Strategic Management in BYD Energy

Introduction

Strategic management involves the organisational planning through which the conglomerates aim at fulfilling the pre-specified aims and objectives by conducting in depth analysis of the competitor position, external and internal environment of the business and developing appropriate planning (Li et al., 2016). Through strategic management, the companies can analyse their internal and external environment, competitors and customers in the market which provides a scope to the organisations to understand the market structure and develop effective tactics to expand their business across the globe. The aim of the study is to conduct the situational analysis for the company Build Your Dream (BYD) energy for improving the understanding about the mission and vision of the organisation as well as the competitors in the market and customer analysis which in turn helps to understand the market demand and situation for conducting the operational activities of the business. The study also provides a scope to analyse strategic marketing options for the company where the factors such as innovation strategy and social and ethical strategies can be evaluated through which the company focuses on marketing tactics for strengthening their customer base and expanding their business around the international automotive markets for gaining highly competitive advantage so that the business can secure future sustainable development. Through this paper, it is beneficial to conduct situation analysis and strategic marketing option as well as upcoming challenges in near future for successful marketing for the organisation BYD Energy to sustain in the business and increase their market share around the international automotive industry.

Background of the company

BYD Energy is the high technological company for enhancing technological innovation for better life and it has been founded in the year of 1995. The organisation BYD Energy has growing their business from a start up with only 20 employees and it becomes a successful company in the recent years in the global automotive industry with more than 240 thousand employees. Throughout 24 years, the company is successful in enhancing high speed growth and it plays a significant role in the industries such as electronics, mew energy, railway transit and automobiles. The company BYD focuses on providing zero emission energy solution through energy generation and storage. Revenue and market capitalisation of the company exceeds RMB 100 billion which is the major strengthen of the organisation where BYD invests more on he in depth research and development for continuous innovation and creativity (BYD, 2018a).

BYD Energy aims at building safe, efficient and stable storage solutions for renewable energy where the company becomes a reputed brand for promoting sustainable business by delivering high quality battery and automotive machineries with zero emission energy solutions. The energy slogan of the company BYD Energy is ‘New Energy Give us New Future’ and their products are such as large scale battery projects on different international borders, battery box low and high voltage for the commercial and domestic purpose and the zero emission mission of the company is effective to develop brad visibility and secure future sustainable development with new innovative and creative products for the social communities. The aim of the company is to enhance the providing of non-toxic energy with zero emission and zero pollution. the core values of the organisation BYD Energy are such as passion, innovation, pragmatism and excellence through which the company is successful in gaining market share and conduct their operational activities across the globe (BYD, 2018b).

Task 1: Situational Analysis

Company’s mission and vision

The mission of the company is ‘to enhance technological innovation for a better life’ which is effective for the company to encourage continuous innovation and creativity for developing and designing new innovative products that ensures zero emission and zero pollution. During the daytime, the solar farms capture the solar power of sunshine and at night, energy storage system are helpful through which the company is able to provide power to the families and hereby, it can be stated that, the company BYD is successful to retain the customers for both domestic as well as commercial purpose. Electric vehicles are another innovation of the company through technological advancement which ensures zero emission and zero pollution and apart from this, SkyRail system with green belt are effective for connecting the cities with zero emission and zero pollution. New energy for future approaching and more possibilities for a better life through mitigating the pollution are effective for the company which in turn helps to sustain in the business and secure future sustainable development (Jan, and Wolfgang, 2018). Hereby, the mission and vision of the company to become the reputed firm in the automotive industry are effective for successful marketing where the mission statement attracts more audiences across the international countries and strengthen their customer’s base. The values of the company are innovation, excellence, passion and pragmatism which are also effective for the company to gain high market share and fulfil the vision and mission of the company in gaining highly competitive advantage and enhance the performnace of the company in the automotive industry (BYD, 2018c).

Directional and growth strategies

The company BYD focuses on utilising their strengths for growing the business and gaining highly competitive advantage so that the business can secure sustainable development in near future. the availability of low-cost labour is one of the strategies through which the company aims at manufacturing the products at lower cost and providing the quality products to the customers at affordable price (Quan, Loon, Sanderson, 2018). Electric automobile products, rechargeable battery and a variety of electric car models are effective for growing the business and gain high market share by retaining the customers for the organisational quality and sustainable products. In addition to these, the process of managing the skilled labour through providing performnace related pay, empowering the human being at the organisational decision making practice, giving them harmony and freedom to work, encouraging their creativity and motivating them continuously through collaboration and communication are effective for establishing the business in the international automotive industry and gain high market share by ensuring sustainable growth in near future (Zhen et al., 2016). The growth strategy of the firm also depends on the three main innovation strategies such as low-cost manufacturing, low cost materials and design and increase functionality and minimal features sets. These strategic planning are effective for innovation and creativity where the brand is successful in designing unique products with zero emission of greenhouse gases. low cost design and manufacturing helps to lower the price of the final products which can attract the low- and middle-income class across the globe. Apart from that, the company BYD can strengthen their customer’s base by providing quality products at affordable and competitive price which maximises the values of the customers as well (BYD, 2018d).

Competencies

Core competencies of the business is important for achieving success and in this context, for the organisation BYD, the core competencies are such as leadership style of the firm, communication, technological innovation and employee’s creativity, people management and delivery of final product to the end customers. The company BYD focuses on improving the internal and external communication with the suppliers, distributors of components of the electric cars, employees as well as the end customers through Information and Telecommunication Technology (ICT), GPS system, Enterprise Resource Planning (ERP) and other mobile application through which the distribution and sales network can be handled well in the organisation.

Leadership style and managerial practice at the workplace of BYD is effective to enhance communication and cooperation among the team members and the managers are successful in handling the people and lead them towards achieving success. These are the major core competencies of the business through which BYD aims at securing future sustainable development (Quan, Loon, and Sanderson, 2018).

Competitive advantage

Through the resource-based view, it is posisbel to analyse the competitive advantage of the companies in the market where the organisation is successful in utilising the organisational resources and enhancing their capabilities to achieve the pre-specified objective of the firm (Loon, 2016). In this regard, the company BYD is also successful in managing their resources and utilising their capabilities to achieve highly competitive advantage in the international automotive industry so that BYD can secure future sustainable development and run the operational activities with positive environmental footprints and contribution in the social communities as a whole.

The tangible resources of the company BYD are such as financial assets including cash, net assets of the company, securities and borrowing capacities and the physical assets including the plants, branches of BYD, manufacturing units across the world and the reserves. On the other handle the intangible resources are such as patents and copyright as well as licensing of the organisation, through which BYD is running their operational activities ethically which in turn helps to imporve the brand reputation and organisational culture in the automotive industry. The human resources of the organisation include the skilled labour force, engineers, manufacturers and designers who are able to improve innovation and creativity in technology and design of the products through communication, learning, motivation and collaboration (Lei, 2018).

Critical competitive analysis

Competitive analysis is also effective for the business to identify the competitive threats of the business in the market in operating the operational activities across the international borders. Here, the main competitors of the company BYD are Volkswagen and Toyota who are efficient in providing a huge range of quality products and proficient services to the customers and these organisations are successful in creating values for the customers by delivering innovative and uniquely designed products. Both eth competitive companies, Volkswagen and Toyota have high markets share as compared to the company BYD and they have strong financial resources for conducting in depth research and develop innovative products including electric cars. The core competencies of the Volkswagen are strong technology-based manufacturing unit, large volume of production and skilled labour and on the other hand, the core competencies of Toyota are efficient staff members, strong team at the workplace, diversified plant for manufacturing the products, and financial resources through which both the companies are operating in the international market efficiently (The Economic Times, 2018b). The organisation BYD in this regard need to grab the market growth and introduce new products including electric cars in the market and mitigate the threats of high competition from Volkswagen and Toyota, and government regulations for securing future sustainable development (Sharma, and Jha, 2016).

Critical customer analysis

The customer analysis is important for developing effective strategic planning here the company can target the right customers in the market who have high potential to make effective purchase decision for the organisation products. In this regard, the company BYD conduct in depth analysis for customer segmentation and segment the customer base on the basis of the income of the customers, needs and preferences of the buyers, market demand and ability and interest to buy the products of BYD. The demand for cars varies from one customer to other as per their ability to purchase, choices and interest and in this regard the company BYD targets the medium and high-income earners who have the potential to make effective purchase decision of buying the electric cars of the company BYD. In addition to these, the organisation promotes the aim of zero emission and zero pollution and target the customers who are concerned about the environmental sustainability and prefer safe and healthy environut to maximise the wellbeing. Hereby, the company targets the high-income earners and the individuals who have the interest to buy the electric cars for reducing the emission of the greenhouse gasses and providing positive environmental footprint in the economy. In order to satisfy the customers, the company BYD focuses on technological innovation and developing creative design that attracts the customers across the international borders. On the other hand, in order to satisfy the low income earners, the company focuses on minimising the cost of production and promote the products like BYD F0 and BYD F3 which can meet the preferences and demand of the customer who are low income earners as the company is successful in minimising the cost of the models and meet the customer’s demand by providing them quality products at affordable price. Similarly, the company BYD is also successful in maximising the preferences and choices of the high-income classes by promoting luxury electric cars in the market and thus, the customer segmentation and analysis is beneficial for BYD to track the market demand and acknowledge the actual choice and preferences of the customers for meeting their needs and interest of electric cars (Masiero et al., 2016).

Task 2: Strategic marketing options and planning

Innovation strategies

Innovation strategies are one of the main success factors for the organisation BYD, where the organisation focuses on continuous innovation and creativity for promoting the brand at the international market and in this context, innovation is a unique strategic planning for developing effective marketing plan for expanding the business across the international borders (Zhang, and Chen, 2018). For example, the organisation BYD can focus on improving the leadership and management through enhancing entrepreneurial spirit with professional, technological expertise, strategic vision and leadership so that they can empower all the staff in the decision-making practice of the company as well as utilise the upcoming market opportunities. The technological innovation is another strategic planning for successful promotion of the company in the automotive industry with the aim of zero pollution and zero emission. The research and development team establish more research institutions across the globe for conducting in depth research on developing rechargeable battery and enhancing the use of renewable energy resource which also plays a crucial role in marketing and promoting the brand around the international markets (Cao, Zhang, and Antony, 2018). Data accumulation and technological advancement for developing the organisational products and electric cars are effective for the company BYD to sustain in the market and expand their business through promoting the business and providing suitable information about the sustainability of the Organisational products and the aim of zero emission which in turn helps the company to improve trust and loyalty among the society communities by giving the safe and secured environment to live. The IPR strategy is another innovation which an effective factor for marketing is also and promoting the organisational products where the organisation BYD ensure the customers to provide the original products by maintaining operational strategies, sole license, exclusive permission of production and manufacturing the parts of the electric cars and battery, patents, copyright which are beneficial for maximising the value of the customers (The Economic Times, 2018a).

Innovative product design and quality of the products with continuous innovation and creativity are also advantageous for successful marketing of the brand at the international markets. The marketing strategic planning is also another innovation strategy of the company BYD where the company focuses on the channel management through sales network and branch network to retain the customers across the international markets where the sales network and branches are effective to increase the brand visibility at the market in which the customers can make effective purchase decision (Masiero et al., 2016). Market segmentation is another tactic to retain the customers after identifying their actual needs and preferences. the company BYD focuses on small and medium sized cities and then target the large cutes and high-end customers so that it is possible to promote the organisational products through effective marketing tactics (Xu, 2016). Through marketing strategic planning, the organisation BYD can be successful in providing effective information to the customers about the organisational objective, corporate strategy, operational activities, quality products, price of the products and the renewable resources, which in turn helps to strengthen their customers base ad secure future sustainable development. Hereby, continuous innovation and creativity as well as the technological advancement, production of rechargeable battery, electric cars and other automotive parts, increasing the use of renewable energy resources and the aim of zero emission and zero pollution are the innovative strategic planning through which the leader and managers of the company BYD may promote the organisational products and business across the globe sustainably (BYD, 2018g).

Social and ethical strategies

Corporate social responsibility is necessary for the organisations to secure future sustainable development and it also helps in establishing the business at the international markets, with strong brand image and reputation. The contribution in the social communities of the companies provides positive impacts on the human being and it provides an opportunity to gain highly competitive advantage and imporve market share by strengthening the customers base of the organisations. Hereby, ethical and social responsibilities of the companies are important to run the operational activities of the companies sustainably and secure future growth. As per the social and ethical responsibility, the companies try to be profitable, creating values for the society, be ethical by maintaining all the rules and run the business with fairness and transparency as well as improve quality of the life of the citizens.

The above mentioned social and ethical practice of the companies are hereby beneficial to run the business ethically without any harm or negative impacts on the society. In this context, BYD is also focusing on manging the social and ethical responsibilities of the business and utilise the social and ethical factors as a strong marketing strategic planning where the customers can get positive information about the business operational activities of the company. The company first of all invest a huge amount of resources on the children welfare and charity institution for enhancing the educational system and encourage the child to learn for higher achievement. This is the social responsibility of the company, where BYD focuses on improving the profitability volume of the firm and invest more on the social activities such as student’s welfare maximisation and charity homes so that the new generation can get better platform to be educated. In addition to these, BYD provides an opportunity to enhance educational system through increasing donations in different schools which is also advantageous for the social communities and the company’s reputation can also be maximised through such contribution in the society. Hereby, social and ethical strategies of the company BYD can be beneficial for developing effective marketing strategies and imporve brand reputation and promote the organisational products sustainable in the international markets. Ethical rules for conducting the business activities, licensing and copy right activities are effective for the company BYD to run their operational activities efficiently across the international borders and promote the organisation successfully in the automotive industry. It is the high-tech firm focusing on increasing the use of renewable energy resources in the organisations or multinational corporate firms so that the aim of enhancing zero pollution and zero emission can be implemented effectively (BYD, 2018e).

In this context, the strategy of using solar panel is another initiative of the organisation for reducing the wastage of energy resources and utilising the renewable energy resource for domestic and commercial purpose and hereby, the company BYD focuses on positive contribution on the social communities for giving them safe and clean environment to live. In addition to these, the company is technology based and innovation-oriented company and in this regard, they try to manage the people ethically by safety measures at the workplace as well as creating values for the employees through providing monetary and non-monetary rewards to the staff members so that the employees can be motivated for more creativity and innovation (Zhen et al., 2016). Managing all the stakeholders including government, employees, customers, suppliers, distributors, manufacturers, shareholders and the social communities as a whole is another strategic planning of BYD for managing social and ethical responsibility and promote the brand at the international markets. Hereby, through social and ethical strategic planning, the organisation BYD may focus on developing marketing planning where the representative of the company can provide proper information about the mission of the organisation, contribution on the society, ethical values of the organisation and social responsibilities of zero pollution and charity directly to the customers where it is posisbel to retain the trustworthy customers for long run (BYD, 2018f).

Upcoming challenges for BYD

It is the mission of the company BYD to become a reputed brand in the automotive industry across the international nations where the aim of zero pollution and zero emission can be maximised. However, in doing their business internationally, the company faces several issues related to high competition, low cost advantage, insufficient core technologies, lack of brand advantage and others for which the company fails to gain high market share with the organisational products and services. Centralised power in the organisation is one of the main disadvantages where the managers and employees feel lack of empowerment in the decision-making practice at the workplace for enhancing creativity and innovation. Restriction in the investment cost for technology and research and development where the cost for employees is raising in operating revenues, whereas the cost for research and development is dropping int h operating revenue which deteriorates the chance of creativity and innovation due to lack of in-depth research and development and technological upgradation. Insufficient core technologies at the company deteriorates the opportunity to enhancing their performnace and gaining high markets share as compared to the competitive companies at the market (Zhen et al., 2016).

Decreased demand of downstream market decreases the revenue and sale volume of the organisation where the efficiency of the company is deteriorating and cost of production in increasing day by day due to lack of proficiency of the employees and lack of investment in technological advancement as well as research and development. The supply chain network is expanding very fast across the globe and the cost for the suppliers is also increasing which in turn raises the cost of products and distribution of the organisational products where the price of the products becomes high (Zhen et al., 2016). There is high competition among the distributors and in this regard intense competition is another upcoming challenge for the company BYD to expand their business and promote the brand successfully in the market. Another challenge for the company BYD is lack of professionals managers where family type management structure, overstaffing, lack of management of the people at the workplace and poor cooperation and empowerment of the staff at the decision making practice may worsen the performnace level of the firm which in turn decreases the market share where the company may fail to grab the upcoming market opportunities of retaining trustworthy and long run customers across the global automotive market (Refer to appendix 2).

Conclusion and marketing strategic planning for future

It can be concluded that, the company BYD is operating across the globe with the aim of increasing the utilisation of renewable resources for domestic and commercial purpose to preserve and protect the natural resources and enhance the practiced of zero emission and zero pollution to provide safe environment for maximising the wellbeing of the individuals. Through innovation and creativity as well as utilising different upgraded technology, the company is also successful in developing quality products like rechargeable battery, battery cars and electric cars which help to reduce pollution an sustain in the business sustainably. The company needs to expand their business through developing effective marketing strategic planning where the company focuses on segmenting the customers for targeting the right customers across the international borders. The company also needs to promote the organisational products through digital marketing strategic planning by utilising social platform like Facebook, YouTube and Twitter. The organisation must provide appropriate information about the product design, advantages of the products, benefits of using the automotive parts of the business, process and other company related information as well as enhance the social media campaign through investing more in the social communities for successful promotion for the organisation BYD. Through this tactic, the company BYD can strengthen their customer base and improve the positive brand image across the international markets.

Reference List

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