An Inside Look at the Automotive Industry (Prestige Auto Co.) (Prestige Auto Co.)By: Cicilia Anggara Amanda Aprilia Peter Labib Jin Yong Park Loide Siahaan Andry Soenario

Agenda Introduction Introduction GM analysis GM analysis Toyota analysis Toyota analysis New recommendations New recommendations Conclusion Conclusion

Robust revenue growth in Asia Robust revenue growth in Asia Strong brand portfolio Strong brand portfolio Improvement in reliability Improvement in reliability Advanced technology Advanced technology GM Strengths

GM Weaknesses Poor performance in North America Poor performance in North America Weak profitability Weak profitability Vehicles seen as plain and unattractive Vehicles seen as plain and unattractive Negative Company Culture Negative Company Culture

GM Opportunities Increase market share in Asia Increase market share in Asia Introduction of new attractive vehicles Introduction of new attractive vehicles Example: Saturn Aura, Cadillac Escalade Roll out fully electronic and hydrogen cars Roll out fully electronic and hydrogen cars

GM Threats Rise in the price of raw materials Rise in the price of raw materials Supplier in Delphi is bankrupt Supplier in Delphi is bankrupt Low capital spending Low capital spending Japanese roll out hydrogen and electric cars Japanese roll out hydrogen and electric cars

Toyota Strengths High Commitment High Commitment Powerful communication skill Powerful communication skill Trust from top management to low management Trust from top management to low management Value diversity Value diversity Fulfill customers’ demand Fulfill customers’ demand

Toyota Strengths Customers’ satisfaction is #1 Customers’ satisfaction is #1 Target different segments of customers Target different segments of customers TPS (Toyota Production System) TPS (Toyota Production System) Just in time strategyJust in time strategy

Toyota Weakness Global BusinessGlobal Business Barrier to entry European MarketBarrier to entry European Market

Toyota Opportunities Brand name for ‘reliability’ for 40 years Brand name for ‘reliability’ for 40 years Introduce new innovation Introduce new innovation High-technological automobile High-technological automobile Word-of-Mouth fame Word-of-Mouth fame

Toyota Threats Compete with HondaCompete with Honda Compete with ChinaCompete with China Monetary competitionMonetary competition Rebate, non-APR finances, discountsRebate, non-APR finances, discounts

Recommendations for automotive industry Standard Company Cultures Having a good relationship with suppliers Having a good relationship with suppliers Establishing effective communication cultures Establishing effective communication cultures Developing program management cultures Developing program management cultures

Specific Guidelines Personal Equal treatment opportunities & Health and safety issues Workplace Purchase decisions based on supplier’s price, quality and service Global Export and import sanctions against specific Countries Environmental More regulation

Competitive Advantages Important to develop competitive advantages Important to develop competitive advantages Our aim: be the “Starbucks of the industry.” Our aim: be the “Starbucks of the industry.” Provide a superior experience: Provide a superior experience: beforebefore duringduring after buying a car.after buying a car.

More on Competitive Advantages Aggressively market with incentive deals Aggressively market with incentive deals Train employees on how to sell cars Train employees on how to sell cars We must have a superior service experience We must have a superior service experience

Supply Chain Relationships Communication is key Communication is key Weed out ineffective supply chain members Weed out ineffective supply chain members Maintain and reward supportive supply chain members Maintain and reward supportive supply chain members

How to Select Members of the Supply Chain Takes time to develop a good supply chain Takes time to develop a good supply chain Each employee needs to: Each employee needs to: UnderstandUnderstand Agree to the processes of the organizationAgree to the processes of the organization In order to do that: In order to do that: Relationships must emphasize trust, commitment, and respectRelationships must emphasize trust, commitment, and respect

Pull Strategy Consumers demand the products Consumers demand the products Example: Toyota Production System (TPS) Avoids overproduction Avoids overproduction Increase profit Increase profit

Empowering Supply Chain Create an atmosphere of inclusion Create an atmosphere of inclusion Everyone has a voice Everyone has a voice Their voices must be listened Their voices must be listened Receptive to input from different areas Receptive to input from different areas

Target Different Segments to Keep Customers Fulfill what customers want Fulfill what customers want Varieties in models, price, and engine Varieties in models, price, and engine Build loyal customers Build loyal customers

Motivation Motivation for employees RewardReward Freedom for any ideasFreedom for any ideas Excellent workplaceExcellent workplace Motivation for dealerships RewardReward The Prestige Company motivates dealerships and employeesThe Prestige Company motivates dealerships and employees

Leadership Trait Theory Trait Theory 1. Desire to lead 2. Self confidence 3. Be smart 4. A good selling strategy

To be a good leader Proper training and education Proper training and education Ability to deal with the all components Ability to deal with the all components Solve problems in real-life situations Solve problems in real-life situations Work as group Work as group

Work Places Team Work Team Work Diversity Diversity Employees Compensation Employees Compensation 401 K, health care insurance, and retirement fund

Conclusion 1. Positive culture 2. Trust, commitment, and respect (Long-lasting relationship in supply chain) (Long-lasting relationship in supply chain) 3. Diversity 4. Motivation through relationships & reward 5. Imperfectly imitable competitive advantage 6. Theory of constraints