Strategic Management of Perodua: Conclusion - Conclusion & Recommendations

Conclusion & Recommendations

One of the processes of strategic management is applying external environment analysis that identifies opportunities and threats. The tool that can be used is PEST analysis that stands for Political, Economical, Social and Technological analysis. After applying the concept on the local company, which is Perodua, we found out that from political view, the company receives backing from the government from the days it initiated and it help them grow bigger from there after. What the company can do more is increasing its export sales by making agreements with strategic countries so that the company can further boost their profits. In economic factors, with the current drop in currency and implementation of GST, the automobile industry had seen a plunge as consumers buying power is reduced more and more. To counter this, for the time being Perodua can offer appealing rebates and discounts on their cars so that the consumer may purchase it.

From the social stand, with the increase in population that includes youths and adults, Perodua can reap benefits from this and make mass production of the cars. Although there are environmental issues regarding usage of standard motor vehicles, there is not much threat to the industry as the green alternatives are more expensive and hard to maintain. Technology wise, Perodua triumphs with their best in line value for money innovative technology through strategic partnership with Japanese companies, Toyota and Daihatsu. Their fuel-efficient cars attract consumers nationwide and the specifications for the car is not too shabby either. Perodua can continue improving their expertise with more tactical venture with bigger company to expand their business.

On towards the micro scale of analysis that looks into the industry environment itself, we used Porter’s Five Forces Model to identify competitive forces that can bring impact to an industry. The first being threat of new entrants, that is relatively weak. This is due to the company dominating the total sales on year 2015 for cars, and there is few or non existent brand that is being introduced in the market. Secondly, the rivalry within industry that includes both local and international brand. Through careful planning,  the company tries to compete with its rival that is in the same class only, not bothering to come up with a more powerful type of product. Although it’s a safe move, the company cannot grow more exponentially if they don’t try to take risk and being daring to try to take the next step.