An Inside Look at the Automotive An Inside Look at the Automotive Industry Industry

(Prestige Auto Co.)(Prestige Auto Co.)

By: By: Cicilia AnggaraCicilia AnggaraAmanda ApriliaAmanda Aprilia

Peter LabibPeter LabibJin Yong ParkJin Yong ParkLoide SiahaanLoide SiahaanAndry SoenarioAndry Soenario

AgendaAgenda

• IntroductionIntroduction

• GM analysisGM analysis

• Toyota analysisToyota analysis

• New recommendationsNew recommendations

• ConclusionConclusion

• Robust revenue growth in AsiaRobust revenue growth in Asia • Strong brand portfolioStrong brand portfolio

• Improvement in reliability Improvement in reliability

• Advanced technology Advanced technology

GM StrengthsGM Strengths

GM WeaknessesGM Weaknesses

• Poor performance in North AmericaPoor performance in North America

• Weak profitabilityWeak profitability

• Vehicles seen as plain and unattractiveVehicles seen as plain and unattractive

• Negative Company CultureNegative Company Culture

GM OpportunitiesGM Opportunities

• Increase market share in AsiaIncrease market share in Asia

• Introduction of new attractive vehiclesIntroduction of new attractive vehicles

Example: Saturn Aura, Cadillac EscaladeExample: Saturn Aura, Cadillac Escalade

• Roll out fully electronic and hydrogen carsRoll out fully electronic and hydrogen cars

GM ThreatsGM Threats

• Rise in the price of raw materialsRise in the price of raw materials

• Supplier in Delphi is bankruptSupplier in Delphi is bankrupt

• Low capital spendingLow capital spending

• Japanese roll out hydrogen and electric carsJapanese roll out hydrogen and electric cars

Toyota StrengthsToyota Strengths

• High CommitmentHigh Commitment

• Powerful communication skillPowerful communication skill

• Trust from top management to low managementTrust from top management to low management

• Value diversityValue diversity

• Fulfill customers’ demandFulfill customers’ demand

Toyota StrengthsToyota Strengths

• Customers’ satisfaction is #1Customers’ satisfaction is #1

• Target different segments of customersTarget different segments of customers

• TPS (Toyota Production System)TPS (Toyota Production System)• Just in time strategyJust in time strategy

Toyota WeaknessToyota Weakness

• Global BusinessGlobal Business

• Barrier to entry European MarketBarrier to entry European Market

Toyota OpportunitiesToyota Opportunities

• Brand name for ‘reliability’ for 40 yearsBrand name for ‘reliability’ for 40 years

• Introduce new innovationIntroduce new innovation

• High-technological automobileHigh-technological automobile

• Word-of-Mouth fameWord-of-Mouth fame

Toyota ThreatsToyota 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 Recommendations for automotive industryindustry

Standard Company CulturesStandard Company Cultures

• Having a good relationship with suppliersHaving a good relationship with suppliers

• Establishing effective communication culturesEstablishing effective communication cultures

• Developing program management culturesDeveloping program management cultures

Specific Guidelines Specific Guidelines

PersonalPersonal Equal treatment opportunities & Equal treatment opportunities & Health and safety issuesHealth and safety issues

WorkplaceWorkplace Purchase decisions based on supplier’s Purchase decisions based on supplier’s price, quality and serviceprice, quality and service

GlobalGlobal Export and import sanctions against Export and import sanctions against specific Countriesspecific Countries

EnvironmentalEnvironmental More regulationMore regulation

Competitive AdvantagesCompetitive Advantages

• Important to develop competitive advantagesImportant 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:• before before • duringduring• after buying a car.after buying a car.

More on Competitive AdvantagesMore on Competitive Advantages

• Aggressively market with incentive dealsAggressively market with incentive deals

• Train employees on how to sell carsTrain employees on how to sell cars

• We must have a superior service experienceWe must have a superior service experience

Supply Chain RelationshipsSupply Chain Relationships

• Communication is keyCommunication is key

• Weed out ineffective supply chain members Weed out ineffective supply chain members

• Maintain and reward supportive supply chain Maintain and reward supportive supply chain membersmembers

How to Select Members of the How to Select Members of the Supply ChainSupply Chain

• Takes time to develop a good supply chainTakes time to develop a good supply chain

• Each employee needs to:Each employee needs to:• Understand Understand • Agree to the processes of the organization Agree to the processes of the organization

• In order to do that:In order to do that:• Relationships must emphasize trust, commitment, Relationships must emphasize trust, commitment,

and respect and respect

Pull StrategyPull Strategy

• Consumers demand the productsConsumers demand the products

Example: Toyota Production System (TPS)Example: Toyota Production System (TPS)

• Avoids overproductionAvoids overproduction

• Increase profit Increase profit

Empowering Supply ChainEmpowering Supply Chain

• Create an atmosphere of inclusionCreate an atmosphere of inclusion

• Everyone has a voiceEveryone has a voice

• Their voices must be listenedTheir voices must be listened

• Receptive to input from different areas Receptive to input from different areas

Target Different Segments to Keep Target Different Segments to Keep CustomersCustomers

• Fulfill what customers wantFulfill what customers want

• Varieties in models, price, and engineVarieties in models, price, and engine

• Build loyal customersBuild loyal customers

MotivationMotivation

Motivation for employeesMotivation for employees

• RewardReward• Freedom for any ideasFreedom for any ideas• Excellent workplaceExcellent workplace

Motivation for dealershipsMotivation for dealerships

• RewardReward• The Prestige Company motivates dealerships The Prestige Company motivates dealerships

and employeesand employees

LeadershipLeadership

• Trait TheoryTrait Theory

1. Desire to lead1. Desire to lead

2. Self confidence2. Self confidence

3. Be smart3. Be smart

4. A good selling strategy4. A good selling strategy

To be a good leaderTo be a good leader

• Proper training and education Proper training and education

• Ability to deal with the all componentsAbility to deal with the all components

• Solve problems in real-life situations Solve problems in real-life situations

• Work as groupWork as group

Work PlacesWork Places

• Team WorkTeam Work

• DiversityDiversity

• Employees Compensation Employees Compensation

401 K, health care insurance, and retirement fund401 K, health care insurance, and retirement fund

ConclusionConclusion

1.1. Positive culturePositive culture2.2. Trust, commitment, and respectTrust, commitment, and respect

(Long-lasting relationship in supply chain)(Long-lasting relationship in supply chain)

3.3. DiversityDiversity4.4. Motivation through relationships & rewardMotivation through relationships & reward5.5. Imperfectly imitable competitive advantageImperfectly imitable competitive advantage6.6. Theory of constraintsTheory of constraints