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PROJECT ON

SKODA AUTO INDIA PRIVATE


LTD.

SUBJECT : - Strategic Management

SUBMITTED TO : - Prof. Rahul Sir

SUBMITTED BY : - Sarabjeet

STD : - SY-BMS

ROLL NO : - 13

CONTENTS
INTRODUCTION

HISTORY

BACKGROUND
PRODUCT

SERVICE

LEVELS OF STRATEGIC MANAGEMENT

KEY STEPS TOWARDS STRATEGIC PLAN

KEY STEP TOWARDS BUSINESS STRAGEGIES

STRATEGIC MANAGEMENT PROCESS

BCG MATERIX

GE MATERIX

7 MECKENSI MATRIXES

ORGANISATIONAL STRUCTURE

TYPES OF STRATEGY

CONCLUSION

RECOMMANDATION

INTRODUCTION

Skoda Auto India Pvt Ltd.


Skoda Auto is a part of the International Volkswagen
Group whose controlling stake is owned by Porsche SE .
It is one of the premier automobile manufacturers in
Europe, based in Czech Republic. The company
introduced itself on November 16th, 2001. With its
Greenfield plant in Aurangabad, the company has
its dealership network spread over Mumbai and Delhi
region.

The brand Skoda Auto is globally known for its stylish


looks, well built exterior and its constant endeavor to
introduce modern technologies. The company has
already introduced 16 luxury models in Indian market.

It sells cars under the brand name of Skoda. According


to an official release, Skoda Auto India sold more than
16,000 units in the 2008, a 28.5% increase from 2007
sales totals

Despite a dip in global automobile sales, Skoda India


managed to sell 17000 units of its vehicles in 2008,
with growth registered 33.2 % from previous year.

HISTORY

At the beginning of December 1895 the mechanic


Václav Laurin and the book-seller Václav Klement, both
bicyckle enthusiasts, started manufacturing bicycles of
thein own design, patriotically named Slavia in the
nationalist atmosphere of the ond of the 19th century.
A few years later, in 1899, the Laurin & Klement Co.
began producing motorcycles, wich were soon
succesful and gained several racing victories. After
initial experiments at the turn of century, producing of
motorcycles was gradually replaced by automobiles
form 1905 onward.

Based on the traditional production processes and past


success, the Czechoslovak economy managed to
maintain a relatively good standard in the post/socialist
period for several decades, in spite of the changes
brought about by planned economy and efforts at
unduly rapid growth. This standard only became
questionable towards the end of the 1960’s due to
development of new technology in the western world.
The permanent stagnation of the economy started after
the 70’s, also affecting the SKODA automobile
manufacturer in spite of the company’s leading position
in the East Europe marker. Production grew again only
when the model range Skoda Favorit went into
production in 1987.

After the political changes of 1989, under the new


market economy conditions the Government of the
Czechoslovak Republic and the management of Skoda
began to search for a strong foreign partner whose
experience and investments would be capable of
securing long-range international competitiveness of
the company. In December 1990, the Government
decided on cooperation with the German Volkswagen
Group. The Skoda – Volkswagen joint venture began to
operate on 16 April 1991 under the name Skoda,
automobile as., becoming the fourth brand of the
Volkswagen Group alongside VW, AUDI a SEAT.
BACKGROUND IN INDIA

Skoda Auto India started its operations in India on


November 16, 2001. They opened their manufacturing
unit in Shendra, on the outskirts of Aurangabad. Thus
setting their foot on the Indian soil. The first Skoda car
which had hit the Indian roads was the Skoda Octavia
which was priced at 10.6 lakh INR. Skoda Octavia is a
medium sized car and gained popularity for two
primary reasons, first being the fact that the car had
100 percent import content and second reason that the
model was available in both petrol and diesel version.
The Octavia is being imported to India as semi-
knocked-down kits and assembled at the company's
Aurangabad plant. The plant currently assembles 10
cars a day and operates on a single shift. The
indigenization level is planned to be around 10 per cent
by 2002-end. In spite of being somewhat highly priced,
the Skoda has received a tremendous response in the
Indian market. Hence Skoda Auto has plans to launch
its three luxury cars Elegance, Laurin and Klement, and
Superb in India in 2002-03. With the market trend and
inclination of the economy to spend generously to own
a luxury car.
Skoda is targeted a 17-18-per cent share of the
combined C- and D-segment volume in India in 2003.
Skoda, which made an initial investment of $15 million
in the Aurangabad facility, invested $56 million more in
due course of time for higher level of localization which
in turn would bring down the cost of the cars
manufactured.
In April 2007 Skoda (VW group) invested $912m to
expand its plant at Aurangabad & Chakan plant at Pune
to accommodate the production on Volkswagen, Audi
and Porsche. In 31st march 2009 chakan plant was
ready and Skoda announced localization level
increased to 50% from 15%.

PRODUCT
SKODA INDIA OFFERS THE FOLLOWING CARS,
SKODA FABIA

The sleek looking Fabia is the first Super Hatch in India


with a huge passenger and cargo space designed with
premium looks. It has all the comforts and roominess of
a big luxury car and at the same time it is so compact
that you can drive it and park it with utmost ease in the
most congested areas.

This super hatch that combines looks with performance


and economy is available in petrol and diesel variants.
It packs quite a punch every time it hits the road.
Features
• Available in both petrol (1.2 ltrs) and 1.4 TDi
engine
• Dual airbags for safety
• ABS (anti lock breaking system)
• Integrated music system
• Parking sensors
• Climate control
• Multi-function display
• Sunroof

SKODA OCTAVIA

Octavia is an orderly design with no unwanted mass.


It’s more about straight lines than about curves. It looks
very European with the subtle nose section and high
waistline. The build quality is as good as it can get and
is faintly reflected in the way the Octavia looks. While
seated in the rear, you will have limited legroom but
the story is completely different at the front as the
seats at front are enormously accommodating. The
quality of the interior is quite good and it exudes a
tough feel.
The 1.9l turbo-diesel engine is the one which has sold
the most, and rightly so. It is frugal and manages to
keep the performance-oriented driver happy at the
same time. The 1.8l, 150bhp turbocharged petrol
engine is an entirely different beast and is one of the
most powerful in the under-Rs 20 lakh price bracket. It
is supremely responsive and makes the Octavia one of
the fastest four-door offerings in the nation. Running on
low-profile tyres, the Octavia RS (1.8l) suffers from
harsh ride quality but the handling is razor sharp. The
regular Octavia offers better ride comfort and even
when going over big potholes, it results in an expected
bump.
The Octavia offers the build quality of a battle tank and
storage capacity of a water tank. Good ride and modest
handling are other positives which make it click so well
but what swings the balance in her favor by a fair
margin is the fuel efficiency which is one of the best in
the country. Makes perfect sense to take this car on
long journeys.

FEATURES
• Leather seats
• Climate control
• Integrated music system with steering mounted
control
• Dual airbag
• Xenon head lamps
• Alloy wheels
• Sun-roof
• Multi-functional display
• DSG transmission
• Parking sensors
• Tilt steering

SKODA LAURA
Skoda Laura, a stable mate of Skoda Octavia, Laura is popular for its
contemporary, dynamic designer looks. Specially customized, the model
has stood the test of times in Indian conditions with its extraordinary
performance giving results beyond imagination. Skoda (Sedan) The Skoda
Laura with its diesel variants targets the middle class consumer with
Skoda car prices between rupees sixteen and nineteen lakhs, it is
available in 3 engine options
• The 1.8TSi borrowed from Audi
• 1.9 turbo diesel
• 2.0 turbo diesel
Features
• 12 way adjustable electrical seat
• 6 airbags
• Abs + EBD + traction control
• Heated front seat
• 6.5 inch TFT music player with steering mounted control
• Dual zone climatronic
• Leather upholster
• Cruise control
• Xenon projector headlamps
• Rear and Front parking sensor
• Central information system
• Rain sensor
SKODA SUPERB
Skoda has gone all out with the new superb to make
you feel that you are buying a 40 lakh car for half the
price. It has technology, features and safety equipment
that befit other luxury cars. But the surprise is the 1.8
TSI motor, which has performance and efficiency to
threaten the Accord. The car comes with 3 engine
options 1.8 tsi motor , 1.9 TDI and 2.7V6 petrol engine ,
it also the first of its kind 7 speed triptronic DSG
transmission first introduced by an local manufacturer.
FEATURES
Ac-vents on b-pillar for rear passengers
touch screen stereo which has multi-information radio
station display-can display up to 9 different FM stations
and just on the touch of a screen, you can choose your
desired station.
blue tooth connectivity with controls on steering wheel
trip computer with full information including service
level indicator
driver's 8-way power adjustable seat with 3 memory
settings (not sure of the front passengers as I forgot to
pay notice)
digital display of temperature for rear passengers also
behind the gear console.
dual zone automatic climate control with individual
temperature controls
electric roller blind on the rear window
manual roller blind on the side rear windows
when the car is locked, the mirrors (OSRVM)
automatically retract
automatic boot lid opening from the key fob
boot locks automatically when closed down softly due
to electromagnetic
buttons
twin-door system-either open just the deck lid or the
rear hatch-an electromagnetic bottom on the left opens
the deck lid and one on the right opens the hatch..
Front and rear parking sensors
tyre pressure monitoring system
rain sensing auto-on wipers
60:40 rear split seat
front, side and curtain airbags with knee airbag etc

SERVICE
In India, Skoda parts are not sold in the open
market and are only available from Škoda Auto
India authorized dealers; Skoda currently has 61
dealerships across India, but plans to expand to 65
dealerships by the end of 2009.
Service for Skoda car
Warranty for Skoda products
In accordance with the warranty conditions Skoda
offers following warranty
• 2 - Year warranty on New Skoda vehicles for unlimited
kms
• 2 - Years warranty on Skoda Genuine Parts and Skoda
Genuine Accessories for unlimited kms.
• The warranty will be honored by authorized Skoda
dealership
LEVELS OF STRATEGIC MANAGEMENT

Skoda India is an Business Unit (BU) of the VW


international group of companies, VW decided to setup
an BU in India because of the large automobile market
in India, the luxurious car market in India in about 3500
units per month, which maybe a small share compared
to other segment, but the growth in this segment is at
34% annually, which is among the highest in the world.
Hence just imports of manufactured won’t have been
viable because they would have attracted 100% duty,
but also the company also have missed the opportunity
to tap the export friendly market set up in India.

From the levels of strategy, BUSINESS STRATEGY fits


SKODA AUTO INDIA LTD, as Skoda is a multinational
corporation it has production facilities and presence in
large number Business units in world markets
belonging to a particular country i.e. Skoda India,
Skoda china etc which are connected to the parent
company. Here the head of the BU decides the
strategies and step need to be taken for the company
growth and smooth operation.

In business strategy Skoda India is Competitive


Strategy system as it is competing with other premier
car manufacturers like Honda and Toyota.
Skoda India is trying to bring down the cost of vehicles
manufactured by locally manufacturing components of
the vehicle hence evading from paying heavy taxes on
direct imports.

Competitive pricing has also been a hand behind


Skoda’s huge success, their price has been below the
price of their competitors and with solid built and
quality, Skoda has been triumphing in Indian premier
segment market.

KEY STEP TOWARDS BUSINESS STRATEGY (SWOT


ANALYSIS)

Strength
Weakness
• Brand image • Pricy spare
• Established parts
distribution • Petrol versions
• Fuel efficient car not success
engines • Complaints of
• Built quality en-ethical
• High resale practice during
value A.S.S
• Advanced • High import
technology duty leveled on
importing
components

• Increase PP of • Threats from


people new companies
• Premium entering market
segment growth • Threat from
by 34% Constantly
• Lower level of evolving Indian
threats from companies
Indian • Threats from
companies competitors
• Tax incentives
Opportunity Threats

B.C.G matrix

Stars Question mark

• Skoda Laura 1.9TDi • Skoda Laura 1.8 TSi


• Skoda Fabia 1.4 TDi • Skoda Laura 2.0 Tdi
• Skoda Fabia 1.2 petrol • Skoda Superb 1.8 TSi

Cash Cows Dogs

• Skoda Octavia 1.9 tdi • Skoda Octavia 1.8


• Skoda superb 1.9 tdi petrol
• Skoda combi
• Skoda vRS
• Skoda superb 2.7 V6

Question marks: they are new products with potential


for success but their cash needs are high and cash
generation is low. In Skoda’s stable Laura 1.8tsi, 2.0 tdi
and superb 1.8tsi have been introduced into Indian
market. The initial sales are high but there still remains
a question mark about future sales after the hype dies
down.

Stars: Stars are defined by having high market share in


a growing market. Stars are using large amounts of
cash. Stars are leaders in the business. For Skoda the
highest seller are Laura 1.9TDi and Fabia, these
product are the one’s giving higher profits to the
company.

Cash Cows: Cash cows are in a position of high market


share in a mature market; they are the main horse
pulling the company forward in the sales chart. For
Skoda Octavia remain Cash Cow and the largest seller
of the company. They have reached the maturity stage
but still manage to sell in the market because of its
value for money and ease of maintenance.

Dogs: Dogs have no market share or very little market


share and does not bring in much profit to the
company, it is even considered as loss making asset to
the company. For Skoda Octavia combi, vRS has
become DOG because it is only demanded by car
enthusiasts as it is performance based car and Skoda
superb 2.7 V6 is also a dog is it is expensive and has
low fuel economy.
GE matrix

GE is an alternative technique used in product


management to find out whether the product is a profit
making or loss making, hence to make a decision to
continue to invest in the development of the product.
Business Strength

Strong Medium
Weakness

High

Medium
Low

Industry Fabia 1.2 , Laura 1.9TDi


1.4Tdi

Laura 1.8 tsi, Octavia Octavia


2.0 TDi 1.9TDi Combi

Skoda superb Superb


1.8 tsi 1.9Tdi

Octavia vRS Octavia 1.8

Skoda 2.7
V6
Attractiveness

• The line A and upper cell indicate strong business


strength and industry attractiveness i.e. Fabia,
Laura 1.8Tsi & 2.0TDi and superb 1.8 tsi and Skoda
Laura 1.9 TDi.

• Line B shows medium strength in industry


attractiveness and business strength, products are
Octavia 1.9TDi and Superb 1.9TDi.
• Line C show low industry attractiveness and
business strength, products are Octavia vRS,
Octavia 1.8 and Skoda 2.7 V6 and Octavia Combi.

7 Mackenzie Matrixes

Soft skills
Hard Skills

SKILLS STRATEGY

STAFF SHARE STRUCTU


VALUE RE

STYLE SYSTEM

Hard Skills

Strategy: The basic strategy of Skoda was to bring an


premium diesel cars to the Indian market along with
petrol, as there was an absence of any diesel premium
car, the only other two where Honda civic and Toyota
corolla. Even though Skoda launched petrol cars but
they knew that a more affordable and cheap diesel car
is behind their success.
There was a new strategy in 2004, when Skoda decided
to launch its super hatchback The Skoda Fabia and it
was an immediate success.
Skoda currently plans to expand their presence in India
and making India an export hub for their cars because
of cheap labor and raw material availability.

Structure: The head of the Business unit head of Skoda


India is Mr. Jorg Mueller president VW India. VW India is
divided up into 4 Business units those are
• Skoda India
• VW India
• Porsche India
• Audi India
The organizational structure followed is of Strategic
business unit.

System: Skoda Auto's philosophy of employing the


latest technology to ensure that our cars are built to
the highest standard and are available at attractive
prices has a long tradition. This commitment also
extends to the best quality, the best services & the
concern for environment. As part of this commitment,
Skoda Auto offers the roomiest cars in their class,
providing luxury, value for money & people oriented
technology.

Soft Skills

Staff: Skoda Auto is making an effort to create such a


working environment, which supports motivation, high
performance and creativity of the employees while
respecting their individuality and varying needs. This
approach also has support at all-concern level.
Practical consequences are subsequently applied in the
individual areas, regardless of whether this concerns
HR policy, working environment, working safety,
protection of the health of employees, education and
personal development of employees or provided social
services

Shared value: A value of the company that guides the


employee towards value behavior. Skoda Auto's value
of making the environment friendly cars, best built
quality, value for money, providing luxury, & people
oriented technology.

Skills: To produce various car models, Skoda have built


new manufacturing facilities and equipped them with
the most advanced technology available to automobile
manufacturers worldwide. Skoda’s employees are also
leading specialists in their fields.
Organizational structure

President VW group India

MD Skoda MD Porsche MD VW
MD Audi

HR FN PR MKT
Types of Strategies

Integration strategy

Backward Integration strategy fits Skoda India best


because, initially Skoda use to import the cars in
Complete knocked down Kits (CKD) and would
assemble it in India, now Skoda has started
manufacturing components locally to build their cars.

Intensive Strategy

Market Penetration fits Skoda the best because as we


have seen since their launch they place their products
price very low from their competitors, hence catching
the attention of buyers.

Diversification strategy
Concentric Diversification: Skoda India also has started
to produce Audi, Porsche and VW cars in their
manufacturing plant apart from manufacturing Skoda’s.

Defensive Strategy

Potter Generic Strategy

Focus: The Company’s main focus since their launch to


retain its spot is to concentrate on highly fuel efficient
diesel cars which have created an impact in the
premium segment cars.

Key Step towards Strategic Planning

Vision: Skoda Auto is a brand known for its lifestyle


value, offering reliability and European build quality
with a constant Endeavour to introduce modern
technologies. The vision of the company is slated by
the slogan below: -

Man needs an automobile as well as the nature

Technology focused on safety and environment


Modern engineering

Mission: to develop a brand name and brand following,


to set up standards in production and to be an example
of automobile manufacturing in India.
Objectives: the company’s objective is to make India
their global production factory from where they can
export their products to the world. Within the country
they want to be the leading premium automobile
manufacturer in India.

Value: Skoda Auto philosophy of employing the latest


technology to ensure that our cars are built to the
highest standard and are available at attractive prices
has a long tradition.

Goals: Skoda vision is to be the leading premium


automobile MFG in India, customer satisfaction, VFM
products.

Customers have responded to their products in the


following way
• 1st in Sales satisfaction index 2007
• 'Most Technologically Advanced Car'
• 'Executive Car of the Year'
• 'NFO Voice of customer'
• 'Best entry luxury car'

Strategy: The current strategies implemented are


Create new market for small cars
Market penetration with dropping prices
To increase Local production percentage of
components from 50% to 75%

Strategic Management Process

Strategic Management Process

Strategic Strategic
Strategic Evaluation
Formulation Implementation &
Control
Strategy formulation: after Framing missions and
objectives and SWOT analysis, Skoda India has worked
on a plan to tap the Lower hatchback segment of the
market.

News: Skoda India, a part of the Volkswagen Group, is changing tack


and one could soon see new cheaper small cars on Indian roads. Next
week, the Skoda India management would be in the company's
headquarters in Europe to discuss the nitty gritty of the new small
car, as well as a way forward in India, where Skoda is number nine
among car manufacturers.

Strategy implementation: it will be down in mid 2009


when the current manufacturing plant will be expanded
to facilitate the new production line.

Conclusion: following is the conclusion about Skoda


India

They make rock solid cars and fuel efficient cars which
the customer desire for and for this the sales speak for
them selves

In 2006 and 2007, Skoda India has received a spate of


awards which has been remarkable in terms of
achievements like J D POWER ASIA PACIFIC AWARDS
FOR 2007 for being ranked 1st in Sales satisfaction
index 2007

Skoda India also achieved the 'TCS award' in mid size


premium segment against Honda Civic in 2006 along
with 'Most Technologically Advanced Car' for
Skoda Laura; 'Best Variant' for Skoda Superb
Turbo Diesel from CNBC-TV18 AUTOCAR AUTO AWARDS
2006

'Executive Car of the Year' from NDTV PROFIT CAR


INDIA AWARDS 2006, and 'Auto tech of the Year'
from OVERDRIVE 2006, both awards for Skoda Laura

Recommendation

Their current strategies in Place takes care of most of


the recommendation I had in mind but few which
haven’t been addressed are
High labor cost during A.S.S is heavy on customers
needs to be brought down

Reliability problem of Skoda Superb as the advanced


engine cannot deal with our fuel quality

Unethical activities going with dealer and Service


centre’s like changing original parts with duplicate
once, hence dealers and service centre have to be
inspected by the company

High price on spare parts need to be brought down

These are a few recommendation given by me, these


are the few problems I feel needs to be addressed by
the company for better customer service.