Strengths, Weaknesses/Limitations, Opportunities, and Threats
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Published: Mon, 5 Dec 2016
What was the key weakness that Skoda was able to identify?
One of the successful global brand is Skoda, which producesses their products in today’s strong competitive market. In order to get more competitive edges and more shares in market, Skoda identify their internal weaknesses and try to reduce them. Internal weaknesses are the things that business not good at, that it is ineffective at or that it has a poor reputation for. It also includes the factors that cause losses, hardships, disputes, grievances and complaints for a business.
There are some key weaknesses that Skoda needs to improve such as their market share which is only 1,7%, with this small market share they can not compete with their competitors who has more market shares than Skoda. This is because Skoda is mostly known as very poor vehicle quality, design, assembly, and materials in Eastern European. That is why customers already have negative ideas about Skoda’s products. Skoda try to change their negative image from 1999 onwards, under Volksagon AG ownership. They changed their image and try to prove that Skoda’s cars are not low budget or low quality anymore. They want to show others that they are strong competitors as well. However, a brand ‘health check’ in 2006 showed the result which Skoda does not want. The result was Skoda still had a low image in their market comparing with other brands such as Ford, Peugeot who already known as high quality products. All in all Skoda is no longer poor quality brand, it did not have a high image either.
What strength did Skoda use to turn its brand weakness into an opportunity?
Strengths are things that a business and its staff are effective at and well known for. When company’s use their advantages and make more profits than their competitors we call it their strengths. With their strengths company’s lead to confidence in the market and it causes customers to come back again and they became loyal customers for that business. It sometimes cause other businesses to try to learn from them.
Opportuniyies are the directions that the business could profitably take in future because of its strengths or because of the elimination of its weaknesses. This involves a consideration of the business environment from the widest and most creative possible standpoints.
In this case study Skoda’s strategy was focused on their existing strengths and take more advantages of the opportunities in the market. In order to identify their own strengths and weaknesses Skoda UK done some research about their products and services from customers. The result of this research shows that Skoda’s customers are very satisfied with their cars and voted Skoda the ‘number one car in the market’. Skoda concentrated on owner experience rather than profits which brings more strength to the company. Because of their good customer service Skoda’s 98% of customers would reccommend Skoda to others such as their family and friends. This is one of the biggest strength that Skoda has ,even the brand known to others with their poor image and low-quality products, their customer satisfaction would increase their sales more than their competitors who only cares for their product quality. In other words Skoda’s competitors focused on only products and sales that is why Skoda take this to their opportunity and focused on their customer satisfaction. Skoda’s unique selling proposition (USP) focused on happy Skoda customers and it enables them to differentiate the brand from others.
How has Skoda strategically addressed external threats?
Threats are external factors which can be negative effect for your business. Threats to a business arise from the activities of competitors and from failing to take opportunities or to build on successes. Threats also come from complacency, a lack of rigour, and from falling profits, perhaps due to rising costs.
Understanding and analysing their treats is very important for the SWOT process. Skoda is competing very crowded and high competitive environment. That is why they should use strong strategy in order to get more competitive edges. United Kingdom is big market for car industry, there are fifty different car brands selling 200 models. In order to survive from this market Skoda make sure that their customer segmentation and marketing is really effective and results should be possitive. If they can not do this other competitors and customers would underestimate Skoda. Another thing that Skoda needs to do in order to compete in UK is increase their product range. They have seven different cars which represents Skoda in UK. Each of them are made especially for their customers and priced to appeal to different market segmentation groups.
Another external threats that Skoda addressed was their Corporate Social Responsibility (CSR) according to EU legal and environmental regulations. Skoda found their ways to be responsible for the social. For instance, they were recycling as much as they can and using latest manufacturing technologies which are not harming the environment. They even got technology to design their cars with lower noise levels and developed sound quality.
What in your view are the important benefits of using a SWOT analysis?
One of the most popular and useful analysis for business is SWOT analysis. Most businesses analyse their current position by using SWOT analysis, which identifies the business’s internal strengths and weaknesses and the external threats and opportunities facing a business.
Business analysis is the examination of the ‘how, what, why’ of business activity. It helps to organisation to analysing the possible internal problems and advantages that a business has. It might determine the factors external to the business that could affect its strategy. The outcome of analysis should be to find the organisation’s strengths and capabilities, its commercial and operational advantages and the wider general pressures and constraints on the business which is really useful for any business. Businesses have a number of methods to carry out analysis. The purpose of SWOT analysis is to conduct a general and quick examination of a business’s current position so that it can identify preferred and likely directions in future. The analysis is often carried out as a brainstorming discussion. It is an effective way of gathering and categorising information, illustrating particular matters and generating interest in the business and its activities quickly. Another benefit for SWOT analysis is it often used as a method by which marketing departments can plan its marketing strategy. It is easy way to understandts your own mistakes and weaknesses in order to improve your opportunities using your strengths. Using SWOT analysis would bring a huge success to your business.
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