Situational analysis
Holden is GM Holden Ltd commonly designated, is one of only seven fully integrated global General Motors operations that designs, builds and sells vehicles for Australia and the world. As one of the biggest automobile company in Australia, Holden always pursue the goal of producing the Australian car and even dominated the car industry in 1960s despite the Ford Falcon, Chrysler Valiant, and Japanese cars arrival. The 1980s were a challenge for Holden and other companies in Australian automobile industry. The Australian government tried to revive the industry with the Button car plan. Which encourage carmakers to focus on producing fewer models at higher, more economical volumes and to export cars (Wright, 1998). In 1990s, Holden continues manufacturing Australia’s best selling car with significant numbers exporting, also, Holden adopted a strategy of importing cares to offer a full range of competitive vehicles (GM, 2005). Holden’s market surge from 20th century and give the first selling position to Ford and Toyota. Last year, Holden even announced that they would cease engine and vehicle manufacturing operations in Australia at the end of 2017. A national sales company, a parts distribution center and a global design studio are the new consist of Holden Australia (ABC, 2013).
Due to the 2007-08 Global Financial Crisis, there is a large recession in terms of GDP decline and unemployment levels. Consumer spending slows down, there is a decrease investment in automobiles industry. All members of the marketing channel feel the effects of recession because sales volume levels and profitability fall significantly during that time. As this economics environment, consumer would shift to lower-priced products which would be small and cheap cars in automobile industry (Rosenbloom, 2013). Before, in Australian automobile industry, there would only be Holden, it has strong domestic dominant over other brands. Lots of Japan, Korean car manufactures come into Australian market to share the benefits with Holden. When competition is high, the servicing of customers is of greater importance (Etgar, 1977). As Australia develop the new model, the strong Australian dollar, first, factory has to cut the employee to reduce the cost, then other currency for example would be cheap, so the export is cheaper than the domestic build one. Thus makes the oversea company take competitive advantage in the industry as they have the lower cost of the car material with high revenue up range. Not like Holden, has expensive cost that has to cut the employee to control the revenue. Holden have to determined the price policy carefully to make customer satisfaction (Roche,Barbolla, & Yagüe200). Holden only perform 4.67% and 6.42% ROI compare with 3.97% and 11.34% in 2011 (Holden annual report & Ford annual report). Also, the fuel prices rises chase consumer changes the preference to more fuel-efficient cars. Carmakers also under the pressure to reduce the impact on the environment, the manufacture that has the technology would take advantage in this competitive situation.
Toyota’s as the biggest competitor of Holden, its distribution channel was constructed by absorbing existing dealers, and has generated an egalitarian culture to deal with its relatively independent dealers. Such a culture makes the sharing rule of the rewards more sensitive to the observed efforts of each dealer, and derives high efforts from dealers. This effect works to the channel’s advantage in the competition for market share (Nariu,2004).
Holden as one of only seven countries in the GM world with the capability to design, build and sell cars. As the representative of the Australian domestic automotive industry to continue it needs stable and contemporary assistance and clear, competitive long-term policies with certainty that make Australia an attractive place to invest. Government assistance enables Holden to compete with other automotive manufacturing