Creating a Marketing Plan

Silo Automotive

Introduction

Silo Automotive Company is a new, integrated automotive company, which manufactures electric powered vehicles and substantially scalable, clean, power harnessing automotive products. The company’s headquarters are in California together with its main manufacturing plant and was founded in 2014. The company currently has 19 manufacturing plants spread across the United States and Europe. A team of engineers whose main goal was to create an electric powered vehicle that was superior, faster, and more fun to drive in comparison to gasoline cars. The main belief of the company states the sooner the globe ends its dependency on fossil fuels and moves toward a more environmentally friendly option such as carbon fuels future, the better. This is particularly being achieved at a faster rate due to the incorporation of the two automotive segments into a single platform. The main funding sources of Silo Automotive come from the contributions of the founders since they are a combination of chief executive officers of various global engineering companies.

Background Information

The automotive industry has greatly advanced due to the changes in technology, with global sales increasing from 11.78 million annually in 1990 to 27.53 million sales in 2017, according to auto alliance analysis. This shows technology has made it possible for this industry to meet the high demand for automotive products and services in the market. This industry is comprised of various companies that usually manufacture vehicles and deliver them to the selling and distributing companies. There are other companies in this industry that manufacture as well as sell vehicles at the same time. The automotive industry is subdivided into two segments - car manufactures and car parts manufacturer. However, Silo Automotive is particularly in the market to solve some of the challenges associated with the two segments of the automotive industry by combining them. There has been an increase in the number of automotive part suppliers in the industry in recent times as compared to vehicle manufacturers. This is because the vehicles in the current generation are more complex than past years' vehicles, more especially when considering the parts and the electronics components incorporated in the vehicle (Adjei, & Adjei, M. 2017).

Due to the expenses associated with car manufacturing, there are a smaller number of manufacturers in the industry with only three leading manufacturers from the United States - Ford, General Motors, and Chrysler Companies. The global automotive industry leaders include Honda, Toyota, Nissan Motors, Volkswagen, and Hyundai Companies, respectively. Considering Toyota, it contributes to more than 17% of the Japanese economy. According to the Japanese Budget Control Body, Toyota is one of the key pillars of the Japanese economy from job creation to government taxation. This industry began with German inventors, Karl Benz and Gottlieb Daimler who developed an internal combustion engine vehicle that was powered by gasoline in the late 1800s (Adjei, & Adjei, M. 2017).

The vehicle invented in Germany was expensive to own, therefore the industry remained dormant until Henry Ford developed an assembly line mass production, which made the vehicles less expensive, hence people started purchasing and owning vehicles. This boosted the economy of the United States because the industry was contributing almost 35% of the United States economy through taxes and easy movement of workers from one city to another or from one state to another. The industry also contributed to the reduction of unemployment rates. According to Auto Alliance, the industry has directly employed 1.5 million United States citizens. According to the survey conducted by the World Bank in collaboration with Auto Alliance in 2018, the report indicated the automotive industry together with its transportation services brings in an annual average revenue of $19.5 trillion US dollars globally (Barron, Pereda, & Stacey, 2017).

Silo Automotive Company is entering the market with great force and embracing technological advancement in design as well as manufacturing more customer preferences. The integration of the two segments of the automotive industry into a single platform is where the company name originates from. In this paper, the various components of the company’s market plan will be discussed.

Silo Automotive Company’s Mission Statements

Silo Automotive’s mission in the automobile industry is defined by three main components, acceleration, world transition, and sustainable energy. In the beginning, the company's mission was to accelerate the world's transition to sustainable transport but in 2017, it changed the mission from sustainable transport to sustainable energy to make the mission statement of the Silo Automotive to read as, “To accelerate the world’s transportation to sustainable energy.” The new mission statement significantly shifted the company’s business to the current opportunistic global market of renewable energy.

Silo Automotive Company Goals

The company’s goals can be categorized into both short-term and long-term goals. These goals are defined as follows:

Short-term goals, which the company projects to achieve in the next one to three years:

I. By the end of 2019, the Silo Automotive Company is projecting to launch its electric-powered car manufacturing in Africa.

II. In March 2020, Silo Automotive Company is projected to make its cars fully autonomous.

III. Silo Automotive Company is also aimed at generating unit sales of more than 2 million electric vehicles in five years. This can be measured via the profitability of the company and the cash flows (Conti, Kotter, & Putrus, 2015).

IV. Silo Automotive Company is aimed at being the most attractive employer in the automotive industry. The specific primary goal is to have the best team in the industry, whose performance will be defined via high qualification, fit, as well as motivated employees. These goals can be measured via meetings as well as appraisals, without forgetting the quantitative measurement of employee performance.

V. Silo Automotive Company is also aiming at doubling the number of its superchargers by the end of January 2021.

These short-term goals can be measured using the appropriate key performance indicators such as customer satisfaction, the profitability of the company, and efficiency of its services which can be measured by customer complaints, profits, and efficiency.

Long-term goals the company is aiming at achieving by the end of five years or more are as follows:

I. Silo Automotive Company intends to deploy intelligent innovations, technologies to become a global leader in customer satisfaction as well as the quality of electric cars. Silo Automotive Company views client satisfaction as one of the primary requirements of its long-term success. This can be measured via the complaints as well as complements the company receives from its customers on the quality of the products and their efficiency.

II. Silo Automotive Company is projected to officially open its manufacturing plant in Japan, which will be generating 50,000 electric-powered cars annually.

Environmental Analysis of Silo Automotive Company

Competitive Rivalry in Automotive Industry

The intensive competition existing in the automotive industry tends to drive down prices and can decrease the overall profitability of a company. From the Auto Alliance, four main companies are competing with Silo Automotive Company in the automobile industry. These companies include Honda, General Motors, Tesla Inc, and Ford Company (Edeling, & Himme, 2018). Tesla, Inc. is the primary competitor in the electric vehicle manufacturing industry. Although other companies are starting to compete in the electric automobile industry these four are the ones offering direct competition to Silo Automotive Company. Together, these companies raise over $300.6 billion annually between their estimated 3,480,700 employees across the world. In terms of employees, Silo Automotive Company has approximately 68,000 employees, per a 2018 analysis. It should be noted Silo Automotive Company is still young in the industry, but with the rate of its market penetration, it’s going to be one of the strongest companies in the automotive industry.

Political

In the current business world, there is not a multinational organization that is immune to the different decisions made by the various host governments where Silo Automotive Company is inclusive. The unstable market condition that Silo Automotive Company has experienced since it was established as a multinational company is as a result of inconsistent policies of the host countries more specifically in Europe and the frequent change in duty tariffs. The current shifting in policies of the government is also affecting Silo Automotive Company. For example, in 2014, it was reported the governments of Venezuela, as well as Nigeria, were antagonistic to the innovations of electric cars since they believed the electric cars were fuel-efficient and they were going to reduce their dependence on oil which is their key product in their economies as far as exportation is a concerned. This prevented Silo Automotive Company market from growing in these two countries. In general terms, Silo Automotive Company has been experiencing favorable legalities in the political environment in the 19 States and nations where the company's services are offered.

Economic

The economic environment had many factors that impacted Silo Automotive Company in its process of carrying out car manufacturing activities. Some variables which are encouraging from Silo Automotive Company are the decreasing unemployment rates in the United States and other countries where the Company had its services being carried out. The general increase in the salaries of employees working in the automotive industry under Silo Automotive Company, and both the increasing GDP as well as the continued increasing trend of the living standards of the communities surrounded by Silo Automotive Company indicated a significant economic contribution of Silo Automotive Company to the society.

Social Culture

The social-cultural factors in the market environment have many impacts, both positive and negative, as far as Silo Automotive Company development is a concerned. Due to the fluctuating prices of fuel in the market, more customers of automotive products are starting to consider electrically powered vehicle engines because of the high efficiency. From Silo Automotive Company sales record, for instance, around 140,000 Chevrolet Cruz’s, which are electric-powered automobiles were sold for only six months in 2010. This tendency of customers changing their desire to purchase electric powered engine vehicles usually influences the manufactures to increase their electric powered engine production vehicles. For example, in the current market, Honda, General Motors, Tesla Inc, and Ford Company are the producers of the electrically powered engine vehicles, apart from Silo Automotive Company (Gangidi, 2019). Customers in the United States and in Europe, have increased their desire to purchase electrically powered engine vehicles, due to their non-pollution nature and their high efficiency. This is a direct market for Silo Company, which is influenced by the social class of the population. As far as legal is concerned, the company adheres to the laws of every host country where it carries out its operations as it's spelled out in the international standards.

Technological Impacts

Technology is the main factor being embraced by every organization needing to be competitive in the market besides increasing its revenue; Silo Automotive Company has not been left behind. The technological environment plays a critical role in the acquisition of the corporate strategy of the company. Some variables such information technology and the internet have been greatly utilized in facilitating the success of the company's corporate strategic move.

The SWOT Analysis of the Company

SWOT analysis refers to the company’s strengths, weaknesses, opportunities, and threats in the market.

Strengths of Silo Automotive Company

I. Strong Market Position and Brand Recognition; Silo has a strong market in terms of sales and competition. Focusing on customer satisfaction in various nations where its services are being offered will propel Silo into further successes.

II. Strong Focus on Research and Development; The strong focus on research and development by Silo Automotive Company in the automotive industry is directly related to the technological advancement in the industry.

III. Extensive Production and Distribution Network; Silo Automotive Company has a large production and distribution network – making it a multinational company.

Weaknesses of the Company

I. Declining sales in key geographic segments; for the last two years, Silo Automotive Company has witnessed a reduction in its sales in key areas. In the financial year 2015 -2016 for instance, there was a reduction in the Company’s sales across North America.

II. The company is also facing challenges in its strategic marketing and promotion of its products since its young in the market.

III. Product recalls could affect brand image; product recalls could negatively impact the company’s products in the market (Griffin, & Sahid, 2018).

Opportunities for the Company

I. Growing global automotive industry; the economic downturn following the Euro Crisis negatively impacted the automotive industry. The strong ricochet of 2011 which continued to 2012 and onwards have highly revived the automotive industry which was in its lowest state economically (Griffin, & Sahid, 2018).

II. Strong outlook for the global new car market; although the automotive industry experienced somehow a gradual growth from 2008 to 2012, the automotive market industry experienced acceleration in 2012 to 2016.

III. The strong advocacy on the embrace of non-pollutants in the globe due to the increased global warming.

Threats

I. Intense competition; the global automotive industry market is highly competitive; this creates pressure on Silo Automotive Company from various manufacturers in the industry.

II. Fluctuations in foreign currency are also a major concern; the fluctuations in foreign currency exchange rates are one of the sensitive areas of great concern of Silo Automotive Company (Yuksel, & Michalek, 2015).

III. The current tax policy of the US is also a major concern which might hinder the development of the company to other countries like China, which is highly targeted by the US importation policies.

References:

Adjei, F., & Adjei, M. (2017). Market share, firm innovation, and idiosyncratic volatility. Journal of Economics and Finance, 41(3), 569-580.

Barron, A., Pereda, A., & Stacey, S. (2017). Exploring the performance of government affairs subsidiaries: A study of organization design and the social capital of European government affairs managers at Toyota Motor Europe and Hyundai Motor Company in Brussels. Journal of World Business, 52(2), 184-196.

Conti, M., Kotter, R., & Putrus, G. (2015). Energy efficiency in electric and plug-in hybrid electric vehicles and their impact on the total cost of ownership. In Electric Vehicle Business Models (pp. 147-165). Springer, Cham.

Edeling, A., & Himme, A. (2018). When Does Market Share Matter? New Empirical Generalizations from a Meta-Analysis of the Market Share–Performance Relationship. Journal of Marketing, 82(3), 1-24.

Gangidi, P. (2019). A systematic approach to root cause analysis using 3× 5 why’s technique. International Journal of Lean Six Sigma, 10(1), 295-310.

Griffin, A. S., & Sahid, M. L. I. (2018). Competitiveness Analysis of ASEAN Automotive Industry: A Comparison between Malaysia and Thailand. Journal of Science, Technology and Innovation Policy, 3(2).

Yuksel, T., & Michalek, J. J. (2015). Effects of regional temperature on electric vehicle efficiency, range, and emissions in the United States. Environmental science & technology, 49(6), 3974-3980.