INTRODUCTION

Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry.

Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance. The manager must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), i.e., they should make best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats. Strategic management is nothing but planning for both predictable as well as unfeasible contingencies. It is applicable to both small as well as large organizations as even the smallest organization face competition and, by formulating and implementing appropriate strategies, they can attain sustainable competitive advantage.

It is a way in which strategists set the objectives and proceed about attaining them. It deals with making and implementing decisions about future direction of an organization. It helps us to identify the direction in which an organization is moving.Strategic management is a continuous process that evaluates and controls the business and the industries in which an organization is involved; evaluates its competitors and sets goals and strategies to meet all existing and potential competitors; and then revaluates strategies on a regular basis to determine how it has been implemented and whether it was successful or does it needs replacement.

Strategic Management gives a broader perspective to the employees of an organization and they can better understand how their job fits into the entire organizational plan and how it is co-related to other organizational members. It is nothing but the art of managing employees in a manner which maximizes the ability of achieving business objectives. The employees become more trustworthy, more committed and more satisfied as they can co-relate themselves very well with each organizational task. They can understand the reaction of environmental changes on the organization and the probable response of the organization with the help of strategic management. Thus the employees can judge the impact of such changes on their own job and can effectively face the changes. The managers and employees must do appropriate things in appropriate manner. They need to be both effective as well as efficient.

One of the major role of strategic management is to incorporate various functional areas of the organization completely, as well as, to ensure these functional areas harmonize and get together well. Another role of strategic management is to keep a continuous eye on the goals and objectives of the organization.

1

DEFINING STRATEGIC MANAGEMENT

Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. This definition captures two main elements that go to the heart of the field of strategic management. First, the strategic management of an organization entails three on-going processes: analysis, decisions, and actions. That is, strategic management is concerned with the analysis of strategic goals (vision, mission, and strategic objectives) along with the analysis of the internal and external environment of the organization. Next, leaders must make strategic decisions. These decisions, broadly speaking, address two basic questions: What industries should we compete in? How should we compete in those industries? These questions also often involve an organization’s domestic as well as its international operations. And last are the actions that must be taken. Decisions are of little use, of course, unless they are acted on. Firms must take the necessary actions to implement their strategies. This requires leaders to allocate the necessary resources and to design the organization to bring the intended strategies to reality. As we will see in the next section, this is an on-going, evolving process that requires a great deal of interaction among these three processes.

Second, the essence of strategic management is the study of why some firms outperform others. Thus, managers need to determine how a firm is to compete so that it can obtain advantages that are sustainable over a lengthy period of time. That means focusing on two fundamental questions: How should we compete in order to create competitive advantages in the marketplace? For example, managers need to determine if the firm should position itself as the low-cost producer, or develop products and services that are unique which will enable the firm to charge premium prices-or some combination of both.

Ideas that work are almost always copied by rivals immediately. In the 1980s, American Airlines tried to establish a competitive advantage by introducing the frequent flyer program. Within weeks, all the airlines did the same thing. Overnight, instead of competitive advantage, frequent flyer programs became a necessary tool for competitive parity, not competitive advantage. The challenge, therefore, is to create competitive advantage that is sustainable.

Michael Porter argues that sustainable competitive advantage cannot be achieved through operational effectiveness alone. Most of the popular management innovations of the last two decades-total quality, just-in-time, benchmarking, and business process reengineering, outsourcing all about operational effectiveness. Operational effectiveness means performing similar activities better than rivals Sustainable competitive advantage is possible only through performing different activities from rivals or performing similar activities in different ways. Companies such as Wal-Mart, Southwest Airlines, and IKEA have developed unique, internally consistent, and difficult to imitate activity systems that have provided them with sustained competitive advantage. A company with a good strategy must make clear choices about what it wants to accomplish. Trying to do everything that your rivals do eventually leads to mutually destructive price competition, not long-term advantage.

2

FEATURES OF STRATEGIC MANAGEMENT

Flexibility: It is one of the important features in strategic management. In the case of determining long term strategies, several intricate problems and hazards can be visible, on that case, the management can take hurried decision adapting to changed environment.

Integration: To take planning under the strategic management, it is essential to integrate goals objects alongside the internal and external sides of the institution.

Speed: To bring the dynamism under the strategic management, it is inevitable to access the important affairs so that it may be possible to speed up the pace of action at present and future.

Innovation: Innovation or creativity is an important feature in the case of strategic management. We know, environment is ever changing, that is way demand, taste, and behavioural patterns of employers and employees are to be changed. Strategic management controls and takes things forward by producing new strategic planning and framing newer strategies.

Long-term plan: Long-term planning is very essential to bring good result. There is no way to adopt long-term planning if anybody intends to compete in the field of industry.

Guide-line of plan: Guide-line of planning pin-points to implement any planning under the strategic management.

Determination of alternatives: It is a very urgent affair to implement goals of any institution. Under the strategic management, determination of alternatives can face obstacles standing on the way easily.

Consideration of environment: This tool which can move anybody to achieve goals ignoring all unfavourable environments consideration of environment directs to take decision cautiously.

3

STRATEGIC MANAGEMENT PROCESS

The strategic management process means defining the organization’s strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises its competitors; and fixes goals to meet the entire present and future competitor’s and then reassesses each strategy.

Strategic management process has following four steps:1. Environmental Scanning- Environmental scanning refers to a process of collecting,

scrutinizing and providing information for strategic purposes. It helps in analysing the internal and external factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it.

2. Strategy Formulation- Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies.

3. Strategy Implementation- Strategy implementation implies making the strategy work as intended or putting the organization’s chosen strategy into action. Strategy implementation includes designing the organization’s structure, distributing resources, developing decision making process, and managing human resources.

4. Strategy Evaluation- Strategy evaluation is the final step of strategy management process. The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions. Evaluation makes sure that the organizational strategy as well as its implementation meets the organizational objectives.

These components are steps that are carried, in chronological order, when creating a new strategic management plan. Present businesses that have already created a strategic management plan will revert to these steps as per the situation’s requirement, so as to make essential changes

Components of Strategic Management ProcessStrategic management is an on-going process. Therefore, it must be realized that each component interacts with the other components and that this interaction often happens in chorus.

4

Functional Strategies

The success of an organization largely depends on strategic management. Different level of strategic management plays different roles. During the 1970’s many organizations adopted top-down strategic planning for the survival of an organization.

Once higher level strategies are developed, the next task of the management is to formulate and implement strategies for each functional area. Strategies are Formulated on three different levels:

Corporate level Business unit level Functional level

To run an organization successfully it is essential to plan a strategy at each level but to gain maximum benefit of planning it is important to align the plans at every level. Without alignment department functions will contradict each other’s purpose and the overall corporate strategy will become less effective.No matter how well corporate level strategies are designed and formulated but if the execution of corporate level strategy fails in meeting the expected standard all the effort will go in vain. The success of strategy is largely determined at the functional level.  Functional level checks the reality of corporate level and business level strategy and brings the desired result by turning strategies and planning into realities.

The functional level of your organization is the level of the operating divisions and departments. It is the responsibility of the strategist to provide direction to functional managers regarding the execution of plan and strategies for the successful implementation. The role of functional strategy is very crucial for the existence of an organization. Functional strategy provides support to overall business strategy and secondly it spells out as to how functional managers will proceed to achieve the set goals and objectives. Departments like marketing, finance, production and HR are based on the functional capabilities of an organization.

Within functional strategies there might be several sub-level areas. Functional strategies are planned keeping in mind the higher level strategies. In terms of level of strategy formulation functional strategy falls below business-level strategies.The development plan of functional strategies is conceived and designed by top-level management. Strategist manager plans executable functional strategies. Functional strategies support the overall business and corporate level business.Functional strategies are formulated by specialists in each area. It outlines the action plan and sets the milestones that are needed to achieve before reaching to the final goal of corporate strategy.  Functional strategies work as a backbone of the organization. It provides the basic information on resources and capabilities on which the higher level strategy is designed. It involves coordinating the various functions and operations needed to design, manufacture, deliver, and support the product or service of each business within the corporate portfolio. Functional level strategy executes the plan developed at a higher level for the growth and advancement of an organization.Functional strategies are primarily concerned with:

5

Efficiently utilizing specialists within the functional area.

Integrating activities within the functional area (e.g., coordinating advertising, promotion, and marketing research in marketing; or purchasing, inventory control, and shipping in production/operations).

Assuring that functional strategies mesh with business-level strategies and the overall corporate-level strategy.The success of functional strategy is highly affected by the time factor. For example advertising of a new product is launched 60 days prior to shipment of the first product. Functional strategies have a shorter time span than business-level or corporate –level strategies.

The task of functional unit of any organization is to formulate higher level strategies by providing input into the business unit level and corporate level strategy. Processing the available information and using it for higher level strategy formulation. Once the higher level strategies are developed, the function unit starts making executable action plans for each department.

The strategic planner knows the relevance and significance of planning at different levels and how it helps the organization in achieving its objectives. The purpose of strategies and planning are to guide organizations in achieving its goals.Such as providing information on customer feedback or on resources and capabilities on which the higher level strategies can be based. Once the higher level strategy or strategic intent is developed, the functional units translate them into discrete action plans that each department or division must accomplish for the strategy to succeed. A good strategist draws a strategy using all the available resources and gets maximum benefits from its resources.

6

INTRODUCTION

Skoda Auto India Pvt Ltd.

Skoda Auto is a part of the International Volkswagen Group whose controlling stake is owned by Porsche SE. It is one of the premier automobile manufacturers in Europe, based in Czech Republic. The company introduced itself on November 16th, 2001. With its Greenfield plant in Aurangabad, the company has its dealership network spread over Mumbai and Delhi region.

The brand Skoda Auto is globally known for its stylish looks, well-built exterior and its constant endeavour to introduce modern technologies. The company has already introduced 16 luxury models in Indian market.

The environment is irreplaceable by man and, as such, it must be protected and preserved for the present and future generations. Aware of this fact, SKODA Auto, being the largest company in the Czech Republic, therefore tries to be an example to other companies. Environmental approach to development and production of new vehicles, as well as services, form the base of the company's business strategy. SKODA vehicles meet most of the environment-friendly criteria, and some models even meet the EU4 emission standard. Likewise, all of SKODA Auto developmental and production processes comply with the legislative standards of the economically advanced countries of the European Union, and the newly prepared principles of old automobile recycling.

It sells cars under the brand name of Skoda. According to an official release, Skoda Auto India sold more than 16,000 units in the 2008, a 28.5% increase from 2007 sales totals.

Despite a dip in global automobile sales, Skoda India managed to sell 17000 units of its vehicles in 2008, with growth registered 33.2 % from previous year.

Application of the latest scientific findings and technical devices, as well as modern processes and technologies enable SKODA Auto engineers to reduce the time required for developing new models, and to respond more flexibly to environmental legislation.

Noise is one of the unfavorable factors affecting the environment. SKODA Auto, however, has no problem keeping up with the progressive legislation of today. Contrary to earlier vehicles, in today's model lines, e.g., the Fabia and the Octavia, the noise level – both internal and external – has dropped by nearly 10 decibels.

 

Carbon, nitrogen, and solid particles emission is a serious form of environmental pollution. SKODA Auto fits its vehicles with engines that not only meet strict EU3 emission limits, in effect since 2001, but also the EU4 emission standards.

7

 HISTORY

At the beginning of December 1895 the mechanic Václav Laurin and the book-seller Václav Klement, both bicycles enthusiasts, started manufacturing bicycles of their own design, patriotically named Slavia in the nationalist atmosphere of them 19th century. A few years later, in 1899, the Laurin & Klement Co. began producing motorcycles, which were soon successful and gained several racing victories. After initial experiments at the turn of century, producing of motorcycles was gradually replaced by automobiles from 1905 onward.

Due to the country's economic development, a joint venture with a strong industrial partner became essential in the 1920s in order to strengthen and modernise the Company, which was at that time producing numerous types of passenger cars, trucks, buses, airplane engines and agricultural machinery. In 1925, fusion with the Pilsen SKODA Co. was accomplished, marking the end of the Laurin and Klement trademark. In early 1930s, the automotive business was again organised as a separate joint-stock company within the SKODA Group After the crisis, the company achieved a breakthrough with the Type SKODA Popular.

The German occupation in 1939 to 1945 caused a considerable disruption in the history of the company, which was integrated into the industrial structure of the German Empire. The civilian production-programme was immediately limited and production was turned to its needs. In the course of a large-scale nationalisation, which began immediately after the end of the war, the Company became a national enterprise named AZNP in 1946. Within the political and economic changes of that time, it acquired the monopoly of passenger car production.

Based on the traditional production processes and past success, the Czechoslovak economy managed to maintain a relatively good standard in the post/socialist period for several decades, in spite of the changes brought about by planned economy and efforts at unduly rapid growth. This standard only became questionable towards the end of the 1960’s due to development of new technology in the western world. The permanent stagnation of the economy started after the 70’s, also affecting the SKODA automobile manufacturer in spite of the company’s leading position in the East Europe marker. Production grew again only when the model range Skoda Favorit went into production in 1987.

After the political changes of 1989, under the new market economy conditions the Government of the Czechoslovak Republic and the management of Skoda began to search for a strong foreign partner whose experience and investments would be capable of securing long-range international competitiveness of the company. In December 1990, the Government decided on cooperation with the German Volkswagen Group. The Skoda –Volkswagen joint venture began to operate on 16 April 1991 under the name Skoda, automobile as becoming the fourth brand of the Volkswagen Group alongside VW, AUDI a SEAT.

8

BACKGROUND IN INDIA

Skoda Auto India started its operations in India on November 16, 2001. They opened their manufacturing unit in Shendra, on the outskirts of Aurangabad thus setting their foot on the Indian soil. The first Skoda car which had hit the Indian roads was the Skoda Octavia which was priced at 10.6 lakh INR. Skoda Octavia is a medium sized car and gained popularity for two primary reasons, first being the fact that the car had 100 percent import content and second reason that the model was available in both petrol and diesel version. The Octavia is being imported to India as semi-knocked-down kits and assembled at the company's Aurangabad plant. The plant currently assembles 10 cars a day and operates on a single shift. The indigenization level is planned to be around 10 per cent by 2002-end. In spite of being somewhat highly priced, the Skoda has received a tremendous response in the Indian market. Hence Skoda Auto has plans to launch its three luxury cars Elegance, Laurin and Klement, and Superb in India in 2002-03 with the market trend and inclination of the economy to spend generously to own a luxury car. Skoda is targeted a 17-18-per cent share of the combined C- and D-segment volume in India in 2003. Skoda, which made an initial investment of $15 million in the Aurangabad facility, invested $56 million more in due course of time for higher level of localization which in turn would bring down the cost of the cars manufactured. In April 2007 Skoda (VW group) invested $912m to expand its plant at Aurangabad & Chakan plant at Pune to accommodate the production on Volkswagen, Audi and Porsche. In 31st march 2009 Chakan plant was ready and Skoda announced localization level increased to 50% from 15%.

9

PRODUCT

All ŠKODA vehicles are designed to be supremely efficient and achieve low greenhouse-gas emissions, thanks to utilizing state of the art technologies. But real world fuel consumption is still in the hands of you, the driver. Improper driving style may increase both fuel consumption and greenhouse gas emissions by tenths percent. That’s why we’d like to offer you with ten tips to help you fully use your car’s potential.

1. Be smooth

Smoothness is mother of efficiency. Aggressive driving with lot of braking and acceleration leads to high fuel consumption. Clean, smooth inputs will not only save you money, they also make your journey more pleasant and comfortable.

2. Look ahead!

Is the traffic coming to a stop in front of you? Is that green light down the road going to turn red? Lift your foot! Coasting car uses no fuel and by slowing down early enough, you may even find in position to accelerate again before you come to a full stop, saving yet more fuel!

3. Engine brake

Brakes turn energy into heat. If your car is equipped with energy recovery system, you can recoup at least part of this energy. And in any case, you’ll save the fuel that would otherwise be used to keep engine running at takeover.

4. Rev Low

High engine speeds mean more resistance and more friction losses. Especially with modern turbocharged engines, which can achieve maximum torque in low rpms, it’s unnecessary to rev the engine too much. Or you can just listen to the Shift recommendation system.

5. Travel light

Weight not only slows you down, it also costs you fuel. Take the unnecessary items out of the car, every kilogram counts. And watch for the aerodynamics, too. Try not to levy your windows open and take off the bike racks or roof boxes when not in use.

6. Navigate

Traffic jams do not only cost you time (and time is money). They increase fuel consumption, so they cost you money. Again using your ŠKODA Navigation systems with traffic information, you can avoid them and use your time and money on finer things in life.

10

7. Slow down

Fast driving usually won’t save you more than a few minutes, but it may severely increase your fuel consumption. Even 10 or 20km/h may make a huge difference and keeping under the speed limits will not only save you money, but also make your journey safer and less stressful.

8. Take care

Only if it’s in perfect shape, can your car give its best. Make sure that your tyres are properly inflated, your oil and filters changed regularly and that your car is properly maintained by professionals at the authorized ŠKODA Service Partner.

9. Switch off

Running your engine on idle is unnecessary waste of fuel, so switch it off every time you stay stationary for a prolonged period of time. Or you can just order one of our Start-stop equipped cars and leave it to computer!

10. Use slipstream

Hiding in the slipstream behind cars or, preferably, trucks, can vastly reduce the aerodynamic drag and significantly reduce fuel consumption. Just watch out and don’t get too close!

11

SKODA INDIA OFFERS THE FOLLOWING CARS,

SKODA FABIA

The sleek looking Fabia is the first Super Hatch in India with a huge passenger and cargo space designed with premium looks. It has all the comforts and roominess of a big luxury car and at the same time it is so compact that you can drive it and park it with utmost ease in the most congested areas. This super hatch that combines looks with performance and economy is available in petrol and diesel variants. It packs quite a punch every time it hits the road.

12

SKODA OCTAVIA

Octavia is an orderly design with no unwanted mass. It’s more about straight lines than about curves. It looks very European with the subtle nose section and high waistline. The build quality is as good as it can get and is faintly reflected in the way the Octavia looks. While seated in the rear, you will have limited legroom but the story is completely different at the front as the seats at front are enormously accommodating. The quality of the interior is quite good and it exudes a tough feel.

13

SKODA LAURA

Skoda Laura, a stable mate of Skoda Octavia, Laura is popular for its contemporary, dynamic designer looks. Specially customized, the model has stood the test of times in Indian conditions with its extraordinary performance giving results beyond imagination. Skoda (Sedan) The Skoda Laura with its diesel variants targets the middle class consumer with Skoda car prices between rupees sixteen and nineteen lakhs, it is available in 3 engine options

14

SKODA SUPERB

Skoda has gone all out with the new superb to make you feel that you are buying a 40 lakh car for half the price. It has technology, features and safety equipment that befit other luxury cars. But the surprise is the 1.8 TSI motor, which has performance and efficiency to threaten the Accord. The car comes with 3 engine options 1.8 tsi motor , 1.9 TDI and 2.7V6 petrol

15

engine , it also the first of its kind 7 speed triptronic DSG transmission first introduced by an local manufacturer.

SERVICE

In India, Skoda parts are not sold in the open market and are only available from Škoda Auto India authorized dealers; Skoda currently has 61 dealerships across India, but plans to expand to 65 dealerships by the end of 2009. Service for Skoda car

Warranty for Skoda products

In accordance with the warranty conditions Skoda offers following warranty • 2 - Year warranty on New Skoda vehicles for unlimited kms • 2 - Years warranty on Skoda Genuine Parts and Skoda Genuine Accessories for unlimited kms. • The warranty will be honored by authorized Skoda dealership

16

LEVELS OF STRATEGIC MANAGEMENT

Skoda India is an Business Unit (BU) of the VW international group of companies, VW decided to setup an BU in India because of the large automobile market in India, the luxurious car market in India in about 3500 units per month, which maybe a small share compared to other segment, but the growth in this segment is at 34% annually, which is among the highest in the world. Hence just imports of manufactured won’t have been viable because they would have attracted 100% duty, but also the company also have missed the opportunity to tap the export friendly market set up in India. From the levels of strategy, BUSINESS STRATEGY fits SKODA AUTO INDIA LTD, as Skoda is a multinational corporation it has production facilities and presence in large number Business units in world markets belonging to a particular country i.e. Skoda India, Skoda china etc which are connected to the parent company. Here the head of the BU decides the strategies and step need to be taken for the company growth and smooth operation.

In business strategy Skoda India is Competitive Strategy system as it is competing with other premier car manufacturers like Honda and Toyota.

Skoda India is trying to bring down the cost of vehicles manufactured by locally manufacturing components of the vehicle hence evading from paying heavy taxes on direct imports.

Competitive pricing has also been a hand behind Skoda’s huge success, their price has been below the price of their competitors and with solid built and quality, Skoda has been triumphing in Indian premier segment market.

17

KEY STEP TOWARDS BUSINESS STRATEGY (SWOT ANALYSIS)

Strength Weakness

• Brand image

• Established distribution

• Fuel efficient engines

• Built quality

• High resale value

• Advanced technology

• Pricy spare parts

• Petrol versions car not success

• Complaints of en-ethical practice during A.S.S

• High import duty levelled on importing components

Opportunity Threats

• Increase PP of people

• Premium segment growth by 34%

• Lower level of threats from Indian companies

• Tax incentives

• Threats from new companies entering market

• Threat from Constantly evolving Indian companies

• Threats from competitors

18

B.C.G MATRIX

Stars Question Mark

• Skoda Laura 1.9TDi • Skoda Fabia 1.4 TDi • Skoda Fabia 1.2 petrol

• Skoda Laura 1.8 TSi • Skoda Laura 2.0 Tdi • Skoda Superb 1.8 TSi

Cash Cows Dogs

• Skoda Octavia 1.9 tdi • Skoda superb 1.9 tdi

• Skoda Octavia 1.8 petrol • Skoda combi • Skoda vRS • Skoda superb 2.7 V6

Question marks: they are new products with potential for success but their cash needs are high and cash generation is low. In Skoda’s stable Laura 1.8tsi, 2.0 tdi and superb 1.8tsi have been introduced into Indian market. The initial sales are high but there still remains a question mark about future sales after the hype dies down.

Stars: Stars are defined by having high market share in a growing market. Stars are using large amounts of cash. Stars are leaders in the business. For Skoda the highest seller are Laura 1.9TDi and Fabia, these product are the one’s giving higher profits to the company.

Cash Cows: Cash cows are in a position of high market share in a mature market; they are the main horse pulling the company forward in the sales chart. For Skoda Octavia remain Cash Cow and the largest seller of the company. They have reached the maturity stage but still manage to sell in the market because of its value for money and ease of maintenance.

Dogs: Dogs have no market share or very little market share and does not bring in much profit to the company, it is even considered as loss making asset to the company. For Skoda Octavia combi, vRS has become DOG because it is only demanded by car enthusiasts as it is performance based car and Skoda superb 2.7 V6 is also a dog is it is expensive and has low fuel economy.

19

Hard Skills

Strategy: The basic strategy of Skoda was to bring an premium diesel cars to the Indian market along with petrol, as there was an absence of any diesel premium car, the only other two where Honda civic and Toyota corolla. Even though Skoda launched petrol cars but they knew that a more affordable and cheap diesel car is behind their success. There was a new strategy in 2004, when Skoda decided to launch its super hatchback The Skoda Fabia and it was an immediate success. Skoda currently plans to expand their presence in India and making India an export hub for their cars because of cheap labour and raw material availability. Structure: The head of the Business unit head of Skoda India is Mr. Jorg Mueller president VW India. VW India is divided up into 4 Business units those are

Skoda India VW India Porsche India Audi India

The organizational structure followed is of Strategic business unit. System: Skoda Auto's philosophy of employing the latest technology to ensure that our cars are built to the highest standard and are available at attractive prices has a long tradition. This commitment also extends to the best quality, the best services & the concern for environment. As part of this commitment, Skoda Auto offers the roomiest cars in their class, providing luxury, value for money & people oriented technology.

Soft Skills

Staff: Skoda Auto is making an effort to create such a working environment, which supports motivation, high performance and creativity of the employees while respecting their individuality and varying needs. This approach also has support at all-concern level. Practical consequences are subsequently applied in the individual areas, regardless of whether this concerns HR policy, working environment, working safety, protection of the health of employees, education and personal development of employees or provided social services Shared value: A value of the company that guides the employee towards value behaviour. Skoda Auto's value of making the environment friendly cars, best built quality, value for money, providing luxury, & people oriented technology.

Skills: To produce various car models, Skoda have built new manufacturing facilities and equipped them with the most advanced technology available to automobile manufacturers worldwide. Skoda’s employees are also leading specialists in their fields.

20

Types of Strategies

Integration strategy

Backward Integration strategy fits Skoda India best because, initially Skoda use to import the cars in Complete knocked down Kits (CKD) and would assemble it in India, now Skoda has started manufacturing components locally to build their cars.

Intensive Strategy

Market Penetration fits Skoda the best because as we have seen since their launch they place their products price very low from their competitors, hence catching the attention of buyers.

Diversification strategy

Concentric Diversification: Skoda India also has started to produce Audi, Porsche and VW cars in their manufacturing plant apart from manufacturing Skoda’s.

Defensive Strategy

Potter Generic Strategy

Focus: The Company’s main focus since their launch to retain its spot is to concentrate on highly fuel efficient diesel cars which have created an impact in the premium segment cars.

21

KEY STEP TOWARDS STRATEGIC PLANNING

Vision: Skoda Auto is a brand known for its lifestyle value, offering reliability and European build quality with a constant Endeavour to introduce modern technologies. The vision of the company is slated by the slogan below: -

Man needs an automobile as well as the nature Technology focused on safety and environment Modern engineering

Mission: to develop a brand name and brand following, to set up standards in production and to be an example of automobile manufacturing in India.

Objectives: the company’s objective is to make India their global production factory from where they can export their products to the world. Within the country they want to be the leading premium automobile manufacturer in India.

Value: Skoda Auto philosophy of employing the latest technology to ensure that our cars are built to the highest standard and are available at attractive prices has a long tradition.

Goals: Skoda vision is to be the leading premium automobile MFG in India, customer satisfaction, VFM products. Customers have responded to their products in the following way

1st in Sales satisfaction index 2007 'Most Technologically Advanced Car' 'Executive Car of the Year' 'NFO Voice of customer' 'Best entry luxury car'

Strategy: The current strategies implemented are Create new market for small cars Market penetration with dropping prices To increase Local production percentage of components from 50% to 75%

22

STRATEGIC MANAGEMENT PROCESS

Strategy formulation: after Framing missions and objectives and SWOT analysis, Skoda India has worked on a plan to tap the Lower hatchback segment of the market.

News: Skoda India, a part of the Volkswagen Group, is changing tack and one could soon see new cheaper small cars on Indian roads. Next week, the Skoda India management would be in the company's headquarters in Europe to discuss the nitty gritty of the new small car, as well as a way forward in India, where Skoda is number nine among car manufacturers.

Strategy implementation: it will be down in mid-2009 when the current manufacturing plant will be expanded to facilitate the new production line.

23

Skoda’s 7-yr turnaround plan

Czech car maker Skoda has adopted a major seven-year turnaround plan in India, under which it has decided not to look at volume growth till 2016 and focus on the premium car segment instead of the mass market of small cars. The idea is to concentrate on brand-building in order to improve its reputation of poor after-sales support, which is believed to have contributed to a sharp drop in sales over the last year in FY13, Skoda's domestic volumes had dipped 15% (to 29,067 units) while sales in April-July FY14 are already down 46% (6,989 units).

Sudhir Rao, MD, Skoda Auto India, told FE that in the past year the company had been evaluating its strengths and weaknesses and has now devised a plan for the short and medium term. Our strengths are our products, our weakness is the often-stated customer service and after-sales. Our strong focus is now on eliminating that weakness. That will put us back in a very strong position from a brand perspective, which then sets the foundation for growth. So the sequence has reversed, its now about focussing on products, eliminating weaknesses and going for growth, he said.

This strategy will play itself out over the next seven years, till 2020. There are obviously milestones in between. To fix (the weaknesses) is a two-three journey. The message I want to send out to the market is that we have strong products and that we are turning this company around in terms of all its negatives, he added.

The start of this new strategy will see Skoda, a Volkswagen group brand, bring back the 'Octavia' brand in the next few weeks in the form of a new mid-size sedan. The brand is important, since the Octavia sedan was the first brand for the company when it entered India 12 years ago and still has strong recall with consumers, but it was later replaced with the Laura.

Incidentally, this development comes a few weeks after the company decided to temporarily pause the production of the Fabia hatch at the Chakan plant near Pune. The Fabia was the only small car sold by Skoda in India, but had seen its sales dip 51% to 812 units in April-July FY14.

24

Skoda also sells three sedans Rapid, Laura and Superb, apart from the Yeti SUV.

MANAGEMENT   INFORMATION SYSTEMS

Management Information Systems (MIS) is the study of people, technology, organizations and the relationships among them. MIS professionals help firms realize maximum benefit from investment in personnel, equipment, and business processes. MIS is a people-oriented field with an emphasis on service through technology. If you have an interest in technology and have the desire to use technology to improve people’s lives, a degree in MIS may be for you.Businesses use information systems at all levels of operation to collect, process and store data. Management aggregates and disseminates this data in the form of information needed to carry out the daily operations of business. Everyone who works in business, from someone who pays the bills to the person who makes employment decisions, uses information systems. A car dealership could use a computer database to keep track of which products sell best. A retail store might use a computer-based information system to sell products over the Internet. In fact, many (if not most) businesses concentrate on the alignment of MIS with business goals to achieve competitive advantage over other businesses.

MIS professionals create information systems for data management (i.e., storing, searching and analysing data). In addition, they manage various information systems to meet the needs of managers, staff and customers. By working collaboratively with various members of their work group, as well as with their customers and clients, MIS professionals are able to play a key role in areas such as information security, integration and exchange. As an MIS major, you will learn to design, implement and use business information systems in innovative ways to increase the effectiveness and efficiency of your company.A common misconception that MIS only concerns programming; however, programming is just a small part of the MIS curriculum. While programming concepts represent some of the founding concepts and information systems development, implementation and use, many jobs in MIS do not utilize programming at all. A large portion of the MIS degree focuses on data analysis, teamwork, leadership, project management, customer service and underlying business theories. These aspects of the degree are what set the MIS professional apart from a computer science specialist.

25

CHARACTERISTICS OF STRATEGIC MIS SYSTEM

DOCUMENT AND RECORD MANAGEMENT

Document and record management may well be the most crucial aspect of any information

system. Some examples of types of information maintained in these systems would be

accounting, financial, manufacturing, marketing, and human resources. An information

system can serve as a library. When properly collected, organized, and indexed in accordance

with the requirements of the organization, its stored data becomes accessible to those who

need the information.

The location and retrieval of archived information can be a direct and logical process, if

careful planning is employed during the design of the system. Creating an outline of how the

information should be organized and indexed can be a very valuable tool during the design

phase of a system. A critical feature of any information system should be the ability to not

only access and retrieve data, but also to keep the archived information as current as possible.

COLLABORATIVE TOOLS

Collaborative tools can consist of software or hardware, and serve as a base for the sharing of

data and information, both internally and externally. These tools allow the exchange of

information between users, as well as the sharing of resources. As previously mentioned,

real-time communication is also a possible function that can be enabled through the use of

collaborative tools.

DATA MINING

Data mining, or the process of analysing empirical data, allows for the extrapolation of

information. The extrapolated results are then used in forecasting and defining trends.

26

QUERY TOOLS

Query tools allow the users to find the information needed to perform any specific function.

The inability to easily create and execute functional queries is a common weak link in many

information systems. A significant cause of that inability, as noted earlier, can be the

communication difficulties between a management information systems department and the

system users.

Another critical issue toward ensuring successful navigation of the varied information levels

and partitions is the compatibility factor between knowledge bases. For maximum

effectiveness, the system administrator should ascertain that the varied collection, retrieval,

and analysis levels of the system either operate on a common platform, or can export the data

to a common platform. Although much the same as query tools in principle, intelligent agents

allow the customization of the information flow through sorting and filtering to suit the

individual needs of the users. The primary difference between query tools and intelligent

agents is that query tools allow the sorting and filtering processes to be employed to the

specifications of management and the system administrators, and intelligent agents allow the

information flow to be defined in accord with the needs of the user.

Operational ExcellenceThis relates to achieving excellence in business in operations to achieve higher profitability. For example, a consumer goods manufacturer may decide upon using a wide distribution network to get maximum reach to the customers and exposure.A manufacturing company may pursue a strategy of aggressive marketing and mass production.

New Products, Services and Business ModelsThis is part of growth strategy of an organization. A new product or a new service introduced, with a very fast growth potential provides a mean for steady growth business turnover.With the help of information technology, a company might even opt for an entirely new business model, which will allow it establish, consolidate and maintain a leadership in the existing market as well as provide a competitive edge in the industry.For example, a company selling low priced detergent may opt for producing higher range detergents for washing machines, washing soaps and bath soaps.It involves market strategies also that include planning for distribution, advertisement, market research and other related aspects.

Customer and Supplier IntimacyWhen a Business really knows their Customers and serves them well, 'the way they want to be served', the Customers generally responds by returning and buying more from the firm. This raises revenues and profits.

27

Likewise with Suppliers; the more a Business engages its Suppliers, the better the Suppliers can provide vital information. This will lower the cost and bring huge improvement in supply-chain management.

Improved Decision MakingA very important pre-requisite of strategic planning is to provide the right information at the right time to the right person, for making an informed decision.Well planned Information Systems and technologies make it possible for the decision makers to use real-time data from the marketplace when making informed decisions.

Competitive Advantage and Survival

The following list illustrates some of the strategic planning that provides competitive advantage and survival:

Planning for an overall growth for the company Thorough MARKET  research to understand the market dynamics involving demand-supply Various policies that will dominate the course and movement of business Expansion and diversification to conquer new markets Choosing a perfect product strategy that involves either expanding a family of products or an

associated product, Strategies for choosing the market, distribution, pricing, advertising, packing and other

market oriented strategies Strategies driven by industry-level changes or Government regulations. Strategies for change management.

SKODA AUTO MIS SYSTEMS

The Academic information system (AIS) is used for the management of all academic records. It is one of the Czech Republic’s most advanced University information systems and it not only used by our university but by other Universities both in the Czech Republic and abroad. The licence is owned by the Mendel University in Brno and provided by IS4U ltd. SKODA AUTO University has been using the system since 2007 and it has become an indispensable tool for the Study affairs department, administration processes, educational support, research projects and the technological basis for the Educational Centre Na Karmeli. Students access this system via their web browser and many operations can be completed through the AIS, such as: enrolling for courses, registering for courses, registering electronically ,sharing study materials on the document server, submitting written assignments, signing up for exams, accessing study results in the Electronic index, having access to the Study affairs department’s electronic workflow applications and many other features regarding their study programmes.

28

Unicorn Systems helped establish IT Project  Management Office at ŠKODA AUTO. Unicorn Systems as a part of the ŠKODA AUTO team was responsible for the Implementation of processes and tools to support IT project managers. The result is a functional organizational unit that gradually improves the quality of IT project management at the ŠKODA AUTO.

The key tasks of the project were:defining project office services including SLA parameters,implementing IT project management trends (e.g. SCRUM) to support the methodology used at ŠKODA AUTO,),designing and implementing a new version of the system to support project management (MS Project Server, MS SharePoint),implementing a system Atlassian JIRA to support the change management process and defect-tracking and establishing project manager support.The project started on the basis of an independent analysis, which recognized the maturity level of IT project management at ŠKODA AUTO and the recommended development road-map. Unicorn Systems specialists broke down the conclusions of the independent analysis into practically oriented goals with high added value.

“Our goal was to help establish an organizational unit that will be accepted throughout all the ŠKODA AUTO divisions and that will ensure complete standardization of project information. We are glad to support ŠKODA AUTO with our long-term experience with implementing IT project offices,”  added Lukáš Zrzavý, Operations Director of Unicorn Systems.

About Unicorn Systems

Unicorn Systems is a renowned European company providing the largest information systems and solutions in the area of information and communication technologies. We have focused on providing high added value and a competitive edge to our clients for many years. We have been operating on the market since 1990 and since then we have created a series of high-end large-scale solutions that are extended and used among the most important companies in a variety of sectors. We have the best references from companies in banking, insurance, energy and utilities, telecommunications, manufacturing, trade and the government. Our customers are not only the largest companies but also market leaders. We have detailed knowledge of the entire spectrum of all business sectors. We understand the principles of their operation as well as comprehend the specific needs of our customers.

Our extensive team of systematically educated experts perfectly masters all current product lines, components, technology, and therefore we have essentially no technological restrictions. Even though we enforce a lot of revolutionary ideas in our work, the overall delivery of proven solutions are subject to fundamental criteria - quality, scope, term and budget. 

29

Conclusion

Following is the conclusion about Skoda India:-

They make rock solid cars and fuel efficient cars which the customer desire for and for this the sales speak for them selves

In 2006 and 2007, Skoda India has received a spate of awards which has been remarkable in terms of achievements like J D POWER ASIA PACIFIC AWARDS FOR 2007 for being ranked 1st in Sales satisfaction index 2007

Skoda India also achieved the 'TCS award' in mid-size premium segment against Honda Civic in 2006 along with 'Most Technologically Advanced Car' for Skoda Laura; 'Best Variant' for Skoda Superb Turbo Diesel from CNBC-TV18 AUTOCAR AUTO AWARDS 2006

'Executive Car of the Year' from NDTV PROFIT CAR INDIA AWARDS 2006, and 'Auto tech of the Year' from OVERDRIVE 2006, both awards for Skoda Laura

30

Recommendation

Their current strategies in Place takes care of most of the recommendation I had in mind but few which haven’t been addressed are

High labour cost during A.S.S is heavy on customers’ needs to be brought down.

Reliability problem of Skoda Superb as the advanced engine cannot deal with our fuel quality.

Unethical activities going with dealer and Service centre’s like changing original parts with duplicate once, hence dealers and service centre have to be inspected by the company.

High price on spare parts need to be brought down.

These are a few recommendations given by me; these are the few problems I feel needs to be addressed by the company for better customer service.

31