strategic management

Presenters

• MOHIB UR REHMAN KAYANI• SYED BAKHTYAR ALI SHAH• SAHIBXADA ZEESHAN AMIN• SULMAN SHER • MEHREEN SHAH

• 1895  Laurin & Klement• July 1945 produced trucks for world

war 2• Hitler order to Skoda• After world war

History of Skoda

Achievements

• Introduced new model • Awards And Honors • Car Of The Year • Auto Trophy • Family Car Of The Year• Red Dot • Skoda Auto School

INTERNAL FACTOR EVALUATION MATRIX OF SKODA AUTOMOBILE

Strengths W R W/S1. Operates in about 90 countries 0.09 4 0.36

2. First car ever produced in Europe 0.06 3 0.18

3. Produced 556347 vehicles in 2006 0.06 3 0.18

4. Innovative design such as Skoda Roomsters, and Skoda Fabio 0.09 4 0.36

5. Large number of full time employees 0.06 3 0.18

6. Net income 203billions and revenue is 11 billion Czech crown 0.06 3 0.18

7. Increased in equity reserved 0.04 3 0.12

8. Total asset increased 0.04 3 0.12

9. Skoda auto school 0.07 3 0.21

10. Skoda healthy company program 0.08 3 0.32

Weaknesses

11. Problem with assembly plant 0.08 2 0.16

12. Skoda in Czech language mean “a shame” 0.09 1 0.09

13. Parent Volkswagen have financial problems 0.05 1 0.09

14. Total current liabilities increased 0.04 1 0.04

15. Only passengers’ car manufacturer 0.09 2 0.18

Total 1 2.73

Interpretation

• Skoda automobile total weighted score For IFE is 2.73. Which shows that Skoda automobile captured well its strengths and getting decent advantage of its strengths by dealing with its weaknesses facing internally by the firm.

EXTERNAL FACTOR EVALUATION MATRIX OF SKODA AUTOMOBILE

Opportunities W R W/S

i. Gained monopoly status as only Czech car manufacturer 0.06 2 0.12

i. Oldest car manufacturer in Central Europe fell greatly in both quality and prestige 0.07 3 0.21

i. Czech Republic encourage the privatization an entrepreneurial act 0.07 3 0.21

i. New models began to take market share 0.06 3 0.18

i. Parent Volkswagen operates plant in Africa, America, Asia/pacific, and Europe region 0.04 2 0.08

i. Rapid expansion of overall market for light commercial vehicles 0.06 2 0.12

i. Focus on new energy forms 0.09 4 0.36

i. Ford sells Rang rover and jaguar division which shows lack of profitability 0.08 3 0.24

i. Over 10% growth were recorded in the Western Europe countries 0.05 2 0.10

Threats

i. Bad reputation throughout 20th century 0.09 4 0.36

i. Chinese firm expand globally 0.08 3 0.24

i. Intense competition 0.07 3 0.21

i. Petroleum prices goes up 0.07 3 0.21

i. Domestic producers were forced to cut their prices 0.05 3 0.15

i. Mergers of automobile companies 0.06 3 0.18

Total 1 2.97

• Interpretation• As the EFE result of Skoda automobile is 2.97.

This shows that company is doing well and getting the advantage of its external opportunities and also dealing with the threats facing by the firm.

COMPETITIVE PROFILE MATRIX OF SKODA Skoda Nissan General Motor

Critical success factor Weight Ratings W/S Ratings W/S Ratings W/S

Product innovativeness 0.09 3 0.27 2 0.18 3 0.18

Bad reputation 0.1 1 0.1 3 0.3 4 0.4

Global expansion 0.1 4 0.4 4 0.4 4 0.4

Management 0.1 3 0.3 4 0.4 4 0.4

Marketing communication 0.08 3 0.24 3 0.24 2 0.16

Supplier control 0.04 3 0.12 2 0.08 4 0.16

Trained employees 0.06 3 0.18 3 0.18 4 0.24

Market share 0.2 1 0.2 2 0.4 4 0.8

Production capacity 0.04 3 0.12 3 0.12 4 0.16

Price competitiveness 0.1 2 0.1 4 0.4 2 0.2

Financial position 0.09 3 0.27 3 0.09 4 0.36

Total 2.30 2.79 3.46

Interpretation• The CPM matrix shows the result of the three companies such

as Skoda, Nissan and General motors. According to the result of CPM Skoda weighted score is 2.30, Nissan get the weighted score of 2397 and the General motors get the weighted score of 3.46. Which shows Skoda goes weaker as compared to its competitors. The General Motors is the market leader by capturing the 24.6% of Us car market share (2007). And the Nissan motors grabbed the 6.2% US market share.

SPACE MATRIX OF SKODA AUTOMOBILEFinancial strengths

• Net income increased 5

• Cash reserves 6

• Asset increased 5

• Increased in revenues 4Total 20

• Industry Strengths

• Profit potential 4

• Financial stability 4

• Ease of entry 5

• Strongest growth in automobile sector 6

Total 24

• Environmental strengths

• Intense competition -5

• Technological change -3

• Petroleum price goes up -4

• Price war -4

• Globalization -5

Total -21

• Market share in Czech republic -1

• Product quality -6

• Innovation -6

• Control over suppliers -5

Total -18

Competitive advantage

Conclusion

ES Average is =(-21/5=-4.2) IS Average is = (24/5=4.8)

CA Average is =(-18/4=-4.5) FS Average is = (20/4=5)

Directional vectors coordinate:

X-axis: 4.8+(-4.5)=0.3

Y-axis: 5+(-4.2)=0.8

The Skoda pursue Aggressive strategies

SPACE MATRIX GRAPHICAL PLOT

1

5

-6

-4

-5

-3

-2

-1

6

2

3

4

-1 -2 -3 -4 -5 -6 1 2 3 4 5 6

AGGRESSIVE CONSERVATIVE

DEFENSIVE COMPETITIVE

Interpretation

Afinancially strong firm that achieved major competitive advantage in a growing industry. Which has also have intense competition

I-E MATRIX FOR SKODA AUTOMOBILE

IFE SCORE

HIGH 3.0 to 4.0

MEDIUM 2.0 to 2.99

LOW 1.0 to 1.99

HIGH 3.0 to 4.0

MEDIUM 2.0 to 2.99

LOW 1.0 to 1.99

EFE

SC

OR

E

Hold and Maintain

Interpretation

As the Skoda automobile IFE total weighted score is 2.73 and the EFE total weighted score is 2.97. So the plotting the values of EFE and IFE total weighted score in I-E matrix. So the result of both IFE and EFE lies in plot v. Plot v is Average and medium plot. This mean Skoda automobile strategic position is hold and maintain.