new product development. At the same time, it will help the proper renewal of the existing product line that will help to secure the distribution channels that will help to transfer the products to the targeted market segments (Hax & Wilde II 2003). This will focus on the R&D and innovation process for the company. In order to maintain the process of engineering and designing passenger cars which will suit the taste and preferences of the customers this is affected by different demographics, economics and social factors. Due to the growing problem of global economic crisis, it will be important to focus on low cost or differentiation of the products. 9.      Aligning Organization Wide Strategies   In this stage, it will be important to focus on organizational change, because it will focus on restructuring the current business rules and policies towards the strategies of the company. In the case of the company, it will be important to focus on the strong product base, solid supply chain infrastructure as well as internal innovation capabilities to match (Hax & Wilde II 2003).   10.   Adaptive Processes   Because of the fact that the strategies of the company focus on the R&D process of Proton, it will be important to focus on the Innovation as the strategic task. It ensures a continuous stream of new products and services in order to maintain the future viability of the business. It also helps to mobilizes all of the creative resources of the firm which include the technical, production and capabilities in the marketing field in order to develop an innovative infrastructure for the business. Furthermore, the company must not limit itself to the pursuit of the different internal product development, but must focus the sources of innovation from the suppliers, customers and key complementors. It maintains the focus on the renewal of the business to maintain its competitive advantage as well as superior financial performance (Hax & Wilde II 2003).      In this stage, it will be important for the company to know the reactions and opinions of the Malaysia customers regarding the design of their models, particularly the issue of almost identical design of each model. 11.   Metrics/Performance Measures   It is important to consider that metrics providing overview should be supplemented with granular metrics (12Manage n.d.). A balance score card dimensions for the firm and for each customer segment tier were identified that will allow Proton to monitor and analyze its current executions of customer targeting as well as innovative strategies which represent different changes of key cost drivers of the financial perspective, operational effectiveness, technology as well as customer perspective (Core.org n.d.) (see Appendix ).Based on the said balance score card dimension, as well as the Delta Model, it is important for Proton to focus on the changing preferences and demands of their current customers, which are their strategic partners from different parts of the globe, as well as their current loyal customers. It is important to focus on new services and products as well as the capability to deliver new car models to their partnership. As a result, the significant dimensions in the performance matrix must be percentage  of strategic/exclusive partnership acquisition, percentage of business volume from different strategic/exclusive partnership, as well as switching costs for complementor and customer (Core.org n.d.). 12.   Conclusion   Proton was considered as the national car manufacturer of Malaysia and considered as the major player in the industry. However due to the different factors, primarily the implementation of AFTA, the sales and market share of the company decline. In details, the growing competition enables the Malaysian market to have a wide choice of cars to be availed. On the other hand, due to the strong support of the government, as well as the strong position of the company in the market, it can be said that the company failed to focus on the most important aspect of a company in order to maintain competitive advantage, and that is innovation. Most of the customers are saying that the company is no longer offering real new models of cars. Aside from that, the company is also having a problem in their supply chain, which results to high pricing of Proton's car compare to other international brand in the market. In order to solve the current situation of the company, it will be important to focus on innovation or R&D process. This can be done by focusing on applying new IT or IS to speed up the process of designing. It is also important to focus on the HR aspect of the company in order ensure that the company has talented and skilled staffs to develop new and better products that will suit the ever changing preferences of the consumers.   13.   References 12Manage. Porter’s Five Forces Analysis. Available from: http://www.12manage.com/. [25th March 2009]   AseanAffairs (2009). Malaysia’s Proton Still Needs Government Support. Available from: http://www.aseanaffairs.com/page/malaysia%27s_proton_still_needs_government_support. [25th March 2009]   AseanOneMonitoring (2009). Malaysia Auto Sales to Fall 12.4 Percent on Slowing Economy. Available from: http://www.asiaone.com/Motoring/News/Story/A1Story20090122-116465.html. [Accessed 24th March 2009]   BuildBoard. Analysis SWOT Proton. Available from: http://g4.buildboard.com/images/attachpic/g4/B400/B400F1844T909_8195ded601b2dd2aaee71cb07bd4c006.pdf. [25th March 2009]   Core. DMK International (8) – Aggregate and Granular Metrics. Availabe from: http://www.core.org.cn/NR/rdonlyres/Sloan-School-of-Management/15-904Fall-2005/F43E8DBF-9AF8-4B07-BB61-2920E880D30F/0/dm_csstd_dmk8_2.pdf. [2nd April 2009]   Chrysler, M. (2008). Malaysian Auto Industry Facing Decline as Global Economy Slows. Available from: http://subscribers.wardsauto.com/ar/malaysian_industry_decline_081208/wall.html?return=http://subscribers.wardsauto.com/ar/malaysian_industry_decline_081208/. [25th March 2009]   Dey, A. (2002). The Impact of AFTA on the ASEAN Automotive Industry. Available from: http://www.frost.com/prod/servlet/market-insight-top.pag?docid=IMAY-58VK85. [25th March 2009] ESCAP (2009). V. Malaysia. Available from: http://www.unescap.org/tid/publication/part_two2223_mal.pdf. [Accessed 24th 2009]   Frost & Sullivan (2002). The Impact of AFTA on the ASEAN Automotive Industry. Available from: http://www.frost.com/prod/servlet/market-insight-top.pag?docid=IMAY-58VK85. [Accessed 24th 2009]     Ghani, K., Zainuddin, Y., Fereidouni, H. G. & Ziaee, A. (2008). ‘AFTA: Effect on Malaysian Economy’. Journal of Management and Social Sciences. vol. 4, no. 2, pp. 134 – 141. Available from: http://www.biztek.edu.pk/downloads/research/jmss_v4_n2/6.%20Afta.pdf. [25th March 2009] [Accessed 24th 2009]   Hax, A. & Wilde II, D. (2003). ‘The Delta Model- A New Framework of Strategy’. Journal of Strategic Management Education, vol. 1, no. 1. Available from: http://pesona.mmu.edu.my/~wruslan/MISP2/Readings/detail/Reading-37.pdf.   Histomobile. Proton (1985-). Available from: http://www.histomobile.com/dvd_histomobile/histomo/63/history2.asp. [Accessed 24th 2009]   Ministry of International Trade and Industry 2008. Malaysia and AFTA. Available from: http://www.miti.gov.my/cms/documentstorage/com.tms.cms.document.Document_7d9e2e2f-c0a81573-11c011c0-50afb270/afta.pdf. [25th March 2009]   Nijssen, E. J. & Frambach, R. (2000). Creating Customer Value Through Strategic Marketing Planning: A Management Approach. Springer   PMProject. The History of PROTON, Available from: http://pmproject.doubleukay.com/proton_history.html. [Accessed 24th 2009]   PriceWaterHouseCooper (2005). Malaysia. Available from: http://www.pwc.com/gx/eng/about/ind/retail/growth/malaysia.pdf. [Accessed 24th 2009]   US Department of State. Malaysia. Available from: http://www.state.gov/r/pa/ei/bgn/2777.htm. [Accessed 24th 2009]   Value Based Management.net. The Delta Model. Available from: http://www.valuebasedmanagement.net/methods_hax_wilde_delta_model.html. [Accessed 24th 2009]       14.   Appendices   14.1   Appendix A: Strategic Triangle                                               Source: (Hax & Wilde II 2003)               14.2   Appendix B: Balance Score Card Dimension of Proton   	 		 		 		Balance Scorecard Framework 		 		 		Shareholder Look 		 		 		Operational Effectiveness 		 		 		Organizational Learning 		 		 		Customer targeting 	 	 		 		 		Proton 		 		 		·       		Volume, revenue, gross margin by 		technology segment and market segment 		 		·       		Revenue and turnover by 		geographical segment (Asia, Europe, Middle East, Africa and Pacific) 		 		·       		Revenue and turnover by business 		domain such as capital, industrial and government. 		 		 		·      		Wholly-owned subsidiary Lotus 		Engineering UK – leading automotive engineering consultancy company 		 		·      		Application of Information 		Technology in the R&D and auto development 		 		 		·      		% of sales from new technology 		and models; 		 		·      		Training as a % of sales; 		 		  		 		 		·     		Customer market share by tier 		 		·     		Profitability by customer tier 		 		·     		Customer satisfaction by tier 	 	 		 		 		Strategic and Integrated Partner 		companies 		 		 		·       		Volume, revenue, turnover, gross 		margin by individual client 		 		·       		Year over year sales and 		turnovers growth by individual clients; 		 		·       		Return on business relationship 		investment 		 		 		·      		Cost to serve clients; 		 		  		 		 		·      		Number of clients on each 		country and partner; 		 		·      		Return on investment on 		collaboration tools per selected clients; 		 		·      		Return on % revenue on the 		center of excellence establishment 		 		 		·     		Customer satisfaction; 		 		·     		Joint revenue and turnover from 		complementor relationship 		 		·     		Relationship 	 	 		 		 		Body Shopper 		 		 		·       		Volume, revenue, turnover, gross 		margin by individual clients; 		 		·       		Return on investment per head; 		 		·       		% revenue and sales from new 		clients 		 		 		·      		Time needed in order to complete 		the transaction from start to finish per model or project; 		 		·      		Idle time of engineering; 		 		·      		Return on investment on 		collaboration; 		 		·      		% of revenue, volume, earnings 		by different channels: 		 		o  		Referral by clients; 		 		o  		Direct selling; 		 		o  		Cross selling 		 		·     		Cost of training per project 		 		 		·      		Cost of the collaboration tool 		in order to facilitate transfer of knowledge 		 		 		·     		Cost to serve clients per 		channel; 		 		·     		Customer satisfaction on the 		models, relationship and cost of products. 	   Adopted from: (Core.org n.d.)

Strategic Management of Proton, Malaysia

Strategic Management: Proton, Malaysia Table of Contents TOC \o "1-3" \h \z \u 1. Introduction . PAGEREF _Toc2264...