Module code: BUSM3042 Module title: Contemporary Marketing Strategy Title: A critical analysis into the automotive company

Jaguar Land Rover Course: Advertising Student number: 10007215 Due date: Monday 15th April 2013 Word Count: 2,137 words

1|Page

Contents Contents............................................................................................................................Page 2 Introduction.......................................................................................................................Page 3 Brief History of the company.............................................................................................Page 3 PEST Analysis.....................................................................................................................Page 4 Figure 1: PEST Analysis diagram....................................Page 4 Political factors..............................................................Page 4 Economical factors........................................................Page 4 Social factors.................................................................Page 5 Technological factors....................................................Page 5 Competitive Analysis.........................................................................................................Page 6 Figure 2: Michael Porters Five forces model...............Page 6 Threats of new entrants................................................Page 6 Threats of substitutes...................................................Page 7 Bargaining power of suppliers......................................Page 7 Bargaining power of buyers.........................................Page 7 Competitive rivalry in industry.....................................Page 7 Internal Environment analysis...........................................................................................Page 8 Figure 3: Mckinsey 7s model.......................................Page 8 Structure......................................................................Page 8 Style.............................................................................Page 8 Staff.............................................................................Page 8 Systems........................................................................Page 8 Shared values...............................................................Page 8 Skills.............................................................................Page 8 Strategy........................................................................Page 8 Summary of strengths.....................................................................................................Page 9 Online Marketing tools...................................................................................................Page 10 Website..................................................................Page 10

2|Page

Social networking and viral media.........................Page 11 Interactive campaigns............................................Page 12 Mobile apps...........................................................Page 12 Offline marketing tools................................................................................................Page 13 Sponsorship...........................................................Page 13 Celebrity endorsement..........................................Page 13 Competitive position within the market......................................................................Page 14 SWOT analysis............................................................................................................Page 15 References...................................................................................................................Page 16

3|Page

Introduction For this assignment, a critical analysis will be provided for the automotive company Land Rover which forms part of the Jaguar Land Rover Ltd Company (JLR). The critical analysis will include the external business environment of JLR using a PEST analysis, the competitive environment using Michael Porters five forces and the competitive strategy to see where Land Rover is based around its other competitors. The internal environment will be analysed using Mckinseys 7ss. Throughout there will be constructive commentary on how these environments are affected and continue to affect the company from looking at the on and off-line marketing activities finishing with a SWOT analysis of the company helping to identify its strengths, weaknesses, opportunities and threats. Brief history of Land Rover Jaguar Land Rover (JLR) was formed in 2000 when Land Rover was bought by Ford who had already acquired Jaguar in 1989 forming JLR. Ford then sold JLR to Tata motors, Indias biggest vehicle makers in 2008 after ten months of negotiations. Land Rover introduced their first vehicle in 1947. In 1970, Land Rover launched new sportier, more luxurious models known as Range Rover. Land Rover has gone from strength to strength building an empowering reputation all over the world whilst now their main focus is on sustainability in innovation by supporting projects all over the world and designing cars that use low emissions and sustainable manufacturing.

4|Page

PEST Analysis
A PEST (Political, Economical, Social and Technological) analysis as explained by Ashford, Drummond and Ensor (2008: p.24-25) has been used in order to analyse the macro-environment for Jaguar Land Rover.

Figure 1: PEST Analysis model (Source: Strategic Marketing: Planning and Control 2013)

5|Page

Competitive Analysis
According to Renko et al (2011) every single entrepreneur should have one goal in mind in order to become successful and that is to raise competitiveness. This is true but at the same time the company cannot become consumed by competition else they will lose track of other important aspects such as customers and the value you hold to them so finding a way to become better so that it helps everyone involved would be more substantial. A competitive analysis has been done using Michael Porters Five forces:

6|Page

Figure 2: Michael Porters Five forces model (Source: Global Ed 2012)

Threat of new entrants Land Rover is primarily known for their 4x4 vehicles. In the 21 century, people are becoming more concerned about the environment and being green. Large vehicles such as Land Rovers, Range Rovers and other branded 4x4 vehicles are also called Gas guzzlers (Guardian, 2008). One article in the Guardian (2008) talks about taxes on gas guzzlers to raise 1.2bn which will be used to aid new research on greener cars. New entrants into the market that produce green cars or focus on electric cars may pose a threat to Land Rover and would suggest that threat of new entrants to the market is moderately high (Renko et al, 2011) however Land Rover has started reducing their CO emissions of the vehicles and aiding environmental projects around the world and anyone who goes up against Land Rover would have to rely heavily on advertising. Since Land Rover was bought by Tata motors, there has been an increase in demand from China (Daily Mail, 2012). Distribution of channels might be a problem as there are brands from all over the world however, to compete on a scale as high as Land Rover, this might prove difficult for new entrants. Threat of substitutes Luckily for Land Rover, cars are not something you can substitute for something else. However, this could pose a problem as people are becoming healthier and deciding to walk or use a bicycle over using their car. The location of local transport and the ease of that over having a car and not having expenses such as fuel, insurance and road tax etc. Even by peoples preference for a smaller car over a big 4x4. One other major way it could affect Land Rover is if their customer decides to switch brands. Instead of having a land Rover, they buy from one of their competitors instead. This said Land Rover need to make sure theyre customers feel as if they are getting one of a kind.
st

7|Page

Bargaining power of suppliers Considering Land Rover have been going since 1947, the brand name has grown and strengthened over time making anyone who goes against them become more of a risk. Jaguar Land Rover is so big and successful being formed of two major UK brand names. With this in mind, JLR would probably like to keep their suppliers British so that in itself has reduced its choice of suppliers if they were to go against them. However, an article by the Telegraph (2012) states that JLR has spent an extra 1bn with their UK suppliers helping to boost the economy. This just demonstrates what scale of power JLR has over its suppliers just through how big they are and how much money the company brings in. Bargaining power of buyers Land Rover has their own dealerships all over the world so when it comes to buying power they remain in control. However, consumers may become dissatisfied with their range, or if they have a bad experience, they may start looking for alternatives but it would take more than one to make a great impact on the brand. Consumers dont buy in large volumes so again the power would lie with Land Ro ver.

Competitive rivalry in industry Land Rover is one of the only true British producers of 4x4 vehicles alongside their main German competitors BMW, Mercedes-Benz and Audi. Through both Jaguar and Land Rover becoming one, it has resulted in booming sales growth in China leading to a 76% increase (Guardian, 2012). According to the Guardian (2012) the Land Rover and Range Rover brands were outperforming competitors in old and new markets showing that they are growing their presence in emerging markets proving their sustainability. Especially with Land Rover developing new unique selling points such as its industry-leading lightweight architectures, this helps to put them ahead of their competitors (Telegraph, 2011). Land Rover has embarked upon celebrity endorsement for their new Range Rover Evoque by using Victoria Beckham to help input into the design. She is also ambassador to the Evoque with her own limited edition (Land Rover, 2012). Sales figures show that Land Rover had a sales increase of 25% compared to 2011 which was driven by the release of the Evoque, becoming Land Rovers biggest selling product in this market (Coventry Telegraph, 2013).

8|Page

Internal environmental analysis

Mckinsey 7s model

Figure 3: McKinsey 7s model (Source: Mind tools, 2013) The Mckinsey 7s of change, a management tool which has been applied and analysed below showing the internal environment for Jaguar Land Rover. These are all important ingredients for organisational behaviour (Grant, 2008).

9|Page

Summary of Strengths
From the information provided previously, it clearly shows that Jaguar Land Rovers success is a result of when the Indian company Tata Motors decided to invest in the company. Luckily for Jaguar Land Rover, their move towards the Asian market had extreme success with China as they see British motor cars as a status symbol (Telegraph, 2011). With Jaguar Land Rover being made up of two of the most popular British brands, that of Jaguar and Land Rover, they are already set up for success. Internally within the organisation, Jaguar Land Rover seems to put a lot of emphasis on maintaining a healthy relationship with its employees. Shown to have good communication and engagement strategies set in place, such as the New Pulse magazine satisfaction survey where staff can talk about the performance of the brand as an employee and discuss ways of improvement and changes to be made for future, this is a good strength to build the company from within, setting good foundations from within in order to build upon (Land Rover, 2013). As the environment is becoming such a priority within the world today, Land Rover has really risen above all of the negative press and stereotypes associated with 4x4 vehicles and gas guzzlers. The way they go around this is by having sustainability as one of their main strategies, training their staff about sustainability and their new 800m investment into new technologies that help the company to reduce their CO emissions through their engineering and sustainable manufacturing but also the design of their vehicles by using lightweight architectures which reduce fuel emissions. They also support projects all around the world by planting trees; in total they have 143 stories of how JLR have done their bit to help the environment (Land Rover, 2013).

Website screenshot of the story wall and how JLR have helped do their bit towards the environment: featuring 143 stories.

10 | P a g e

Online Marketing Tools

Land Rover has a real strong online presence. They have many ways in which they reach their customers online. The following discuss how they have used online marketing tools past and present.

Website
Land Rover has their own website which enables its customers to gain information and knowledge about the company. There is also an area for those who have purchased a Land Rover or Ranger Rover, whereby they can get exclusive information. On the website, there is information about the models available, finance, news, prices, photos, videos and reviews. There is history about the brand and about how they are focussing and developing ways of becoming more sustainable. On the website, people are able to locate their nearest dealerships, book test drives, order information and brochures to their door, sign up for newsletters and access information through other sources.

Links to areas within the Land Rover website

11 | P a g e

Social Networking and viral media

Land Rover has their own facebook page which has 1.5million likes. The facebook page allows them to post photos, videos and allows their customers to be interactive with the brand by posting comments, asking questions and interacting with other Land Rover enthusiasts.

Land Rover also has their own Twitter pages where people Tweet about the brand and spread awareness to other users.

Their twitter page has 23,485 followers

They have their own YouTube page whereby they post viral videos about the brand and allow people access to view their TV advertising and TV spots. The page is also linked to their Facebook, Twitter and website and vice versa keeping everyone connected. Finally, Land Rover has their own blog which again is linked to all of their other sites, with a link on their official website. The blog allows enthusiasts to get up to date information, exclusive content as well as extras such as wallpapers, play games, get involved with upcoming events and enter competitions, basically everything you would need or want to know.

12 | P a g e

Interactive campaigns When it came to launching their Range Rover Evoque, Land Rover created an interactive online platform whereby people can watch a series of interactive adverts called Being Henry by the Brooklyn Brothers, where whatever route you tell Henry to take will decide on what style you are suited to. This lead up to the big launch in 2011.

Mobile apps As part of the Pulse of the city campaign for the Evoque, a mobile app was designed for people to track their journeys and post them to the Evoque official website, all in aid to spread awareness of the new model. All the Land Rover apps are available on iTunes.

13 | P a g e

Offline Marketing tools

As well as maintaining a really strong online presence, Land Rover has created an equally strong offline presence too. The following discusses ways in which the brand uses offline marketing tools. Sponsorship Land Rover sponsor Rugby teams across the UK at all levels, professional and amateur. Examples are the Land Rover premiership rugby cup for under 11 and 12 teams through to when they sponsored the British & Irish Lions tour to Australia and Hong Kong in 2013. The company are also a worldwide partner of Rugby World cup 2015 (Land Rover, 2013). As well as sponsoring Rugby, they sponsor Ski club Great Britain. Chemmy Alcott and Graham Bell are both British champions of skiing, owners of a Land Rover/Range rover and are ambassadors to the brand. There is also a Snow report app designed by Land Rover available to download from iTunes. Finally, Land Rover also sponsor equestrian sports such as the horse trials, the British eventing team and the Royal Windsor Horse show (Land Rover, 2013).

Rugby

Equestrian

Celebrity Endorsement

14 | P a g e

If you were basing Land Rovers competitive position on its popularity through its facebook likes you can clearly see that BMW is far ahead, with 3 million more likes than Mercedes and 12 million more likes than Land Rover. Based on Twitter followers, Land Rover is the least popular with Audi having the highest amount of followers.

15 | P a g e

SWOT Analysis

16 | P a g e

References
Audience UK (2013) Socio-economic groups. [Online] Available from: http://www.audiencesuk.org/data-andresources/jargonbuster/S/social-grade [Accessed: 12/4/13]. Bajaj, V. (August 30 2012) Tata Motors Finds Success in Jaguar Land Rover. The New York Times. Available from: http://www.nytimes.com/2012/08/31/business/global/tata-motors-finds-success-in-jaguar-landrover.html?pagewanted=all&_r=0 [Accessed: 13/4/13]. Butigan, R., Sustic, I. & Renko, N. (2011) Designing marketing strategy using the five competitive forces model by Michael e. Porter case of small bakery in Croatia. International Journal of management cases. [Online] 376-385. Available from: Businesssourcepremier. [Accessed: 13/4/13]. Coventry Telegraph (January 7 2013) Jaguar Land Rover report record UK sales. The Coventry Telegraph. Available from: http://www.coventrytelegraph.net/news/coventry-news/2013/01/07/breaking-jaguar-land-rover-report-record-uksale-92746-32559403/ [Accessed: 13/4/13]. Drummond, G. Ensor, J, Ashford, R. (2008) Strategic Marketing: Planning and Control. 3 Edition. ButterworthHeinemann: Oxford Gardner, A. (2012) Political, Economic and Legal factors. [Online] Available from: http://ameliagardner.blogspot.co.uk/ [Accessed: 12/4/13]. Global Ed (2012) Book review for Competitive strategy: Michael Porters Five forces. [Online] Available from: http://globaleduc.wordpress.com/2012/09/17/book-review-competitive-strategy-by-michael-porter/ [Accessed: 13/4/13]. Grant, P. (2008) The productive ward round: a critical analysis of organisational change. The International Journal of Clinical Leadership. [Online] 16. 193-201. Available from: businesssourcepremier. [Accessed: 13/4/13]. th Horrell, P. (August 10 2011) Jaguar Land Rover is back on track. The Telegraph. Available from: http://www.telegraph.co.uk/motoring/car-manufacturers/jaguar/8688764/Jaguar-Land-Rover-is-back-on-track.html [Accessed: 13/4/13]. Hyde, N. (July 20th 2008) Global warming: green campaigners blamed for 4x4 attacks. The Guardian. Available from: http://www.guardian.co.uk/environment/2008/jul/20/activists.climatechange [Accessed: 13/4/13]. Jaguar Land River (2013) Newsroom: Range Rover Evoque and Being Henry. [Online]. Available from: http://newsroom.jaguarlandrover.com/north-american/landrover/images?ipid=41370&altTemplate=Image%20Pack [Accessed: 14/4/13]. Jaguar Land Rover (2011/2012) Our people: Sustainability report. [Online] Jaguar Land Rover. Available from: http://www.jaguarlandrover.com/pdf/13340_JLR_SR_Inter_3_H.pdf [Accessed: 13/4/13]. Jaguar Land Rover (2011/2012) Strategy: Sustainability report. [Online] Jaguar Land Rover. Available from: http://report.jaguarlandrover.com/wpcontent/uploads/2013/pdf/JLR_sustainability_report_1_Strategy.pdf [Accessed: 13/4/13]. Jaguar Land Rover (2013) Daniel Craig Range Rover Sport. [Online] Available from: http://newsroom.jaguarlandrover.com/en-in/land-rover/ [Accessed: 14/4/13]. Jaguar Land Rover (2013) Official website for Jaguar Land Rover about us. [Online] Available from: http://www.jaguarlandrovercareers.com/jaguar-land-rover/about-us/future/ [Accessed: 13/4/13]. Jaguar Land Rover (2013) Official website for Jaguar Land Rover bout sustainability. [Online] Available from: http://www.landrover.com/gb/en/lr/about-land-rover/sustainability/ [Accessed: 12/4/13].
rd th th

17 | P a g e

Jaguar Land Rover (2013) Official website for Jaguar Land Rover careers. [Online] Available from: http://www.jaguarlandrovercareers.com/jaguar-land-rover/about-us/past-present/ [Accessed: 12/4/13]. Jaguar Land Rover (2013) Official website for Jaguar Land Rover media centre. [Online] Available from: http://newsroom.jaguarlandrover.com/en-in/jlr-corp/ [Accessed: 12/4/13]. Jaguar Land Rover (2013) Official website for Jaguar Land Rover. [Online] Available from: http://www.landrover.com/gb/en/lr/ [Accessed: 12/4/13]. Jaguar Land Rover (2013) Our 360 plan for sustainability. [Online]. Available from: http://report.jaguarlandrover.com/#strategy [Accessed: 12/4/13]. Jaguar Land Rover (2013) Portal and updates. [Online] Available from: https://jlr.portal.covisint.com/web/portal/home [Accessed: 13/4/13]. Milmo, D. (March 13 2008) New taxes on gas-guzzlers will raise an extra 1.2bn. The Guardian. Available from: http://www.guardian.co.uk/environment/2008/mar/13/travelandtransport.carbonemissions [Accessed: 13/4/13]. Milmo, D. (May 29 2012) Booming business in China helps Jaguar Land Rover to 1.5bn profit. The Guardian. Available from: http://www.guardian.co.uk/business/2012/may/29/business-china-jaguar-land-rover-profit [Accessed: 13/4/13]. Mindtools (2013) The McKinsey 7S Framework: Ensuring That All Parts of Your Organization Work in Harmony. [Online] Available from: http://www.mindtools.com/pages/article/newSTR_91.htm [Accessed: 14/4/13]. Mintel (2012) Car purchasing process- UK- May 2012. [Online] Available from: Mintel [Accessed: 14/4/13]. Monitor creative (2012) Image of Being Henry. [Online] Available from: http://www.monitorcreative.co.uk/2012/02/blog/being-henry-by-range-rover-evoque/ [Accessed: 14/4/13]. Moore, M. (February 14 2011) China is the world's second largest economy. The Telegraph. Available from: http://www.telegraph.co.uk/finance/economics/8322550/China-is-the-worlds-second-largest-economy.html [Accessed: 13/4/13]. Nyarko, P. (2012) How do Political, Legal and Social factors impact on a business . [Online] Available from: http://perrynyarko.blogspot.co.uk/ [Accessed: 12/4/13]. Oliver, B. (August 25 2012) Jaguar Land Rover: Made in Britain. Saved in India. Craved in China. How the Jaguar Land Rover group was saved by Indian cash and Chinese drivers. The Daily Mail. Available from: http://www.dailymail.co.uk/home/moslive/article-2192468/Jaguar-Land-Rover-Made-Britain-Saved-India-CravedChina-How-group-saved--Indian-cash-Chinese-drivers.html [Accessed: 13/4/13]. Professional engineering (March 5 2013) Jaguar Land Rover to create 700 jobs. Professional engineering. Available from: http://profeng.com/news/jaguar-land-rover-to-create-700-jobs [Accessed: 12/4/13]. Ruddick, G. (July 15 2011) Jaguar Land Rover sales slow as Tata in reverse. The Telegraph. Available from: http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/8639669/Jaguar-Land-Rover-salesslow-as-Tata-in-reverse.html [Accessed: 13/4/13]. Ruddick, G. (May 11 2012) Jaguar Land Rover to spend extra 1bn with UK suppliers. The Telegraph. Available from: http://www.telegraph.co.uk/finance/newsbysector/transport/9260766/Jaguar-Land-Rover-to-spend-extra-1bnwith-UK-suppliers.html [Accessed: 13/4/13]. Telegraph (February 11 2010) Jaguar Land Rover: a history. The Telegraph. Available from: http://www.telegraph.co.uk/finance/newsbysector/transport/8163797/Jaguar-Land-Rover-a-history.html [Accessed: 12/04/13].
th th th th th th th th

18 | P a g e

The Economic Times (April 10 2013) Tata Motors owned Jaguar Land Rover posts record sales for March. The Economic Times. Available from: http://articles.economictimes.indiatimes.com/2013-0410/news/38434282_1_jaguar-land-rover-jlr-sales-tata-motors [Accessed: 13/4/13]. Victoria Beckham (2011) Range Rover Evoque. [Online] Available from: https://victoriabeckham.landrover.com/INT [Accessed: 13/4/13].

th

19 | P a g e