The Great Wall Motors Business Essay

The huge W each Motors Business EssayThis narrative rivet on the warring position of capital groin motors which is angiotensin-converting enzyme of the top privately owned enterprise in China was specified on both A sh ar merchandise in chinaware mainland and H dish out securities persistence on Honkong. The ample mole motors established in 1976 and it is findd after the capacious Wall of China (wiki).The comp each started with manuf subroutineuring of Great fence light vans and peachy jetty deer lams. The great wall deer pickups create a blockadethrough and through in the ware line of the society. By the obliterate of 1998 great wall pickups ranked No. 1 in domestic pickup foodstuff. presentlyadays Great wall motors reach the top level by producing 3 main categories of Haval SUV, Great Wall PC and Wingle Pickup with much than 30 supplementary branches with 45000 employees. Today Haval SUV sustained the top rank in sales and export heap in China for 9 years and Wingle Pickup ranked off do printing in units of mart share, export volume and sales in China. It has achieved a fairly good marque name by producing a monthly sales of above 10,000 units illustrates its excellent capacitance when compared to Joint-Venture leaf blades.Great wall motors brand philosophy stick on specialization, consignment and focus. This philosophy helps to illustrate its strategic vision and specialising spirit from dedicated focus philosophy to effective useable management and conclusively to worldwide direct brand. Moreover its brand outline foc single- placed functions on creating a category of take brands. The brand reading strategy of Great wall motors helps them to be gondolae pace with the world tide.(1 para about the content description)External environsThe Environment is a framework that provides means of survival for the composition. It can append threat as hearty as opportunities to the organisation(Johnson, et al., 2010). This part analyses the external purlieu of great wall motors using Pestle compendium.Pestle analysisOrganisational environment includes all the elements outside the boundary of organisation that can create authorization impact to the organisation positively and negatively(Samson Daft, 2012). Pestle analysis is a instrument used for analysing the macro-environment in which the organisation operates. It is a tool that exclusively scans the semipolitical, economical, social, technological, profound and environmental factors that influences the organisation and it can alike be used to esteem the securities industry emergence and decline. Pestle lists of 6 external environmental factors are explain later in appurtenance 1. However, This part examins in position about the 6 pestle factors that affects the great walls environment .(Downey, J. (2007). strategical analysis tools. London The Chartered Institute of Management Accountants)a.TechnologicalTechnological factors covers u nlike methods take by organisation to deliver break away expeditious and gauge ingatherings with in minimum time slots(Njanja, Martin, Rene, 2012). It includes the way company establish its work methods and patterns, knowledge, materials, tools and methods followed for achieving anticipate outcome and finally how the instruction structures used. In this modern world of engineering, It act as one of the answer for many problems that restrict the yield of business(Njanja, et al., 2012).For Chinese car companies its non adequate to clutch performance capacity so they need to implement more than progressive techniques. So Great wall motors significantly encourages technological advancements and innovations and assert on self-sustaining R D in spite of appearance the organisation (CHINA Great Wall Motors counterbalance science-and- engine room festival inaugurated, 2011).During brave out 5 years, Great wall motors has invested more than 3 billion RMB for the ontogenes is and software for R D. So that it has been accredited as High-Tech Corporation, Postdoctoral cognizance look for Institute, National Recognized corporation Technique centre, National innovative corporation, Provincial go engineering technique centre. Great wall motors would apply the exclusive pool of victimization and innovations for Chinas automobile brands. As a solving of these great-leap-forward developments Great wall motors succeeded to achieve foreign forest standards in military operation of vehicles for their existing and future models like Germany vehicles standard in controlling perceptual constancy and bodywork rigidity, NCAP five stars standards in safety, Japanese vehicle standard in NVH, reassure wear, exquisite project and North American, European and other high-end target market place requirements in waiver(CHINA Great Wall Motors first science-and-technology festival inaugurated, 2011).Great wall motors proviso to invest a 5 more billions to R D dev elopment in the coming years so as to build first class well citeed multinational RD with disclose experiment facilities, to set up a well qualified and efficient worldwide RD, to impulse world level first class technical innovations, to satisfy technical necessitys or aspirations of customers so as to rocket their additional value and amend their competitive ability of products .b.SocialIn china, customers are not much interest in hybrid and electric automobile technology, so at that place are not many steadfasts producing hybrid cars and electric cars. It offers better opportunity for great wall motors in this field as they switch only limited competitors. For a short run, they can have a great market share in this field. scarcely in a long run, more competitions volition occur, when more and more firms came to use this technology.Today customers are looking for better playing and mileage cars. Hybrid cars of great wall motors have better mileage and proceeding when compare with other hybrid cars. But it is not up to the level of gasolene cars performance, so silence customers prefer to use gasoline cars because of their standard performance. So it is very much mandatory to cleanse their technology in hybrid cars to make its performance better than petrol cars.c.EconomicAs a result of severe price hike of oil color the demand for hybrid and electric cars are continually rising. Great wall motors is one of the leading automobile company in china conducting its research and development in hybrid as well as electric cars. Because of price hike in oil the demand for petrol cars are falling down. On one hand, they can impose or assert their hybrid and electric car technologies as the demand for this are increasing. But on the other hand, as there are hybrid or electric cars, customers were less interested in buying their petrol cars. As they have hybrid and electric cars, their revenue will not break down even if there is fall in demand of pe trol cars. In a long run, they can improve their sales and productions by concentrating more on hybrid and electric cars.Chinese automobile market shows a severe growth of 1/3 recently. This means still there exist more opportunities for great wall motors to grow and pad their activities. They can expand their sales and revenue more if the market is bigger.d. political role of governmentChinese government is going to invest billions of dollars in hybrid technology. Great wall motors is one of the automobile company well known for its research and development in hybrid technology. If they successfully proved that their technology is worth for investment, they can get billions of dollars for their research development in this technology.Now Chinese government is figurening to buy a sizeable number of hybrid cars for use in china within 2 years. As great wall motors are already producing hybrid cars, the plan of Chinese government may put them forth to increase their production to fulfil the wishes of their government.Recently, the official vehicle options adopted by ministry of exertion and information technology were proclaimed. Including Haval H6 and H5, 25 vehicles of GWM were listed. As a result Haval become approximately large(p) brand in the catalogue.SUV because of its versatility it becomes a model with fast growth among customers and market. Due to this new policy of official vehicles, it become popular not only among common customers but broadly requested by dominancers also. Now a days Haval SUV becomes one of the top brands in the Chinese office cars market for bulk purchase by government departments of fire fighting, roadstead and expressway governance.However in china, there are some obstacle on car ownership in some part of cities, as part of reducing traffic congestion and accidents. To some extent, the wakeless restrictions and revenue increase affects the sales and revenue of great wall motors.(http//sites.cdnis.edu.hk/students/10 0106/2011/03/31/pest-analysis/)e.environmental( blue jet) green issues,pollution,wasteEnvironmental factors have greater role in automobile manufacturing as they cause severe hazards to living creatures by air pollution. To conk these harmful hazards and achieving fuel efficiency in their vehicles, Great wall motors introduced technological innovations in diesel engines like turbo charging and emissions technologies. So that they succeeded to achieve narrow emission with attractive fuel preservation and better advocate output(Anonymous, 2011).They are also trying to implement green diesel technology in their vehicles. With this technology in vehicles, great wall motors are demanding an eco-friendly environment with susceptibility parsimoniousness performance. By this technology, the chairman of the company believes that, they created a breakthrough in high-efficiency vehicles with energy saving power(CHINA Bosch cooperates with Great Wall Motors for green diesel technology exh ibition, 2012).f. legal health safety regulationsGreat wall motors give more brilliance for health safety of their customers. For that they introduced advanced all wheel driving technology in their vehicles(Anonymous, 2011).2.Porters five force analysisPorters five force system was developed by Michael E. Porter in 1979 for evaluating and identifying the current strengths and market positions of different business firms.The Pictorial representation of porters five force is shown in appendix 2 and the porters five forces analysis of great wall motors is explained as follows(Downey, J. (2007). Strategic analysis tools. London The Chartered Institute of Management Accountants)a.threat of new entrantsThis is one of the severe threats faced by great wall motors. There are several reasons for this threat. As china is one of the growing economies, the market demand for cars is continually increasing. As a result of this, many new automobile companies are trying to walk carefully to the early horizontal surface of automobile life cycle. Then only they can withstand in this industry in future developed stages. Moreover the faint intellectual blank space laws enable new companies to copying the design as well as other properties of others. So that they can develop new innovations in efficient and effective manner than researching and development procedures.b. Bargaining power of buyers or customersThis power is also moderately high for great wall motors as there are so many automobile manufacturers both in china and international markets other than great wall motors. So that its too rideful to withstand in this market without implementing any striking innovations.c. Threat of substitutesIn China, Mass- exile could affect the car sales badly. But today in this growing economy there exist a vogue in china that, people considered car as their status symbol. So if any one comes to be financially stable then he ends up with buying a car rather than depending on cheap est modes like mass- transit or bicycles. So the impact of substitutes doesnt effects great wall largely.(http//porters-5-forces.blogspot.com.au/2011/11/porters-five-forces-analysis-china.html)3. Strategic capabilitiesa) Three high strategiesTo enhance the products quality, Great wall motors do three highs strategies namely high performance, high technology and high quality. So that they are encouraged to use high tech innovations and better performing designs to their products for getting excellent and effective quality products. While competing with other international leading brands, the three high strategies made them fit to keep a highly accelerated momentum in their sales. In the aspect of 3 high strategies they recently signed the strategic cooperation agreement with many international companies like TRW, Valeo, Bosch, BorgWarner, Ricado, Mahle, Autoliv, and Brose in product manufacturing. The relationship of great wall motors with these international giants compelled them t o upgrade their product quality by conducting thorough research and development of technologies.b) Established branding based on categoryGreat wall motors is the chinas 1st automobile company that established their brands with the category. According to their view point, historical brand would be the representative of distinguishing model in customers mind. As a result of this category branding, they are respecting solid advantages including For many years, their Haval SUV and wingle Pickup have been recorded as No 1 in sales market. In the coming years also GWM decided to focus on 3 main categories PC, SUV and Pickup and they wants to become top most in the market with each of 3 brands in paramount positions with Haval- as chinas best interchange SUV brand, great wall PC as chinas leading PC brand and wingle -as chinas best pick up brand. With this 3 leading brand positions, the brand name of Great wall motors strongly supported.(http//www.topgreatwall.com/great/page.php?lang=en page_name=about)c)capabilities-GWM continue to keep open a looker sustainable growth in the auto market, because of its steady operation and focusing strategy. They also followed a routine of valuing RD within the company so that they succeed in keeping up the quality of their products by updating technologies (News). Recent data published by NPCA (National passengers cars association) shows that that GWM opens a prominent position in top 10 sales list during the first half of year 2012.When NPCA narrowed the list, GWM is the only independent brand which hold such a fabulous position.Recently, the seminar conducted by GWMs technology centre announced that comprehensive proving ground will be finished by end of 2013. GWM is really proud to have first absolute proving ground among Chinese independent automobile companies. From their beginning onwards GWM gives more antecedence for product quality. They constantly assured their product quality by product quality maintaining systems . As they give more value for product development and quality test, proving ground was one the major project of GWMs research development centre. The effort of GWM on development of proving ground illustrates the strategic thinking of management and original operation of GWM.d)STRENGTHIn 2011, Chinese automobile market faced a recession because of different factors. When compare with the sales record of 2010, it shows a 30 % fall in overall sales volume. Moreover Chinese independent brands are more brittle and their share got skid sharply. Even in such a dim market, GWM kept up(p) an excellent growth within their industry. According to the chairman of GWM, a strong brand might be a leader in their locality and may act as representative of its product kind in customers mind.GWM is the first automobile industry which introduced brands in their products types. To a large extent, branding their products helps GWM to improve their overall performance and to remain competitive in globa l market. Recently GWMs president divided their secret behind success that focusing on high-quality products rather than fashioning low quality and low priced products. Moreover in this year, they are planning to focus on the improvement of sales outlet and terminal services. So they will concentrate on solving customers problems.(Official website)4. Internal environmentThe value twine system is accomplished to recognise the line of activities committed by the organisation for creating a product or service. The primary activities are the activities that the firm engages for creation and delivery of a product within the organization through assorted logistics and external activities include production and sales. The supporting activities are activities that the organisation employs for polishing the efficiency and effectiveness of primary activities. This analysis helps managers to understand the operational level at which the product undergoes for developing value and this unde rstanding is more superior in the success of all the firms (Porter, 2012). This paper centred on various primary and secondary activities undertaken by great wall motors.Value chain activitiesInbound logistics involves activities that concerned with receiving, storing, and distribution of inputs needed for manufacturing products. Great wall motors maintained to receiving goods from suppliers all around the world in order to maximise their availability of goods. Great wall motors follows a just in time set out for handling their goods. Just in time is an approach of reducing in-process inventory and associatedcosts for improving the investment return on business. Operation stage is the most difficult phase as it involves the activity of converting the raw materials true into a final product. Great wall motors are famous for their reliability because of their efficient operations. Here in this phase great wall assembles all the materials needed for Individual operations including systematization of parts for a car and final tuning of car engine. In Outbound stage, great wall distribute their finally polished vehicles to wholesalers, retailers, or to consumers. Great wall managed to maintain their showrooms in different countries for making their products easily accessible to customers.The marketing strategy that great wall adopted was their primary lead for securing a overriding position in the automobile industry. They maintained a customer orientated pattern in their business operations and also they managed to meet their customers demand. Great wall focused more on marketing communication and furtherance mix in this area. Great wall had given more priority for their customers. So in the area of services they focussed more on final checking, complaint handling, after-sales services and so on.(Official website)SWOT AnalysisStrengths muscular distribution network in chinaSucceeded in identifying local market demandLower operating budget depend on economy scale, low cost of land and labor, cheap plant cost, and own production of spare parts for its vehiclesBetter payment collection procedure encourages it with diminished debt.WeaknessesIt is very much weak in its research developments settings. It depends on knowing professionals from other designer companies to develop designs for their models. According to their record, their RD expense accounts only a small percentage of its total sales.OpportunitiesExpansion of SUV sales leads to an outstanding growth for global vehicle market. China witnessed steady sales in SUV market during 2008-2011.Greatwalls low production cost floor and its paramount position in SUV market enable them to achieve a robust growth in global auto market.Its cost structure encourages the demand of great walls vehicles in global market. Chinas VAT rebate policy allows great wall to enjoy the higher margin in exporting their products to overseas market.ThreatsConclusion