Reference no: EM131499727

Case Study: SWOT Analysis In Action At Skoda

Skoda, a small car company originating in Czechoslovakia in 1895, needed to seek out a strong foreign partner to aid the company amid economic hard times. Skoda chose Volkswagen AG due to its reputation for strength, quality, and reliability. Volkswagen AG comprises Volkswagen, Audi, Skoda, SEAT, Lamborghini, Bentley, and other brands. To improve its performance, Skoda conducted a brand positioning examination (establishing a distinctive image) by obtaining market research data from both internal and external audits, allowing Skoda to conduct a SWOT analysis.

SWOT Analysis stands for:

*Strengths-the internal elements of the business that contribute to growth

*Weaknesses-the attributes that will hinder a business or make it vulnerable

*Opportunities-the external conditions that could enable future growth

*Threats-the external factors which could negatively affect business

Strengths

To identify its strengths, Skoda gathered research from customers and reliable independent surveys. Skoda found that the company excelled at satisfying its customers when it focused on the "owner experience" rather than on sales alone. Almost all of Skoda's customers would recommend Skoda to a friend, meaning that Skoda had a clearly identifiable strength. As a result, Skoda manufactured cars that their customers could enjoy, which is different from simply maximizing sales. Skoda branded themselves as a quality product that satisfies its customers.

Weaknesses

Skoda's analysis showed that in order to grow the business needed to address questions about how the small company (1.7% market share) fit into the highly competitive market. An out-dated perception of the Skoda brand, related to the company's Eastern European origins, contributed to the business' small size. By 1999, Volkswagen AG ownership changed this negative attitude about Skoda. However, Skoda still lacked a strong appeal. Skoda realized that the company needed to cease defensive campaigns illustrating what the brand was not and begin new campaigns illustrating what Skoda had to offer. The change was simple: Skoda new that its owners were happy with their cars.

Opportunities

Skoda realized that its competitors' marketing approaches focused on the product (car) itself. Skoda, conversely, focused its attention on emphasizing the owner's experience with their cars and the customers' satisfaction with Skoda vehicles. This SWOT analysis helped Skoda to differentiate its product from its competitors.

Threats

In the UK market, there are 50 different car makers selling 200 models. In this large and competitive market, Skoda needed to ensure that its message would not be lost or drowned out within the crowded environment. As a result, Skoda manufactured seven different cars, each one appealing to a different segment of the market (city car, luxurious car, family car, etc) with subsequent levels of pricing.

Conclusion

Skoda's SWOT analysis helped the company to discover that Skoda customers were happy with their cars, the brand was no longer seen as a poor, outdated car, the company was able to operate within a niche in the market, and that a change in public perception was vital to Skoda's ability to expand within a highly competitive market.

SWOT analysis brings order and structure to random information. The SWOT model helps managers to look internally and externally. It examines that key internal weaknesses and focuses on strengths managers can utilize to seize opportunities and combat threats.

Author's Note: This case study simply provides a real world example of a company who used SWOT analysis successfully to redefine its market strategy. The case study did not provide a critique of the structured method.

Assignment

Option #1: Organizational Development and Business Strategy

This Module 1 Critical Thinking Assignment addresses two elements that are fundamental to this class: organizational development and business strategy. This Assignment also includes an abbreviated analysis of the Skoda case study that was developed by university students. As a first step, complete the following activities:

• Review definitions of Organizational Development from the reading and other sources of your choosing. Describe the concept of Organizational Development in your own words.

• Read the Skoda case study, focusing especially on the SWOT analysis as a tool in strategic planning.

Write a paper that includes the following:

• Your personal definition of Organizational Development

• An abbreviated assessment of Skoda's strengths: Choose a Skoda strength that was identified through the SWOT analysis. Example: Clear Vision. Discuss how Skoda could benefit from understanding this strength.

• An analysis on the value of a SWOT analysis and strategic planning, explaining why Organizational Development might be important to Skoda

• Citations and references to reading material and experiences to support your positions

Your paper should be 3-4 pages long (not including the title page and references in the page count) and adhere to the writing and citation guidelines as outlined in the CSU-Global Guide to Writing and APA Requirements.