Jaguar Land Rover Automotive Plc (Essay Sample)

Jaguar Land Rover Automotive Plc
Introduction
Jaguar land rover automotive plc is a British multinational company that was founded in 2008 (Waldchen, 2013). The company that deals majorly in development, manufacture, design, and sale of vehicles (Jaguar, Land Rover, and Range Rover) has its headquarters in Whitley, Coventry in the UK (Waldchen, 2013). Since it was founded in 2008, the company has remained a subsidiary of Tata Motors-the Indian carmaker as it parent company. There are three divisions in the automobile company; Jaguar, Range Rover, and Land Rover. It also has four subsidiaries; JLR Limited, JLR Holdings Limited,  HYPERLINK "http://en.wikipedia.org/wiki/Chery_Jaguar_Land_Rover" \o "Chery Jaguar Land Rover" Chery JLR , and  HYPERLINK "http://en.wikipedia.org/w/index.php?title=Jaguar_Land_Rover_India&action=edit&redlink=1" \o "Jaguar Land Rover India (page does not exist)" JLR India (Plunkett & Research, 2008). In the last quarter of 2013, the public limited company had its revenue standing at £ 15.785 billion and its operating income at £ 2.404 billion (Waldchen, 2013). Their net income in the same financial year stood at £ 1.216 billion (Waldchen, 2013). In their fifth year of operation, the company currently employs over 30,000 people worldwide (Wadchen, 2013).
Fortune global 500 ranking (2012) placed the company in position 314, this indicates how progressively the company has been growing. With only 4 years after it was founded, the company has been able to feature in one of the most competitive international companies ranking. This explains why Waldchen (2013) anticipates significant improvement in the company’s ranking in future. Based on its sterling development, this paper analyses the company’s success by considering its data relating to yearly profit since inception. Subsequently, reasons behind success are discussed as well as the contribution of its leadership in the success.
Company Data Used for Evaluating Success
The following data relates to Jaguar land Rover automobile company. The data shows the company’s turnover, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Net income before tax, and net income to shareholders in £m as at 31 march from 2009 to 2013.
Year ending (31 march)TurnoverEBITDANet Income before TaxNet income Attributed to shareholders201315,7852,4021,6751,215201213,5122,0271,5071,41820119,8701,5011,1151,03520106,527349512420094,94983376402(Shafiulla, 2014)
From the data above, it is clear that the company has experienced exponential growth since its first financial year in 2009. By 2011, the company was already making a profit margin that is more than the amount used to buy the two brands in 2008 (£ 1.1 billion) (Maielli, 2010). Again, in the 2013 financial year, the company sold more than 425,000 vehicles in over 170 countries through their expansive 2,520 dealers spread worldwide (Bigné et al, 2012). The dealers outside UK were able to sell 80% of all the vehicles produced in UK in that particular year. The company’s 2013 performance explains why it was awarded the Queen’s Award for Enterprise in International Trade in April 2014 (Shafiulla, 2014). Following their integrated marketing approach, the company’s sales in US, Europe, and UK also increased from below 15% in 2008 to above 40 % currently. The 425,006 sales in 2013 represents 19% increase considering the previous year’s sales (Shafiulla, 2014). Sixty percent of the exports are skewed to North America, China, and mainland Europe (Shafiulla, 2014).
Considering this data, it is fair to conclude that Jaguar Land Rover automobile is a successful company with increasing sales and profit every financial year. Most of the companies in the same industry have not realised such growth rate in such a short period. Projections based on the data indicates the company’s ability to double its current profit margin in the next 4 years.
Business Reasons behind the Company’s Success
Customer’s Satisfaction
One of the company’s core values is excellence. As such, their main priority is to reach the highest possible standards in their daily operation as well as in the products and services they provide. The company is able to achieve this through constant market research that informs them of the prevailing consumer’s demand. In this way, their services and products have been winning consumers’ appeal (Cervi, 2013). For instance, the company has been able to make remarkable inroads in the Chinese market by understanding customers’ tastes and giving it through their competent research and development team (Cervi, 2013).
Strong Brand Name
Brand name is an important tool in marketing and sales. Products and services that enjoy a strong brand name are likely to appeal to the consumers compared to those that do not. Jaguar Land Rover (JLR) Company enjoy the benefits that come with the strong brand name and this has played a role in their continued success (Cervi, 2013). The company has received several awards both locally and internationally. For example, it recently received the Queen’s Excellence Award and has received other international awards including from China, which has given it 20 awards (Segarra, et al, 2013). Coupled with their relentless corporate social responsibility, the company has established a strong brand name that contributes to its success.
Expansive Marketing and Dealer Network
Marketing is a significant component in business. Besides creating awareness, it also brings on focus features of a product or a service to the consumers for comparison with other substitutes. Jaguar Land Rover automobile Company has constantly invested heavily in marketing and communications to attract more customers. Additional to this is their dealer network; with over 2,520 dealers globally, the company has been able to conveniently take their products to the consumers’ ‘door step’ (Lorna, 2012). The expansive dealer network is responsible for the 19 % global sale increase realised last year (2013). Rebecca Murphy, the global brand strategy and identity manager has confirmed that a robust guideline for their marketers in the 177 markets is yet to be availed for continued expansion of their market share (Lorna, 2012).
Investment in Research and Development
Through research and development, the company has been able to come up with solutions that match customers’ requirements. This has endured most customers to consider buying their products, hence realising more sales. The company’s innovation level occasioned by research and development team has ensured that they remain ahead of the pack in the industry and continue to provide solutions in the automobile industry that ‘wow’ prospective customers (Montgomery, 2014). The company thus stands out in the industry with its stunning breakthroughs tailored to meet customers’ demands.
Production of Varied Brands
With the realisation that customers have varied tastes and preferences, the company has conducted market research overtime to identify key variations in customers’ demands and responded by designing and producing vehicles that meets the customers’ preferences. In this way, the company has a variety of brands that suits a wide customer base, which helps them not to lose customers on grounds of limited variety (Montgomery, 2014). In China, the company has been able to make four varied vehicles unique to the market; Jaguar XJ, Jaguar XF, Freelander 2 and Range Rover Evoque (Montgomery, 2014). This was occasioned by the Chinese taste that prefers smaller engines with 2.0 litres capacity (Montgomery, 2014).
Increased Disposable Income
With the global economic recession slowly normalising, there has been increased level of disposable income worldwide. This has created business for the company especially in North America, China, and Europe as more people now want to experience the taste of Jaguar Land Rover products (Cervi, 2013). With increase in disposable income, the company’s success in the industry will continue to remain certain in future (Cervi, 2013). Increase in disposable income is responsible for the company’s interest in the potential Chinese market.
Continued Business Building
Jaguar Land Rover has continued to build their business through investing in technology, research and development, and trainings. In this way, the company has been able to employ more than 25,000 people consisting of a dedicated team of marketers, researchers, designers, engineers, and technicians who are focused in keeping the company ahead of others in the industry (Lorna, 2012).
Company’s Strategic Capabilities; Value Chain and VRIN Tools
Jaguar Land Rover Company has created an effective value chain that is gives them a competitive advantage in the automobile industry. With only five years in the market, dealing with 700 suppliers around the world (50% in Europe, 45% in UK, and 5% the rest of the world) and to subsequently distribute over 350,000 vehicles in over 177 markets is a process that needs efficiency, cooperation, and understanding (Chan, Chan, & Jain, 2012). The company’s directors of material planning and logistics, Dyke, Jeory, and Williams in charge of materials planning, distribution, and inbound logistics respectively have managed keeping the company operational all the time. The cooperation of the three has ensured that; inventory levels are optimum not to disrupt production, vehicles are in the show room for customers, and that there is cooperation within the company’s departments in meeting the required flow of inbound and outbound logistics (Chan, Chan, & Jain, 2012).
This level of supply chain has created value for the company...