Summary

The Rover marque has always been one of the important British motoring scene, firmly middle of the range, yet up-market too. Rover had awinner in the Land Rover,and its luxury version, the Range Rover, and the Mini. However, during the 1960s and 1970s it fell victim to the industrial relations troubles that were tearing large portions of British industry apart. As a result sales dropped reliability deteriorated, and severe financial losses were incurred. In 1970s the company was bought out in a salvage operation by British Aerospace, but it doesnt make it better many of its models were unsuccessful. In 1979 British Aerospace negotiated an agreement with Honda, the Japanese car and motorcycle manufacturer, they took 20% share of Rover`s equity and agreed to collaborate in building motorcars. Despite successful sales over the next few years, Rover was still making losses. In 1993 Honda offered to extend its share of Rovers equity from 20% to 47.5% ,but BMW the prestigious German company, agreed to purchase the full 80% owned by British Aerospace.

Main points of the study

British Leyland (Later called MG-Rover) was a conglomeration of some of the best known names in British car manufacturing, such as M.G. (Morris Garages) and Rover with Austin and Riley and Austin Healy and Triumph and Jaguar and many more. British Leyland suffered from many threats and challenges either through the threats and problems that the firm faced with labor Union and employees strikes, moreover, the company was not able to produce distinctive cars that may have a competitive advantage, moreover, as we mentioned the company was built around mergers from many firms and organizations that have different structures and cultures that makes the coordination and communication process very difficult, moreover, It is appeared from an outsider's point of view that the production line workers were inherently lazy. Land rover had made civilian and military off road vehicles for years, but changed direction in 1970, with their range rover, a luxury vehicle with polished wood trim and the capability to cross

fields, streams, deserts, and jungles designed for Britain wealthy country living classes, the Holly wood jeep appeared wherever there was money , the range rover defined a new product class, it became a fashion statement the only automobile to have been exhibited in Louver, moreover , the price of Land Rover is somewhat not cheap cars, but also its cheaper than Mercedes or BMW. The rover was not able to achieve to achieve high success for many critical reasons: Honda helped rover but it also stopped the car business making profits, rover had to pay for Honda handsomely for the floor plans and engines it needed for its larger models, they paid a royalty to Honda for each jointly developed car rover sold, the technology agreement barred Rover selling, Honda based models in markets , Honda wanted for themselves such as the USA rover needed a better deal with Honda but their weak position AND Honda`s intractability left bae in a jam " we were involved in some kind of Japanese poker game" said Richard evens, chief executive of BAe.

Case Analyses:
Given Rovers much wider range, they were not as successful as BMW which had a much smaller range of vehicles to sell. On 29 January 1994, BAe sold their 80% share in Rover to BMW. With one bold move BMWs share of the European car market they became market leader in off-the road market, and they gained a range of small cars, a low-cost manufacturing base,
BMW is very clear about its targeting. It only targets the premium-priced cars and does not strive to compete in every segment of the auto industry. It avoids the high-volume market of middle-of-the-road vehicles and focuses strictly on the luxury sector.

First I will make SWOT analyses about BMW and its decision on buying Rover: Strength: 1. 2. 3. 4. BMW independently strong owned company Focus of being the best Extensive distribution channels There product developed in a way keep its various brand distinct.

Weaknesses:

1. Its an associated with highly expensive products ,so its production cost high 2. Its affordable only by upper level of the society 3. Competitors had exclusive dealerships and markets Opportunities 1. 2. 3. 4. Global expansion into new markets Bmw looking for having its first four-wheel drive designs Rover was had much lowerproduction costs than BMW Growing market segment can be exploited with sub-brand models

Threats 1. All the other car companies such as Nissan Toyota Honda , who clearly see Europe an attractive and growing market (New entrants in the automobile industry) 2. The direct competitors which existing in British and Europe who compete with Rover models 3. Fail in sealing the new BM Rover design 4. Economic downturn

what is car manufacturer depends more on strategic alliances with other manufacturers

SOURCES & USE OF FUNDS COMPANY position & INDUSTRY Available FACILITIES FEATURES & BENEFITS Existing COMPETITION 3.4 COMPETITIVE ADVANTAGE/BARRIERS TO ENTRY MARKET SIZE 4.2 TARGET CUSTOMER

SHARING RISKS AND EXPENSES.

Another major benefit of a strategic alliance is that the firms involved can share risks. For example, in the early 1990s, film manufacturers Kodak and Fuji joined with camera manufacturers Nikon, Canon, and Minolta to create cameras and film for an "Advanced Photo System." The strategic alliance (which was not based on a strategic alliance) was terminated in 1996 after the film and camera were developed. But it benefited the parties, because, by developing a common product for the market, they shared expenses and they minimized the risks that would have been involved if two or more of them had developed new, but noncompatible, formats. They avoided the potential for the kinds of losses suffered by the Sony Corp. when its Betamax format for videocassette recorders was rejected by the public in favor of the VHS format.

SYNERGISTIC EFFECTS OF SHARED KNOWLEDGE AND EXPERTISE.

A strategic alliance can help a firm gain knowledge and expertise. Further, when partners contribute skills, brands, market knowledge, and assets, there is a synergistic effect. The result is a set of resources that is more valuable than if the firms had kept them separate. For example, in the early 1990s, Motorola initiated an alliance among various partners, including Raytheon, Lockheed Martin, China Great Wall, and Nippon Iridium, to develop and build a global satellite-based communications network. This new network, called Iridium, allowed the partners to develop and implement a worldwide, space-based communications network.

GAINING COMPETITIVE ADVANTAGE.

Similarly, a strategic alliance can help a firm gain a competitive advantage. For example, a strategic alliance can be used to take advantage of a favorable brand image that has been established by one of the partners. (Establishing a brand image is a lengthy, expensive process.) It can also be used to gain shelf space for products. For example, PepsiCo formed a joint venture with the Thomas J. Lipton Co. to market readyto-drink teas throughout the United States. Lipton contributed brand recognition in teas and manufacturing expertise. PepsiCo, as

the world's second-largest soft-drink manufacturer, shared its extensive distribution network.

Read more: Strategic Alliances - benefits, expenses http://www.referenceforbusiness.com/encyclopedia/Sel-Str/StrategicAlliances.html#ixzz1bwnpwUq4

Conclusion And Recommendations

This case study gives an idea that the company should study the consumer's preferences and attitudes in a continuous manner to determine their needs and wants that change with time. The company should investigate the potential markets and strategies to protect its position in the market and to remain the market leader. Invention and innovation are very important dimensions for the success of any business so the researcher recommends that firms have to entroduce new products for consumers in a continuous manner.

I recommend Honda to pull-the-plug on their deal with Rover because Honda cannot be a partner with its competitor. By doing so Honda can be able to compete and can make of R&D for its own benefit rather than for BMW or the others.

Honda & Rover: Opportunities 1) Honda which is one of the smaller Japanese car-makers, was looking forward to enter the British and EU market. 2) Both Rover and Honda will benefited from: Honda`s design and production expertise,and Rover high Image and reputation ,to up-market style and reliability. 3) Honda could use Rovers manufacturing facilities such Honda range at its Birmingham works, Threats 1) Facing many other competing car manufacturers in British that have been in the business for many years earlier. 2) the sale by British Aerospace of 80% to a German competitor BMW. 3)

strategic Analysis, by analyzing the internal and external environment to enable: An understanding of where the firms are and how they got there. An understanding of the resources and the environment An understanding of the Industry and key success factors Consideration of the competitive strategy

Global exbantion in british and EU