Jaguar Land Rover Business Strategy: Environmental Analysis and Strategic Planning Assignment Sample

Jaguar Land Rover Business Strategy: Environmental Analysis and Strategic Planning

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Introduction-Unit 32 –Business Strategy Fundamentals and Environmental Analysis for Organizational Success

A business strategy is a series of actions or choices that aids in the achievement of a company's objectives and goals. Managers utilize it to obtain the upper hand in the marketplace by executing operations, satisfying customers, and meeting desired objectives (Rehman and Anwar, 2019). A business strategy is a long-term plan for achieving a certain objective.

This report will focus on Jaguar Land Rover Limited's internal and external environment for forming effective business strategy of the company. The purpose of this study is on the macroenvironment's effect and impact on organizational growth and improvement. It also covers the organization's internal environment, which should be accessible by a variety of ideas and theories because of its primary weaknesses and strengths in the market. In addition, theories and practices are discussed in detail to help readers grasp the organization's strategic orientation.

As a trainee Strategic Planning Manager at Jaguar Land Rover, I am responsible for conducting an environmental study and developing a draught strategic growth management plan based on recognized internal and external analytical methods, while also considering JLR's development and expansion goals.

LO1

P1 “Macro Environmental Impact and Influence on Organisation”

According to Braun, Latham, and Cannatelli, (2019), in order to determine a company's viability, researchers must look at a variety of aspects that provide useful insights and information for achieving desired outcomes. In order to construct a strategic plan, an organisation must identify its purpose, vision, and goals, which are crucial to its growth and development. A global automotive corporation, Jaguar Land Rover (JLR) is the biggest automobile manufacturer in the United Kingdom and one of the most prominent in the world. A subsidiary of Tata Motors, it is based in Coventry, England, and has its headquarters there (Sindi and Roe, 2017). Machines and equipment of the highest quality are used by Jaguar in the production of bespoke automobile bodywork.

As part of British Leyland following the Second World War, Jaguar started producing luxury saloons and sports cars, which eventually included Rover. Tata Motors acquired Jaguar Land Rover (JLR) in 2008, making it a subsidiary of the Indian firm.

The mission of Jaguar Land Rover: 

The mission of Jaguar Land Rover: Its emphasis on innovation and design creates delightful experiences that inspire people to enjoy life by anticipating and exceeding their needs and expectations (Karabag, Borah, and Berggren, 2018.). They have a strong emphasis on quality and perfection, as well as a strong emphasis on taking care of their customers.

JLR's Vision:

The Future-Type concept is Jaguar Land Rover's vision for 2040 and beyond for a premium small on-demand car, intended to suit the transportation demands of future generations. A completely automated yet drivable, unique narrow-body with semi-tandem 2+1 seating to maximize urban driving and parking as well as adding new features face-to-face'social' sitting is being introduced(Namita and Gupta, 2019). It will be safer to drive with a person in the driver's seat owing to these new technology.

JLR’s Objectives:

Jaguar Land Rover's primary goal is environmental innovation, which is also part of their long-term vision for a brighter future. Organizations must be in balance with their social and natural surroundings in pursuit of its mission.

P2: Analysis of JLR's Macro Environment

When an organization's performance is impacted by its internal and external environment, it includes all of the factors that not only shape possibilities, but also represent dangers to that organisation. Decisions, results, and strategy are all influenced by these variables. The external environment of JLR is analysed below using the PESTLE Framework.

Political Factors:

To be successful at the international level and attract a big customer base, Chang (2016) says that political stability is a key aspect. Jaguar Land Rover has operations in several countries throughout the world. As a result, each country's political circumstances and governance structure, as well as the special needs of the Finance & Accounting business, must be taken into consideration while developing regulations. The JLR corporation faces an immense challenge due to the transition of administration and the implementation of new rules in the most important market (Jasi?ski, Meredith, and Kirwan, 2021). When a firm is creative and environmentally friendly, it may be eligible for reduced taxes policies from the local government. Jaguar Land Rover keeps a careful eye on any developments in the sector, such as political instability, that might lead to a shift in objectives.

Positive: In a positive light, Jaguar Land Rover is an international firm and has relationships with different nations. As a result, any political change may be quickly adopted by the corporation.

Negative: JLR's company has become more unstable in its current markets as a result of coping with various rules and worldwide pressure.

Economic factors:

According to government expenditure, economic variables vary, which also affects the methods of payment in the creation of goods or in the case of development (Grover and Kohli, 2013). Reductions in government investment or restrictions on borrowing and lending effect the growth of JLR on a day-to-day basis. JLR is able to take use of more efficient transportation and distribution networks due to improved infrastructure. In the event of a rise in inflation rates, they must likewise raise their profit margins and pricing.

Positive: Jaguar Land Rover is financially strong and also contributes to the economies of other countries; as a result, JLR and other countries collaborate. On addition, the company's worldwide expansion is facilitated by its capacity to access financial markets and also the availability of liquidity in the stock market.

Negative: However, the economic volatility of existing nations and their varying tax rates have a detrimental effect on JLR's company.

Social factors:

Societal aspects include the beliefs, habits, ethics, and practises of a society, as well as the shifting tastes and preferences of the general public, all of which have a direct impact on business operations. If Jaguar Land Rover is going to succeed in the local market, it has to establish a team of people that understand local culture and customs (Grežo et al., 2020). Demand for their manufacturing and distribution network is directly affected by the company's compliance with all ethical and social standards.

Positive: The company's ability to craft products and services that cater to the tastes and preferences of individual customers contributes to its ability to stand out in the marketplace.

Negative: JLR might have to enhance public service investment in order to meet the needs of the local population. Health and safety concerns are becoming laxer as a result of increasing liberalisation. Avoiding these mindsets is critical for JLR. Failure to do so might have a devastating impact on the sector.

Technological Factors:

In both the domestic and international markets, Jaguar Land Rover is recognised for its cutting-edge technology and customer satisfaction. In order to meet and exceed client expectations while also staying one step ahead of the competition, the organisation must maintain a constant emphasis on cutting-edge technological advancements and reducing manufacturing costs. It makes its products using aluminium technology, which serves as an example to the rest of the globe on how to adopt low weight transportation systems with high efficiency (Grover and Kohli, 2013). It presents automobiles with a performance model that utilises an intelligent technology to enhance efficiency. It also employs technology to eliminate driving mistakes and ensure a safe trip.

Positive: Jaguar works in a variety of countries, necessitating the use of a variety of methods and practises that aid in market competitiveness.

Negative: Adapting to changes in a dynamic environment may be very challenging for businesses. The world's growth in technology might pose a threat to a company's survival.

Legal factors:

Laws and standards that all firms (local and worldwide) are subject to include Trade Laws, Health and Safety Laws, Employment Laws, Consumer Protection Laws, and other laws and regulations (Sandhya, 2020). These rules and laws are intended to ensure equality and predictability, but they also have the potential to impose their will on enterprises and limit their freedom of action. If Jaguar Land Rover's business is not adequately protected, or if the company fails to adhere to the applicable laws, the company will suffer.

Positive: The legal component is critical to the success of any business everywhere in the globe. As a result, it promotes economic progress by protecting both consumers and companies against exploitation.

Negative: However, the company's investment increases as a result of complying with and implementing different rules and regulations. If the firm or its goods or services are severely regulated or illegal, laws and regulations may have a direct influence on Jaguar Land Rover.

Environmental Factors:

It is important to consider environmental aspects such as climate change and the reduction of carbon footprints as well as the improvement of water treatment and the rising emphasis on sustainability as well as safe waste disposal. People are becoming more conscious of the need of protecting the environment, and this trend is expected to continue (Ramkumar, 2020). At the time of manufacture, Jaguar Land Rover places a great deal of attention on environmental regulations and strives to provide products that are environmentally benign. Powerful diesel engines are used to elevate and supply power to the vehicle.

Positive: Organizations that do environmental analyses strive to provide environmentally friendly goods and services as a means of enhancing their own company's brand equity.

Negative: Adhering to environmental rules and regulations, as well as offering eco-friendly goods and services to clients, may be very costly for businesses.

The SWOT analysis below reveals the internal elements that represent risks and opportunities for the firm.

 M1 Analysis of the macro environment to determine and inform strategic decisions

The PESTLE Framework is used to examine JLR's external environment. To be seen in a favourable way, Jaguar Land Rover is a global company with connections to several countries. Consequently, any political reform may be accepted by the company very fast. JLR and other nations work together because of Jaguar Land Rover's financial strength and contribution to the economy of other countries. It is also assisted by the company's ability to access financial markets and the availability of liquidity in stock markets, which aids in its global growth. Product and service customization is an important part of a company's capacity to differentiate itself from competitors in the marketplace. In order to fulfil the demands of the local people, JLR may have to increase public service spending (Braun, Latham, and Cannatelli, 2019). A wide range of processes and practises are needed by Jaguar since the company operates in so many different nations. Any company's success depends on its ability to successfully navigate the legal system, no matter where it is located. As a consequence, it aids in the development of the economy by safeguarding both customers and businesses from being exploited. For companies, complying with environmental legislation and providing environmentally friendly products and services may be very expensive (Agnihotri and Bhattacharya, 2018). A study of the company's internal environment indicates that Jaguar Land Rover is one of the most well-known luxury car manufacturers in the world today. Cutting-edge technology and a knowledgeable workforce are the foundations upon which it will build its future. The combination of Jaguar Land Rover with India's largest automaker, Tata Motors, has opened new doors for JLR. Due to a shortage of demand for diesel automobiles, Jaguar Land Rover is having difficulties in the trade market. Hybrid, electric, and low-emission cars must be the company's primary focus.

LO 2

P2 “Internal Environment and Capabilities of an Organisation”

The internal business environment comprises of a wide range of aspects and components that determine the atmosphere inside the firm's structure and are under the control of the organisation.

The McKinsey 7s Framework for Jaguar Cars:

Strategy:

Jaguar's approach to strategy is versatile and open to new ideas. This is an essential part of Jaguar Cars' long-term strategic planning and strategy formulation (Rehman and Anwar, 2019). When a company's strategy is too rigid, it frequently becomes stagnant and impedes its ability to adapt to changes in the market.

Structure

Learning and progressive organisations complement Jaguar Cars' flat organisational hierarchy. Employees feel more comfortable and confident, and they have more access to information, when there are fewer tiers of management between them and the upper management and leadership. As a result, Jaguar Cars' decision-making processes are faster and employee devotion to the company is higher because of the company's lower hierarchy.

Systems:

In order to maintain smooth corporate operations free of misunderstandings or disagreements, Jaguar Cars has put in place clearly defined processes (Agnihotri and Bhattacharya, 2018). Using the controls, Jaguar Cars constantly tests its systems. Keeping an eye on how things are progressing is a continuous process.

Shared values:

At Jaguar, they have created and conveyed a set of values that they believe will help the workers perform at their best and inspire them to be more committed to the company.

 Style:

 Style: Jaguar Cars is capable of engaging and involve its staff in decision-making processes and management choices via a participatory leadership style. Having frequent interactions with workers and other management groups helps leaders detect and resolve possible problems and get input on strategic strategies and operational procedures.

Staff

Jaguar Cars employs a substantial number of people across the world. Depending on the urgency and the needed skill levels, employees for various job tasks and positions are employed both within and outside (Agnihotri and Bhattacharya, 2018). From this, it can be deduced that the Jaguar workforce is well-trained to carry out the duties of its various job functions and positions.

Skills:

The personnel of Jaguar Cars is highly skilled and capable. Everyone is hired based on their ability and merit. Jaguar Cars places a high value on employing and developing the finest talent in the industry.

VRIO Framework

When evaluating a company's long-term competitive advantage, the VRIO framework looks at both its internal and external resources. The VRIO framework, as described by Sindi and Roe (2017), is composed of four components that together form the acronym VRIO and aid in the discovery of long-term competitive advantage. It is important to clearly establish the corporation's resources, whether they are material or intangible, before moving into the VRIO framework. Resources must be classified into one of the following groups:

VRIO Analysis

(Source: As created by author)

M2 Critical evaluation of the organisation’s skill set, structure and capabilities

Human Resources:

A company's human resource (also known as "human capital") may be a source of competitive edge or a cause of vulnerability (Rehman and Anwar, 2019). Productivity increases and economic development for Jaguar Land Rover may be attributed to its human resources (“individuals with knowledge, skills, and capabilities”)." When it comes to hiring and training new employees, JLR has a well-oiled recruiting machine in place that ensures they get the right individuals in the right positions at the right time. In order to realise their full potential, they build an internal team that enables them to be recognised for their outstanding performance.

Having a well-trained workforce is one of the most significant parts of the company's internal business environment, which has a favourable influence on its development.

However, workers who lack the necessary skills and expertise, as well as those who have a bad attitude toward their work, will be a major hindrance to the organization's success.

Capital Resources and skill set: 

Money, tools, technology, structures, machinery, and so on make up capital resources. In order for a business to carry out its strategy, enough financial resources are unquestionably necessary. By having enough budgets and financial resources, a company may simply execute its strategies and grow (Braun, Latham, and Cannatelli, 2019). When it comes to Jaguar Land Rover's financial stability, they make sure to put their money where their mouths are by using the most effective tactics, utilising the greatest goods, and giving investment possibilities for others.

Organizational Structure

The CEO (Dr Ralf Speth) sits at the top of the pyramid, at Level 1, with his immediate reports at Level 2 of the hierarchy. Executive Directors, the CFO, and the “Chief Commercial Officer” (CCO) make up the 15-person team (CCO). JLR's executive director of manufacturing (Grant McPherson) sits at the top of the company's hierarchy, and the next level down is the middle manager area (Rehman and Anwar, 2019). The vertical functional structure of Levels 1 and 2 is maintained in Level 3, but the divisional structure of Levels 4 and 5 is introduced. When you go down from Grant McPherson, “Executive Director of Manufacturing” at JLR, through Levels 3, 4, and 5, you arrive at the Middle Manager area. The vertical functional structure of Levels 1 and 2 is maintained in Level 3, but the divisional structure of Levels 4 and 5 is introduced.

LO 3: “Porter’s Five Forces Model and Competitive Forces Analysis”

There are five forces of competition that form the Jaguar Land Rover industry, and Porter's five force model is used here to describe JLR's strengths and position in the UK.

Bargaining Power of Buyers:

Luxury brands and automobile types are widely available, giving buyers a lot of options and giving them considerable bargaining power. Cars are available in a broad range of quality, performance, look, price, and amenities (Sindi and Roe, 2017). There is no restriction on the freedom of choice for buyers. For Jaguar Land Rover to meet and exceed consumer expectations while also keeping up with rivals' advances, the firm must constantly enhance the quality and features of its vehicles.

Bargaining Power of Suppliers:

Suppliers' negotiating power is a reflection of buyers' bargaining power. A buyer is a company that buys raw materials from a source. Suppliers in the automobile business have a lot of influence on the industry's competitive landscape because of their scale (Jasi?ski, Meredith, and Kirwan, 2021). Only a few suppliers are able to provide the distinctive and high-quality raw materials required for Jaguar Land Rover luxury automobiles, such as leather, timber, and technology. To exert pressure on JLR, suppliers might either reduce or raise the quality of their goods, or both.

Rivalry:

Jaguar Land Rover (JLR), BMW, and Mercedes-Benz are three of the most competitive luxury automobile manufacturers in the United Kingdom (Nguyen, Wu, and Evans, 2017). Competition among these firms is fierce, since they are all vying to be the top luxury automobile brands in the eyes of their clients, as well as the industry leaders in terms of sales.

Threat of Substitutes:

Volvo S90 is an alternative for the Jaguar XF, which is a product sold by Volvo. Having a huge number of replacements for a product increases a company's competition and decreases its profit potential (Sindi and Roe, 2017). Factors including brand loyalty, comparable pricing, switching costs, trends and fads impact the danger of substitutes. Alternative options pose a significant threat, which might have an effect on Jaguar Land Rover's capacity to set pricing.

Threat of New Entrants:

Customers value Jaguar Land Rover's status as one of the most venerable names in premium transportation. JLR, like many other well-known companies, benefits from strong brand equity and a lack of direct competition. In order to compete with well-established brands like Jaguar Land Rover, several new businesses are creating luxury vehicles and vehicles of a comparable grade and feature set. Existing brands face new difficulties and dangers because of this (Trott et al., 2020). The established brands then raise their investment in their automobiles' quality and features in order to reaffirm their pride in being the prestige of their brands.

LO 4: “Models in interpreting and devising Strategic Planning for JLR”

To prepare a strategy plan, JLR must follow the following frameworks:

Porter's Generic Strategies:

Porter (1985) began his book by elaborating on three ways that he used to illustrate generic strategies:

Cost leadership strategy:

One of the most effective ways to acquire an edge over the competition is via Porter's generic approach (Garg, 2019). Cutting costs by using the average industry pricing is one way to achieve this goal.

Differentiation strategy:

Differentiation entails creating and delivering goods and services that are distinct from those offered by competitors in order to attract customers (Li, Zhang, and Sun, 2019). With a lightweight aluminium shell and efficient engines, Jaguar Land Rover's cars have a distinct advantage over their rivals.

Focus strategy:

Focus structure focuses on a substantial niche market and produces specific goods and services by reaching customer requirements and desires. They mostly create items for a clientele that includes people over the age of 40 who are also very wealthy.

Bowman's Extended Model:

It was established by Bowman and Faulkner (1992) to indicate the strategic positioning of a product in order to acquire a competitive edge in the market. According to the Bowman's Strategy Clock, a business may use the two dimensions to better position its goods and services in the market (Reley, 2018). Price and perceived value are two different things, yet they are intertwined in this case.

Jaguar Land Rover is among the most forward-thinking companies in the automotive industry. There are just two product lines available, as opposed to the six that were formerly available (Sindi and Roe, 2017). In the evaluation of this product line, it is evident that the company's goal is to differentiate its product from its rivals by technical advancement and the adoption of a new product line. It spends a lot of money on research and development, but then has a low investment in R&D compared to its rivals. Consequently, it has resulted in a limited amount of cost reductions in their products and services. Low market share in developing markets compared to their rivals provides an excellent chance for them to attract high-priced goods. Land Rover, on the other hand, has a greater presence in the market than Jaguar. Products like the Freelander and Discovery are available to those in the middle-class.

Strategic Management Planning:

Strategic Management Plan for Jaguar Land Rover was created to acquire a competitive edge over its rivals.

(Source: As created by Author)

Conclusion

As a result of the preceding analysis, it has been established that business strategies are critical for an organisation to address numerous challenges and provide a clear route toward achieving desired goals and objectives. To achieve market success, organisations must consider a variety of elements, including strengths, skills, and competitors, all of which contribute to an organization's viability and potential to develop in the future. Developing an unique brand image and customer loyalty is critical for an organization's long-term success and viability.

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