Saab Strategy Report

Topics: Automotive industry, General Motors, Saab Automobile Pages: 63 (16674 words) Published: May 22, 2011

Strategy Context Report
Module: Bus 302

Industry Context Report

Executive Summary
This report complies the analysis of the new strategy for Saab Automobile following its acquisition by Spyker Cars. The report attempts to assess this strategy and its potential success with an evaluation and analysis of the industry, strategy, macro environment, competitive advantage and sustainability of the competitive advantage. Various frameworks were applied in this report, including Porter’s 5 Forces, Strategic group analysis and VRIN analysis. Findings show, that Saab’s new strategy is based on some of the company’s strongest resources, the Brand, technology and expertise in design. This is particularly important as the industry’s leading force is the Industry Rivalry and the company needs to stand out amongst the plethora of models and manufacturers. The company’s competitive advantage rests upon its potential to differentiate from rivals based on their Swedish design, technology and aviation roots. Lastly, the competitive advantage is one of differentiation and is found to be currently unsustainable. The results of our enquiry and discussion concluded that there is significant potential for growth and profitability within Saab Automobile. Despite making losses the strategic choice is valid and can help create a profitable company in the years to come. We therefore recommend that Saab improve brand awareness and positioning with marketing efforts, promoting its new image and technological advances. Along the same lines, Saab should continue to maintain innovation as demonstrated in 2006 with its BioPower car. Lastly we recommend Saab cultivate an employer image to attract top notch human capital in order to achieve a successful strategy and become a viable company.


Industry Context Report

Table of Contents
Industry Context
Macro Environmental Analysis

1 2 3 3 5 5 7 7 9 9 9 10 11 12 13 15 15 17 20 48 48

Industry Structure
Porter’s Five Forces

Strategic Group Analysis
Strategic groups within the world automobile industry

Strategy Evaluation
Long Term & Agreed Objectives
Objective appraisal of resources
Effective Implementation
Identifying the Advantage

VRIN analysis – Sustainability
Appendix: 1 - Financial Report
Appendix: 2 - Group Diary
Group Diary

APPENDIX 3: Identifying the differentiation potential: the demand side 49


Industry Context Report

In 1937 the company Saab was founded as a manufacturer of military air planes for the Swedish Air Force. By the end of World War II the management decided to diversify into the car industry and by 1949 Saab released its first model, the 92. In the following decades Saab managed to gain market share in Europe and much of its success is attributed to cutting-edge technologies such as new braking-mechanisms and the first turbo charger to be put in a consumer car, as well as successes in various European rally championships. In this time Saab entered the US market and expanded its product range to various mid-sized cars. During the 1980s industry consolidation and increasing competitive advantage of “big players”, such as Toyota, Volkswagen and General Motors, led to decreasing profitability of Saab. In 1990 General Motors purchased 50% of Saab Automobile and acquired the entire company in 2000, with the hope of turning it around and making it profitable again (Saab through the decades, 2011). However, General Motors failed to improve Saab’s business and did not gain a profit within 20 years. This combined with General Motors’ own financial problems, led to the decision to sell Saab to the Dutch sports car manufacturer Spyker in February 2010 (Reed J., 2010). In order to finance this deal Spyker itself had to sell its own sports car section and is now fully committed to turn Saab into a successful premium-brand car manufacturer...
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