Skoda Report

Topics: Automotive industry, Eastern Europe, European Union Pages: 6 (1253 words) Published: March 10, 2014
KOZMINSKI UNIVERSITY
Contemporary Management in CEE
[Report]

Skoda Auto Company Report

[Submission Date – 16.11.2012]
Academic Year 2012/2013
Semester: Five

I hereby certify that I am the author this paper and all sources I used have been reported.

-------------------------------------------------Signature

Czech Republic: Skoda Auto Company

According to the United Nation classification the automotive manufacturing must be categorized in the following category:

Section: C - Manufacturing
Division: 29 - Manufacture of motor vehicles, trailers and semi-trailers

1.Identify and analyse in the assigned country
one industry that you think is potentially
interesting from the business point of view.

We started our research with google, simply starting to search for industries in Czech republic. We found few interesting, for instance Budweisser beer manufacturing company, but as we are highly interested in cars, we have chosen Skoda.

Skoda Auto industry is most famous industrie in Czech Republic. Its also the largest provider of employment and the oldest car industry in Eastern Europe.

2. Describe the industry and explain why you
have chosen that one (use SWOT, and Porter’s
five forces model).
We have chosen car industry because its the most interesting topic for us and we feel that we’ll bring something new and original into our report.

SWOT Analysis:

Strenght:
1. Over a decade of vehicle manufacturer experience.
2. Research and Development from Volkswagen.
3. Volkswagen’s good reputation.
4. Low wages in Czech Republic.
5. Largest employer in the Czech Republic.
6. Well experienced work force available in the Czech Republic. 7. Part of VW group (Skoda can use all technologies implemented in VW group etc.)

Weaknesses:

1. Skoda must deal with quite outdated infrastructure.
2. Skoda means in Czech Republic language „a shame” - people still belive that Skoda produces low-quality cars.
3. Problem of Skoda is that employees are skilled and they demand higher wages, which actually decreases profit margins.
4. Skoda as a part of VW group is still in the shadow of Audi, Bentley, Lamborghini & it may also frighten potential buyers of these cars.

Opportunities:

1. PEople are suffering crysis but still they are buying more and more cars. Regions like India, Eastern Europe, China are still very attractive market for car industries.

2. Word is still emerging, so when the alternative fuel will arrive to the market, Skoda in VW group will be more attractive for companies which would like to be efficient.
3. American Market is opening for european cars - including Skoda Auto’s.
4. VW group is considerning to move manufactures to low cost countries.

Threats:

1. Actual cost of fuel is still growing.
2. It is not obvious that renewable energy will be cheaper.
3. When East European countries joined the European Union, the used car market spreaded more widely, became more available, so it decreased sales of new cars.
4. Higher cost of production in some countries, made it more difficult to maintain competitive on the market

Threat of entry:
As we know Soviet Union no longer exists and large amount of East European countries have jointed the European Union. It made market much more competitive, because borders practically no longer exists and its easy to move manufactures to East Europe, where cost of production is lower and much more attractive for our West European neighbors.

Rivalry among existing competitors:
Companies are struggling with a big competition within this particular market, and all of them all trying to move their manufactures to low-cost countries. Skoda is of course one of them, so its competitive advantage (as located in one of those low-cost countries) won’t last forever.

Bargaining power of Suppliers:
Apparently Skoda is in VW group, which use JIT (just-in-time) inventory systems, which caused that suppliers must have relocated near...

Bibliography: - http://pl.scribd.com/doc/16237745/Skoda-Auto-Case-Study
- http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=27
- http://en.wikipedia.org/wiki/Škoda_Auto
- http://new.skoda-auto.com/en
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