Abstract
Jaguar Land Rover is a reputable company that has existed for a long time in the automotive industry. It is the United Kingdom-based automotive company. Its headquarter is in Whitley, Coventry, United Kingdom. It primarily tasked with designing, manufacturing as well as marketing high segment automobiles in the form of two brands; Land Rover, four-wheel-drive vehicles as well as Jaguar, luxury sports saloon cars. These products are marketed through a network of franchise sale dealers, export and import partnerships and also national sales organizations. The trends and changes in the macro environment within the industry have significantly affected this company too. Porter’s Five Forces and VRIO analysis tools have been used to analyze the automotive industry that Jaguar Land Rover operates in. Analyzing the industry is vital since the business is impacted by the industry’s environment they are operating in. Porter’s Five Forces analysis assists in formulating holistic solutions. The VRIO analysis entails the following steps; listing down the internal resources of the company. From Porter’s Five Forces analysis, it can be concluded that the automotive industry external environment is viable for Jaguar Land Rover to thrive in it. Moreover, VRIO analysis indicates that this company has adequate resources making it ready and capable of undergoing through the changes in the industry efficiently. Corporate social responsibility is important in building the image of the company and also establishing its brand. It is empowering employees to give up their corporate resources for the sake of improving the company’s performance. Companies in the automotive industry strongly consider corporate social responsibility in their operations. For example, Jaguar Land Rover is a projective business that is committed to playing a big role in the communities they are operating in. In the nearby future, the automotive industry will have transformed into more sophisticated technologies.
Introduction
Jaguar Land Rover Automotive PLC is the United Kingdom-based automotive company. Its headquarter is in Whitley, Coventry, United Kingdom (Jaguar Land Rover, n.d.). There are significant changes and trends in the macro environment that affect this company. These changes include; introduction of electric vehicles and other future technologies that have emerged. Therefore, it is important to review Jaguar Land Rover Automotive PLC to determine how the company is coping with the changes and also recommend ways the company can cope up with the changes in the macro-environment. To achieve that, the paper will carry out VRIO analysis and porter’s five forces and describe Jaguar Land Rover corporate social responsibility.
Background
Jaguar Land Rover is a four-wheel-drive vehicle brand based in the United Kingdom which is exclusively offering premium and luxury vehicles. It currently has its store in Slovakia, the United Kingdom, Brazil, and China. Initially, the Land Rover name was utilized by Jaguar Land Rover for a boxy four-wheel drive an off-road brand that was introduced in 1948 and currently referred to as Land Rover Series which is now considered a British icon (Jaguar Land Rover, n.d.). With time, Land Rover expanded to establish its brand, entailing constant increasing various types of four-wheel drive and off-road brands (Jaguar Land Rover, n.d.). It started with the 1970 Range Rover and then later introduced mid-range Discovery as well as Freelander line at the entry-level and also the 1990 Land Rover Defender refresh, then the current marque entailing the two Discovery models, four different Range Rover models as well as the second generation of Defenders producing 2020 model. The next phase of this paper is the literature review on Porter’s Five Forces, VRIO analysis and Corporate Social Responsibility.
Literature review
Porter’s Five Forces is an important tool for analyzing the macro environment of Jaguar Land Rover PLC (Grundy, 2006). The industry is analyzed in five dimensions. They include the threats facing the industry because of new entrants, threat due to substitute products, the buyers’ bargaining power within the industry, suppliers’ bargaining power within the industry and the competitive rivalry in the industry (Grundy, 2006). This tool assists in understanding the strength that major players within the industry.
VRIO analysis is undertaken to get to know about the abilities of a company and its internal strength. The analysis is based on four dimensions including; Value, Rareness, Imitability, and Organization. Suppose a resource is quite high on the four dimensions, then it grants the company long-term competitive advantage (Knott, 2015). However, suppose a resource is high on Imitability, Value as well as Rareness, it will bring an unused competitive advantage to the company. Suppose a resource is valuable and has high rareness, then it grants temporary competitive advantage (Knott, 2015). Suppose a resource is high on only value, then it is a competitive parity. But if it is none, then it will be considered a competitive disadvantage.
Corporate social responsibility refers to a self-regulating business model assisting the organization to be socially accountable to the public, itself and to the stakeholders. Engaging in CSR entails the company operating in strategies that enhances the environment and society rather than contributing negatively. Limitations of CSR include; impact on the company’s reputation, competitive disadvantage, clash on the company’s objective and cost. The next phase entails the analysis of Jaguar Land Rover Company. It will begin with VRIO analysis.
VRIO analysis
Valuable
The financial resources of this company appear to be highly valuable since they assist in investing in emerging external opportunities and combating external threats (Donnelly, Begley & Collis, 2017).
The employees of this company are of great value to the organization. A bigger population of the employees is highly trained thus leading to increased productivity due to the company’s more output. It has loyal employees with higher retention levels, therefore, translating into greater value for consumers (Donnelly, Begley & Collis, 2017).
The company’s patents are highly valuable because they enable the company to sell the products without being interfered with by competition (Donnelly, Begley & Collis, 2017). The patents also offer the company with licensing revenue whenever the company licenses the patents out to other companies.
The company’s distribution network is also a highly valuable resource. This distribution network assists the company to reach out to a wider customer base (Bailey & De Propris, 2017). It also enhances the translation of promotional activities into sales.
The cost structure of this company is not considered as a valuable resource since the production techniques result in greater costs than those of the competition thus impacting the general profit of the company thus giving it a competitive disadvantage (Giampieri et al., 2019).
Rare
The company’s financial resources are determined to be rare based on the analysis. Only a few companies have strong financial resources in the automobile industry (Giampieri et al., 2019).
The analysis also identifies the employees of this company to be a rare resource. The employees are trained as well as so skilled more than employees in other organization (Giampieri et al., 2019). The company offers better compensation as well as a better work environment to make sure that it retains the employees.
The company’s patents are considered a rare resource. The competitors do not have these patents and tend to be unavailable thus allowing the company to utilize them without being interfered with by the competitors (Giampieri et al., 2019).
Jaguar Land Rover’s distribution network is found to be a rare resource since competitors need to make a lot of investment as well as time in coming up with an improved distribution network exceeding that of Jaguar Land Rover (Giampieri et al., 2019).
Imitable
The company’s financial resources are so costly for imitating since the resources have been obtained through longterm profits over the years (Bailey & De Propris, 2017).
It is not costly imitating the employees of Jaguar Land Rover since other companies are capable of training their employees to improve their competence (Bailey & De Propris, 2017). Moreover, other companies can employee employees from Jaguar Land Rover by offering better compensation and offering a favorable working environment with opportunities for growth.
Jaguar Land Rover’s patents are hard to imitate since it is illegal imitating patented products and also tends to be a costly process (Bailey & De Propris, 2017).
The company’s distribution network is costly to imitate since it is a network that has been created over the years slowly by Jaguar Land Rover (Van Den Hoed, & Vergragt, 2017). The competitors require to invest a big amount suppose they want to imitate this company’s distribution system.
Organization
The company’s financial resources are highly organized to capture value. The financial resources are utilized deliberately to invest in the right place, take opportunities as well as combat threats (Van Den Hoed, & Vergragt, 2017). It proves that give a competitive advantage to the company.
The company’s patents are not organized well thus meaning that the company is not exploiting these patents to their capacity therefore giving the company unused competitive advantage (Donnelly, Begley & Collis, 2017).
The company’s distribution network is very organized as the company utilizes the network in reaching out to the customers by making sure its products are available everywhere (Donnelly, Begley & Collis, 2017). This proves to offer the company a sustained competitive advantage. The next phase of the analysis will be the Porter’s Fiver Forces analysis of Jaguar Land Rover.
Porter’s Five Forces
The threat of New Entrants
It is quite harder to achieve the economies of scale within the automobile industry whereby Land Rover operates thus making it easier for companies to produce large capacities to gain a cost advantage (Donnelly, Begley & Collis, 2017).
The industry has a stronger product differentiation such that companies within the industry are selling differentiated products instead of standardized products (Donnelly, Begley & Collis, 2017). Customers tend to seek differentiated products and have a strong focus on advertisement and also customer service. These forces tend to make the threat of new entrants to be weaker.
The required capital is very high, thus rendering it hard for new entrants to establish businesses that entail higher expenditures. The capital expenditure is also higher due to extensive research and the cost of development (Donnelly, Begley & Collis, 2017). Therefore, it renders the threat of new entrants to be weak.
Accessibility to distribution networks is quite easier for new entrants (Bailey & De Propris, 2017). The new entrants are capable of getting their products, therefore, making the threat of new entrants to be stronger.
Bargaining Power of Suppliers
The industry has a lot of suppliers more than buyers. This indicates that suppliers have low control over the products’ prices thus making the suppliers’ bargaining power to be weaker (Bailey & De Propris, 2017).
Suppliers’ products tend to be less differentiated, standardized as well as possessing lower switching costs (Bailey & De Propris, 2017). Buyers of Land Rover find it easier switching suppliers, therefore, making the power of suppliers to be weak.
In the industry, the supplies appear not to be contending with other products meaning that substitute products are lacking apart from those provided by the suppliers (Rawlinson & Wells, 2016). This gives the suppliers bargaining power to be strong.
The industry that Jaguar Land Rover is operating it is a vital customer to the suppliers. The profits of the suppliers are almost close to that of the industry (Bailey & De Propris, 2017). The suppliers have offered reasonable pricing thus making the suppliers bargaining power weak.
Bargaining Power of Buyers
The suppliers appear to supersede the number of companies that produce the products meaning that buyers have a few options to choose companies from and have little control over prices. It makes the bargaining power of the buyers to be weak (Donnelly, Begley & Collis, 2017).
In the industry, product differentiation is a higher meaning that buyers are not capable of finding alternative companies that produce a specific product (Donnelly, Begley & Collis, 2017). The difficulty in switching tends to make the buyers’ bargaining power weak.
The buyers’ income appears to be low meaning that there exists a pressure of purchasing at lower prices, thus making the buyers more sensitive in terms of price (Donnelly, Begley & Collis, 2017). Therefore, the buying power of the buyers is weak in this industry.
The Threat of Substitute Products or Services
The industry has few substitutes for the products. Only a few substitutes are there and produced small companies (Bailey & De Propris, 2017). Since the industry has few substitutes, it makes the threat of substitute products to be weak in the industry.
Substitute products tend to be available and of high quality though tend to be more expensive. These substitute products are sold at low prices with sufficient quality. Therefore, buyers are less probable to switch to them (Donnelly, Begley & Collis, 2017). The threat of substitute products is therefore weak.
Rivalry Among Existing Firms
Competitors in this industry are quite a few and appear to be larger. The companies’ moves are noticeable due to their size (Bailey & De Propris, 2017). Therefore, the rivalry among existing companies appears to be weak in the industry.
The automotive industry is growing from time to time and still expected to grow even further (Bailey & De Propris, 2007). This positive growth in the industry shows that competitors are less probable to take part in competitive actions since they do not have to compete over the market share. After the analysis the next step will be to determine Jaguar Land Rover’s corporate social responsibility.
Corporate social responsibility
Corporate social responsibility is important in building the image of the company and also establishing its brand (Jacobides, MacDuffie & Tae, 2016). For example, Jaguar Land Rover is a projective business that is committed to playing a big role in the communities they are operating in (Jaguar Land Rover, n.d.). Its corporate social responsibility is focused on creating opportunities for several people. It is operating through project areas that entail technology, wellbeing, and health, education and talent.
Conclusion
To sum up, Jaguar Land Rover is a reputable company that has existed for a long time in the automotive industry. The trends and changes in the industry have significantly affected it. From Porter’s Five Forces analysis, it can be concluded that the automotive industry external environment is viable for Jaguar Land Rover to thrive in it. Moreover, VRIO analysis indicates that this company has adequate resources making it ready and capable of undergoing through the changes in the industry efficiently.