The Current State of Skoda’s Business in the Uk

Introduction Skoda, as a machine manufacturer with a great history, has become one of the companies of Volkswagen who is the largest vehicle manufacturer in Europe since 1991 (Volkswagen, 2012). There is a fast development of Skoda in recent years. Its deliveries to customers in 2011 profitd by 15. 3% comp ared to 2010 (Skoda, 2012). This report aims to evaluate the current situation of Skoda in the UK using the organize analysis. analyze the business environment of Skoda in the UK by using the postage stamp analysis in detail. create the possible strategies for Skodas future development based on the analysis.Company Overview With twenty years development supported by Volkswagen, Skoda achieved a new high record of sales for 45282 vehicles in the UK, which occupied over 5% of the whole sales volume of the brand. In the commercialise of the UK, Skoda has launched seven models, videlicet Citigo, Fabia, Roomster, Rapid, Octavia, Superb and Yeti (Skoda, 2012). drum analysis B oth toughened and weak points of the business situation about Skoda in the UK can be seen in the SWOT analysis (see appendix I). The most obvious strength is the satisfaction provided to customers.Skoda has been doing good job on improving their products and services to meet customers demands. The company surveys their feelings and opinions directly to position the correct needs of customers. At the similar time, some chances might be taken by Skoda to boost sales. Focusing on the vehicle itself as the selling strategy, Skodas competitors leave the space to Skoda to focus on happy Skoda customers. It avoided the direct competition focusing on the product itself with other rivals and became the unique selling suggest of Skoda in the vehicle market (Times, 2008).In contrast, there are still some persistent weaknesses and threats of Skoda. One weak point, for example, is the negative effects from the image of poor quality, design, assembly, and materials in the past. Although Skod a had tried to make many efforts to make the brand image better, it was proved to fail in the mid-market range by a brand named Health Check. Meanwhile, the threats for Skoda are 50 different car makers selling 200 models in the UK. That means there is a highly competitive market in the UK, potential secureers would devolve Skoda.Informing the customers effectively and developing potential customers are the challenges for Skoda (Times, 2008). PESTEL analysis There are six parts of PESTLE analysis about business environment in the UK which focus on the external elements, namely, political, economic, social, technological, legitimate and environmental factors. Some changes of political element, such as raising the VAT, are made by the UK government to increase the cost of buying cars. Plus, the UK customers are encouraged by British government to buy cars which are environmentally friendly because the road tax will be let downd if people have small engines cars.That means the vehi cle with smaller engine will attract more customers due to the financial reason. At the same time, the British car industry is affected by the economic recession. There is less demand which leads to fewer new vehicles being sold. People prefer to buy second hand cars instead of new cars because of the low price. The economic factors are more essential than the quality and design of cars because low consumption of new car means less profits the companies can gain (Gough, 2012).For the social element, the lifestyle changes of consumers may influence the design of a vehicle. Many bigger seats and big space are provided in the cars for meeting the requirements of the growing number of obese people in the UK. In addition, the development of technology is a chance for companies to reduce production cost. Advertising their products widely on the Internet will attract more potential buyers. There might be some new legal limitations of driving cars in the future. The speed limits may be con sidered more to ensure the citizens safety.Finally, the environmental issues, for instance the global warming, will be the pressure of vehicle manufacturers. They have to think about how to reduce the pollutant emission to be responsible for their society (Gough, 2012). Future strategy Two main suggested approaches aiming to solve the challenges of Skoda according to SWOT and PESTLE analyses are as follows Invest a lot on promotion. Such as advertise their product on Internet and TV for intercommunicate UK customers the high quality and low price of the cars to change the bad brand image. Expand the model range for meeting different demands of British customers to increase the market share in heavy competition. Conclusion and Recommendations It can be found that the high satisfaction and high quality with low price are the strong points of Skoda. Although some weak points exist, they can be solved by advertising of telling the high quality and expanding the range of model to gain more British customers. In summary, Skoda should overcome the negative effects by using its advantages to boost sales and increase market share in the UK.