AARC- Strategic Analysis
Contents
INTRODUCTION
AARK is a planning to develop automaker in Europe which sought to develop vehicles that are reasonably priced and meet the requirements of regular customers. The production of a Large and medium automobile model is the company's primary goal for the first year, with plans to grow and make investments in alternative models in the following years. The mission, goals, and decisions taken during the first year of AARK are described in this report.
nbsp;MISSION STATEMENT
Our goal is to deliver outcomes that are client-focused to automobile buyers in an effort to match and surpass their expectations. We are indeed committed to seeking a high degree of staff development while maintaining a reputation for excellence.
VISION STATEMENT
To be the dominant player in excellence and elegance in the auto manufacturing sector by offering high-quality vehicles to buyers seeking premium driving experiences. The AARK brand is driven by the demands of our clients.
BUSINESS OBJECTIVES
Our corporate goal is to assure the stability of the business and to focus on the yearly sustainable growth.
?? Revenue:?To make a gross margin of 40% of the market by the end of 2nd year and to increase 6% target per annum.
?? Marketing: To achieve 8% market share by the end of the 2nd year and to gain one of the leading positions in the market.
?? Growth: An increase of 1.5 % market share value is targeted and an average 5% growth rate for the company in a year.
?? Human Resources: To minimize strike rate from 6 days to 4 days. To balance the work force for the expected growth and development of the company.
?? Quality: To reduce customer complaint by increasing quality and to Invest in R&D to reduce the claim on warranty and related costs.
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MARKET SEGMENTS AND TARGET CUSTOMERS
For the medium model, our target customers are in between 25 to 40 years old. For the large one, we have targeted people who are in between 55 and above and they belong to upper middle class.
From social perspective, the AARK Corporation primarily targeted working, business people, executives, and small families who desired elegance, comfort, and a superior driving experience for affordable prices.
As part of our marketing approach, we choose to use both television and digital media to target the specified age group. Digital media advertising has the quickest rate of growth and reaches consumers through a variety of devices. Additionally, digital media advertising has the quickest rate of growth and reaches consumers through a variety of devices. As a result, it is also employed for audience targeting.
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Marketing strategy
Our Company mainly focusing on cost, so we can gain advantages on our competitors. Applying Cost focus system we will try to sale good reliable product in affordable price. Moreover, we can gain customer loyalty by giving them good value for money product and service. In addition, due to Covid-19 people purchasing power has decreased by quite a margin, so a low maintenance and eco friendly car with low price will attract our target customer easily.
However, a Low cost priced car does not indicate that the brand is not good. As first years launch our main focus is on minimum profit and maximum sale, as a result, our brand will become a recognise brand within first year.
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COMPETITIVE STRATEGY
Due to the market competition of the European automotive market, we have chosen an eco friendly approach to market entry, supplying Cost-effective cars with improved advantages over our competitors. This is accomplished by offering a variety of features and designs in our cars.
Firstly, by delivering electric engines and making investments in the finest quality products, we will introduce particular changes and enhance quality in the upcoming years and we will conscientiously bring our clients the products of the future. By doing this, we hope to develop a long-lasting relationship with our clients and win their loyalty by promising to produce models that are cutting-edge and in high demand.
Secondly, the cars produced by AARK are extremely long-lasting and have a very reasonable, competitive pricing and the highest level of driving safety while also meeting their financial needs..
Thirdly, customers will choose to purchase a model from AARK due to the transparency displayed in our advertisement.
To sum up, when it comes to differentiating ourselves from our rivals, safety, dependability, and performance are our major priorities (Armstrong and Taylor, 2017). The following sections subsequent sections will go into more detail about pricing and differentiating factors.
DESIGN OPTIONS AND R&D
AARK offers a variety of alternatives and styles to appeal to their target market. The medium car - BEE and the large car - Forest are the first two models that AARK is planning to produce in the first year. Within these models, the aforementioned features and layouts were picked:
?Firstly, the design elements and configuration choices were made with the demands of future customers in mind.
Secondly, AARK tried to select features that were deemed necessary for daily needs, which helped to lower the price by leaving out options that were less likely to be used on a regular basis.
Thirdly, in order to be more high-tech, the large car FOREST is included more options than the BEE’s medium car as it is larger and more expensive than the other one.
Fourthly, research has shown that diesel engines are not as fuel-efficient as once believed and due to high price and environment issue people are losing interest in buying petrol engine car, AARK assigned electric engines to the forest and BEE.
Finally, the company has an investment for market research and development which is highly essential to survive in a competitive market place.
PRICING STRATEGY
The penetration pricing method will be used for both the cars. The price of the product is set as per the cost and manufacturing, which ultimately results in the maximum retail price. The cost is something that a consumer pays for a company's goods or services.
Firstly, car prices were based on anticipated margins of 50% for large and 30% for medium-priced vehicles.
Secondly, the company provided the variety of choices and the typical market pricing for a small vehicle. It was decided to add a 30% mark-up to the cost price for the forest, making the asking price ￡19,000 in total.
Finally, since BEE's mission is to offer high-quality vehicles at competitive prices, the company focuses mostly on the options that might be added to each model. A mark-up of 50% was applied to the cost price for the BEE, resulting in an asking price of ￡24,000.
PRODUCTION AND HUMAN RESOURCE MANAGEMENT
First of all, the average sales of the industry have been used as a benchmark for manufacturing both models. As a new player on the market, we will sell all the models in the first year at a reasonable price and prohibit discounting because that might cause losses in brand value.
In the second point, AARK manufacturers decided to hold output at a flexible level due to the risk of new entry as a young firm in the car industry. The amount invested in manufacturing, automation, labour force, and wages all affect output levels.
In addition, to improve the calibre of the products, when compared to "Forest", careful attention to detail is required, mass manufacturing will primarily benefit from the considerable investment automation in "BEE". Within the upcoming operational years, the significant investment in automation will be put to use as a cost-effective strategy.
Finally, based on inflation rates, we intend to raise wages in the ensuing years to establish ourselves as a powerful force in the automotive sector and a top employer.
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REFERENCE
Armstrong, M., & Taylor, S. (2017). Armstrong's Handbook of Human Resource Management Practice (14th ed). New York: Kogan Page Limited.
Robinson, B., & Lakhani, C. (1975). Dynamic price models for new product planning. Management Science, 21(10), 1113-1122.
Kissinger, D. (2019, February 22) Tesla Inc. Five Forces Analysis (Porter’s Model) & Recommendations. Retrieved from https://panmore.com/tesla-motors-inc-five-forcesanalysis-recommendations-porters-model