Opel AU case study
To achieve the target, this essay will use the relevant elements In PESTLE framework to critical analyze the external environment, allowed by critical evaluation of the business response using evaluation criteria provided.
Case study overview People was highly aggressive when the company’s fist show room opened in Australia, with a network of 20 dealers nationally and an ambitious sales target of 15,000 by 201 5(Dowling 2013). However, People did not even get a fraction of that with 541 cars sold In the latter half of 2012 and 989 cars sold In the first half of 2013(Ernie 2013).
The Astral—-People’s little fancy car Is a representative of the company’s segment market—-well designed hatchbacks equipped with powerful engines and sport style. The nice Astral also had a nice price of ADD 29,800(Dispatch 20131 at the same time the prices of most rivals was dipping to close ADD 20,000(Dispatch 2013). Failed to in the intensive price war, People finally abandoned Australian arm in August 2012 left 20 heavily Invested Australian dealers behind.
The company Is unlikely return to Australia In the name of People but It Is still work with Holder on the potential to sale some cars with Holder badges(Park 2013).
Critical analysis of the external environment using the PESTLE framework The MIS-analysis of the external environment should be responsible for People’s failure. Economically and socially speaking, the arrive of People was doomed from the beginning. The auto market of Australia changed considerably within past 10 years which was ignored by People. Till today, People still considers Itself as a original high-end brand In the private car market.
With the Ignorance of the market Melcher such as Peugeot and Renault, People’s target competitor was Volkswagen. VOW is prospering with each passing day and becomes a major player who can strive for the first with Toyota in the world market(Moon 2013). However, People along with the hole GM is not in a dominant position now. Although Holder is still a big player in the Australian market but can it survive with out subsidies from government? Moreover, Australian auto market is a Intensive competitive market which has 66 brands of cars but only 23 millions of population(Dowling 2013).
The segments we need to be selling our volume Into are so incredibly competitive now, and that’s what changed in a way that’s invalidated the entire business case. ‘ Said by People Australia spokeswoman Michelle Lang. Regarding other European brands, Renault, with a 60-year history in Australia, only sales 3500 cars in 2011(Dowling 2013). Actually, in the past 10 years, Renaults best annually sales number is 4656 in 2002 which only reached less than a quarter of its initial target 2 sales(Dowling z Peugeot, standalone In EYE, only one year younger than Holder, has averaged fewer than 7000 sales during 2003 to 2012(Dowling 2013).
Acknowledged the data above, People’s 989 sales in the first half of 2013 which was 114 less than Propose is , to some extend, reasonably(O’Brien 2013).
Technologically speaking, lacking of innovation in products and technology, decisive outstanding advantages can hardly be found in People cars. Toyota has leading hybrid technology and cheap warranty services, is famous for its powerful GET engines and DOGS(Direct Shift Gearbox), Holder is equipped with perfect production and supply chain and People Just has nothing except its garish box.
But to the 20 franchisers it is a different thing. Obviously franchisers was anger at People exit because the massive losses from their investment in the brand. Due to the such huge sums involved in setting up a car retail dealership, the franchisers claimed that the government needs to create special rules to protect car retailers from overbearing behavior up a dealership(Park 2013). How the company will do to compensate for the franchisers is unable to know till now but Ms.
Lang said People Australia will speak with each every dealer on an individual basis and these kind of meetings started at August 11,2013 and haven’t finished now(Park 2013). But the failure in Australia seems has no influence on People’s international expansion plans, according to Ms. Lang, the company’s hired 350 new engineers in Germany, ‘General Motors is committed to making People profitable again,’ she said(Park 2013). Conclusion To conclude, poor market segmentation and impractical sales target are contributory factors in People’s failure.