Value Chain and Resource Analysis

Internal Audit

            The internal audit of a company consists of the value chain analysis and identifying the core resources and competencies. The external audit on the other hand covers the current condition of the industry in which the company deals in (Christopher, 2016). Value chain Analysis- The value chain analysis covers the entire process starting with the production of the products the logistics, technology, management, infrastructure, marketing and sales, services and others.  This analysis tool helps to find out areas for improvement (Lee & Gereffi, 2015). The inbound logistics in the automotive industry is the first step of the process where the raw materials are supplied in the production house. The operation stage is divided into several parts and covers the process of transforming the raw materials into the product.  The outbound logistics reaches the products from the manufacturers to the retailers.

The marketing and sales are the essential parts of the automotive industry. The promotion, distribution, advertising, sales management, relationship with the customers are maintained (Nykvist & Nilsson, 2015). The company must set its target customers in this stage and seek for ways to satisfy the customer demands. The final primary activity is adding value to the product. The customer support comes under the service stage. It is a continuing process in which customers are supported regarding the use, maintenance, enquiries and others which helps the organization to create a positive impression in front of the customers.

Resources and competencies -The Holden Company must have some key resources and competencies to succeed fast in the highly competitive industry. The resources include operational, financial, intangible resources and others (Niesten & Alkemade, 2016). The company also must be aware of its competencies that would be helpful in determining what type of company it is and what activities must be conducted to use the resources in the best possible way. For example, a well –structured sophisticated IT will be helpful for the company to forecast the market demand an act accordingly. 

A sophisticated corporate culture and CSR will enable the company to have a good working environment with motivated and loyal employees. Competencies are the activities that a company is able to do in order to beat the competitors.   The Holden Company functions in the Australian automotive market and the market analysis of Australia’s automotive industry through Porter’s Five Force model will help to find out which aspects the company should focus on and what the key elements to flourish are(Nykvist & Nilsson, 2015). The analysis will reveal the success factors for the company. Threat of new entrants – The Local Australian automotive market is not that strong because the foreign markets put pressure on the Australian market.

The exporting car manufacturers enjoy the decreasing export taxes and randomly export duty – free cars causing challenge in the development of the Australian car manufacturers. The threat of new entrants is high in the Australian market. Threat of Competitors – The existing competitors in the Australian automotive market are Ford, Toyota, Mitsubishi and many others. 

Market Analysis through Porter’s Five Forces

These manufacturers give furious competition every year. Due to the limited market volume of Australia which is 20 million, these rival companies literally struggle to occupy the maximum market share. The internal competition increases the sustenance pressure on these companies.  Apart from these, there are other smaller car manufacturers which are gaining importance in the market fast with their small business competitive strategies (Soo et al.,2017). The Holden Company has to compete with these market goliaths and establish its own position.  Threats of substitution – The land of Australia is full of other substitutions including bicycle, metro, train, motorbike, plane, trains and other. Therefore, this industry is full of substitutes.

The government regulation on carbon emission has reduced the use of personal cars and the public choose public transports more. Power of buyers –  Due to the extensive and exclusive range of car varieties from the various car manufacturers, the bargaining power of the buyers are high in this industry. Therefore, if the Holden Company intends to profit in this industry, it has to be extra-ordinary to satisfy the buyers. Power of Suppliers – Due to the large automotive industry and plenty of car manufacturers the suppliers always keep the companies in pressure. The car manufacturers do not avail the opportunity to bargain the price of the parts unless they themselves produce it (Grant, 2016). In this respect the Holden Company either have to produce the auto mobile parts themselves or stay under pressure of the suppliers.

Key strategic issues

             The key strategic issues are those on which the company must focus in future for better results. The first is customers and the second is the competitors (Soo et al.,2017). The company must focus on the customer satisfaction, customer preferences. The company should explore and discover what the customer want extra in their products, what will be their preference after 3-5 years (Habib, Kamran & Rashid, 2015). The Holden Company must develop enough competency in judging the customer demands, their behavioral, regional, educational, cultural differences which shape their choice.

Since, the next focus be on the competitors, the company must draw a sketch of the strategic planning of their competitors. They must foresee what their competitors have and they do not have in their company. Based on the data, they need to establish their own strategic plan which will excel their competitors in future (Wu,2015). Keeping in view the Australian automotive market and the tough competitors in the industry, the Holden Company must develop cost leadership strategy, in order to beat the competitors in terms of price. However, the price does not matter to some customers, with the reasonable price, they must provide quality products also.

Conclusion

            Therefore, from the above discussion it can be said that the Holden Company is a rising automotive company is Australia and it must implement a strategic planning in its business in order to succeed fast and give tough competition to the giant competitors in the Australian market. The present report outlines the key strategies that the company must incorporate analyzing its value chain and internal resources, competencies and capabilities.     

References 

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Habib, S., Kamran, M., & Rashid, U. (2015). Impact analysis of vehicle-to-grid technology and charging strategies of electric vehicles on distribution networks–a review. Journal of Power Sources, 277, 205-214.

holden.com (2018). Holden Australia | New Cars, Offers, Dealers & Services. [online] Holden.com.au.

Lee, J., & Gereffi, G. (2015). Global value chains, rising power firms and economic and social upgrading. Critical perspectives on international business, 11(3/4), 319-339.

Niesten, E., & Alkemade, F. (2016). How is value created and captured in smart grids? A review of the literature and an analysis of pilot projects. Renewable and Sustainable Energy Reviews, 53, 629-638.

Nykvist, B., & Nilsson, M. (2015). Rapidly falling costs of battery packs for electric vehicles. nature climate change, 5(4), 329.

Soo, V. K., Peeters, J., Compston, P., Doolan, M., & Duflou, J. R. (2017). Comparative study of end-of-life vehicle recycling in Australia and Belgium. Procedia CIRP, 61, 269-274.

Wu, M. Y. (2015). Driving an unfamiliar vehicle in an unfamiliar country: Exploring Chinese recreational vehicle tourists’ safety concerns and coping techniques in Australia. Journal of Travel Research, 54(6), 801-813.