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1 . Intro

The aim of this kind of report is always to critically measure the Daewoo’s 1995 UK auto market access. After coming into the highly competitive British car industry, Daewoo were able to achieve a competitive advantage simply by focusing on delivering effective customer service.

We seek to understand why set up car firms did not react to customer requirements prior Daewoo’s entrance and what approaches they may also adopt to outperform Daewoo presently.

The report likewise takes a look at the innovations linked to the UK access of the Korean language car producer and how that they could sustain these improvements to retain and create on their existing market share. Feasible brand expansion strategies will probably be suggested for Daewoo to adhere to subsequent to the successful launch with the car. We finally determine other areas where businesses could acquire a competitive benefits by applying a customer-centred strategy.

2 . Examination of the Case installment payments on your 1 Problem facing the auto industry The industry can be faced with two main choices when answering Daewoo’s concern. The initially which is to conserve resources rather than respond depending on the belief that Daewoo’s competitive edge is not sustainable. Daewoo’s direct division strategy will incur increased customer service and logistics costs (Doyle and Stern, 2007) and the firm’s current aggressive promotional approach will also impact their important thing.

Furthermore, the ‘post modern’ criticism of delivering such high support levels is that it is unsustainable due to the fact that the client will simply enhance their expectations in line with improved offerings (Kotler ain al, 2007). However , this sort of a strategy might involve if you are an00 of risk. The second option for responding to Daewoo’s challenge is usually to adopt protection strategies (Lambin, 2007). We feel that it is vital to establish there is no common strategy and individual players would be suggested to review whether or not the threat of Daewoo is pertinent to their target audience.

For example , high end car producers such as Audi and Mercedes are highly not likely to suffer any consequences as they will not target similar price sensitive market. Firms that do focus on price very sensitive customers (such as Kia, Fiat and Renault) can be advised to consider a much more immediate approach nevertheless. The most appropriate function of doing this may be through a combination of ‘position’, ‘flank’ and ‘pre-emptive’ defences (Lambin, 2007). First of all, through a ‘position defence’, it would be recommended that manufacturers use their existing brand equities and consumer bottom.

Daewoo will not benefit from a lengthy standing presence in the UK market and, therefore, protecting existing customer directories is a crucial element in protecting market share. A variety of ‘Flank’ and ‘Pre-emptive’ defences would be recommended to address the threat caused by Daewoo’s division strategy. An obvious way of doing this would be to replicate the technique and satisfy the standards set by Daewoo. However , this would be a costly and hard process to implement because of the high leave barriers due to existing circulation agreements.

Therefore , to pre-rhyme the next move in Daewoo’s technique would be a more viable solution and could give the competition a primary mover edge. The growth of e-commerce and internet utilization in 1998-2000 was unparalleled (BBC, 2010) and growing an online program represents an opportunity to create an interactive and cost effective syndication strategy. Ownership of such a option would allow companies to lead digital convergence and gives further lessens in pressure and intrusion into the client’s decision making procedure.

2 . three or more Customer-focused procedure According to the pre-launch research conducted by Daewoo, the overall standard of customer satisfaction in the UK car market was low. Almost all consumers suffered from unpleasant shopping for experiences as a result of apathy via dealers, inconsistent pricing and poor after-sales service. This kind of provided Daewoo a competitive advantage by operating as being a customer-focused company. The Korean language conglomerate aimed at optimizing their particular customer solutions, including an exceptional showroom ambiance (Rodgers, 1995).

Despite of this kind of example, the industry experienced failed to pioneer in a customer-focused manner. The primary reason is that as the UK car industry structure experienced remained unrevised for one 100 years. Conventional innovation approaches incorporate building good quality cars (Volkswagen and Toyota) or offering low prices while (Lada). However , they did not break the tradition by investing in an innovative, customer-focused strategy.

An additional cause could be that UK automobile producers were highly conservative. In accordance to Whittington (2010) buyer centric tactics are so sophisticated that requires the company not only evaluate the problem in the market researches, but as well develop a target view to consider economical and operational issues. We all feel that, that on account of the economical and operational investment necessary, manufacturers denoted the risk of following such a strategy was too high risk.

The very last possibility is usually that the market would not believe this kind of customer-focused creativity was possible and glossed over the importance of after-sales solutions and the ever-changing customer developments. The opportunity was clearly demonstrated through researching the market data, even so we experience it was disregarded and the industry change adverse. Ironically, they failed to anticipate a market entrant could determine and acquire a competitive benefits through customer-focused innovation. Daewoo’s successful launch approach taught the marketplace a bitter lesson.

2 . 4 Lasting competitive advantage Daewoo offers achieved its aim of gaining circa 1% share in the UK new car marketplace. A challenge the company now confronts is to sustain this position and improve that further in the future. As pointed out in 2 . 1, it could be argued that Daewoo’s competitive advantage is definitely not eco friendly. It could, consequently , be easily imitated by rivals, substituted by simply rivals’ offerings and as a result lose their rarity and be less valued by simply customers in the longer-term (Barney, 1991, Srivastava et ing, 2001, Kotler et approach, 2009). In order to avoid such a fate, the business should embark on a number of measures. Firstly, it will improve the quality of cars to be able to compete more effectively with competitors when they inevitably table act Daewoo’s strategy.

Superior quality cars with the brand’s confident image and reputation gained during the release stage will assist you to retain buyers.

You go through ‘Daewoo’ in category ‘Essay examples’ Second, it should perform market research on a regular basis to collect information regarding customers’ requires. This will guarantee the company will continue tailoring its products and services in order to meet these requirements better than competition. Moreover, the business should continue innovating consumer services to endure a competitive edge. It should frequently seek new ways for the whole connection with buying a car, so that it will offer something else when competitors copy its current innovations. For example , Daewoo may well launch a site where buyers are given a choice to co-create a car with the addition of features or add/exclude services.

Finally, the company has been emphasising weaknesses of other auto makers in its advertising efforts until now. It should start to focus more on its own talents communicate all of them in an effective manner. Will probably be problematic and expensive to attract customers and raise awareness with the current advertising when ever competitors enhance their services. It is vital to bear in mind that it will take some time intended for competitors to complement Daewoo’s important success elements as they might need to go through ethnical, structural and operational improvements (Woodruff, 1997). Daewoo posseses an invaluable prospect now to build further upon its existing capabilities to sustain the market situation and become a stronger rival in the future.

2 . 5 Different sector optionsCustomers today happen to be strongly benefit oriented. Being aware of where worth resides through the standpoint from the customer is becoming extremely crucial for managers, since greater amounts of customer satisfaction lead to greater amounts of customer commitment and retention, positive personal, a stronger competitive location and eventually, higher market share (Kotler ain al, 2009). Daewoo bitten an industry because competitive because the car sector through a value and customer satisfaction strategy. Effective companies are able to invert the traditional organisation data by placing customers near the top of the pyramid as opposed to managers who think that the customer is definitely the company’s simply true revenue centre (Kotler et ‘s, 2009).

Customer-centred companies just like Amazon. com are within a strong position to identify new opportunities and set a program that guarantees to deliver long term profits due to the customer positioning (Kotler ain al, 2009). A firm can achieve competitive edge in other sectors such as travelling, banking, insurance, airlines, selling and fast moving consumer products by employing a customer-focused approach. The example of how Freebie southwest Airlines attained a distinct benefit in an incredibly competitive sector such as the flight industry simply by focusing on providing higher client value bears testimony to the.

Customers place high value in Southwest’s frequent departures, on-time service, friendly employees and very low costs (Heskett ain al, 1994). However , it really is imperative to comprehend the fact that not all businesses are able to achieve a competitive benefits through outstanding customer service (Lambin, 2007). A company should have the interior capabilities and resources to adapt to changing customer requirements. The service level provided must also always be appropriate to the target market in order to exceed client expectations. installment payments on your 6 Brand extension

Entrepreneurs must assess each potential brand file format by how effectively this leverages and contributes to manufacturer equity. With the right product ‘fit’, the user’s perception in the parent brand can decrease perceived risk within several consumer or B2B making decisions processes (Kotler, 2009, Webster, 1991). The Daewoo brand has become synonymous with exceeding beyond customer expectations. This creates numerous company extension possibilities.

As in 2 . 5, Daewoo should on the other hand ensure that this is certainly related to all their core competencies to maximize the likelihood of success. All of us feel that an ideal opportunity comes in the form of extending the Daewoo brand to the commercial vehicle portion. This would not require the corporation to re-plan their complete marketing strategy since this would maintain true intended for targeting small to medium business (SMB’s) marketplaces as well as consumer. Furthermore, Daewoo would be able to power their partnership with GM to reduce r and d costs by re-branding additional Vauxhall/Opel versions such as the ‘Corsa’ van. A progressively diversified, yet viable alternative would be to expand the Daewoo brand to motorcycles.

This could again allow the company to leverage its brand equity and circulation networks, nevertheless the product and market is outdoors their existing knowledge base. In order to overcome this lack of knowledge and competence, we would recommend that Daewoo follow a similar alliance strategy that they can previously used with GMC with a leading motorcycle producer. Although this is certainly likely to make certain that the core product will be of a superior quality, Daewoo should be mindful to the fact that their existing staff requires extensive product training keep service levels.

The final and the most diversified brand extension could to utilize Daewoo’s brand equity within the Finance sector (motor insurance). Just like the motorbike market nevertheless , Daewoo tend not to currently have the information or resources to be competitive in the market. In cases like this, we would recommend Daewoo to control a franchise partnership with a suitable insurance carrier. As stated above, it is however very important that Daewoo ensure that both core and augmented item fit with their particular brand.

a few. ConclusionsConcluding in our evaluation of the 95 launch of the Daewoo automotive brand in the UK market, it is obvious that it was a success. The company capitalized on a weak spot in the market by simply leveraging their particular knowledge base and intensive resources to provide exceptional customer service. Sceptical views of the approaches longevity are however justified. The impressive distribution technique adopted needs additional spending and the industry’s aggressive advertising activity will again affect the bottom line. It can be clear that in order to stay stable available in the market and maintain a sustainable competitive advantage, the organization must still understand and satisfy the demands and would like of the customer.

Although brand extensions provide a lucrative growth opportunity, the company must not let this to detract using their main competency- customer satisfaction. With regards to the market environment, Daewoo’s competitors have no someone to blame although themselves. In spite of this, they need to adopt effective defence ways of match and exceed Daewoo’s market providing in order to safeguard their business from further depletion. Furthermore, to pre-rhyme and lead the next main development in customer satisfaction will be imperative to long term accomplishment.

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