Strategic Report of JLR automotive plc in the

automobile industry

Presented by:Quang, Tran - 15661254Sheila, Wamalwa - 15783127Tianqi, Qi - 15628918

EXECUTIVE SUMMARY

• Structure: Introduction, Macro analysis, Micro analysis, Conclusion and recommendations

• Main finding and conclusion:Macro analysis:Micro analysis:Recommendations:

INTRODUCTIONCompany background

• Founded by Tata Motors in 2008 • Industry: Passenger cars (Dow Jones)• Top competitors: Volkswagen AG, Hyundai

motor AG, Audi AG, Toyota, Nissan, Fiat, Daimler AG

• Products: Luxury vehicles, off-road vehicles i.e Jaguar XE or Land Rover Defender

• Employees: 32,127

1. MACRO ANALYSIS 1.1 Disruptive technologies

• Fully electric and autonomous vehicles: Tesla and Google Cost less, less emission, reduce human factor accidents

• Internet of things (IoT) revolution: Sensors, analytics and big data not only between cars but also cities, retail, insurance…• Digital services disruptions: In-vehicle experience: infotainment, commerce or concierge services – link to smartphone technology Vehicle data: vehicle health, diagnostics technologies – after sales services to improve customer stickiness Vehicle ownership: multimodal travel, car-sharing i.e Daimler Car2Go and BMW DriveNow threat to ownershipIn summary: • Many disruptive technologies that becoming trends• Electric and autonomous technologies can be expensive• JLR can adapt digital services technologies in order to compete in the future

• Ride sharing technology: Uber and Airbnb Threat to car ownership and car maker

1. MACRO ANALYSIS 1.2 Emerging Issues

• Globalization: Ability of Car Companies to expand to new and foreign markets, as a result of increased competition in their domestic market.

• Offshoring and Offsourcing: Vehicle components are manufactured in different locations in different countries.

• Regionalisation: vehicles are manufactured according to tastes and preferences of the consumer.

• Product diversification• Environmental protection and carbon print reduction.

1. MACRO ANALYSIS1.3 PEST

• Political, Laws and Government regulations related to safety standards and environmental issues.

• Social Demographics. Market for premium cars is enjoying steady growth in china among the middle class who have a good disposable income, aim is to seek status and show off.

• In India the working age population spend on premium cars due to easy access to finance

1. MACRO ANALYSIS 1.4 Porters 8 forces

• Bargaining power of buyers is low, as they have various brands and models to choose from.

• Bargaining power of suppliers is low as many parts are used to produce a car, and it takes many suppliers to accomplish this. Industry manufacturers can easily switch suppliers

• Competitors threat: The industry is highly competitive and is expected to rise as a result of globalization. Competing for the same customers and resources.

• Digitalization. Digital marketing technology like social media, mobile technology and independent online information sources is used for marketing automobiles currently.

2 Micro analysis2.1 Boston Matrix

2. Micro analysis 2.2 Ansoff’s Matrix

a

2. Micro analysis2.3 HRM scenario

• Organisational Culture -Hierarchical organizational structure

• Controlling system

2. Micro analysis2.4 Resource appraisal - KPI

Category Measure(£)

JLR Volkswagen Toyota Industry average

Shareholder value EPS N/A 15.39 4.26 --

P/E N/A 8.24 12.18 12.09

LT debt structure Debt/equity ratio 0.39 0.86 0.59 10.85

ST Liquidity Current ratio 1.13 1.04 1.09 1.37

Inventory efficiency Inventory turnover 5.89 4.83 9.85 8.94

Profitability/ Management effectiveness

Net profit margin 9.32% 2.87% 8.17% 6.33%

ROA 7.23% 1.68% 4.84% 5.95%

ROE 19.29% 6.90% 13.75% 15.91%

Brand equity Goodwill/total asset 0% 6.3% 0% --

Image & trust metrics 9 8 1 --

Tangible Book Value per Share 0.73 40.66 33.01 --

Relative UK market share 4.01% 7.1% 4.02% --

Cash reserves Cash ratio 0.6 0.26 0.32 --

Cash flow to debt ratio 135.1 7.76 19.42 --

Reputational metrics CSR ranking Not in top 100 11 33 --

Sources: Factiva, Statista, Brand Z and CRS Reptrak 100

2. Micro analysis2.4 Resource appraisal - KPI

Shareholder Value: N/A - JLR is owned by TataLong-term debt structure: Strength: Lower D/E ratio than industry average and competitors less riskShort-term liquidity: Higher current ratio than competitors but lower than industry average BUT not a problem since it has specific profitable future projectCash reserves: Much higher than competitors and industry average No problem in raising short term financeInventory efficiency: Lower than Toyota and industry average may have excessive inventoryProfitability: JLR outperformed competitors( 3 higher ratios)

Recommendation: Future strategy should focus on expand market share and improve image/reputation

Brand equity:No goodwill, similar to ToyotaLower market share than the two competitors in the UK WeaknessLower image + trust metrics than competitors WeaknessLower tangible book value per share WeaknessCSR reputational metrics: Based on elements such as leadership, governance, … (CRS Reptrak 100)JLR is not even in top 100 but the two competitors are Weakness

Conclusion & Recommendations