SEAT Improvent Case - EPS 2013 (International Marketing)

8/13/2019 SEAT Improvent Case - EPS 2013 (International Marketing)

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22-3-2013

IMPROVEMENTCASE

Authors:

Francisco Pellicer

Robert Reitsma

Joaqun Agera

Alexandra Marinas

Teacher:

Lynn Kahle

Course:

International Marketing


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TABLE OF CONTENT1 INTRODUCTION 1

1.1 Assignment ...................................................................................... 1

1.2 Main question: ................................................................................. 1

1.3 About SEAT: ..................................................................................... 1

1.3.1 Mission statement (Volkswagen Group): ............................................... 1

1.3.2 Mission statement: ............................................................................... 1

1.3.3 Vision statement: ................................................................................. 1

2 SWOTANALYSIS 23 RECOMMENDATIONS 3

3.1 A new market ................................................................................... 3

3.2 Electric SEAT .................................................................................... 4

3.2.1 Why Electric? ......................................................................................... 4

3.2.2 The car ................................................................................................. 5


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1INTRODUCTION1 1 AssignmentSpanish automobile manufacturer, SEAT, is a subsidiary of the Volkswagen Group. In order to build

the business, top management in SEAT has asked your consulting group for help. They have heard

that you are engineers who understand global market trends, opportunities and threats.

SEAT wants to become an innovative, design-thinking organization in 2013. They are looking for

some serious changes that have impact and they need some input on how to incorporate shared

value to improve their sustainability and make their business more attractive to Headquarters in

Germany.

In order to transform SEATs business, your group will hand in a written report to the CMO, Lynn

Kahle, [email protected], no later than 29 March 2013. Your report should include the problems that

need to be addressed and recommendations that illustrate the application of the theory from class.

You are welcome to include drawings or other visual materials but the report should not exceed five

A4 pages.

1 2 Main question:How can SEAT become a more innovative and design-thinking organization in a sustainable way by

2013?

1 3 About SEAT:1.3.1 Mission statement (Volkswagen Group):The goal of the Group is to offer attractive, safe and environmentally sound vehicles which are

competitive on an increasingly tough market and which set world standards in their respective

classes.

1.3.2 Mission statement:To be the number one among the worlds automobile manufacturers, and to make individualized,

sustainable and safe mobility based on superior quality possible for people throughout the world.

1.3.3

Vision statement:Our pursuit of innovation and perfection and our responsible approach will help to make us the

worlds leading automaker by 2018 both economically and ecologically.


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2SWOTANALYSISThe strengths, weaknesses of SEAT as an organization have been researched, on the market side

both the opportunities and the treats have been identified. A summary can be found inTable 2.1

below.

Internal

Strengths:

o Capitalo Technologyo Know howo Strong and stable position within

the Volkswagen Group (VAG)

o Market leader in Spaino Capacity for manufacturing every

part

o Marker of youthful and sport carso Presence in the motorsporto Good brand presence and

awareness across Europe

Weaknesses:

o Currently not profitable and may be sold byVolkswagen or discontinued.

o Not present in the emerging markets where there ishigh growth opportunity.

o There is a possibility of clash of cultures as thecompany is primarily Spanish with the parent beingGerman. (Different mindset)

External

Opportunities:

o They can enter emerging marketsfor better growth.

o Volkswagen can put in moreresources in SEAT for developmentand expansion.

o It can still expand in the eco-motiverange to include modeproducts in the range.

Threats:

o Changes in the global macro-economic scenario.o SEAT doesnt offer as much electric or hybrid cars

as their competitors.o Aggressive growth plans by the Korean and

Japanese counterparts.

o Competitors Honda Chevrolet Nissan Toyota

Table 2.1 - SWOT Analysis


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3RECOMMENDATIONS3 1 A new marketIn the SWOT Analysis several key points have been identified, in particular the weakness of not being

profitable and not operating in emerging markets, which competitors do. Also some opportunities

have presented themselves, SEAT can expand their market share by stepping into emerging markets

and to make better use of the resources of its parent company, the Volkswagen Group.

This has led to research into the global automotive market. It has shown that big changes are

expected for the coming years, China and India are the two main emerging markets. The gross

domestic product (GDP) for the Asia Pacific region is rapidly growing each year, specifically for China

and India. Chinas GDP is expected to be 126% bigger in 2020 than in 2010, for India this percentage

is 116%.1

Looking at this trend and comparing it to the automotive market, it is clear that the growth of the

automotive market closely follows the GDP growth.Figure 3.1 illustrates the number of automotive

products being sold in past years as well as a forecast for 2020.

Figure 3.1 - Automotive sales by geography2

A big geographical shift towards the Asian market can be identified and it is wise for SEAT to be part

of this trend. Currently no vehicle in SEATs product range is produced or sold in China nor India.

However the Volkswagen Group in general has several factories and retailers in China and India that

are producing and selling Volkswagen, Audi and koda. For SEAT to enter these markets quickly

within 2013, factories and distribution centers of the whole Volkswagen Group should be used.

This solution to the addresses several weaknesses and threats by capitalizing on different

opportunities. By rapidly stepping into the emerging markets using existing resources from their

parent company, SEAT can increase their market share thus making them a more profitable

1DBS Bank Ltd. "Imagining Asia 2020 - Make way for the Asia giant." China, October 2011.

2Booz & Company Inc. "India Automotive Market 2020." Delhi, 2011.


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organization. And at the same time counteracting their competitorsrapid expansion on emerging

markets.

3 2 Electric SEATSEAT has a range of so-called environmentally friendly(eco-friendly) cars in their assortment,

environmentally friendly is in quotation marks because the technology used to produce and drive

these cars still pollute the environment. With the current technology much more clean ways of

automotive transport are available, hybrid or even fully electric cars are not a thing of the past

anymore.

At this moment SEAT is one of the few car producer with no hybrid and or electric cars in their

product range, in contrary to several of its biggest competitors. However technology for hybrid and

electronic cars is still in full development, this day and age good alternatives to the conventional

combustion engine(s) are available.

3.2.1

Why Electric?The SWOT analysis has identified that there is enough technological know-how available in both the

parent company as well as in SEAT for developing a hybrid and or full electric car. A good addition to

SEATs Ecomotive line would be a full electric car, to become a stronger organization and to

counteract the threat of competitors leaping even further ahead on the eco-friendly car front.

A good place to start with SEATsfull electric car is the European market. Forecasts say that as many

as four million plug-in vehicles will be on the road in Europe by 2020, with a potential of up to 10 or

15% of new vehicle sales (one third of which would be pure electric vehicles and plug-in hybrid two

thirds)3. One of the reasons the full electric car is chosen, is because of the European Unions

policies4. The European Union plans cut the use of fossil fuels by cars in half by 2030, prior to its

gradual replacement by 2050. The EU argues that by then, the major urban centers are free of CO2

emissions and greenhouse gasses.

For smooth integration of electric vehicles in society, it must have support from the government. In

the beginning, SEAT will market their electric car in its home country, Spain. The Spanish government

has already granted SEAT their support, this support consists of a network for electric cars with

testing in major cities to test the performance and acceptance of this vehicle type.

3http://www.revistaambienta.es/WebAmbienta/marm/Dinamicas/secciones/articulos/Ingeteam.htm

4European Commission. Roadmap to a Single European Transport Area. Brussels, 2011.


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3.2.2 The carThe type of customer SEAT should focus on is the average European customer, making small changes

to the electric car where needed to adopt it to certain country markets and standards.

Research into customer demand has shown that an average European citizen has a preference to

specific attributes of a car. The order of preference is listed inTable 3.1 below.

Priority Criteria Percentage

1st Purchase Price 72%

2nd Cost of using 63%

3rd Fitness for use and needs 52%

4th Specifications / security 51%

5th Model / design / comfort / ergonomics 30%

6th Brand 17%

7th Driving pleasure 11%

8th Country where manufactured / assembled 4%

9th Image provided by the vehicle 1%

Table 3.1 - Customer preference

The table shows that price of both purchase as well as the cost of use are most important. Not only

these criteria are important, also the age of the target group is important, SEAT can best focus on

customers between the age of 30 and 60. Study on customer behavior on the automotive market has

shown that this age are group are the most intensive users.Figure 3.2 below shows the percentage

of vehicle use within the different age categories.

Figure 3.2 - Usage of cars5

Regarding the technology in electric vehicles in general, their electric motors provide a quiet and

smooth ride, as well as stronger acceleration. Besides those ride features they also require less

maintenance than conventional combustion engines and are cheaper in use. Considering that the

cost of use is the second most important criteria when buying a car (Table 3.1), it is smart to choose a

5Cetelem. elobservatoriocetelem.2013. http://www.elobservatoriocetelem.es/.

18-24 25-34 35-44 45-54 55-64 > 65 years

%


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technology with low operating costs like the electric motors. Operating costs of electric vehicles are

about half or even less than regular vehicles. Whereas the benefit on maintenance costs can be up to

35% in favor of electric cars.

Battery capacity and recharging capabilities are the most important issue nowadays. The ideal

situation is a full electric car that offers extensive range without an electrical car with the certainty of

not breaking down or run out of power. This day and age the main problem with full electric cars is

their range without the long recharging period.

New technologies are available and can be adopted by SEAT to develop a less recharge dependent

car. The main source of energy for SEATs full electric car should be a lithium-ion liquid battery with

its own cooling capabilities. What would make this car innovative is that the battery can be

recharged wirelessly via a network integrated in the infrastructure. Power can be generated via a

magnetic resonance coupling, this system consists of two coils, one on the car and one integrated

into the road. The two coils oscillate in sync transmitting power to the batteries as you drive over it.6

When this wireless charging system is not available and the batteries would runs out of power, a 1.4L

gasoline fueled engine will function as a generator backing up the electric system. Unlike hybrid cars

this little engine cannot be used to drive the car, it can only be used for recharging the batteries,

extending the range with up to 600 km.7

6Delphi Wireless Charging System.Performed by TreeLiving. 2012.

7From the desk of Chevrolet Volt.Performed by Chevrolet. 2012.

SEAT Improvent Case - EPS 2013 (International Marketing)

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