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Skoda Motors final

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									Skoda Motors
     Some comments about
        Skoda Motors
• People would often ask, “Have you heard the one
  about…..”
• “ How do you double the value of a Skoda?, Fill it
  with gasoline.”
• “ What do you call a Convertible Skoda? A
  DUMPSTER.”
• “Why does the Skoda have a heated rear window?
  To keep your hands WARM when you are
  PUSHING it.”
                   Origins
• In 1895 Skoda Automobile Company was founded,
  when Vaclav Laurin and Vaclav Klement began
  manufacturing Slavia-brand bicycles. Just four years
  later, Laurin & Klement began manufacturing
  motorcycles.
• 1905 -The first car, called the “Voiturette A”.
• 1907- Laurin & Klement set up a joint-stock
  company.
        Origins Continued
• 1925- factory merges with the Skoda machinery
  manufacturing company in Plzeň.
• 1930- ASAP (“Akciova Společnost pro Automobilov‎
  Průmysl” – the Automotive Industry Joint-stock
  Company).
• 1939–1945- During the war years, the factory focuses on
  producing materials for the military. Just a few days
  before the war ends, the factory is bombed and sustains
  considerable damage. The enterprise is nationalized in the
  autumn of 1945.
      Origins Continued
• 1946- The enterprise’s reconstruction takes
  place under a new name, AZNP (“Automobilové
  zavody, narodni podnik”).
• 1991- April 16 marks the beginning of a new
  chapter in the Company’s history, when it is
  acquired by the strategic partner Volkswagen.
  Skoda becomes the Volkswagen Group’s fourth
  brand.
                VISION

To have the biggest market share in Europe by
looking for extraordinary solutions those satisfy
     extraordinarily demanding customers
                  Mission
To provide quality sales, service and transportation
    needs for our customers. This is and will be
     accomplished through a dedicated team of
   employees whose number one goal is customer
        satisfaction along with a management
  team whose responsibility is to ensure employee
       satisfaction, and customer enthusiasm.
                             Values
Three basic values of Skoda brand are:

• Intelligence: We continuously seek innovative technical solutions and new
  ways in which to care for and approach the customers that are most important
  for us. Our conduct toward the customers is aboveboard, and we respect their
  desires and needs.

• Attractiveness: We develop automobiles that are aesthetically and technically
  of high standard and always continuous an attractive offer for our customers
  not only in terms of design or technical parameters but also the wide range of
  offered services.

• Dedication: We are following the steps of founders our company Messrs.
  Laurin and Klement. We are enthusiastically working on the further
  development of our vehicles; we identify ourselves with our products.
INTERNAL AUDIT
             Strength                               Weakness
1.   Skoda won numerous awards for      1.   Poor brand name due to
     producing a quality automobile.         Skoda relates to Eastern
2.   Skoda implements low-cost               Europe origins that in the past
     country sourcing strategy.
                                             the cars had an image of poor
3.   Skoda is the largest employer in
                                             vehicle quality, and design.
     the Czech Republic.
4.   Total assets are gradually         2.   Total Skoda market share is
     increasing.                             1.7%.
5.   Skoda achieves highest growth in   3.   Skoda has problems with their
     2006 sales in Eastern Europe,           assembly plants outside of the
     number one carmaker in Central          Czech Republic.
     Europe, and grew its Western
     Europe market share to 2.1
   INTERNAL FACTOR
EVALUATION (IFE) MATRIX
Key Internal Factors                                  Weight      Rating       Weighted Score
Strengths
1. Skoda won numerous awards for producing a               0.15            3            0.45
    quality automobile.
1. Skoda implements low-cost country sourcing              0.15            3            0.45
    strategy.
1.   Skoda is the largest employer in the Czech            0.08            3            0.24

     Republic.
1.   Total assets are gradually increasing.                0.10            3            0.30

1.   Skoda achieves highest growth in 2006 sales in        0.18            4            0.72
     Eastern Europe, number one carmaker in Central
     Europe, and grew its Western Europe market
     share to 2.1
Weaknesses
1. Weak brand name due to Skoda relates to Eastern         0.18            1            0.18
   Europe origins that in the past the cars had an
   image of poor vehicle quality, and design.
1.   Total Skoda market share is 1.7%.                     0.08            2            0.16
1.   Skoda has problems with their assembly plants         0.08            1            0.08
     outside of the Czech Republic

                         Total                             1.00                         2.58
EXTERNAL AUDIT
                Opportunities                                        Threats
1. Growing automobile industry in Middle          1. Highly crowded and competitive
    East by 9%, Southeast Asia by 14%, and            environment.
    Africa by 8%.                                 2. Franchised dealerships are free to set
                                                      vehicle prices, and they may or may not
2. By 2010, electronics are expected to
                                                      offer customers the discounts that
    account for nearly 40 percent of an average
                                                      automakers provide.
    vehicle’s value.
                                                  3. Continuous increasing in oil prices may

3. The forecast for the market for new                affect automobiles sales around the world.
   passenger cars in Russia is +11%.

4. U.S. small-car demand outpacing North
   American capacity.
   External Factor
Evaluation (EFE) Matrix
               Key External Factors                     Weight   Rating   Weighted Score

Opportunities
1.   Growing automobile industry in Middle East          0.15      3           0.45
     by 9%, Southeast Asia by 14%, and Africa by
     8%.

2.   By 2010, electronics are expected to account for    0.15      2           0.30
     nearly 40 percent of an average vehicle’s value


3.   The forecast for the market for new passenger       0.20      3           0.60
     cars in Russia is +11%
4.   U.S. small-car demand outpacing North               0.15      2           0.30
     American capacity
Threats
1.   Highly crowded and competitive environment          0.15      3           0.45


2.   Franchised dealerships are free to set vehicle      0.10      2           0.20
     prices, and they may or may not offer
     customers the discounts that automakers
     provide.

3.   Continuous increasing in oil prices may affect      0.10      2           0.20
     automobiles sales around the world.


Total                                                    1.00                  2.50
CPM-Competitive Profile
       Matrix
                        Skoda                 Peugeot           Renault            Opel

Critical       Weight   Rating Weighted   Rating Weighted   Rating Weighted   Rating   Weighted
Success                        Score             Score             Score               Score
Factors
Price          0.12     4      .48        2      .24        3      .36        2        .24
Financial      0.15     3      .45        4      .60        3      .45        4        .60
Position

Advertising    0.09     2      .18        3      .27        2      .18        4        .36
Innovation     0.22     2      .44        3      .66        2      .44        4        .88
Market Share   0. 22    2      .44        4      .88        2      .44        4        .88
Management     0.10     3      .30        3      .30        3      .30        3        .30
Global         0.10     3      .30        4      .40        3      .30        4        .40
Expansion

     Total      1.00             2.59              3.35              2.47                3.66
Financial Ratio Analysis
       12/2006
    Growth Rates %                Skoda   Industry
    Sales (Qtr vs year ago qtr)   1.12      9.40
    Net Income (YTD vs YTD)       1.48     11.80
    Liquidity Ratios
    Current Ratio                 1.48      2.10
    Quick Ratio                   1.13      0.90
    Efficiency Ratio
    Assets to sales               0.52      11.0
    Profitability Ratios
    Returns to sales              0.055     3.2
    Returns to Assets             0.11      6.4
    Debt Ratio
    Total liabilities to          1.80     277.2
SWOT MATRIX
                                                                      Strengths                                           Weaknesses
                                                   1.   Skoda won numerous awards for producing a          1.   Poor brand name due to Skoda relates to
                                                        quality automobile.                                     Eastern Europe origins that in the past the
                                                   2.   Skoda implements low-cost country sourcing              cars had an image of poor vehicle quality, and
                                                        strategy.                                               design.
                                                   3.   Skoda is the largest employer in the Czech         2.   Total Skoda market share is 1.7%.
                                                        Republic.                                          3.   Skoda has problems with their assembly
                                                   4.   Total assets are gradually increasing.                  plants outside of the Czech Republic.
                                                   5.   Skoda achieves highest growth in 2006 sales in
                                                        Eastern Europe, number one carmaker in Central
                                                        Europe, and grew its Western Europe market share
                                                        to 2.1.




                Opportunities                                           S-O Strategies                                      W-O Strategies
1.   Growing automobile industry in Middle         1.   Using price as a competitive advantage to          1.   Increase market share by entering new growth
                                                        concentrate on Russia Market (S2,O3)                    market in Middle east, Southeast Asia, and
     East by 9%, Southeast Asia by 14%, and
                                                   2.   Open assembly plant in Mexico to feeding North          Africa(W2,O1)
     Africa by 8%.                                      America market (S1,S2,S5,O1,O4)                    2.   Improving automobiles quality by introducing
                                                                                                                innovative, electronic features, and design
2.   By 2010, electronics are expected to                                                                       (W1,O2)
     account for nearly 40 percent of an average
     vehicle’s value.
3.   The forecast for the market for new
     passenger cars in Russia is +11%.
4.   U.S. small-car demand outpacing North
     American capacity
              Threats                                     S-T Strategies                                 W-T Strategies
1.   Highly crowded and competitive           1.   Increase marketing efforts to make new       1.   Offer 5 years/200000 Kilometer
                                                   repositioning(S4, S5, T1, T3)                     warranty on all vehicles (W1, T1)
     environment.
                                              2.   Focus on producing middle and small engine
2.   Franchised dealerships are free to set        cars(S1,S2,T3)
     vehicle prices, and they may or may
     not offer customers the discounts that
     automakers provide.
3.   Continuous increasing in oil prices
     may affect automobiles sales around
     the world.
SPACE MATRIX
Financial Strength           Rating   Environmental Stability         Rating

Return on assets             2        Rate of inflation               -3

Leverage                     1        Technological changes           -4

Net Income                   2        Price Elasticity of demand      -6

ROE                          2        Competitive pressure            -6

                                      Barriers to entry new markets   -6

Average                      1.75     Average                         -5


                                      Y-axis                          -3.25

Competitive Advantage        Rating   Industry Strength               Rating

Market share                 -1       Growth potential                2

Product Quality              -2       Financial stability             2

Customer Loyalty             -1       Ease of entry new markets       3

Control over other parties   -1       Resources utilization           2

Technological know-how       -1       Profit potential                3

Average                      1.20     Average                         2.40


                                      X-axis                          1.20
                        FS


     Conservative             Aggressive




CA                                          IS




            Defensive         Competitive




                         ES
    The Boston Consulting
     Group (BCG) Matrix
                      Market share position


           Stars                              Question Marks


                                   Skoda
Industry
  Sales
 Growth
  Rate
           Cash Caw                                 Dogs

								
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