Assessing The Automotive Industry Company Magna Commerce Essay

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Automotive industry comprises of designing, development, manufacture, marketing and sale of automotives such as motor vehicles. Market changes are evidenced by decreasing consumer confidence, government involvement and credit market tightened conditions. These upcoming realities together with other influencers have continued to impact automobile industry. Common influencers include consumer demand or even changing requirements especially in regard to greener cars and increasing costs on raw materials (Heneric et al 25). Large market share acquisition remains a great asset to companies in automotive industry. Many firms in automotive industry have resulted into production of competitive products suitable for clients needs. Therefore, automotive industry is faced with stiff competition by various companies offering diversified products. This paper documents an analysis of three major competitors in automotive industry. An overall company analysis of Johnson controls, Dana and Leer Co. will be undertaken during this research.

Competitor's analysis

Johnson controls

It's a diversified company operating under three key business segments dealing with power solutions, building efficiency and automotive experience. Power solutions provided by Johnson include renewable energy solutions and global workplace solutions. Similarly, Johnson's offers performance contracting and innovation services across the world. Johnsons control is based in USA but operates in atleast 125 countries and has approximately 130,000 employees by end of fiscal 2009. It's a published company with NY stock exchange operating under JCI as its ticker. Johnsons has strong market position in its services provision according customers varied needs (Stark15).

Strengths and weaknesses

Johnson controls prosperity over the years is attributable to wide business range or business units/segments. Operation in threes diverse business segment, enables Johnson controls to maintain a high profitability in the industry. Building efficiency, automotive experience and power solutions provide a wider portfolio to the company hence less influence by market dynamics. Secondly, strategic positioning among prominent American companies has enabled Johnsons to remain a prosperous and most admired company in automotive industry. Despite these strongholds, Johnson controls has poor performance in some parts of its markets in regard to automotive segment. Again, low output per employee is a weakness that Johnson controls has experienced. A comparative survey on its competitors shows that Johnson control has weaker productivity.

Financial performance

According to research, Johnson controls has improved performance since 2004 to fiscal 2009. Financial performance in terms of revenue recorded in US dollars has been increasing as well. By fiscal 2009 report, Johnson's had a 4.35% profit margin which was an improvement from profit margin of 3.90% by Sept. 2009. Key financial ratios in comparison to other competitors' indicate an improvement.

Marketing strategies

Johnsons undertakes intensive products promotion through advertisement, branding and environmental responsibility efforts that appeal to the automotive market. Introduction of new logos, slogans and advertising campaigns are some of the moves undertaken by Johnson controls in marketing. Together with diversification, these marketing strategies underscore Johnson control and Magna ought to design strong marketing strategies to counter competition.

Dana holding

Products and services offered by Dana are either from automotive light vehicle or off-highway and/or commercial vehicle segment. The company provides products and services under automotive on design, manufacture and development. These products include sealing products, thermal management, axles and driveshaft. Dan is based in USA but has operations major cities in the world. It's a public listed company with NYSE under Dan ticker. By Sept 2009, Dana had 25,000 employees in various operations globally (Stark 27).

Financial performance

Dana has experienced performance decline in recent years compared to FY2007 results. In FY2008, revenue of $8,095 million was recorded indicating a decline at about 7.2% decline compared to FY2007. Research shows operating loss increased from $7 millions in fiscal 2007 to $385 millions in 2008. This indicates increasing operational costs over years hence increasing operational loss recorded.

Strength and weaknesses

Similarly to Johnson control, Dana strength is based on diversified portfolio due to segmentation of business operations. Again, a well established global network in 26 countries enabled a wider market reach hence higher sales. Dana also has strong technological capabilities that enhance innovation. Through these technologies, Dana holding has ability to introduce competitive products in the automotive markets. Dana also has weaknesses that continually cause decline in profitability. These include low employee output, weak balance sheets and decline in historic performance especially in North America.

Lear

Lear is prominent in provision of automotive seating systems, electrical distribution systems and other electrical products. Lear has approx. 80,000 employees in 2009 and its operations are global to regions such as Asia, US and Europe.

Financial performance

Lear financial performance declined over 2008 compared to 2007 performance. FY2008 revenue recorded of $13,570.5 million indicated a decreased by 15.2% in comparison to previous performance. Again, operating loss recorded in current FY was lesser than those recorded in FY2007. Lear records revenue according to geographic and by business divisions. From their records, a decline in performance in some regions and major markets was notable (Heneric et al 275).

Strengths and weaknesses

Lear capability in terms of research and development is very strong. Therefore, Lear has ability to create new products that meet customers' requirement hence a wider market. Again, Lear bases its operation in low cost countries which enables operation of larger network at low costs. Diversified customer base is also a key strength for Lear. A strong bargaining power in the market is created by a large customer base enjoyed by Lear. Despite these strengths, Lear is faced with poor performance in major outlets and a general declining performance.

Conclusion

In conclusion, globalization is an aspect present automotive industry with key companies operating chains in every region in the world. Global market changes have steered competition among various players. Competition analysis shows that similar factors affect automobile companies and advance research can assist I overcoming challenges such as low employee productivity. Competition can be countered by diversification and quality production to capture larger market.

Work-cited

Heneric, Oliver, Licht, Georg and Sofka, Wolfgang. Europe's automotive industry on the move: competitiveness in a changing world. New York, U.S.A: Springer publisher, 2005

Stark, Harry. Automotive news. New York, U.S.A: Crain Automotive Group, 2001

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