Skodas Marketing Turn Around

Skodas Marketing Turn AroundHow did Skoda manage this major turnaround in the public perception of the company? Analyse the changes that have taken place 55 marks. In your analysis, you should use k directlyledge of focal point strategies and approaches that you have gained from the module or further study 40 marks. Please make sure that you spring metre give the axe and complete references to the sources of any of the concepts or information on the company that you include.In the early mid-nineties Skoda was a struggling company, faced with a shortage of skilled labour, low harvestingivity, high debts and low gross gross sales agreements (North, 2009). Skoda was producing out-dated and unreliable cable cars, causing its notice to be synonymous with unreliability. VW turned around its fortunes with changes in technology, management blueprint and marketing. let out to its product offering was the utilisation of VWs common weapons platform approach, another cornerstone was the recognition that the disfigurement required a complete overhaul. Skoda is now a successful erupt of the VW Company and for the large part has seen strong sales and profit. More recently, tough market conditions have made business difficult with most competitors suffering. Skoda however, has found itself in a stronger aspect than many an astonishing achievement considering its poor market position only 20 years ago.Skodas roots are based in early 19th ampere-second Czechoslovakia when Vclav Laurinand Vclav Klement began to produce their own bicycles. This progressed quickly to motorcycles and eventually automobiles in 1905. It was not until the 1920s when Laurin and Klement became partners with Skoda Works, the garner arms manufacturer and the origin of the enduring name. After the global depression in the early 1930s, Skoda successfully exported models such as the Popular until the break out of World War 2 and the German occupation. During this time the Nazi occupation di rected industry efforts towards arms and munitions and hence issue in this period acutely fell. Post World War 2, Czechoslovakia fell behind the iron curtain and became part of the centrally think communist soviet government. Designs were overhauled and updated models were sleek over being developed through until the 1960s. However, at this point western scientific advancements overtook that of Skoda and the inherent inefficiency at heart the centrally planned economy began to take an effect. Towards the end of the communist regime Skoda were lock up producing models based on those from the 60s and subsequently became the tooshie of ridicule for poor reliability and spirit (North, 2009). This is essentially the basis of the tarnished brand that had to be rebuilt in order to achieve its current position in the market. Skoda was producing cars that were poor compared to its contestation and using technology that was hopelessly out of date (Edmondson, 2007). Ailing Skoda was bought by VW and began to turn Skoda around, largely by integrating it into its own highly successful business model the part and eventual complete sale by the Czechoslovakian government to VW represented an innovation in government foreign business insurance (Lengyel Cadil, 2009).In order to compete in western markets in which capacity for cars exceeded demand resulting in a buyers market. In order to survive from competition, it needed to assess its product offering and brand image in the pursuit of market perceived value. In order to address Skodas issues VW re-aligned Company objectives to produce a calibre value car and a strong brand image.In order to increase the efficiency and forest of the Skoda work, VW began to train employees in its management methods. Management across different businesses require consideration for organisational finish particularly when working within an international setting (Naylor, 2004 pg120-121). The VW management had to deal with differences in business culture. Initially VW grooming did not improve the productivity of the Czech production plants, as the Czech engineers had adopted a truly flexible improvisatory way of working. VW employed strict control on methods and made use lean production methods such as the just in time (JIT) management. Although it is generally more efficient and cost good (Naylor, 2004, pg 510-511), JIT bed involve short delays or pauses whilst waiting for the correct parts to arrive to maintain fictional character. This contrasted with the Skoda improvisatory genius of working. VW took on more of a Human relations approach to its management, and by understanding and respecting Skodas business culture it was able to break down inflexible aspects of the old Skoda culture whilst working with other parts such as their vast and varied experience in order to bring about successful change. The management adapted their management style from a very directive role to include aspects of behaviour i n order to deal with the cultural differences and more effectively manage the unused workforce (Naylor, 2004 pg 10-11).The management likewise introduced novel methods to achieve Total Quality Management (TQM), this reduces the minute of errors on the production by devising everyone responsible for quality control as opposed to only checking for transformations at the final stage of the production line and therefore increasing productivity (Naylor, 2004 pg 510-511). To achieve this VW introduced the Red Button which halted the production line when a fault was spot by a member of staff. This introduction encouraged personal responsibility for fault checking. The knowledge that anyone could halt the assembly line and highlight individual errors combined with the fact that more errors were spotted and corrected before reaching the end of the assembly line resulted in less errors reducing the number of defects.After making changes to the management and workforce to deal with VWs c ulture, VW began to work with Skoda on its new vehicles, based on the VW common platform approach. The common platform approach allowed many cars to share the structure. This allowed Skoda to immediately take service of the latest advancements of VW technology, massively reducing the cost required to produce a new model. The common platform approach allows for innovation at the visible customer-facing parts of the vehicle.Creating a flexible management and employing VWs methodology worked nearly for Skoda. The result was the creation of cars which were as if not more reliable than VW badged counterparts. The Octavia beat its VW counterpart the golf game in endurance tests (North, 2009). The result of combining VW management and technology with Skoda know-how had resulted in cars that were more reliable than VW was producing on its own.Skoda now produces quality vehicles winning awards across Europe and the world (appendix 2.) including Car of the Year in India 2009 (Skoda, 2009). This high quality production also resulted in high customer satisfaction scoring Skoda highly in fissiparous customer satisfaction surveys. In the 2007 European consumer satisfaction and quality studies, it ranked top ten in France and Germany and in Britain ranked 2nd (Edmondson, 2007). From internal customer research Skoda discovered that 98% of its customers would recommend Skoda to a friend (The Times Online). From the outset and throughout the introduction of the new VW based Skoda models, the branding of Skoda was overhauled.From the outset It was clear initially that Skodas brand was poor in most of Europe, Skoda was associated with cheap poor quality and unreliability and VW excrete a large amount of money to Decontaminate the brand image cites admitted flaws of the past 548 changes and Its a Skoda genuine (North, 2009). In 2006 Skoda reviewed its market position and conducted a SWOT analysis. It was clear that the brand was still within a Niche Market an assessment of i ts brand suggested that although Skoda had been successful at disassociating itself with low-budget and low quality it still had a weak and neutral image compared with its competitors. (The Times Online) It was also clear that Skoda owners were happy about owning a Skoda and. Skoda decided once again to reposition its brand to gain market share in the mainstream car market. Skoda responded with a new marketing strategy, again leaving behind its successful brand defensive tactics. Its new market strategy was based around the happiness of its owners as shown in satisfaction surveys with the confident shibboleth the manufacturer of happy drivers. Promotion centred on this emotional draw with adverts such as the Cake during the advert the actual car is not shown at any point (The Times Online)This flexible management, commitment to quality and brand recognition gave Skoda the over-haul it needed. Since VWs take 20 years ago, Skoda sales have quadrupled to 650,000 cars and are responsib le for 25% of VWs profits. Skoda product positioning was competing with other upmarket brands such as VW and Audi not only on charge but also on quality (North, 2009).Skodas success followed the introduction of the Octavia and the Fabia, these were based on VW platforms this allowed the underlying bod to be based on underlying modern, tried and tested technology. The Octavia beat its upmarket rival the Golf in endurance tests proving that management organisational and cultural changes at Skoda had allowed for the culmination of VW management and Skoda experience had produced a product even better than VW alone. In 2005 Skoda moved to diversify its brand by expanding its range into new and growth markets segments such as MPVs and SUVs allowing it to diversify and increase the size of its target market these also sold well.Similarities with Skoda can be found in Rover. Rover founded in 1877was nationalised in 1970 caused by labour strikes and financial difficulties. It was so priv atised and passed around to various parent companies. Its issues with an out-dated and un-reliable product, with poor brand image and financial instabilities were never resolved and resulted in MG Rover declaring bankruptcy in 2004.Skoda was a struggling company, turned around by VW. Key to its success were VWs management strategies combining directive and organisation approach to management VW was able to aid Skoda in producing a competitive product and a strong brand image. Skoda is poised for future growth within both western and emerging markets (Edmondson, 2007).Bibliography(n.d.). Retrieved 03 1, 2011, from The Times Online http//www.thetimes100.co.uk/downloads/skoda/skoda_13_full.pdfEdmondson, G. (2007). Skoda Volkswagens Hot Growth Engine. Bloombery Businessweek, sep 14 2007.Lengyel, B., Cadil, V. (2009). Innovation policy Challenges in Transition Countries Foreign Business RD in the Czech Republic and Hungary. HUMAN CAPITAL, INNOVATION, KNOWLEDGE, Volume 16, estimate 1, 174-188.Naylor, J. (2004). Management Second Edition. Prentice Hall.North, P. (2009). The Rise of Skoda . Engineering elevator carmotive, pg 25-26.Skoda. (2009). Skoda Annual Report .Appendix 1.Laurin Klement is the original brand name used by the founders of the bicylcle company they started in 1895 which became Skoda, named after the company founders Vclav Laurin and Vclav Klement.As at the end of 2009, koda Auto Groups worldwide workforce comprised 26,153 employees including 1,986 temporary employees and 1,336 people employed by subsidiaries of Skoda Auto Group.In 2009 Skoda Auto Groups injury rate was 1.6 injuries per one jillion hours worked.In 2008 Skoda Auto Group achieved 200,182 million CZK from sales and 10,818 million CZK in profit after tax. In 2009 Skoda Auto Group achieved 187,858 million CZK from sales and 3,462 million CZK in profit after taxAudi, Bentley, Bugatti, Lamborghini, Skoda, Seat and Scania are all part of the Volkswagen group. descent Skoda Annual Repor t, 2009