015

BSBMKG507A Interpret market trends and developments

Sawangvong

AUD
I

Arunrat

One of the topmost luxury automobile manufacturers in the world, Audi is as

much known for its car as for its sophisticated luxury. Audi is a completely
owned group of Volkswagen and has one of the most famous logos of
automobile history the four interconnected rings of Audi. Here is the SWOT
analysis of Audi.
Strengths in the SWOT analysis of Audi
Technology and engineering - Audi is known for the engineering and
precision behind their cars. And that is exactly what they market. The look
and design of the car comes with precision engineering and use of high
capacity engines. The same looks cannot be achieved without the proper
manufacturing facilities or the right manufacturing process.
Brand name - A brand is a promise and Audi definitely carries the trust
factor behind it. Known as one of the safest cars in the world, Audi has the
design, the technology and the safety to be one of the best cars around.
Furthermore, years of proper marketing communications and years of
introducing newer, faster and more sleek cars has added to the brand name
of Audi as a super premium car manufacturer.
Products - For an automobile manufacturer, the products are the key
driving elements for the success or failure of the company. This is where
Audi is at its best. Audi has varying series of car models, all from premium to
super premium to ultra premium. The A series and the Q series of Audi cars
are one of the most popular and in demand series from Audi. But other then
that, Audi also focuses on innovation with cars like Audi ultra, Audi Quattro,
Audi sport and others.
Product Portfolio

Brands

1. Audi A1

2. Audi A3

3. Audi A4

4. Audi A5

5. Audi A6

6. Audi A7

7. Audi A8

8. Audi Q3

9. Audi Q5

10. Audi Q7

11. Audi R8

12. Audi TT

Design - BMW, Mercedes, Audi, Ferrari, all these cars are known and are
premium because of the design of their cars. Sleek, Sophisticated and Rich,

all these attributes can be associated with an Audi car. Audi cars
are differentiated mainly by its logo which involves 4 interconnected circles.
Besides these, the car comes in hatchback as well as sedan and luxury cars.
The accessories which accompany an Audi car is almost as famous as the
car itself. Air bags for safety, seat and mirror warmers, automated gears, the
interior decoration of the car, all of these things contribute to the design
element of Audi.
Weaknesses in the SWOT analysis of Audi
Diversification - BMW diversified itself into low cost cars and has kept a
larger product portfolio because it wants to increase its turnover. Same
strategy has not been followed by Audi because of which BMW has taken the
front seat in the luxury car segments leaving Audi lagging behind.
Promotions and communications - The message of Audi ads always hits
the bulls eye. However, Audi needs to pick up the frequency of promotions
as well. You will see Audi promoting even less then BMW which is a mistake.
Although premium brands need not be present everywhere, regular and to
the point promotions which set the idea of premium in the minds of the
customers need to shown again and again. Both BMW and Mercedes are
promoting more vigorously then Audi.
Opportunities in the SWOT analysis of Audi
Target Emerging markets - Because of its presence in limited number of
markets, Audi can introduce its products in emerging markets as well,
thereby covering more geographical territory and bringing more turn over
and profits for themselves.
Innovate for mature markets - Innovation and diversification in mature
markets will give Audi an edge from their competitors making them stand
apart in the crowd. Innovation can be in the form of battery fueled premium
cars, or more energy efficiency or the overall working of cars in themselves.
Innovation is a driving force behind differentiation which will help Audi in the
long run.
Threats in the SWOT analysis of Audi
Limited markets - The market is limited and the share of the pie is going to
other premium brands as well. This may cause saturation in the long run.
Threats in general to luxury cars - Younger generation spending more on
gadgets and realizing the value of savings on other products

Risks of international markets - Audi cannot survive with its home

territory. It has to spread internationally. The PEST risk across countries is
high which takes a lot of time of the brand to manage.
Competition - Like any industry, competition is high even in the luxury car
manufacturers segment, the competition being strongest from BMW.
Thus overall, even though the going is good for Audi, the future is grim with
the opportunities to expand being limited in mature markets and at the
same time rising competition from Mercedes and BMW as well as other
premium cars. However, Audi being Audi, we are sure that the company will
thrive in the long run and make the necessary strategy changes to expand
further and become more profitable.
Competition
1. BMW
2. Volkswagen
3. Mercedes
Competitors

4. Porsche

Recommendations
The electro rheological (ER) fluids used in the hybrid cars engine require
high voltage to operate, that is, the breakdown voltage of air is 3kV/mm.
Audi can modify the ER fluid, by using different combination of electrodes
which can reduce the voltage requirement of ER fluidto function. Suspension,
which particles may tend to clump or settle, is also one of the major
problems of using ER fluid in hybrid vehicles. Audi can tackle this problem by
matching the density of the solid and liquid particles in the components, to
ensure the effectiveness of the operation. Or, Audi can use nanotechnology
the nanoparticles, which the particles are very tiny in size, hence, reducing
the suspension. To overcome the problem of settlement of particles in the
engine, Audi can add lubricant to enhance to lubricity of the engine, which
can help to discourage the gravitational settling and promote particle
suspense. Lubricant helps to reduce friction, thus, enhancing the
smoothness of operation, modifying the viscosity and inhibiting wear,
improving the problem of suspension.
Next, it could be considered a right choice for Audi to expand its production
in China and India because the labour cost in those potentially developing

countries is much lower compare to its original country. However, low labour
cost might affect the production of the company. A low wage paid to a
worker would discourage a worker to put in effort to do his part perfectly.
Audi can prevent this problem by increasing the wages or maybe give bonus
to its workers who show their initiative to perform well in their job. It would
not be a wise decision to have a great number of unskilled or
unknowledgeable workers in an operation. Hence, it is suggested that, Audi
chooses its crew wisely. Choose skilful and knowledgeable people to join the
crew through a careful interview. Otherwise, provide training to those
unskilled workers, or provide time- to- time skill- up courses and practical
training, so that the workers are equipped with relevant and up- to- date
knowledge and skills. Besides, the Board of Directors has to do its duty
checking the employees from time to time, distinguish the problem faced by
employees and company, so that improvements can be made to ensure the
quality of production is maintained.
There is a research shows that Asia countries, especially India is a highly
potential developing country, as it attracts many international investors to
invest in the country, meaning India has potential to become a high class
country. This means that people in India will be able to owe luxury cars like
Audi in future. However, presently the purchasing power for luxury goods of
people in the country is still limited. Actually, Audi can refer to this present
situation, come out with the concept of producing low cost cars or ordinary
cars, to meet the needs of people in the countries. In this case, people with
less income will be also able to own a car themselves. This will not only
expand the market and increase the income of the company, it is also
beneficial to the people who are having a moderate income.
Conclusion
In my opinion, I think the current marketing mix which Audi has is
satisfactory to customer needs. Because for a new or potential customer,
Audi will offer free test drive for the customer and to make sure there are
satisfy with their product. On the other hand, customer also can easily to
obtain latest information from the website.
In providing a wide range of products and with high quality, Audi has by far
influenced most of the customers perception favorably towards its products.
From time the company was created till now, the quality of the products that
Audi offers is improving each year. But the well-known car that less
frequently bought by the consumers because the price is too expensive
which is within the range of RM 179,900 to RM 1250,000. The price will
expensive is because Audi do price comparison with other car in the market
with their main competitors which are BMW and Mercedes-Benz. And it is a

branded product that having mass advertisement in magazines, television

and personal selling by reseller and producer in order to convince consumers
to buy it and remind the consumer about their product in the market.
Even though the prices imposed by Audi seems to be fair with consideration
of the quality of the products offered. The only problem is that, Audi has
priced its products too expensively for a middle or lower class customer to
afford to buy those products. Apart from that Audi has targeted its market
mainly to urban customers as are the only customers who can afford such
expensive products. In my opinion, I think Audi has to create also some of
low end products with low prices which can be affordable to low income
users.
As I have mentioned above, In the case of place (distribution), Audi is using
wholesaler channel to promote their products to the consumers. With the
Audi have strong wholesaler channel, it will able to focus on their innovation
for products to keep competing in such high competitive market since this
market is known as oligopolistic competition.