Abstract
The automobile sector is filled with intense competition due to the numerous strong brands in the industry. Though having survived for close to a century now, Aston Martin is not immune to collapse in situations of extreme competition and failures. The company has tried to enforce different strategies to maintain its position in the vehicle market. This report evaluates the methods that apply to implementing strategic management in the company to assist in the maintenance of its competitive advantages as the leading producer of luxurious automobiles. The techniques are vetted based on managerial, organization, and competitive models to identify those that suit Aston Martin. The approaches determine the strongholds of the corporations and the weaknesses it exhibits. Then decisions are made concerning the best strategies for the firm using adequate evidence. The directive is to formulate a consistent set of managerial techniques that will secure and maintain the brand of Aston Martin.
Introduction
A firm requires continuous monitoring, assessment, planning, and analysis of all the factors necessary for it to attain is objectives. The procedure is called strategic management. The primary directive is to create and enforce successful strategies that will enable the company to gain competitive advantage. The methods guide the decisions made by the management. The theoretic framework for such as setup entails a resource-based model as well as an organizational, game, and microeconomic theory. In this paper, an example of the Aston Martin Company is used to extract the models, approaches, and, techniques that a corporation needs to develop strategic management so that they can acquire competitive advantages.
Aston Martin is a British enterprise that produces grand tourers and luxury sports vehicles. The firm began in 1913 under the leadership of Robert Bamford and Lionel Martin. The company became associated luxurious touring vehicles in the 50s and 60s with even a prominent movie character, James Bond, advertising the brand and using it in his films. The firm has had a rough historical background that includes the period of bankruptcy they faced in the 70s (Spender, 2014, 19). It has also enjoyed stability and success under the reign of Ford Motors and David Brown. Aston has enforced various strategies to maintain its brand such as signing deals with multinational companies like Daimler-AG to sustain its power plants and support a long-lasting generation of motor vehicles. They have also signed deals with other companies such as Mercedes-AMG to enable a continuous supply of electrical systems (Kesho, 2015, 16).
The objective is to take a keen look at the company’s environment, strategies, and the models it uses to enforce strategic management and competitive advantage. SWOT evaluation is a fundamental tool that assists leader to analyze the likelihoods of the success of a particular mission or project. In entails the external and internal forces involved in an organizational strategy. A detailed economic outline suggests that Aston Martin has encountered various external issues since its inception such as conservative customer spending, high raw material costs, and high unemployment. Internally, the company faced the aging of its product line and production disruptions. Subsequently, it opted to form strategic alliances to share technology and innovation (Nedergaard and Gyrd-Jones, 2013, 765).
Aston Martin possesses strengths, opportunities, weaknesses, and threats tabulated below using the SWOT analysis
The evaluation proves that Aston Martin has remained profitable even in the face of numerous pressures for over a century. The reasons for stability include its brand, design, and innovative reputation. In the face of issues, the company utilizes its strength to maintain production in the highly competitive car industry. It also provides essential areas that the company should address to better its stakes in the automobile industry (Henry, 2011, 19).
Development of Strategic Choices
Many scholars are conversant with the ideology used in articulating a suitable strategy. However, they are often tied down by the semantics of what the technique means. The common error that emerges is utilizing the word strategy to mean an essential plan. In its simplest form, the term has two components. It must have a competitive element and a tradeoff. Aston Martin needs to reinvent itself by using competitive strategies with a high level of tradeoffs. The methods should be founded on various primary models such as the PESTLE analysis, Porter’s five forces, Bowman’s Strategy Clock, Porter’s Generic Techniques, and the SAFE model. The PESTLE concept is monitored by marketing principles to enable the company to track its surroundings before launching a new program. For example, Aston Martin has recently raised waves because of its largest product offensive. The enterprise seeks to reinvent itself as the best supercar manufacturer so that it can portray its fitness to take over Ferrari. Therefore, before taking up the program, they should assess the economic, legal, technological, ecological, political, and social factors that might improve or hinder their operations.
The five forces developed by Porter help a firm to examine its power balance in the economy. The outlook is essential because it establishes an understanding of a business’s present competitive stand and the one they are considering to pursue. Every enterprise has the objective of expanding its horizons and conquering the globe. Aston Martin, for instance, aims to avoid limiting itself to the Western region and to penetrate continents such as Asia and Australia. It is the task of a firm in a particular market to highlight a competitive edge and satisfy the requirements of consumers better than its rivals. With the high degree of rivalry in the automobile industry, how can a company market its brand better than others? Porter captures the elements of this query using three generic methods: market segmentation, product differentiation, and cost leadership. Through the three methods, an organization can give its buyers what they want more effectively and at a better price than others (Kotula et.al, 2015, 244).
Bowman’s Strategic Clock extends the notions of Porter’s generic strategies to eight techniques. The clock presents perceived value and cost combinations that the firm can use in identifying the effectiveness of their strategy. The eight methods provided by the diagram include low value, moderate differentiation, focused differentiation, low price, standard product, focused differentiation, standard price, and high price (Sillince, Jarzabkowski and Shaw, 2015, 26). The elements are used depending on the competition levels in various environments. When developing an articulate strategy, the firm must position itself bearing in mind its entrepreneurial competencies. While most companies choose a focused and differentiated method to engineer their new products, they need to comprehend the unique array of characteristics that create the kind of market reputation they need. For example, Aston Martin has always presented itself as a firm that focuses on luxurious and expensive vehicle brands. Their target market mostly is the high-income earners. Therefore, they provide high prices and focused differentiation for high-value products. The SAFe model then comes in to evaluate the overall sustainability of their proposed plans. A pictorial representation of the Bowman’s Strategy Clock from Ubé-Sanjuán and Espitia-Escuer (2013, 25) is as follows:
Evaluation of the Strategic Choices
Recently, Aston Martin has decided to pay attention to market and product development. They have encouraged their shareholders to invest close to 500 million euros within the next half decade to pursue growth and develop new approaches in the emerging global markets such as the Middle East, India, and China. The competitive degree of commitment depends on the quality of resources and programs that will bring about the remarkable transformation. The strategy of Aston Martin aims at raising the investment ratio, introducing higher earnings, and maintaining a competitive advantage. The company also uses a profitability and growth strategy where they work towards refueling their new models and technology assets. The demographics of the customer base in the firm follow that of Bentley. The aspects represent the near-potential of a large proportion even before product development occurs (Heiner, Martin, Roger and Yuanyuan, 2012, 24).
Despite the financial limitations that Aston Martin has had over the last years, the enterprise has not been idle. It has formulated some of the sector’s unique engagement experiences and customer management procedures. The venn-paradigm of the company’s competitive advantage shows that Aston Martin does not have any marginal advantage (Stead, 2014, 137). It is only a brand monopoly with the label of being cool and possessing an efficient operational platform. In the automobile industry, the firm represents a fascinating example of an active strategy. Aston Martin balances the competitive demands of the available opportunities to maintain its reputation, the experiences given to customers, and the desirability of its goods. The firm is aware of its strengths and does not spend a lot of time focusing on opportunities it cannot gain (Nedergaard and Gyrd-Jones, 2013, 770).
The problem that Aston Martin now faces is to direct the operational agility, self-awareness, and focus on raising the production levels of its vehicles. Most large corporations feel safe because they have renowned brands. Unfortunately, due to the assumption, they do not pay attention to creating efficient surroundings that deliver the stakeholders value and they are less responsive to the requirements of the markets. The failure by the big companies represents Aston’s advantage in a sector with a bloated capacity and competition towards expansion with less efficiency. There are various models that a firm can use to determine how to compete through strategic management. The SAFe model has already been mentioned. Others include the Ansoff analysis that explains the market-product strategies. It identifies the markets that a firm should enter or leave. The model also outlines growth direction and competition techniques. Portfolio structures have also been developed to examine the product’s image and generation techniques. For the strategies created by Aston Martin to be successful, they must portray feasibility, acceptability, and suitability. Screening tools can be utilized to exploit strengths and overcome challenges, assess returns and risks, and the resource needed to accomplish the strategy. The models are effective in developing plans for penetrating foreign markets which is the present goal of Aston Martin (Kotula et.al, 2015, 249).
Recommendations
Since Michael Porter raised the issues of competitive strategy in the 80s, it has become a central topic in strategic management. After highlighting the models and approaches that Aston Martin can use to assess their current operations, it is the management’s roles to choose the best strategies that align with the organizational activities and culture. The method should receive support from all the parties involved in the company’s practices (Thompson and Martin, 2010, 78). The groups include the PESTLE factors that interact with the business and affect its decisions. Also, the internal features are crucial to strategy development and implementation. All these stakeholders are only interested in witnessing the growth and sustenance of the firm. So far, Aston Martin has made substantial attempts to promote its operations through partnerships and strategic alliances with suppliers and competitors. They should continuously monitor the usefulness of the partnerships to ensure that they do not lose their value (Kesho, 2015, 40).
Product differentiation, value, and price are also fundamental elements based on the Bowman’s Clock. Aston Martin should provide diverse goods and services that will attract the customers. The products should also be of high value considering that their costs are high to catch the interests of a high-income audience. Their aim to enter promising markets such as India, Indonesia, and China will also be assisted by the strategic alliances. Most of their customers are situated in America and Europe, the move to pursue emerging markets presents difficulties that can only be resolved by merging with companies in the regions. The firms will provide a stable background and familiar setting for the customer base they intend to acquire in Asia. Aston Martin should study the activities of the people in the region so that they can build a relationship between their culture and that of the individuals (Henry, 2011, 38).
Aston Martin has survived for over a century indicating its resilience and loyal consume-base. They should strengthen their survival aspects by using rare and non-imitable resources that support a sustained competitive advantage. The procedure requires the use of a resource-based model to assess the external and internal sources of the competitive advantage. The leadership is also fundamental in the process of strategic management and competitive advantage. Their skills can show the areas that the firm is not performing well so that adjustments are made. The corporation’s strengths also need to be maintained (Heiner, Martin, Roger and Yuanyuan, 2012, 36). They should eliminate or achieve a consensus with the threats they encounter if they want to undertake the complete exploitation of the opportunities in the automobile industry. Aston Martin should also start focusing on the middle and low-income earners who also represent a viable market opportunity. They can produce vehicles that are classy and still fit the budget of the individuals. The move has already been tried by Toyota, which is the current global leader in the automotive sector. Aston Martin should cover the needs of the entire customer-base instead of aiming for one target population to improve their sales, brand image, and control span.
References
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