Discuss about the Competitive Strategy of IBC Automobile Company.
Isuzu Bedford Corporation (IBC) is a known automobile company dealing with manufacturing of cars in the UK. As recorded by Hansen (2016, p. 559), the competitive problems posed to the operations of IBC automobile industry by other companies dealing with similar operations have adversely affected its operations. Different competitive strategies developed by stakeholders have enabled IBC to attain an essential share in the market of its products in comparison to its chief competitors in the same operation (Parnes 2011, p. 58). Therefore, the principal target of this research paperwork is to examine three competitive strategies that IBC employs to improve its services around different marketplaces. The three primary competitive plan discuss in this research paperwork include the PETEL, SWOT, along with Porter’s Five Analysis
PESTEL analysis in every competitive business setting continues to be the type of analysis that has received the critical application by various industries. The application of this analysis has helped most organizations to be capable of keeping track of their market shares along with the environment that they operate. The company uses this analysis to address issues that relate to its Political, Economic, Social, Technological, Ecological, together with legal factors that affect its operations (Onoren et al., 2017, p. 519). Therefore the IBC industry concentrates on addressing the issue marked in PESTEL to sustain its global development in business operations. Some of the factors that come with the political aspect of IBC within PESTEL framework comprise of different issues that consist of the policy of taxation, the stability of government, regulations for foreign trade, along with the economics of social welfare (Tiwari et al., 2011, p. 32). Presently, IBC faces increased instances of rising in rates and fees of taxes imposed to their operations by the UK government.
In economic aspect, the company faces cases of high costs of taxations that comprises of the high duties of customs. Examples of high taxes are imposed on the activities of importing essential raw materials to be applicable by the company in the production of different vehicles such as Nissan Primastas. Kuhar (2017, p. 25) indicated that increase in the rate of tax had enabled IBC to face cases of increment in charges of taxes in the production cost resulting to limitations in the scales of sales of the products produced by the company. The present scenario of political development in the UK poses the considerable threat to operations of the IBC automobile industry. In social aspect, IBC is affected by different factors that consist of cultural along with demographic issues. Some of this issues that affect operations of IBC consist of safety awareness, distribution of age among car users, population, and attributes of career. All these social factors help the company to concentrate on ideas that help it to adapt to its external social environment that make it survive in the competitive marketplaces (Colovic and Mayrhofer 2011, p. 1487). The technological aspect of the analysis on the company shows that IBC needs to adapt to changes in technology so that it can achieve huge returns. Improvement of technology as enabled IBC to produce quality cars for less money that helps it in reducing costs of operations. The aspect of ecological factors has made IBC concentrate on producing vehicles that are effective in operating in different weathers. The production of different vehicles that can be used in almost every country has made the company have huge customer base around the global society (Joseph 2016, p. 43). The aspect of legal issues on IBC includes health along with safety, equal chances, and standards of advertising, rights of targeted clients, and regulations, safety and labeling of products. Through these legal issues, IBC can understand what is and what is not legal for its operations to be successful.
The framework of Porter’s Five Forces remains to be an essential effect used to support operations of industries. The analysis helps most businesses to concentrate on improving their operations to survive in competitive marketplaces. The management of IBC has the abilities of determining how operations of the industry remain high to survive in the highly competitive marketplaces. As stated by Onoren et al., (2017, p. 516), the Porter’s Five Forces strategies applied in the strategic management analysis of IBC comprise of different issues. These issues include bargaining powers of buyers, the rivalry of competition, the force of bargaining of the suppliers of the sector, threat imposed by new entry of products, along with the threat of substitution around the marketplaces. Applying these Porter’s Five Forces in examining how IBC organized their strategy to remain competitive, it is clear that the company seems to comprise of better powers for bargaining over the esteemed buyers of its goods along with its suppliers of different raw materials. The existence cases of improved operations of IBC remain to be attributable by the essential portion of its power of monopoly of the industry of dealing with the production of automobile products around the UK marketplaces (Zhikang 2017, p. 326). However, despite IBC surviving the stiff competition posed to it by its chief rivals in the market, IBC faces the threats that occurred from the contest of improved products and users of technology in production. The dangers that the company faced adversely affects its share in the marketplace as well as its market control in automotive organizations. Therefore, by the use of Porter’s Five Analysis concepts, IBC can develop strategies that they can use to cope with competition in the marketplace.
SWOT analysis in every competitive marketplace setting remains to be the type of analysis that has attained significant application by various organizations. The application of this analysis helps most organizations to maintain track of their market shares along with the environment that they work. SWOT analysis of IBC focuses on the company’s strength, weakness, opportunity it as on the market, as well as the presence of threats that affects its operations. As reported by Onoren et al., (2017, p. 521), the analysis of SWOT is attained within activities of IBC by considering all factors that affect operations of the industry in every competitive marketplace. Some of the strengths that make IBC to remain competitive in its operations around the market include the idea that it is a known largest industry in the UK. The diversity of the company to deal with manufacturing products like sports vehicles, trucks, public transports, and volume cars among others make the company to attain huge customer base (Tiwari et al., 2011, p. 28). The presence of the high cost of business transactions and attendances of structural inertia of the IBC form some of the weakness in the market. These weaknesses make it possible for the management of the IBC to concentrate on practical ways of improving business operations. As urged by Kohpaiboon and Jongwanich (2013, p. 226) , high demand in the automobile marketplace and scope in inventing cars that are energy saving in the economy remains to be some of the opportunities that the IBC has improve its competitive advantage in the marketplaces. Besides, some of the threats that affect operations of IBC include cases of occurrences of the global recession, barriers of marketplace entry, and global overcapacity in the entry. These thereat have been the essential issue that reduces the competitive advantage of the IBC in the local UK markets along with global marketplaces.
Conclusion
From the research above, several factors affects the operations of IBC in the competitive marketplaces. Useful analysis done by the management of IBC has been significant in ensuring that the company remains to be one of the most prominent automotive organizations in the UK marketplaces. It has become a necessity for IBC to develop an ideal approach to cope with different uncertainties that can arise during its operations shortly in competing with its chief competitors. Typical competitive strategies can help IBC to boost its activities and operations towards achieving valuable market.
List of References
Colovic, A, & Mayrhofer, U 2011, ‘Optimizing the Location of R&D and Production Activities: Trends in the Automotive Industry’, European Planning Studies, vol. 19, no. 8, pp. 1481-1498. Available from: 10.1080/09654313.2011.586175. [19 April 2018].
Hansen, A 2016, ‘Driving Development? The Problems and Promises of the Car in Vietnam’, Journal of Contemporary Asia, vol. 46, no. 4, pp. 551-569. Available from: 10.1080/00472336.2016.1151916. [19 April 2018].
Joseph, DR 2016, ‘Take These Steps To Maintain Efficiency Of Your IBC’, Plastics Technology, vol. 62, no. 12, pp. 42-47.
Kohpaiboon, A, & Jongwanich, J 2013, ‘International Production Networks, Clusters, and Industrial Upgrading: Evidence from Automotive and Hard Disk Drive Industries in Thailand’, Review of Policy Research, vol. 30, no. 2, pp. 211-239. Available from: 10.1111/ropr.12010. [19 April 2018].
Kuhar, MS 2017, ‘Right Up The Road: ConExpo-Con/Agg 2017: Every Three Years ConExpo-Con/Agg is the International Gathering Place for the Construction Industries. Find Out What’s New at the Show. (Cover story)’, Rock Products, 120, 2, pp. 20-39, Academic Search Premier, EBSCOhost, viewed 19 April 2018.
Onoren, M., Arar, T. and Yurdakul, G. (2017). Developing Competitive Strategies Based on SWOT Analysis in Porter s Five Forces Model by DANP. Journal of Business Research – Turk, 9(2), pp.511-528.
Parnes, D 2011, ‘Competitive Strategies and Exit Decisions in Oligopolies’, Journal of Multidisciplinary Research (1947-2900), vol. 3, no. 2, pp. 43-65.
Segawa, N, Natsuda, K, & Thoburn, J 2014, ‘Affirmative Action and Economic Liberalisation: The Dilemmas of the Malaysian Automotive Industry’, Asian Studies Review, vol. 38, no. 3, pp. 422-441. Available from: 10.1080/10357823.2014.928847. [19 April 2018].
Tiwari, R, Herstatt, C, & Ranawat, M 2011, ‘Policy Studies 58: Benevolent Benefactor or Insensitive Regulator? Tracing the Role of Government Policies in the Development of India’s Automobile Industry’, Policy Studies (15471349), no. 58, pp. 1-63.
Zhikang, L. (2017). Research on Development Strategy of Automobile Reverse Logistics Based on SWOT Analysis. Procedia Engineering, 174, pp.324-330.
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