Essay SEAT, S.A. is a Spanish Automobile Manufacturer – Case Study – Management Assignment Help

Assignment Task

 

BACKGROUND

SEAT, S.A. is a Spanish automobile manufacturer with its head office in Martorell (near Barcelona), Spain. The firm has been a wholly-owned subsidiary of Volkswagen Group since 1986.

The firm is strategically repositioning itself from a vehicle manufacturer to a provider of mobility services (i.e. where users pay for transportation only when they need it, rather than owning a personal vehicle that is not used most of the time), especially in increasingly crowded urban areas.
As stated by Luca De Meo, the firm’s Chairman:

“We are convinced that vehicles will become the second largest connected platform after the mobile phone and we will have the chance to integrate them into a rich ecosystem. This transformation forces us to innovate and move beyond the scope of being just a carmaker, stretching our value chain towards new mobility services, platforms and data businesses”.

As part of this repositioning, SEAT has identified ‘compact urban mobility’ (short commutes less than 10 kilometres within the city environment, using a small vehicle) as a core area for strategic development.

The firm unveiled its ‘Minim?’ concept vehicle at the 2019 Mobile World Congress to demonstrate SEAT’s vision of the ‘compact urban mobility’ of tomorrow.

Integrating the fields of electrification, connectivity and shared mobility the ‘Minim?’ is a 2-passenger quadricycle primarily intended for business-to-consumer carsharing providers* that has been designed to:

have a considerably smaller ecological footprint (3.1 square metres) than a normal car (7.2 square metres) while providing safe, agile travel and easy parking
release zero emissions due to its all-electric powertrain
reduce the operating costs of carsharing providers by 50%, as the integrated battery-swap system means the vehicle rarely needs to be taken to a recharging point
provide a convenient and smooth digital user experience for users based on hyperconnectivity with built-in 5-G technology
allow the vehicle – in the future and subject to further development of autonomous technologies – to pick up the user when requested, thereby solving one of the main carsharing user pain points.

The ‘Minim?’ will go into production in 2021, leaving the firm with only 18 months to decide which city from across the globe will be most attractive for the product launch. SEAT’s international strategy team have already undertaken some initial desktop research.

Referring to the ‘C40 cities’ (94 of the world’s greatest cities whose mayors are committed to driving meaningful and sustainable action on climate change, including in the area of urban mobility), they have decided to focus on London (UK) and Sydney (Australia) as potentially attractive cities for the product launch of the ‘Minim?’.

As an external consultant, you have been commissioned by the team to research and evaluate these 2 cities and their wider macroenvironments in greater detail.

* Two of the main types of business-to-consumer car-sharing models are:
Station-based carsharing (e.g. Zipcar, Communauto, Maven) – the user only has a choice between a round trip (picking the car up at Station A and returning it to Station A), or a tightly-monitored one-way trip (picking the car up at Station A and returning it to Station B). Those who plan trips ahead of time or are looking for a car at a specific time would benefit from these services.
Free-floating carsharing (e.g. car2go, Gig or DriveNow) – the user can see which cars are available within a set operating area on a mobile app and choose the one closest to them. Once the user is finished using the car, they can drop off the car at any location within the set operating area, saving time and avoiding unnecessary trips. Those who are spontaneous and decide last-minute that they need a car would benefit from these services.
NB the difference between carsharing and ridesharing: Carsharing = ‘I rent a car to drive now and park it when I’m finished; someone else will rent the same car later and drive it’; Ridesharing = ‘where several people with compatible destinations/routes go together in the same car (instead of travelling individually in their own personal car or in a carshare vehicle).

TASKS

1. In order to identify which city is the most potentially attractive destination for the launch of the SEAT ‘Minim?’, you are required to undertake a comparative analysis of what you believe to be the most relevant city-level urban mobility and wider macro-environmental factors of London and Sydney.

Task 1 must be presented in table format and must be no more than 8 pages in length.
Wider macro-environmental data should be recent, primarily quantitative and obtained from appropriate sources (e.g. the most recently published World Economic Forum’s Global Competitiveness report).
City-level urban mobility data should be recent, primarily quantitative and obtained from appropriate sources (e.g. the 2019 Deloitte City Mobility Index, which assesses the health of cities’ mobility networks and their readiness to embrace the future of mobility in the coming decades).
A scoring system should be used for each city-level / wider macro-environmental factor for each city to show whether each factor is more or less attractive for the company. These scores should then be totalled for each city in order to arrive at a score of overall attractiveness for each city.
Refer to the Assignment 1 Briefing slides for further guidance.

– Worth 40% of the overall mark
– Not included in the word count

2- Evaluation of Factors Suitable in London for Launching SEAT
The business environment of cities and countries is always changing due to this reason it is crucial to apply principles of business management to effectively and appropriately evaluate the suggested business environment before launching. The SEAT company is a company that values which any business or company will apply such as carrying out the SWOT analysis found London to be the best city to launch its operations. The evaluation ensures the company’s management is able to determine the available threats and opportunities and after evaluating them a wise and most advantageous decision is made thus will result in the growth and development of the company both in the short run and long run. The business experts have provided various management tools that are used to determine the most suitable area to establish a business. The commonly known management tool for evaluation is called PESTEL, it is the business management tool used to provide London to be the most suitable city to launch.
PESTEL business management tool is commonly used because of its clear objectivity and ease to apply and also carrying out the effective evaluation. The tool explores widely the six important macro-environmental factors which greatly impact the performance of the company. It provides the available opportunities and threats which are provided by clearly evaluating the six commonly known macro-environmental factors. All the macro-environmental factors are to be considered to provide the most suitable city for SEAT was London which implies that the comparison of the macro-environmental factors proved that these factors were adequate and sufficient to sustain the operations of the SEAT. Any company which does not appropriately evaluate the environmental factors of the environment before launching its operation there is a high likelihood of long term underdevelopment, that’s why SEAT had to undertake thorough evaluation and analysis before coming up with London as the most suitable city and the United Kingdom as the most appropriate country for launching its operations as the factors provided will positively impact the growth and development of the SEAT. The PESTEL provides the factors as Political, Economic, Social, Technological, Environmental, and Legal.
Political Factors- Government rules and several counties’ practices have a great impact on the business environment thereby influencing its growth and development or even decision making when opting to set up a company in various countries. The national political nature of the United Kingdom a conducive for setting up a company which I suggest SEAT should be comfortable with while launching its operation. The political factor is subdividing into various subcategories such as political risk, the political risk of counties is provided by the country’s risk tier, corruption level of the country provided by indexes of corruption, and political orientation of the government in the future (Srdjevic, et.al, 2012). The political instability of the country does not provide a stable business environment which consequently influences the operations of the company’s operations negatively. The political risk level of the United Kingdom is very insignificant therefore cannot influence the operations negatively if it was launched successfully. The accumulation of these political categories level provided the suitable political environment for launching SEAT Minimo. Due to the peaceful environment in United Kingdom, it provides good business opportunities to various companies. The counties associated with constant political instability and wars have very few companies due to the factor that the investors are cannot risk launching their companies in countries where the company or industry development is limited. Corruption which is a political related factor is another political factor that attracts or scares the busiest people respect to its extent. United Kingdom is one of the top 15 counties where the corruption level is very minimal due to this SEAT minimo and other countries can launch their operations and grow effectively as the corruption is minimal thus providing the ideal environment for business operations (Alvemo, et, al,2010). The countries with a high level of corruption are attributed to little company’s prosperity due to high corruption level which discourages business operations.
The level of future orientation of the government- influences the company’s performance, that’s why it was crucial to establish the level of future orientation of the government of the United Kingdom. The plans and other visions in terms of business environment development by the United Kingdom are determined to provide a conducive environment that will promote the growth and development of the companies and industries within the country. The three above discussed political sub factors all constitute the general political factor, thus all the above are crucial to be determined before launching, I evaluated them and the political environment of the United Kingdom proved to be sufficient to sustain the development and growth of SEAT Minimo Company.

Economic Factors:
National economy-level evaluation is vital before launching the company operations. The economic factor can be determined by evaluating economic risk, financial risk, economic freedom, economic equality, GDP growth, and size of the population. The economic risk helps the management of the company know if they invest in a particular country the level of the incurring profit. Some countries have a very high-risk tier which implies that after launching the company or industry there is a high likely hood of incurring losses or even in long run forced to close the entire operation. The United Kingdom provides a good environment to invest widely as the growth of the company is highly guaranteed. Economic freedom also provides another crucial factor to be established, some countries limit the company to a certain investment level however United Kingdom does not provide adverse economic freedom which provides an ideal country for launching the SEAT Minimo. A huge population provides the required consumers of the services of the company which is the transportation. The GDP, per capita and the level of equality of the country are generally high all providing favorable national economic factor which is suitable for launching of the SEAT Minimo.
Metropolitan economic factors levels are also essential to evaluate as they influence the operations faster as compared to the national economic factors. The metropolitan economic factors include metropolitan working age, this is the target population which the SEAT Company is targeting to offer them transport services, and the population of working age of London is generally high (at least one adult does some work in 92% of working-age households in London) thus providing sufficient consumers of the services which will be provided by the SEAT Minimo. The area of the metropolitan area given in square kilometers provides an opportunity for the expansion of the company in the future if its operation increases in the future. The population density and the GDP of London is more than 10 times higher than that of the next most densely populated region of England Proven to be sufficient to support and encourage the development and launching of the company. Both the National economic and metropolitan economic factors are adequate to support the launching and growth of the SEAT Minimo Company.

Social Factors
The culture and society around the company or an industry influence the general business environment. Some of these factors which made London an ideal city are the high population and many tourists/ remote employees which will consequently provide a sufficient market for the transportation services. Age distribution the huge population age group of the United Kingdom comprises the working class which implies that the transportation services will have sufficient demand favorable for its growth and long term development of SEAT Minimo.
Technological Factors- The technology comprises mainly research and development, level of technology in the United Kingdom is generally high which provides favorable technology which the management of the SEAT Minimo may be anticipating to undertake their various operations effectively. Some of the techno factors include the level of mobile and laptop subscription level which is generally high in the United Kingdom. Modern days the transportation companies rely mostly on mobile phones which are installed with distance measuring apps that provide the time consumed with the respective amount of money required for transportation. The level of mobile usage is extremely high which will make the operations of the Seat Minimo its service delivery to be sufficient and effective thus recording huge profits attributed to the high level of technology.
Innovation level which is under research and development also ought to be evaluated. The United Kingdom is one of the counties where innovation and new developments are made and the government has been on the front line in the promotion of innovation. The countries where the innovation capabilities are minimal have few companies and industries most of them are third world countries, this is because the investors and top management of companies or industries are not willing to launch companies to areas where the level of innovation is minimal as the growth and development of the companies and industries are greatly influenced by the innovation level and low innovation will result to slow growth and development of the companies which none of the management will be willing to risk. The network and connectivity of the country also affect the growth and development of the company in a way that lack of connectivity and network process undertaking will undermine the performance due to the poor technology provided. The network coverage in the United Kingdom and more so in England where London is located is well established thus will lead to the growth and development of the SEAT Company if it is appropriately launched in London. The United Kingdom is also one of the counties with the most embracing of disruptive issues, all the above sufficient technological factors available in the United Kingdom are ideal and most appropriate for launching and developing the company.

Environmental Factors- Environmental factors influence the management decision when it comes to choosing the launching of the company to two companies with different environmental factors. The United Kingdom has favorable environmental conditions which are ideal for the launching of the company. Some important environmental factors include weather, natural disasters, air quality, and climate change all the above are favorable for the Launching of the SEAT Minimo countries with bad environmental factors discourage setting up of the companies and industries.
Legal Factors- Legal factors constitute safety rules and regulations, discrimination laws, employment laws, consumer protection laws all the following greatly impact how the company will operate, demand of services, and the level of the operation costs. The legislation influences reporting and accounting of companies and corporations. The management of the corporations and industries will always prefer to launch their operations in the countries where the safety of the business and the workers are highly guaranteed and provided over the countries which do value safeties of the workers of the company’s performance (Kolios, & Read, 2013). The legal factors can be classified into various factors such as the ease of doing business, the level of ease of doing business in the United Kingdom is relatively high which provides a favorable macro environment for business set up and development.
The level of protection of the company’s property, the government of the United Kingdom greatly values the property of the companies and their sufficiently laid regulation to protect the company’s property. The government also values and protects the property of all foreign investors thus attracting investors who are ready to launch the company in the United Kingdom. The business has freedom in formulation of rules which influence the performance of the companies. The United Kingdom values company’s decision and includes them in the various law-making processes as they impact them and is the aim of the government to provide the ideal conditions for launching and development of both local and foreign companies. Judicial independence affects the national legal level of the country; the judicial system of the United Kingdom is one of the most independent judicial systems worldwide. Due to this factor the investors are willing to launch industries and companies in the United Kingdom.
Sufficient macro-environmental factors provide ideal conditions in which the companies launching will be successful, the growth and development of these companies are also guaranteed. The United Kingdom is one of the countries where the macro-environmental factors which will favor launching of companies will have long term benefit, thus why SEAT Minimo management should launch its operation since its growth and development is ensured. Most important is London where the above factors are much better as compared to the national level. The business management committee needs to establish and evaluate as these factors determine business closure or growth and development of the company, to ensure the growth and development the macro environment should be evaluated and choose the city providing the best.