咨询管理战略组织项目麦肯锡工具评估 strategy proposal_seat.PPT
-1-Roland Berger&Partners International Management ConsultantsBarcelona Beijing Berlin Brussels Bucharest Budapest Buenos Aires Detroit Dsseldorf Frankfurt Hamburg Kiev Lisbon LondonMadrid Milan Moscow Munich New York Paris Prague Riga Rome So Paulo Shanghai Stuttgart Tokyo Vienna Warsaw ZurichGrowth strategy vs profitable strategy?Discussion Paper Barcelona,September 2000INTERNAL USE ONLYBCN-8030-02604-013-18-2-This document has been prepared to be a starting point to prepare our approach to SEATAll data used to prepare this presentation are publicThese data are supported by off the record interviews to SEAT managersNo SEAT employees has seen this materialBCN-8030-02604-013-18-3-Some data shows that now profitability has more priority than growthPoor operating results in 1999The new model year doesnt achieve economic targetsSome task forces has been designed to reduce costROS of SEAT is a away from Konzern strategic targetSEAT recently announced that they will retire from Worldwide Rally ChampionshipSEAT could enter in looses in 2000 or 2001BCN-8030-02604-013-18-4-There are no optimistic data regarding SEAT results in 1999Still 2nd in Spain,but bigger gap with 1stOperational Margin 0ROS=0,5%Profits reductionGeneration margin reductionFinancial profits growthRenaultSeatCitronFordOpelPeugeotSpanish Market ShareBCN-8030-02604-013-18-5-SEAT is now in a go or no go situation:full fledged company or just a brandTwo major scenariosFull-fledged companyDriver:increase brand valueNeed to investNeed to increase marginsLong-term resultsShort-term losesJust one more brand is the KonzernDriver:restructuringElimination of all company-related structure:R+D(except design,purchasing,administration,)Social impactShort term resultBCN-8030-02604-013-18-6-No matter the selected strategic scenario,there is some room for rationalisationAreas with improvement potentialSEAT is present in too many markets,loosing money in some of the non-strategic ones:Country focalisationSEAT products are too diversified and with too many optionsProduct simplificationActual cost is quite different from targetedImprove product cost control during all product lifeBCN-8030-02604-013-18-7-ContentThis document was created for the exclusive use of our clients.It is not complete unless supported by the underlying detailed analyses and oral presentation.It must not be passed on to third parties except with the explicit prior consent of Roland Berger&Partners.A.Some Economic FactsB.Some Sales FactsC.Actions to implement the Joy of life strategyBCN-8030-02604-013-18-8-A.Some Economic Facts BCN-8030-02604-013-18-9-Profits has dropped after several years of satisfactory performanceSource:Annual ReportsEvolution of profit2,486(29,473)(151,315)(12,756)(11,286)5,33911,05124,46214,210BCN-8030-02604-013-18-10-Furthermore,operating profit has drastically dropped down from 2.2%to 0.06%of sales volume827,534968,862ROS:2.2%ROS:0.06%BCN-8030-02604-013-18-11-In 1999 SEAT growth policy had been not sustainable because market prices have dropped and the company failed to select profitable product enhancementsSEAT product pricing curve C Cost PricePriceCostP0P2P1 P9899A(98)B(99)BCN-8030-02604-013-18-12-Sales volume,doubled in 5 years,has overwhelm the capacities built during the early and mid 90s while the organization has kept its focus on sales growthGrowth capacitySales growthOperating profit199319951996/19981999-5%+16%+22%+17%BCN-8030-02604-013-18-13-ExampleMY99Target GP99GP99CMCostsDesignComfortVolkswagenADACSide crashIsofixNew enginesAnticorrosionBreaks improvementCablesOthers 2.5%1.5%The Ibiza GP99 improved with many quality issues generated an extracost that could not be charged because there was no quality enhancement perceived by the clientBCN-8030-02604-013-18-14-After many years focusing on growth,the capacity to generate profits in a very competitive market can shorter and even disappearGrowthProfitsPriorityBrand positioningProducts portfolioMarkets/DistributionR&DProductionQuantityDefine(Marketing)More offerMore countries/importersMore projectsMore qualityMore carsContribution marginCommunicate internally&externallyMore value for customerStrengthen core countriesProfit analysis/responsibilityMore successful launchmentsMore perceived qualityMore serviceBCN-8030-02604-013-18-15-When the growth become a must above all it can generate several problemsMarketing/commercial departments agree on pricing targets that can not be achievedIt is believed that new products,more equipment and more quality will always generate more sales as complexity growsUsage of non profitable commercial tools to achieve sales targets Confrontation of commercial and product development areasLack of focused strategy:try everything,everywhereBCN-8030-02604-013-18-16-The numbers of importers/countries has grown up to 65 including Spain,is SEAT in too many countries?CountryImporters*)With letter of intendSpainGermanyAndorraAustriaBelgiumDenmarkFinlandFranceGibraltarGreeceHollandIcelandIrelandItalyLuxembourgNorwayPortugalSwedenSwitzerlandUnited KingdomAngolaArgentinaAustraliaBoliviaBrazilBulgariaColombiaCroatiaSEAT Mercado DomsticoSEAT Deutschland GmbHEurop-Auto,S.A.Allmobil Autohandel GmbHS.A.(SEAT Import)Skanco A/SAuto-SpandyGroupe Volkwagen France,S.A.Rock Motors,Ltd.Technocar,S.A.Pon Car B.V.Hekla H.F.Hispano Cars Ltd.Augerma Spa.Hispanautos Losch,S.A.Haralda Moller ASSociedade Hispnica Automovies Lda.SEAT Sverige ABAmag Automobil und Motoren A.G.VW Group United Kingdom Ltd.Soc.Hisp.Automoveis Angola S.A.R.L.Espasa,S.A.VW Argentina,S.A.Inchcape Distributors Australia Pty.Ltd.Autocorp,S.R.L.VW do BraxilAutotechnika,Ltd.Coches EuropeosAuto Centar ZubakCountryImportersCyprusCzech RepublicChileEgyptSloveniaGhanaGuadeloupeGuatemalaHungaryIsraelIvory CoastJamaicaJordanLebanonMacedonianMadagascarMaltaMartinique*)MoroccoParaguayPolandQatar*)Rep.DominicanReunion Island*)RomaniaRussiaP.M.Tserioris Ltd.Import Volkswagen Group s.r.o.Benotto de Chile,S.A.Engineering Automotive Co.Porsche Slovenia d.o.o.Masai Motors Developers Ltd.Soc.Guadeloupeenne de Distrib.Moderne,S.A.Auto Mercantil,S.A.Porsche HungariaChampion Motors,Ltd.ComafriqueVehicles&Supplies,Ltd.Motor Trade Co.,Ltd.Sigma Middle East S.A.L.TD KA-DIS d.o.SodiamaIndustrial Motors,Ltd.Sodauto,S.A.Bavaria Motors,S.A.Diesa,S.A.Iberia Motor Company,S.A.Bin Ohaher Trading EnterprisesAutomviles del Mediterrneo,S.A.Compagnie dAutomobile et Transports(C.A.T.)Porsche Romania S.R.L.Rosinka,S.A.(Area Moscu)CountryImportersSalvadorSaudi ArabiaSingaporeSlovakiaTaiwan*)ThailandTrinidad TobagoTurkeyUn.Arab Emir.UruguayVenezuelaAlfasal S.A.de C.V.Safari Motors Company,Ltd.Barcelona Motors Pte.Ltd.Skoda Auto Slovakia,Co.Ltd.Chinchun Motor Co.Ltd.Lee Yang Seah,Ltd.Pte.Robinson Enterprises Ltd.Katalonya Oto Servis VE.Ticaret,A.S.Bin Dhaher EnterprisesAmobil,S.A.Corporacin Automotriz R.V.,C.A.BCN-8030-02604-013-18-17-Country policies are mainly defined based on volume growth and are often very profitableHigh volume growth countriesProfitabilityGreeceFinlandSwedenHollandHungaryTaiwanBrazilCountryVolumeV.GrowthProfitability5 years expected performancePolicyExampleBCN-8030-02604-013-18-18-There is a systematic gap between the expected operational margin and the real operational margin in every projectOpportunity to:Analyze target costing failuresAnalyze communication failuresTechnical Center often do no request targetsCommercial impacts are unrealisticFollow up unexistent or weakCommunication and data unavailable unorganized and not well structuredExpected operational margin=30%Real operational margin=25%BCN-8030-02604-013-18-19-Deep analysis and optimization of the following issues will have a clear and positive impact on Price and CostsExampleImpact on PriceImpact on CostsSales up strategy:growth policies and toolsProduction strategy:priorities&errorsPerceived quality vs.conveyed quality:product marketingPositioning:realism,today,goals,meansDistribution logisticsProcedures in commercial related areas/departmentsComplexity benefits:today and projectionsDistribution strategyAnalysis areasReal profitability vs predicted profitability gap(target costing failures)Supply enhancementsNew web based purchasing technologiesR&D strategySystematic launchment delayMaximization of simultaneous reengineering potentialProduct portfolioHuman resources pooling:blocking the cultural change?Shift from strategical to operational tasks decrease of added value in the work placeBCN-8030-02604-013-18-20-B.Some Sales Facts BCN-8030-02604-013-18-21-Source:ANFACEvolution of top six brands market share passenger cars(%)199319941995199619971999%SEAT has overtaken Ford and Opel with respect to market share in Spain and should aim to become market leader before Renault,but the French company is playing hardStrong position in Spain due toBroader product rangeNew attractive modelsAggressive marketingLeading position in Spain essential because ofScale positionPay back of R&D investmentImage positionRenaultSeatCitronFordOpelPeugeot1998BCN-8030-02604-013-18-22-Spanish market has grown in 1998 and 1999 up to 1,4 million car registrations,after many years of stagnation Source:ANFAC,Ranking de la automocinEvolution of car registration in SpainBCN-8030-02604-013-18-23-SEAT Sales have grown 120%at the same time in Spain and abroadSource:Annual ReportsSales evolution of SEAT vehicles(MM.Ptas.)276,207318,648364,799420,835517,920Number of vehiclesAbroadSpain546,809602,923BCN-8030-02604-013-18-24-VW ModelsSEAT Models360.510356.210296.051313.690343.444415.213467.280500.500486.303Martorell production has grown for SEAT models gaining independence from VW modelsSource:Annual Reports,ReutersProduction in Martorell1)Data not available for VW/SEAT models2)ForecastBCN-8030-02604-013-18-25-SEAT has maintained the second position in the Spanish market achieved in 1998Source:DRI,August 98Market Share(%)0SEAT Market Share Evolution in SpainPassenger CarsBCN-8030-02604-013-18-26-SEAT achieves about 70%of its sales with one platform only,however doubled the number of models offered during the last 5 yearsSource:Seat,Roland Berger&Partners AnalysisMarbellaArosaIbizaCordobaCordoba VarioIncaToledo HatchToledo NotchA-MPVAlhambra199519961997199819992000200120022003326307402430487494505536552468888899YearNumber of modelsB-MPV 5%A 11%A071%A0013%Platform Share 1998BCN-8030-02604-013-18-27-SEAT sales by region 1995-1999%Source:Seat,Roland Berger&Partners AnalysisSEATs sales are strongly focussed on West Europe30.80%31.40%33.10%37.40%61.50%59.00%57.20%53.60%9.60%9.70%9.00%7.4%7.70%19951996199719981999SpainRest ofWestern EuropeRest ofWorld100%=326,000100%=344,000100%=402,000100%=430,000100%=505,00056.6%36%2000 growth1South AmericaBrazilArgentinaMexicoWestern EuropeSpain23BCN-8030-02604-013-18-28-SEAT is positioned as the affordable,Mediterranean sports brand within the VW GroupSource:Roland Berger&Partners interviewsCore values Volkswagen GroupQualityHigh-qualitySafetyDurabilityResponsibilitySolidarityLead BrandPremium BrandSports BrandValue BrandCore valuesReliableDemanding in quality and technologyStrategic competitorsMercedes-BenzCore valuesInnovativeOriginal in technology and designStrategic competitorsBMWJaguarCore valuesExpressiveIndividualAttractive pricesStrategic competitorsAlfa RomeoCore valuesAttractive pricesHigh quality and solidStrategic competitorsVolvoWorkmanshipBCN-8030-02604-013-18-29-C.Actions to implement the Joy of life strategyBCN-8030-02604-013-18-30-The required evolution to a top brand is costly,therefore generates three different financing scenariosA5 years support through lower payments to the group(4%)In return SEAT will invest 100%benefits in positioning(communication,network and product)The benefit for the group will be a valuable brand in 5 yearsBVW Group directly pays the positioning effortsIn return SEAT will invest 100%benefits in positioning(communication,network and product)The benefit for the group will be a valuable brand in 5 yearsCSEAT reduced to a local brandUse Martorell for VW,Skoda and Audi productionEliminate all company-related structure:R+D,purchasing,administration,.Short term benefitNo more destruction of Group valueBCN-8030-02604-013-18-31-Todays SEAT value is low despite the achieved production volumeY20001.IBIZA2.Toledo3.Martorell at fully capacity4.600,000 cars sold 19995.64 countriesY20061.Image/Positioning=Joy of life2.5 products meaning Joy of life3.Distribution network selling Joy of life Value=Value=BCN-8030-02604-013-18-32-SEAT positioning target seems not well supported in any area20002006ProductEach product has its own strategyAll products=Joy of lifeDistributionMaximization of n of countries and dealersPrice selling strategy at the point of saleFocus on profitable and quality networkJoy of life selling strategyCommunicationEach product has its own strategyAll products=Joy of lifePriceTargeting Renault,Fiat,PeugeotTargeting Alfa Romeo,Audi?BCN-8030-02604-013-18-33-Today SEAT doesnt know the exact cost of their cars neither the final price that people really will pay for the new modelsY2000Real costs not totally knownAnalysis based on errorsProduct sales volume and price predictions based on unrealistic positionmentProject profitability always lower than targeted profitability(5%)Y2006Advanced cost systemTarget costing empowermentBCN-8030-02604-013-18-34-SEAT product portfolio needs high investment to align product strategy with brand image strategyY2000Toledo means familyIbiza means youthArosa means from priceAlhambra means house and its being sold as a cheap sharonLen means sportCrdoba means?Inca means work and hard discountY2006Eliminate CordobaEliminate IncaDevelop an aggressive hut for the Alhambra or at list an aggressive batchCome out with a roadsterSportif B classEnhance Joy image of new ToledoUse Ibiza to communicate brand image and as the core productBCN-8030-02604-013-18-35-Communication main priority must be brand positioning and distribution must be rationalizedY2000Each car image is communicated separately Messages are completely different for each vehicle:cheap,sport,safe,house,family,generating no common brand image neither brand loyaltyPoint of sale communication is not reinforcedAfter one year the new image is not in the dealer network yetTheres no effective control over the selling technique thus they sell price and communicate price to the customerThe money is being invested in new marketsY2006External communication=Joy of life exclusively!Invest on point of sale imageSet up a control team to inspect selling techniquesGive specific selling formationReduce the number of countries and the number of dealersBCN-8030-02604-013-18-36-Within the VW Group,SEAT covers a comparatively weak position,with low growth prospects apart from the ToledoGrowth per year 98-03(%)-5,0%0%6,1+30,0%1SEATs position in the VW Group 1998=VW,Audi,Skoda=SeatRelative share of platform sales 1998/1999108147242283179700944545747441155GolfToledoLupoPoloPassatSharanArosaOctaviaA3FeliciaA4A6/A8I
