What was the key weakness that Skoda was able to identify?

Answer#1:
Weakness of Skoda:
One of the successful global brands is Skoda, which produces their products in today’s strong
competitive market. In order to get more competitive edges and more shares in market, Skoda
identifies their internal weaknesses and tries to reduce them. Internal weaknesses are the
things that business cannot do well, weaker than other and ineffective at. Moreover, it includes
other factors that bring losses, and difficulties for a business.

Skoda able to identify Brand Position was one of the weakness for Skoda in the highly
competitive fragmented market by positioning the brand as low budget or low quality vehicles
which caused Skoda to get 1.7% of the market share, because the company used to
manufacture cars of poor image of quality, design, assembly, and materials, which leaded
customers to perceive the brand image as poor image for majority consumers compare to other
competitors like Ford, Peugeot, and Renault. By looking business model, example General
Electric business model that say business organisation can determine its self by looking factors
like Business Strengths (strong or average or weak) in the market and industry attractiveness
(high or medium or low) at that market.

Able To Identify:
According to that model that means the Skoda had probably weak business strength and its
industry attractiveness was probably strong in the market. One of the successful global brands
is Skoda, which produces their products in today’s strong competitive market. In order to get
more competitive edges and more shares in market, Skoda identifies their internal weaknesses
and tries to reduce them. Internal weaknesses are the things that business cannot do well,
weaker than other and ineffective at. Moreover, it includes other factors that bring losses, and
difficulties for a business.

That is why customers already have negative ideas about Skoda’s products. Skoda tries 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 analysis gave clear direction to Skoda that there is need to Partnership with Volkswagen by
raising strategic alliance between themselves which leaded the Skoda to change the negative
image in the market. Also Skoda management did understood that they need to correct old
perceptions by stop being defensive in promotional campaigns and change market message as
Skoda owners need to be happy and contented with their cars, Also convincing users that Skoda
cars were great to own and drive.

What strength did Skoda use to turn its brand weakness into on opportunity?

Answer#2:
Turn Brand Weakness into Opportunity:
Strengths are things that a business is powerful at and already known to others. It also includes
their employee’s effective ability as well. 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 brings repeat customers and they became loyal
customers for that business. It sometimes make competitors try to copy your strategy.

According to Charles W.L.Hill (2002) opportunities lead a business into right directions that
business could take in future because of strengths that they have or limiting their weaknesses.
Opportunities consider closely to business environment from the broad and potential points.

Skoda researched through asking customers directly and using independent surveyors like JD
power survey by testing customer’s feelings through questionnaires .Skoda able to position its
brand where there was a gap in the market place against their competitors because
competitors they were focusing in product itself.

Skoda partnership with Volkswagen AG helped the Skoda to gain internal strength due to
combinations of skills and knowledge in both companies, also the Volkswagen has got good
reputation on its business.

Customer Satisfaction:
Satisfaction of its customer by business concentrating on owner experience, future strategic
development and marketing its brand image through designing to sales, satisfaction of their
customer came after producing brand image which has got quality and happy to driver to own
that brand, example of Top gear’s 2007 customer satisfaction survey in 152 models viewers
voted number one car maker and 2008 Octavia model won auto express driver power best car,
Skoda knows 98% of its drivers would recommend Skoda to a friend, page 133 – 134, on the
case study. That shows the out come evidence of Skoda over come the weakness and built the
strength which leaded to opportunities.

Advantage through technology also was best strength for Skoda by using focusing strategy, as
Michael Porter model of Competitive Advantage (cost leadership, focused low cost,
differentiation, focused differentiation)

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 bring more
strength to the company. Because of their good customer service Skoda’s 98% of customers
would recommend 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 takes 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.

Skoda adopted the strategy of focused differentiation in niche market, organisation can adopt a
strategy to compete against other competitors, technologies made Skoda to overcome
weakness and gain strength to opportunity by differentiate in unique selling proposition
through human touch designed of its brand car engines and focused on customer experience.

How has Skoda strategically addressed external threats?

Answer#3:
External Threats:
Threats are external factors which can be negative effect for your business. Threats are usually
came from actions of competitors and not taking opportunities or to make on successes.
“Threats also come from complacency, a lack of rigors, and from falling profits, perhaps due to
rising costs”. Hall et al. p123 (2000)
After careful analysis Skoda able to addressed external threats. One, Skoda UK was able to
ensure that its messages were powerful enough for customers to hear within such a crowded
and competitive environment my using slogan of “the manufacturer of happy drivers” so they
can able to maintain the market share. Skoda able to produced strong range of product in the
UK and globally such as; Skoda fabia sold as basic but quality car, Skoda superb as more
luxurious and up market appeal, the Skoda Octavia as estate provides a family with a fun drive
but also a great big boot, all these brand were UK market segments.

Strategies:
Through the SWOT analysis, the company was able to identify the external threats that may
affect the company's standing in the market and success. One of the biggest threats to Skoda is
intense competition in the European car manufacturing market, particularly in the United
Kingdom. There more or less 50 car manufacturer sand more or less 200 car models comprising
the UK car market. This is a big threat because in an intensely competitive environment, a
company like Skoda runs the risk of being overlooked by the consumers which will eventually
result to loss of market share.

Pricing, Skoda priced all brands according to model range that means Skoda looking to satisfy
their customers according to different groups within the main stream of the car market, Also
combination of competitive pricing and brand range gave advantage to overcome the threats of
other competitors.

Another external threat 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

EU Legal and Environmental regulations made Skoda able to addressed the threats by using the
advantage of technology to produce products which are environmental friendly at every stage
of their life cycle.

By producing Skoda products which they can recycle as much as possible and through
identification of their parts which are marked quick and easy when the car taken apart, Using
latest most environmentally friendly manufacturing technologies and facilities available,
example use of lead free and water based colours to paint areas to protect against corrosion,
By designing processes that will cut fuel consumption and emissions in petrol and diesel
engines. Using lighter parts to make vehicles as aerodynamic as possible to use less energy. By
designing cars with lower noise levels and improved sound quality,
What in your view are the important benefits of using a SWOT analysis?

ANSWER # 4:
Benefits of SWOT Analysis:
One of the most popular and useful analysis for business is SWOT analysis. Most businesses
analyze 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. Using
SWOT analysis gives many advantages to organizations.

SWOT identify Superiority of organization in the market place, swot helps organization to know
how best it is in the market place by looking example the brand image of the company in the
market against other competitor’s brands.

Also SWOT help to determine Staff expertise, loyalty and commitment in the organisation.
Example Skoda management they were looking a foreign partner so company management can
gain expertise in Cars manufacture.

Using a SWOT Analysis:

SWOT help to build good reputation for service or quality, as in case study Skoda build strength
by design cars with their own experience and brand image, SWOT also helps to guide
organisation in future strategic development which will bring advantage to organisation.

Technology adoption, helps organisation to change it operation by gaining advantage through

technology which can reduce costs or improve production. It Helps to give gap idea within
market when organisation wants to position a product or services in the new market. Helps to
understand customer needs by looking their perception on company’s product and if product or
services the company supplies to them are well get satisfied.

Example on the case study of JD Power survey and Top Gear explained how management of
Skoda identified their strength of customer satisfaction to the market place. Helps to
understand competitive activity, by looking other competitors in the business environment.

The SWOT analysis is often carried out as a brainstorming discussion which helps organizations
decisions. It is an effective way of collecting important information, explain some problems and
makes changes in business activities as soon as possible. (Paul and Yeates 2006). Another
benefit for SWOT analysis is it is very useful for marketing departments to make and plan their
marketing strategy.

Helps organisation able to respond for changes in government regulations or legislation,

Example in the case study Skoda able to respond to EU legal and environmental regulations by
producing products that are environmentally friendly at every stage of their life. Also help to
determine supply demand, example shortage of raw materials.