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An Inside Look at the Automotive Industry (Prestige Auto Co.) By: Cicilia Anggara Amanda Aprilia Peter Labib Jin Yong Park Loide Siahaan Andry Soenario Agenda • Introduction • GM analysis • Toyota analysis • New recommendations • Conclusion GM Strengths • Robust revenue growth in Asia • Strong brand portfolio • Improvement in reliability • Advanced technology GM Weaknesses • Poor performance in North America • Weak profitability • Vehicles seen as plain and unattractive • Negative Company Culture GM Opportunities • Increase market share in Asia • Introduction of new attractive vehicles Example: Saturn Aura, Cadillac Escalade • Roll out fully electronic and hydrogen cars GM Threats • Rise in the price of raw materials • Supplier in Delphi is bankrupt • Low capital spending • Japanese roll out hydrogen and electric cars Toyota Strengths • High Commitment • Powerful communication skill • Trust from top management to low management • Value diversity • Fulfill customers’ demand Toyota Strengths • Customers’ satisfaction is #1 • Target different segments of customers • TPS (Toyota Production System) • Just in time strategy Toyota Weakness • Global Business • Barrier to entry European Market Toyota Opportunities • Brand name for ‘reliability’ for 40 years • Introduce new innovation • High-technological automobile • Word-of-Mouth fame Toyota Threats • Compete with Honda • Compete with China • Monetary competition • Rebate, non-APR finances, discounts Recommendations for automotive industry Standard Company Cultures • Having a good relationship with suppliers • Establishing effective communication cultures • Developing program management cultures Specific Guidelines Personal Equal treatment opportunities & Health and safety issues Workplace Purchase decisions based on supplier’s price, quality and service Global Export and import sanctions against specific Countries Environmental More regulation Competitive Advantages • Important to develop competitive advantages • Our aim: be the “Starbucks of the industry.” • Provide a superior experience: • before • during • after buying a car. More on Competitive Advantages • Aggressively market with incentive deals • Train employees on how to sell cars • We must have a superior service experience Supply Chain Relationships • Communication is key • Weed out ineffective supply chain members • Maintain and reward supportive supply chain members How to Select Members of the Supply Chain • Takes time to develop a good supply chain • Each employee needs to: • Understand • Agree to the processes of the organization • In order to do that: • Relationships must emphasize trust, commitment, and respect Pull Strategy • Consumers demand the products Example: Toyota Production System (TPS) • Avoids overproduction • Increase profit Empowering Supply Chain • Create an atmosphere of inclusion • Everyone has a voice • Their voices must be listened • Receptive to input from different areas Target Different Segments to Keep Customers • Fulfill what customers want • Varieties in models, price, and engine • Build loyal customers Motivation Motivation for employees • Reward • Freedom for any ideas • Excellent workplace Motivation for dealerships • Reward • The Prestige Company motivates dealerships and employees Leadership • Trait Theory 1. Desire to lead 2. Self confidence 3. Be smart 4. A good selling strategy To be a good leader • Proper training and education • Ability to deal with the all components • Solve problems in real-life situations • Work as group Work Places • Team Work • Diversity • Employees Compensation 401 K, health care insurance, and retirement fund Conclusion 1. 2. Positive culture Trust, commitment, and respect 3. 4. 5. 6. (Long-lasting relationship in supply chain) Diversity Motivation through relationships & reward Imperfectly imitable competitive advantage Theory of constraints