CASE STUDY: Orbital Engine Company CONTENT
(1) Executive Summary P.3
(2) Introduction of Business Background P.4
(3) OEC’s objective P.4
(4) Key issues Highlights P.5
4.1 Two Wise Decision P.5
4.2 Large Car Manufactures Appeared not ready to adopt OCP Engines P.5-6
4.3 Marketing Lessons Can be Learned P.6 4.3.1 Marketing Mix and 4P s P.6
4.3.2 OEC’s Porter Five Forces P.6
4.3.3 Licensing and Joint Venture P.7
(5) Conclusion P.7
(6) References P.8
(1) Executive Summary
In this severe economic environment the management of time, in the meaning of the ability to pioneer the market with new products or services, becomes crucial. OEC was
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(3) OEC’s objective
OEC’s key objective was to get the major car manufacturers in the US to adopt their new engine. (3) Key issues Highlights
3.1 Two Wise Decision (261)
OEC had made at two wise decisions to get the major car manufacturers to adopt their new engine in the US. First of all, OEC developed a pricing policy for its intellectual property at the early stage that it built up a series of licence options for car manufacturers, such as General Motors, Ford, Fiat, Jaguar and Volkswagen to evaluate the technology and needs before converting into their final licence agreement. Kotler et al (2007, pp.318, 590) mentioned that, “A method of entering a foreign market in which the company enters into an agreement with a licensee in the foreign market, offering the right to use a manufacturing process, trademark, patent, trade secret or other item of value for a fee or royalty…More and more for-profit and not-for-profit organisations are licensing their names to generate additional revenues and brand recognition.” This brand recognition of licensing became one of the key profit generators for OEC.
Secondly, OEC made another wise decision on joint venture with Brunswick Corporation, the parent of Mercury Marine in January 1995, became METEOR. This joint venture helped to develop, manufacture, market and sell Orbtal’s SEFIS to the global market for low emission two stroke engines, which was threatened by
The goal of the new engine was to provide customers with an engine that had a higher torque output, more horsepower and could comply with the new federal emission
Vector sold exotic sports cars and was the only US based manufacturer. Their major competition, Ferrari and Lamborghini, took up 75% of the market share. Gerry’s idea was to make a car based off of aerospace technology. They created the V8 twin turbo which was highly advanced and priced. After selling a total of 13 cars, 45 people were employed. Vector built two other models to increase sell volume and decrease losses.
In business, dangers sneak every step of the way, contender advancements that debilitate the suitability of your items or administrations, new players in the commercial center, antagonistic patterns in product costs, monetary standards, loan fees or the economy. Toss in potential interruptions to supply chains that have been extended crosswise over a huge number of miles and nation fringes by globalization, and the open door for something to turn out badly is, without a doubt, troubling.
Globalization brought upon many changes to the American Automotive Industry in 1975. Increasing demand for import automobiles and the Energy Policy and Conservation Act served to be a real threat to the Ford Motor Company, American Motors, Chrysler Corporation, and General Motors. Out of these four manufacturers Chrysler was affected the worst by the industrial change, as they required a federal aid and required brand /management changes to revive themselves. Globalization formed a more competitive market in the United States during the 1970’s due to the changing emissions standards. The American Automotive Industry had to adjust to the new emissions standards from the Clean Air Act of 1970, and the fuel economy requirements of the Energy Policy and Conservation Act, all while building cars that attracted to American consumers.
There is an old adage which insists “time is money.” While simple, in concept, it has been proven true, in fact. In a global, technologically driven society, however, the very idea of time has changed. Having once implied a spanning space between the hours of “nine to five” relative to the person or organization from whose vantage money was viewed, time is now irrespective of person, organization, or location; it is, literally, “24/7.” With this shift in perception, organizations, especially, have taken on the greater challenge of ensuring efficiency in their operations, allowing their customers the
In the late 1960’s the American auto industry was facing the large challenge of selling American made
The automotive industry designs, develops, manufactures, markets and sells motor vehicles, and is one of the world’s most important economic divisions by profits. This analysis focuses on the industry, specifically, manufacturers of automobiles. There are five competitors in the StratSim environment: Firm A, B, C, D, and E. Industry sales in the most recent year were 4.3 million units, with expected growth in the next year. Within this industry, there are seven-vehicle classes: Economy, Family, Luxury, Sports, Minivan, Truck, and Utility. There are two new classes with potential – if properly marketed.
Tom Everist once said that “all business is timing.” Very little of what has been assembled in the last 30 years is a result of superior business acumen or some complicated market strategy. Land was bought, track was laid, and buildings erected on the premise that we wanted to build a business with what we know and do best: manage resources and sell them to others who need and recognize quality products and
The focus of this paper to describe how the automotive industry has evolved throughout these past years, and its impact on the U.S. economy. The domestic market has gone from being dominated by the “Big Three” which are General Motors, Chrysler, and Ford to now including other major manufacturers from foreign countries. The industry has become an important economic indicator used to predict fluctuations in the U.S. economy. It currently makes up approximately 3.5 percent of the U.S. GDP. The Foreign manufacturers however are slowly increasing market shares now that the Big Three aren’t so big
With billions of dollars invested and hundreds of thousands of Americans employed (Department of Commerce, n.d.), the automobile industry has a vast influence in the United States. Since the time Henry Ford developed the assembly line production (Statista, n.d.) the industry has grown into a global market with no signs of slowing down. Top car companies are constantly searching for new innovations to set them apart from their competitors. Among those companies is Volkswagen (VW). A company which strides in emissions and fuel efficiency turned, not only to be false, but caused a severe amount of damage (Ewing, 2016).
Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This
Economics – organisations operate in environments that have dynamic economic cycles. This necessitates change so as to keep a breast with prevailing economic trends. Good examples include economic cycles, unemployment rates, inflation and even foreign exchange rates. For instance high inflation rates reduce disposable incomes of households thus lowering their purchasing powers. This may signal the production department to come up with new product that meets the demand of consumers (British Journal of Management, 67).
One of the most spoken and discussed issues in the business world has become establishing the association between the Nissan and Mitsubishi car producers. After the scandal that occurred as the Mitsubishi falsified its fuel-economy tests, the cooperation with Nissan is like a lifeline to the company. Nissan's decision to buy an influential share of Mitsubishi's assets is believed to bring benefits to both participants of the process. While this deal would help the Mitsubishi corporation to improve its image after the cheating scandal, Nissan also expects to increase its profits by using the recognizability of Mitsubishi's brand in the eastern countries. Under the conditions of growing global competition in the automobile industry, the alliance between the large Japanese and European car producers is supposed to radically strengthen the positions of both companies on the market.
The United States Automotive industry has been dominated by five major auto manufacturers: GM, Toyota, Ford, Chrysler, and Honda. As globalization increases the domestic automotive market (GM, Ford, Chrysler) suffers from foreign competitors. Although with high entrance barriers the market suffers little to none from new entries. There are several reasons for this the largest being capital. It takes a lot of capital to obtain manufacturing plants, raw materials, as well as to hire and train employees. PASTEL Analysis
The economic environment in the market is so resilient in the face of world economic uncertainty. There is economic freedom in the industry and this will work in favor of the organization. This is because the deficit-cutting efforts have managed to control public spending in the market to level of 70%. The labor reforms that have helped increase working hour flexibility are also in place. According