2862 : Supply Chain Management Assessment Answers

Business plan is about Mercedes Benz, Audi, Volkswagen, BMW and Opel Car Parts based in Mount Wellington, Auckland, New Zealand. The idea is that i will bring the raw materials from German and design, build and sell the parts in New Zealand. The business will also design the car parts depends on the customers requirements. For example, if someone asks for a specific design/type of bumpers we can provide to the customer in high quality, shorter time and logical price than others. please follow instructions given and i will attach all the materials that might help you to complete the business plan assignment requirements. please feel free to ask about anything related to the assignment,,, so it's business plane.

With this initial framework of the business, this report will first analyze the market trends, customer base, and competition (Jean, Sinkovics & Hiebaum, 2014). After that based on the variable nature of the external factors sales and marketing strategies will be framed in order to attain company’s mission and vision. This ideal framework is essential, as it will help to sustain the competitive advantage in the market. Finally, report will be concluded with a reflective approach on the proposal. Being a former employee of mechanical department of a renowned car company, I have experience of dealing with the companies who design car parts for the core organization. Therefore, I thought it would be great to serve customers like Audi and BMW by inventing own auto parts’ company.

Overview of the proposed business

As mentioned before, the proposed business is going to deal with customized auto parts of several luxury cars, the company will be presented with the name of Road rash automobile manufactures Pvt. Limited. Company’s mission vision and values are related to the guideline for employees to provide better services for customers and establish organizational excellence.

Mission statement

Road rash automobile manufactures Pvt. Limited is determined to maintain long-term relationship with clients. Professional service providers are committed to assist in a friendly manner to satisfy queries and solve all the issues.

Vision statement

Vision is to become one of the highest suppliers of automobile machineries at competitive ranges. Company will take initiative to assist emerging businesses with restricted experiences regarding more knowledge and launching of new products within this mechanical sector.

Values

Road rush Automobiles acknowledges customers’ safety with highest priority. The company is committed to deliver quality products at justified prices. We ensure timely delivered items. Besides, the company will work on implementation of better technologies to offer services that are more beneficial to clients.

Industry sector

Auto parts industry involves manufacturing and designing skills; so company have to deal with contractors and mechanical engineers mostly. Moreover, product equipment will be heavy and complicated. As described in AF Ragab and Arisha (2013), business operation must be done with the help of efficient human resource and to ensure that recruitment process as well as practice of knowledge management must be present within organization. According to La Rocca, Ford and Snehota, (2013), automobiles require various materials, which include Iron, plastic steel, rubber, copper, aluminum, petroleum products and many more. Therefore, the idea is to import raw materials from Germany for the production.

Based on expertise, Road rush wants to become global supplier to major automaker companies of New Zealand (Frigant & Zumpe, 2014). Product range is directly connected with machineries of luxury cars. Break lining, break pad, engine gasket, steering and suspension, both the fuel and water pumps; various necessities can be satisfied if clients are collaborating with such a company like Road rush. Every core car companies have to deal with breakdown or regular servicing cases where the demand of variety of auto parts is consistently high. In addition, as I am a specialized automotive engineer with 10 years of Job experience in this sector, it was convenient for me to choose this division as my orientation of business.

In case of any enquiry or to solve any parts related issue, our customer service executives will provide both the direct and indirect in-voice assistance. As described by Setia, Venkatesh and Joglekar (2013), efficient post purchase customer service is important for customer retain and satisfaction purposes.

 Considering the highly competitive automobile market of New Zealand, Road rush has planned to practice continuous process of innovation, installing new technologies in order to sustain a competitive position within industry. As per the argument presented by Kedia (2013, July), pricing strategy would be structured maintaining the point of competitiveness in mind. Additional services of customized products or assistance for installation will be provided on demand at justified prices. Entire process of operations can be executed by employing skilled and efficient human resources. A professional data management team and IT team are essential in terms of securing customer data, which is a sign of operational efficiency.

Market analysis

Political factors are influencing profitability of automobile industry at a huge scale. Governments across the world is preferring low emission vehicle keeping the environmental sustainability in mind. The fuel price is continuously fluctuating as well as the taxes over luxury cars and other vehicles are increasing with the progression of time. In this case, import and export laws of both the Germany and New Zealand must be revised before planning the business. Political changes happen in every three years in this country. Labour laws are strict enough and companies have to pay higher tax, which reduces the chance of profit. However, business regulations are quite liberal.

Based on the per capita income of the country, it can be stated that people are capable of buying quality goods, luxury products easily. Both the unemployment and inflation rate is low, which indicates towards a healthy economy. As far as the economic factors that influence auto parts industry are concerned, if not provided with good economic conditions this kind of industry cannot perform well. Strategically, Road rush is right as New Zealand’s economy is strong as mentioned, where purchasing power of the customer is high.

Major industry trends and opportunities

According to the journal of Frigant and Zumpe, (2014), the size of global automotive market was estimated almost 330 billion and it has immense potential to gain further profitability in coming years. Luxury car manufacturers who are consistently working towards accelerating vehicle performance and needs of customers’ changing preferences centrally drive the market of auto parts industry. The market trend is to look for parts, which lower carbon emission. Following this trend, if Road rush improves their technological infrastructure, execute advanced digitalized practices in delivery, sales and operational services. As per Fagnant and Kockelman (2015), usage of advanced technological devices and software to design and repair parts and maintenance of various services are few important factors on which market growth depends mostly.

Customer base

The customers are core car manufacturing companies like BMW, Audi, Mercedes Benz and Volkswagen originated in mainly Auckland and New Zealand. In order to serve the requirements raw materials are needed to import from Germany. Not only the luxury vehicles companies, but also customers’ who have specific preferences regarding their car outlook and high definition performances are customers of Road Rush too. This organization is a paradise for car enthusiasts who wants to modify performance or change defective parts for their cars. Considering New Zealand’s economic condition it can be said that customers’ purchasing power is high. Therefore, the company can expect profitability by serving their selected customer base.

Competitors

As the buyers’ power is strong in NZ’s market, suppliers face immense competition within the industry (Yu & Goh, 2014). In case of high profitability, as per the journal of Roh, Hong and Min (2014), Road Rush can consider importing raw material from developing countries to keep the production cost low. However, the company does not want to compromise with quality. It entirely depends on buyers that what their choice will be. Therefore, company needs effective customer relationship managers to nurture client relationship periodically in order to compete with existing auto parts companies of New Zealand. Major competitors are going to be existing Auto parts companies of New Zealand like Repco and Pick-a-part.

Opportunities

Considering the technological and economic competency of the market, as argued by Yu and Goh, (2014), it can be stated that automotive suppliers are going to achieve high profitability over the next one decade. In this scenario, if companies look for partnerships and collaborations, in addition more specifically follow e-commerce business model success can be achieved quickly. Therefore, analysing the market in detail, few specific aspects can be found which are highly dynamic in terms of automotive sector. Association among parts distributors or raw materials suppliers, digitalization of several channels is important as technological influences are increasing with time and high pricing strategy coupled with greater differentiation in product cycle. The most noted fact is to be updated with recent specifications and features of luxury cars.

Sales and marketing

As the customers have the power to buy high quality products, positioning the auto parts as a budget product will not appeal the customer base. It must be remembered that company is dealing with luxury products and therefore, premium customers. Compromising with quality will be a massive blunder. Road rush will be presenting their products as high quality at justified prices which is high too compared to other existing brands. Our key sell message towards the customer would be, Road rush is devoted to deliver superior quality products, provide excellent after delivery services and technical assistance along with that company provides customized parts on demand. Moreover, products will assure low or zero emission after installing into the car. This initiative will ensure a competitively safe position and an advanced step towards sustainability.

In order to build the brand image as an emerging company, the service aims to progress the distribution of Auto parts to cater needs of car enthusiasts and core luxury vehicles companies. Brand image depends on delivery of genuine parts, which perform efficiently. The logo must be designed in an attractive way with the help of professional designer. The logo is the first thing, which customers notice about a company. The motto will be to make the logo famous by conducting extensive campaigns. A brand identity will be established when customers will be able to recognise the brand only looking at their logo.

Branding and Marketing strategies

• In case of emerging businesses, considering the impact of digitalization management team needs to make sure if the company name is appearing on recent search results or not. The trend of digital marketing will help to identify potential buyers and according to that allocation of places, monetary resources can be invested.
• A geo-based campaign may help. Cars stopping for traffic signals at road can find digital boards where interesting slogans can be used to promote company or attract investors and businesspersons.
• Develop videos on YouTube as a part of promotional activities. Videos must be related to product demonstration or installation method or how customized vehicles are made. Occasionally, comparing own products with other competitors’ may help customers to attain the idea of what should they buy and what they should not.
• In addition, it has been planned to distribute handbills or brochures to make the market aware along with print and media advertisements. As per the study of Neves et al. (2014), celebrity endorsement is a will recognised policy, yet as it is an emerging company, it will be a high risk to engage a large sum of monetary resource for that.
• The products will be positioned as high standard and environment friendly. Although, customers are mostly core luxury car manufacturing company payments are expected to done on time. Yet, in the cases of customized parts, company has a plan to offer flexible payment mode. Customers can pay with east EMI schemes or via online banking.
• Project selection must be future oriented. Market research has to be distinct enough to understand the trend for next one decade. Right research will help to position the brand and ensure sustainable part of supply chain related to auto parts industry (Yu & Goh, 2014).

Product packaging and distribution strategy

This strategy is related to the procedure by which company is presenting the products and services in front of their customers. This is nothing but attracting potential customer base towards the services. Their satisfaction is the key to gain success.

According to Abdulrahman et al. (2015), the strategic plan includes smart choice of locations where the parts are on demand. Cars based in New Zealand, Auckland and Mount Wellington are to be served as core car manufacturing companies. In order to import raw materials from Germany, company will allocate organisation owned vehicles, which is going to avail air routes to proceed the operations within time.

Business operations

Our company will deliver efficient services utilizing efforts of multiple teams, employee agreement and strategies. Teams will be segregated as different departments according to the hierarchical needs.

Human resource and their skills

• In order to attain organizational goals it is important to recruit highly qualified and skilled IT experts to develop, implement and supervise company’s services and maintain channels of communication. Besides, they are responsible for holding the company data securely from any external harm.
• Company must be well recognised among the target market. In order to ensure that as per Cabigiosu, Zirpoli and Camuffo (2013), employing highly efficient marketing and sales executive and managers is necessary duty of organisation. Innovative ideas will be generated to attain utmost profitability.
• Accounting and finance team will work to maintain revenues, loss and other expenditures. In addition to that, based on their vision company’s future and current operation will be determined.
• Requirement of extremely skilled automotive technicians and engineers to design, manufacture and perform maintenance will be high on demand. The departmental head will be responsible for providing quality assurance of manufactured auto parts and further assistance. In case of mechanical errors within the parts, departmental leader is responsible for informing, and follow the necessary rectifying process.
• Customers’ service team must deal with customers’ complaint and post-delivery installation assistance.
• Security department will take care of security issues such as in case of disagreements between customers regarding payment, delivery or quality.
• A development team must be incorporated within the system by choosing employees from different departments in order to plan for future ventures, estimating financial expenditure, feasibility and marketing details. According to Frigant and Zumpe, (2014), as business industry is consistently growing global, technological capabilities must be revised before planning new initiative.

Computing and communication systems and tools 

In order to make sure that the entire system works at its best, Road rush is going to install contemporary electronic devices and advanced technologies. As described in Benitez-Amado, Llorens-Montes and Fernandez-Perez (2013), branded equipment will be used. Comparing with the competitors such as existing brands and suppliers, we have to differentiate product quality and structure the pricing strategy. In case of any training issue, as described in Liu et al. (2013), company will take initiative to conduct further training sessions for new and undertrained employees and that will help to enhance the firm performance.

Sub-contractors and allies 

Manufacturing of any machineries or structure needs to follow a detailed process. Whereas, general contractor estimates total expenditure of manufacturing auto parts, sub- contractors propose bids for their services and the best one is hired by the company to run the project. The cost of transportation will be high as long journey is associated with the act of importation. Depending on the scale of the project, the size of the team differs in case of serving sub-contractor duties. In this context, employees will be appointed to manufacture auto parts. No third-party company will be hired for executing these duties. However, if the company is assigned to do urgent or huge project in that case Road rush can opt for consulting sub-contractors like mechanical department of core Car manufacturing companies.

Premises

The location of the factory will be outskirts of Auckland city and the city office will be located at urban area of the same. The factory needs at least half hector of space to be established. With God’s grace if in future the business achieves sustainability the company can go for acquisition of lands to reduce expenditure.

Techniques of knowledge management

The culture of effective inter personal communication is necessary to circulate knowledge among the members of different teams. Integrated knowledge will help to generate creative ideas and work together to create better experience for the customers. There are strategies to establish such atmosphere within system.

• Cloud storage is useful to store necessary and important information of employees and customers. There is no substitution of a well-updated secured database. Trust issues might raise if such security programs are violated.
• All the employees irrespective of designations must have enough technical knowledge in order to make themselves compatible with the company infrastructure and contemporary business scenario. In case of any ignorance, urgent training sessions must be arranged or a practice of interpersonal assistance will be appreciated with highest priority.
• After completion of any project, data must be stored in detail within the system in case of future reference. Employees may explore this past reference in case of same kind of project occurrence.
• In addition to that, as elaborated by Tortorella and Fogliatto (2014), occasional training sessions for human resource development and interpersonal sharing of knowledge among colleagues will continue to support the company in terms of managing knowledge sharing for serving customers’ interest.
• For further assistance, experienced staff members can be engaged as quality assurance managers and in charge of human resource development.

Summery and reflection

The paper is analysing a new business plan of an auto part company, which has a plan of supplying automotive parts for luxury car companies like BMW, Audi, and many more, that are based on Auckland, Wellington and New Zealand. The idea is to import raw materials from Germany and the further operations of designing, manufacturing and supplying parts will be performed from the city office located in Auckland. The location of the factory is the countryside of Auckland city, occupying more than half hector of land. Employees must have greater technical and theoretical knowledge in order to be eligible for working with Road rush Pt. Ltd... In the addition, recognising the demand of authentic auto parts and high buying power of the targeted customer base in the market of New Zealand; the company wants to explore the opportunity of serving them. As a former employee of a core car-manufacturing unit and as holder of the automotive engineer degree I have an extensive understanding of product details, which is going to benefit the company for creating a professional product range. Moreover, secured IT infrastructure, trustworthy relationship with the customers, timely delivery and quality assurance will help to sustain in the business. A consistent process of human resource development as well as relevant financial planning will make the future and current ventures successful.

References:

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AF Ragab, M., & Arisha, A. (2013). Knowledge management and measurement: a critical review. Journal of Knowledge Management, 17(6), 873-901.

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