Jaguar Business Analysis

This report will evaluate the strategic position of Jaguar Cars Limited and how emerging technologies might impact on this position. To achieve this, the report will look at both the internal and external environment as well as other techniques such as SWOT analysis.
The internal environment will be evaluated through the use of Jaguar’s culture web and value chain. The external environment will be evaluated through techniques such as the PESTL diagram and the five forces diagram.
A SWOT analysis of Jaguar will also be carried out; this will outline the company’s strengths, weaknesses, opportunities and threats.
Finally the report will look at emerging technologies in the motor industry and their impact on Jaguar and its strategic position outlining whether they could potentially strengthen or weaken this position.
2 – Background
Jaguar Cars Limited was founded by Sir William Lyons and William Walmsley in September 1922 in Blackpool and was originally known as Swallow Sidecar Company. It began life as a manufacturer of motorcycle sidecars before moving onto cars. It was not until 1945 that the name Jaguar was first used, this was due to the company’s desire to avoid connotations with the German SS. [1]

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

Jaguar went on to design and manufacture a range of sports cars, such as the XK120, in the late 1940s to early 1950s. This opened the door into motorsport for Jaguar where they went on to have a lot of success throughout the 1950s particularly in the Le Mans 24 Hour races where they won in 1951, 1953, 1955, 1956 and 1957. [2]
In 1968 Jaguar merged with the British Motor Corporation which later became British Leyland, however this was not to last as Jaguar became independent once more in 1984 before being acquired by Ford in 1989.
Under Ford’s control, Jaguar and Land Rover were brought together to form a parent company known as Jaguar Land Rover. It was during this time that Jaguar produced the XJ220 which, at the time, was the world’s fastest production car ever built. [3]
From 2000-2004 Jaguar also had a racing team which competed in Formula 1, however this did not prove to be successful and the team was sold to Red Bull at the end of 2004 which later went on to become Red Bull Racing. [4]
In 2008 Ford sold Jaguar Land Rover to Tata Motors.
Today Jaguar and Land Rover are still closely linked together and are both headquartered in the same plant in Whitley, Coventry. Jaguar Land Rover employs around 24,000 workers across six different facilities, 10,000 of which are involved solely in Jaguar.
3 – Environment
3.1 – Internal
The internal environment is focused solely around factors inside the company. These factors can relate to elements such as company culture, employees and management style and directly affect how the company may operate.
3.1.1 – Mission Statement & Vision
A mission statement is a brief, to the point statement that accurately sums up what a company stands for and their reason for existing in the first place.
The mission statement of Jaguar is as follows:
“To create and build beautiful fast cars that bring the enjoyment and exhilaration of driving to life”.
This mission statement leaves no doubt in the reader’s mind what Jaguar stands for and what their overall aim as a company is.
Jaguar’s vision or aims stem from its history for making top of the range cars:
“The Jaguar Brand is founded on a long history of distinctive cars offering a unique blend of style, performance, refinement, prestige and affordability. Our aim is to build on this tradition by reinterpreting the values that made the Jaguar legend. We will be a relevant premium competitor, desired by customers for stimulating performance and captivating style”.
This vision outlines Jaguar’s overall aims and where they see themselves in the car industry. They outline that they have a history for making quality cars and that they will continue to do this. They aim to be seen as relevant and desirable by customers by offering cars that are both stylish and enjoyable to drive.
3.1.2 – Culture Web
The culture web is a paradigm of six elements within a company’s internal environment that helps to outline the culture within the company. These six elements are stories, symbols, power structures, organisational structures, control systems and rituals and routines.
The six elements of the culture web as applied to Jaguar are outlined below in figure 3.1.
Stories

Celebrating historic cars
Jaguar often celebrate historic car’s anniversaries.
Job Creation
Recent news of thousands of new jobs being made.
Employee outings
Employee team building or nights out.

Symbols

Instantly recognisable to the general public.

Jaguar cars are synonymous with good quality.

Instantly Recognisable car design.
Power structures

5 directors are in charge of Jaguar.

Customer demand influences Jaguar.

Jaguar must adhere to relevant legislation.
Organisational Structures

The five directors are at the top of the chain.

Jaguar operates under a hierarchical system with 8 levels.

Jaguar operates under a chain of command where engineers will report to a manager who will then report to their manager etc.
Control Systems

Unions are in place to protect employees.

Jaguar has strict quality measures in place to ensure products reach customers high expectations.

Employees are responsible for their own work.
Rituals & Routines

Employees work shifts eg, 9-5 every weekday.

Annual reports are produced and made available to all staff.

Strict quality control routines are in place.
Figure 3.1 – Table of Jaguar’s Culture.
The paradigm of the culture web is the main common ground of the organisation and is at the heart of everything they do, it is often taken for granted. In Jaguar’s case this could be thought of as quality and professionalism as the company is highly regarded for the high quality of their cars and is a main driving factor behind their success as well as the professionalism of the staff to deliver this continuously.
 
3.1.3 – Value Chain
The value chain is a concept that describes the chain of activities within a company and helps to identify the competitive strength of the business through these activities. The chain suggests that each section is connected and thus one section performing poorly could have a detrimental effect on other sections.
The value chain can be thought of as two main sections:
Primary Activities – These activities directly relate to producing the product, in the case of Jaguar, a car. This would involve for example gathering materials, assembly & distribution of the finished product.
Support Activities – These activities do not directly relate to the production but nonetheless are key to success. For example human resources are responsible for staff and a failure to hire effective staff would cause production to suffer.
 
3.1.4 – Core Competencies
The core competencies within a company can be seen as areas in which the company are exceptionally good at and thus set them apart from the competition. One of Jaguar’s key strengths is the highly skilled and motivated workforce that they employ. This excellent workforce has a positive knock on effect for the rest of production, for example tasks such as assembly and maintenance are well done providing well built and reliable vehicles, which Jaguar is renowned for.
This can be related back to Jaguar’s vision to produce desirable cars and it could be said that they are aiming to achieve this through the excellent staff throughout the company.
3.2 – External
The external environment is based on influences outwith the company. These influences could be for example competitors, buyers or suppliers.
3.2.1 – PESTL Analysis
A PESTL analysis looks into five key external factors that could potentially influence a company. These are Political, Economic, Social, Technological and Legal. Figure 3.4 demonstrates PESTL applied to Jaguar.
 
(P)olitical

Continuing interest in reducing carbon emissions both from vehicles and factories.
Increased research into alternative fuel sources may be required.

(E)conomic

The current climate causing less spending. Retirement age changes.
People will be less inclined to pay for higher priced cars which would cause problems due to Jaguar’s lack of budget cars.

(S)ocial

Sports cars becoming less relevant or desirable due to not being environmentally friendly.
Research into making cars that are more efficient or green may be required.

(T)echnological

Hybrid/electric cars becoming much more commonplace.
Again, Jaguar will need to develop hybrid or electric cars or risk being left behind by their competitors.

(L)egal

Changes in health and safety laws and regulations.
Jaguar would need to adapt the way the company works to accommodate new regulations or laws.

Figure 3.4: PESTL Analysis of Jaguar.
3.2.2 – The Five Forces
The five forces model represents the competition within the sector that Jaguar is in. The five forces include buyers, suppliers, existing competition, new competition and substitutes.
Buyers – The buyers are people who are willing to purchase the products and services of Jaguar. This could be through dealerships and distributors as well as other car manufacturers who may wish to use Jaguar’s engines in their cars.
Suppliers – The suppliers are people who provide Jaguar with parts or machinery to enable them to manufacture their cars. A strong established relationship between Jaguar and their suppliers is key to the company’s success as it ensures raw materials or machinery can be delivered as and when Jaguar need it.
Existing competition – This is quite simply other car companies who operate in the luxury/sports car industry, for example Aston Martin, Mercedes Benz, Porsche, Bentley and BMW to name a few. These companies all produce cars that could be seen as an alternative to a Jaguar product and thus take away buyers from Jaguar.
New competition – New competition could be from existing car companies who might delve into the luxury car market, this competition could come from companies such as Ford, Volkswagen or Peugeot for example. It could also come from completely brand new companies; however this is less likely due to the current climate and the need for large amounts of capital to start a business in the luxury car industry. Companies from other markets could also move into the car industry, SAAB being an example of this as they were originally a manufacturer of fighter planes before cars. [5]
Substitutes – These are alternatives to cars. Potential substitutes could be public transport, however due to the nature of luxury cars it could be said that this would pose a very minimal risk. Potential customers who may be looking for a high performance vehicle could be swayed by motorcycles as an alternative.
 
4 – Strategic Position
The strategic position of a company gives an indication of where it lies in its target market. This can highlight how it compares with its competitors or how its customers may view the company.
4.1 – SWOT Analysis
A SWOT analysis can be utilised to identify the strategic position of a company and highlights four key areas that are either helpful or harmful to the company’s objectives. The four key areas are strengths, weaknesses, opportunities and threats.
Strengths – Jaguar’s strengths lie in the company’s well renowned reputation for producing top of the range cars as well as its excellent staff. Jaguar also have strengths in research and development, allowing them to continually have a competitive edge over the competition.
Weaknesses – Jaguar are not seen as a particularly eco friendly company and this could have an increasingly negative impact on the company. As Jaguar sell high end cars, they are selling to a smaller niche market and thus missing out on tapping into the market for cheaper alternatives.
Opportunities – Jaguar must continue to improve upon their excellent reputation for quality if they are to maintain their competitive edge in the market. Continued research and development is a must as Jaguar have an excellent R&D department and should utilise this to improve their eco-friendly image as this is becoming increasingly important in the car industry. Jaguar will look to exploit the growing Chinese market.
Threats – The global economic climate will continue to threaten Jaguar’s strategic position due to increasing fuel prices, less disposable income and changing interest rates to name but a few. Governmental regulations will also threaten Jaguar, for example, stricter emission regulations will cause Jaguar to incur additional expenditure to upgrade and improve existing products and facilities.
Strengths

Weaknesses

Poor eco image
Niche market

Opportunities

Improve upon reputation for quality
Development of eco-friendly cars
Growing Chinese market

Threats

Global climate
Governmental Regulations

Figure 4.1 – SWOT Analysis of Jaguar.
4.2 – Strategic Position of Jaguar
Jaguar’s strategy, as highlighted in their 2010-2011 annual report is as follows:
“The company has a multifaceted strategy to position itself as a leading manufacturer of premium vehicles offering high-quality products tailored to specific markets. The company’s success is tied to its investment in product development, and is reflected in the strategic focus on capital expenditure, R&D and product design.” [6]
The strategic position of Jaguar as can be seen through the previous analyses is strong within their target market. It can be seen that Jaguar’s aims to maintain this position through research and development are indeed, how they are maintaining this position in reality.
If Jaguar wish to strengthen this position, however, they must improve their image as being eco-friendly. This could be achieved through their already well established research and development department.
5 – Emerging Technology
5.1 – Technology
The technologies that are affecting not just Jaguar but the automotive industry as a whole are the variety of methods aimed at reducing carbon dioxide emissions and improving eco-friendliness.
One such technology which is arguably the most popular and well known is the Hybrid electric vehicle (HEV) technology. This technology utilises the standard gasoline engine that works in conjunction with a separate electric engine. This technology is advantageous as the average consumer does not have to change their driving and refuelling routines as, on the surface, the HEV operates exactly the same as a traditional vehicle but with greatly reduced carbon emissions and greater fuel economy. There are, however, concerns over the batteries, mainly due to performance and reliability as well as concerns over toxicity. [7]
Electric cars are also growing in popularity in recent years. As the name suggests these cars run entirely from electricity and, assuming the electricity is gathered from a renewable source, they are completely carbon free. Range and lack of charging stations are proving to be the technology’s main stumbling block as well as overall performance of the car. [8]
Another technology is the hydrogen fuel cell. Hydrogen is advantageous over typical petrol and diesel fuel sources as it does not produce any carbon dioxide emissions and, unlike electric cars, it does not greatly hinder the car’s performance and range. Unfortunately, at this time, hydrogen is proving difficult to exploit in large useable quantities and there are currently no effective means of storing it. [9]
Biofuels such as biodiesel are another alternative that researchers are looking into. Another replacement for standard gasolines, biofuels are often made from vegetable oils or animal fats. Many companies are already using biofuels effectively. In East Ayrshire, Stagecoach operate a fleet of ‘Bio-Buses’ that run on the fuel. It has been noted that due to this Stagecoach have reduced their carbon emissions by around 2450 tonnes. A key advantage to this is that used vegetable oils can be exploited and this can be seen as a form of recycling. Although biofuels will help to reduce carbon emissions, they are not as clean as hydrogen or purely electric cars and as such, are not placed in high regard by many. [10]
5.2 – Impact on Jaguar
The impact these eco-friendly technologies have on Jaguar is huge. If Jaguar were to continue to produce cars in the current way they would simply lose their strategic position and be left well behind their competitors. Not only that but there could be the potential for new government regulations that could completely force them out of business, for example if the company were required by law to produce cars that did not produce above a threshold amount of carbon dioxide.
Jaguar have, of course, outlined these concerns and have begun research into a variety of methods to ensure their carbon footprint is reduced as can be seen from this excerpt from their annual report 2010-2011:
“To comply with current and future environmental norms, the company may have to incur additional capital expenditure and R&D expenditure to upgrade products and manufacturing facilities, which would have an impact on the company’s cost of production and the results of operations and may be difficult to pass through to the company’s customers. If the company is unable to develop commercially viable technologies within the time frames set by the new standards, the company could face significant civil penalties or be forced to restrict product offerings drastically to remain in compliance.” [11]
One such method is an innovative new aluminium body as opposed to the traditional steel body of most cars. Jaguar claim that using aluminium results in significant reduction in weight and thus reduced carbon emissions. Of course, being that Jaguar are renowned for producing cars that are of high performance, simply changing materials with the sole focus on reducing emissions could also be detrimental to their position. Jaguar claim that in conjunction with reduced emissions, the new material offers a stiffer body and thus better performance and handling. It can be seen that Jaguar have implemented necessary changes to reduce their carbon footprint without affecting their strategic position. It could also be argued that this has even strengthened their position by improving the performance of their vehicles.
Intent on ensuring they continue to be a leader in their market, Jaguar have also began production of hybrid vehicles. Two of the first hybrid vehicles produced by Jaguar were concept cars known as the C-X75 supercar, which was unveiled at the 2010 Paris Motor Show, and the more conventional C-X16 sports car, which was unveiled at the 2011 Frankfurt Motor Show.
The C-X75 was built with the intent of inspiring and influencing ideas for future hybrid cars and due to its success, Jaguar have announced plans to develop a road legal variant in conjunction with the Williams F1 team in 2013. 250 cars will be built at a price of £700,000 each and Jaguar claim that the car will boast emissions of just 99g/km.
The C-X16 will also be made into a road variant at a much cheaper cost of under £100,000. The C-X16 will boast an acceleration time of 4.4 seconds from 0-60mph and a top speed of almost 190mph. [12]
It can thus be seen that Jaguar look set to overcome this major obstacle whilst still maintaining their strong position as a top quality car manufacturer. This has been achievable through their strengths in research and development.
6 – Conclusion
This report has successfully evaluated Jaguar’s strategic position and identified emerging technologies and their impact on this position.
The internal environment was evaluated and showed through the culture web, value chain and core competencies that Jaguar operates very strongly and how they successfully achieve this. The mission statement and vision also showed a clear understanding of what they stood for and where they see themselves.
The external environment was also evaluated and showed Jaguar’s position in its relevant market area. PESTL and five forces analyses were carried out to demonstrate just how strong Jaguar’s position in their market was.
The overall strategic position was then outlined and a SWOT diagram showed Jaguar’s strengths, weakness, opportunities and threats. Overall, Jaguar sit very comfortably as a leader in their market.
Finally, emerging technologies affecting Jaguar were shown to be related to global warming and eco-friendliness. It was shown that Jaguar had taken necessary steps to combat this and maintain their strong strategic position.