MGMT436 Strategic Management

MGMT436 Strategic Management

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MGMT436 Strategic Management

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MGMT436 Strategic Management

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Course Code: MGMT436
University: Singapore University Of Social Sciences

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Country: Singapore

Question:

Give a brief description of the new or improved product or service.

Answer:

Introduction
In the globalizing world introducing a new product is very tough task for any business organization. In the recent time automobile industry is also experiencing high acceleration in terms of introducing new products very frequently. In this environment of automobile industry Lamborghini has decided to introduce a brand new model targeting the women having a high net worth and disposal income (Tai Tais) oriented lifestyle. Tai Tais is a Chinese colloquial term which is used for women who do not work and spend so much on themselves to amek their lifestyle more adventurous and luxurious. It is considered same as the Cantonese title for a married woman. In order to introduce a new product organizations need to analyze the market trends and positioning strategies required to make the project successful and sustainable for longer time period.
Overall design of the car is according to the women’s demands and is expected to attract maximum number of targeted customers. Company is planning to launch this modal as soon as possible. For this company conducted a research for the project sustainability in the targeted country as well as targeted customer segment (Ulrich, 2015). In this report a complete market analysis of Automobile industry in Singapore has been done for the launch of this new model of Lamborgini. This market analysis will help to understand market scenario as well as segmentation, positioning of the new product in targeted market and many more factor to help the organization in making effective strategies for the business of new modal.
Product
Company is calling this new model as WOCHOI. This name is decided to distinguish and specify the model particularly introduce for women. Company had designed the new model in Met Red to attract women. This modal has a cabriolet of Met Black color. This will give a tough look to the car. In addition, the company has designed a interchangeable bumper that is easy to fix suitable for women. Interior of the modal has designed to look fancy for women and includes essential accessories like selfie camera, and a make-up kit to give a quick to their make-up. Door opening of the car is similar to that of the door opening style in typical high class models of the brand like Huracan. To make it more attracting company is providing the door line decorated with diamonds. For safety purpose, design of the new model provides an internal button that is linked to police station control room in order to inform in case of any emergency. This will attract the target customers. To take care of women stuffs additional personalized scuff plates are provided in the design.
Market trends
Singapore has a strong economy with average annual growth rate of 2.0% (Tradingeconomics, 2018). This increasing economy of the country is enhancing the lifestyle of people over there. This is making companies to enhance their products as per the increasing lifestyle of people. Especially women in Singapore are increasing their lifestyle more and looking for more and more luxury (Trollinger, 2016). In this trend automobile industry is experiencing a change in the market trends of country. This is increasing the demand for luxury cars. Lamborghini can take an advantage of this trend to introduce this new modal. Further analysis of the market and its trends can be done with the help of some market analysing tools like: PESTLE, SWOT, and Porter’s five force analysis. With the help of these tools company can understand the market trends of Singapore in better way and can prepare more effective strategies for the marketing of this new model called WOCHOI.
PESTLE
Political
Political scenario of Singapore is quite good for or at low risk in comparison to other Asian countries. The political and economic risk consultancy has stated that Singapore has the lowest risk in the continent.
Economy
Singapore is a vibrant developing economy showing a good economic growth rate in last few years. With a much increasing GDP growth economy of the country is developing at a very fast pace. With an economic freedom score of 88.8 country’s economy has secured second position in the list of most free economies for 2018 (Trollinger, 2016). Corruption free environment is making the county best suitable for business purpose. In addition county has the highest per-Capita income in ASEAN.
Social factor
Country is like any other European county having a high literacy rate. Although younger generation of the county is attracted to the western culture, residents work hard and fulfill their basic requirements. High class people are more attracted to the western culture and looking for real luxury.
Technological factors
The IT infrastructure of the country is worthy to praise as it has lowered the cost and time for conducting business.
Environmental factor
Environment Ministery of the country is continuously working on making environment more clean and safe for residents. Since pollution due to transportation is the main problem for government to handle, luxury cars with low pollution are easily marketed to the public increasing the demand.
Legal factors
Country’s laws and regulation are favorable for business purpose. Transportation laws of the country are in the favor of business organization as well as consumers.
SWOT analysis
SWOT analysis defines the possible internal and external analysis of the organization to understand the business in much better way. Business sustainability and growth can be visualized using tool like SWOT only. For this launch of new modal SWOT analysis of the company is as following:

Strengths

Weaknesses

Lamborghini has a well-established market in country
Company has a world renowned brand name
Company has one of the best engines in world for its cars
It has an attraction of Affluent class
Uses best technology for its products

Cars manufactured by the company consumes high cost fuel
Company manufactures cars of high price

Opportunities

Threats

Company can expand its availability in other segments on the industry
It has an opportunity to manufacture hybrid cars
Since the company manufactures cars in limited addition only to rise its brand value but it can increase its production as per demands in the market

Cars of the company consumes more fuel
More competitors are rising in the market

Porter’s generic strategies
In order to get a competitive advantage in the market organization need some strategies to make their product or service more sustainable in the market among other similar products or services. In this way there are different strategies to take this competitive advantage by any type or organization or industry. These strategies are called Porter’s generic competitive strategies.
Cost leadership
In this strategy an organization sets out to become the lowest cost product produces in the industry to attract more customers with its low price tag. Lamborghini cannot follow this strategy as its cars are very advanced as well as luxury. This much luxury comes with a high price tag only.
Differentiation
In this strategy organization looks for a uniqueness in its products to introduce its products as exclusive of its kind. With the launch of this new luxury car designed for women company is using the same strategy. This main objective of the new car production is in itself a differentiation for company making its new car unique from any other luxury sports car available in the market designed especially for women (Bertozzi, Ali and Gul, 2017).
Focus
This generic strategy focuses on a narrow competitive scope within the industry. Lamborghini’s new model is also focusing on this narrow competition in the industry to manufacture a care for women. This main focus of producing a car, targeting only women with high net worth and disposal oriented income, has more growth opportunities in the market.
Key competitors
Lamborghini is a luxury sport car manufacturing company for high class people. In this segment, key competitors of the company are manufacturers of same segment sports cars like, Ferrari, Aston Martin, McLaren, Bugatti, Lotus and many more (Glied and Altman, 2017). These all brands are manufacturing high class luxury cars availing their customers in an affordable price. This competition of manufacturing such luxury cars in a low price is creating a tough competition for all of these brands. Among these Ferrari is making huge revenue of around $3.5 billion (Owler, 2018). The revenue of the company is $700 million (Owler, 2018). The competitors of the firm include Lotus, Bugatti, McLaren and Bentley that may affect the operations and success of the firm (Beaverstock and Faulconbridge, 2014).

Customer attitude
It has been noted that in the last few year from 2013 there is a decline in the number of purchased cars. This was a continuous decline making a serious decrease in the number of purchased cars. On other hand for the industry it is noted that customers for luxury cars are increasing continuously.
When it comes to the statistics of number of cars in Singapore there is a decrease in the number of cars over last few years. This decline in the purchase of cars is recorded only for mass market brands like: Toyota and Hyundai. Meanwhile number of cars from very high end brands has increased significantly (Dewhirst and Lee, 2018). This shows that people in Singapore are demanding more high class cars with luxury and technology. This is a positive point for the company to launch this new car in such favourable scenario of people switching for costly cars. The below graph shows that in the last few year the number of mid-low end brand cars has been decreased from 83% to 78% whereas the number of high end car brand cars has increased from 17% to 22%. This is a significant growth seen in the number of high end brand cars in the country (Viscardi, Arena, Barra and Guadagno, 2016).

(Source: https://www.theonlinecitizen.com/2017/03/09/singaporeans-are-buying-fewer-cars-but-more-expensive-cars/)
Social and ethical issues
If the company launches a new Lamborghini model in the market then it will face ample of social and ethical issues. Due to change in preferences and tastes of women, the company will fail to identify the choices of the customers. Along with this, customs, values and buying behavior issues could also be entertained by the company. On the other hand, ethical issue is one of the significant issues for Lamborghini while introducing new model in the market. The ethical issues are related to code of conducts, behavior and ethics.
Consumer motivation
If the company fulfils the preferences, needs and requirements of the women then it will help to motivate them effectively and carefully. Various factors need to be considered to motivate and promote the consumers in the rivalries market. The consumer motivation would increase if an organization recognize and evaluate the choices of the consumers in a great extent.
Segmentation, targeting and positioning
Segmentation
It is stated that segmentation may be defined as a process of dividing the entire market into the different small units to maximize profitability and revenue in the international market. The new Lamborghini model WOCHOI will help to improve and enhance its sale and impress large number of women in Singapore (Taran, Nielsen, Thomsen, Montemari and Paolone, 2015). The success and growth of new Lamborghini model depend on the target market. Segmentation is done after considering the four major areas such as demographic, behavioral, psychographic and geographic (Dibb, 2010). The segmentation areas for Lamborghini new model has been discussed below.
Demographic: In demographic area, the company will focus on the income, family life, ethnicity, occupation, religion, social class of women in the marketplace (Lee et al, 2011). The firm cannot attain long term goals and objectives without using segmentation strategy. Demographic segmentation is essential to analyze and evaluate the income level of women in Singapore. Without analyzing and identifying the income level of women, the company cannot sale new model in the global market. Women who maintain high income level can buy this new Lamborghini model (Safko, 2010). Lamborghini is a global well known luxury car brand that represents high technology level, innovation ability, and quality standard. It satisfies for social super class women to enjoy symbolic brand in the market. Women have an independent and attractive personality, advocate fashion and strong initiative (Grant, 2016). It is noted that women do not have much understanding of the car, generally they like cars more than driving cars. They are highly focused on the price, whether durable and solid whether to safety.
Geography: Lamborghini will also focus on the geographic location to attract and retain maximum number of women in Singapore. The geographic area includes climate change, weather, region, and size. Geocoding may help the company where prospective women customers may be clustered and target them with ample of campaigns and programs including direct mail (Chauhan, 2015). Geographic segmentation is significant to stand out against the competitors in the market. The company is trying to capture entire female target audience by using segmentation strategy (Caunhye, Nie and Pokharel, 2012).
Behavioral: In this segmentation, the company focuses on the women status, loyalty to the new model in Singapore. It identifies and analyzes the choices of potential user, nonuser, regular user and first time user to increase and improve the sale of WOCHOI.
Psychographic: The Company would focus on the psychographic areas such as interests, opinions, attitudes, lifestyles and activities of women. The organization will further focus on those women who are working in MNC’s. Lamborghini will identify and measure the disposal income and net worth of women (David, 2011).
Target market
The main target market of the company would be women who are very rich and lifestyle oriented with maintaining high net worth and disposal income. The company will further target the elected women leader and married women. Lamborghini focuses on the income level of women who seek excitant. So the firm produce new Lamborghini model like WOCHOI which is high power, high speed and in met red color (Menkhoff, Wah and Loh, 2016). This will help to maximize the outcomes and revenue and further it will also help to gain rivalries benefits in the international market. Women pay more and strong attention to the safety performance and car appearance (Keller, Parameswaran and Jacob, 2011). Generally it is noted that Lamborghini is not suitable for lady because they are unable to control the Lamborghini. But this new model WOCHOI would be developed and made after considering the choices, preferences and security of women in the competitive market. The organization mainly focuses on those women who are age group between 25-30 years (Bhasin, 2018). Women who age group between 25-30 years is very exciting, higher consumption ability, seek individual character and they can pay extra what they want. This age must be the significant marketing Lamborghini object. The luxurious design of the new model itself will attract the target market but company can showcase this luxury to attract more women.
Positioning
Lamborghini has good position in Singapore market for its super cars. Since 2001, Lamborghini Singapore has handled the exclusive distribution for its super sports cars. This distribution of exclusive addition cars is managed under the Euro Sports Auto Private Limited. In 2005, Lamborghini was recognized as “Dealer of the Year in Asia Pacific Region” by Automobile LamborginiS.p.A. and in 2008 for “Best Sales Performance”. Over that last decade in Singapore, company had infused sports driving with the spirit of exploration and exhilaration of adventure. In the target market segment of women of age group 25-30 looking for more adventure and exploration company will get and advantage. In this order to market this new car company can use the brand name value along with the uniqueness of WOCHOI. Also the fancy advertising for the new car will help to attract more women for the car.
A new Lamborghini model that has been taken in the task is WOCHOI. This Lamborghini model is targeting women who are lifestyle oriented with a high net worth and disposal income (Tai Tais)). Tai Tais is a Chinese colloquial term which is used for an elected leader wide or head wide of a multi wife, wealthy married women who does not work or family. It is considered same as the Cantonese title for a married woman. The care would be in met red color because this will help to attract maximum number of women in the international market. To market this new model company will use an attracting slogan goes like: “WOCHOI: Luxury with Power”. This will give the experience of both the comfort as well as power to make it more adventurous. To promote this model company can use the below logo matching with the car specifications:

(Source: https://www.likecovers.com/cover/lamborghini-logo-yellow)
Recommended extended marketing mix
The marketing mix strategy is essential and effective to meet the long term requirements and needs of the business and further, this strategy is also significant to overcome the competitors in the international market (Yeshin, 2012). The recommended marketing mix for new Lamborghini model has been discussed below.
The traditional market mix elements
Product strategy: It has been found that Lamborghini is one of the most popular sports car brands in the world. In today’s era, the company is expanding and exploring the business widely. The product strategy is vital to introduce or launch new product in the global market. Therefore, the company will need to use product strategy to fulfill the long term requirements and needs of the customers (Vrontis, Thrassou and Lamprianou, 2009). Lamborghini is well known for manufacturing sports cars and SUV’s globally. The special features would be presented in new model which is developed by the company for women. The company will focus on the interior, internal button, seat, personalized scuff plates and door to cope up with rivalries in the competitive market. The company should check quality and features of new model before launching it in the international market. Effective and unique product strategy shall be used by the firm to strive with rivalries in the market. It should differentiation its products from the competitorsto build and develop a dynamic image in the minds of the customers (Mbaskool, 2018).
Pricing strategy: Being a luxury car maker, the company generates a market of buyers who are seeking for class coupled with performance and elegance as the criteria for making a vehicle purchase (Avraham and Ketter, 2012). It shall be noted that the company should use premium pricing strategy to capture entire women in the marketplace. It has been found that Lamborghini has targeted upper class women who is both affluent and rick as its target customer. By using premium pricing strategy, the firm would be able to distinguish its product from the rivalries in the market. The Corporation will adopt premium pricing strategy because it is well aware of its customer trust and loyalty in a large extent. Maximizing turnover and trading profits have taken company to new heights (Mbaskool, 2018).
Place strategy: It has been analyzed that Lamborghini has more than 135 dealers in more than 50 countries. Thus, it can take ample of benefits in Singapore also. Japan, UK, middle East, Canada and China are largest market for the company to increase and enhance its profitability and outputs (Mbaskool, 2018). The company should use an effective and efficient workforce for designing and producing new model MOCHOI in the marketplace. Along with this, it should use unique and dynamic distribution channel that helps in prompt distribution with the support of dealership, manufactures and franchise arrangements. Distribution strategy shall be used by the company to introduce new model WOCHOI in the market. By using distribution strategy, the company has been able to capture entire target audience through its supply chain. Place should be decided after considering the needs and requirements of women in Singapore (Mangold and Faulds, 2009).
Promotion strategy: Lamborghini is one of the biggest and popular luxury brands in the market. The company should adopt various marketing plans to remain in limelight and generate brand visibility in the minds of the consumers. Lamborghini is a well-known brand name and is known even in place where it does not operate its promotions activities globally. The firm should use pull and push advertising strategy to direct sale the products in the market. Apart from this, push ad shall be done by the organization to promote new Lamborghini model in Singapore. Extensive marketing campaign and programs which include niche marketing, digital marketing, and GTR racing must be used by Lamborghini to launch new model WOCHOI in the international market. The social media platforms and promotional events can also be further used by the firm to attract ample of women widely. Commercial channels such as magazines, television and billboards might also be used to increase awareness among the women (Mbaskool, 2018).
Service marketing mix elements
People: The company posses effective and dynamic management team to conduct business activities and actions in a hassle free manner. Lamborghini hires qualified, skilled and talented staff to offer products in the global market. No company can attain uplift profitability without using dynamic and strong management team in the competitive market. It is recommended that the company should focus on the training and development coaching of the workers to increase the number of women internationally (Bhasin, 2018).
Process: The delivery of cars shall be done with the customer present so that long term objectives and goals can be attained. Lamborghini should use effective and unique process to produce new model in the market (Lovelock and Patterson, 2015).
Physical evidence: Physical evidence shall be provided by the firm while selling the WOCHOI internationally. Along with this, some additional services must also be provided by the company to women globally. Apart from this, managers and employees should maintain reciprocal relationship with customers at the stores while selling. In this way, the company has been able to introduce new model WOCHOI in the global market (Gordon, 2012).
Conclusion
On the above mentioned analysis it is concluded that Lamborghini is one of the biggest brands who produces sports cars and SUVs. The above mentioned analysis shows that how the company produces a new model MOCHOI for women customers in the international market. Here is the discussion about the marketing trends and environment that help in maximizing the sale and revenue of the firm in the market. Pestle analysis, SWOT analysis and key competitors that play a vital role in launching new model in Singapore also have been explained in the task briefly. There are four parts of the task: in first part the paper provides a brief information about the new Lamborghini model and second part, the paper outlines the pestle analysis, consumer behavior and SWOT analysis. In third part, the paper shows that how segmentation, targeting and positioning strategy help in attain attracting and retaining the women customers globally. In final part, a recommended marketing mix strategy has been explained briefly.
References
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