The market picked up and so did profits. For the first time in Skoda history, the company had a wait list of customers in UK. The company registered continuing and ongoing growth in profits for the fifth year in a row.
The Auto industry in the world has been going through an excessive change in performance and growth. In the last decade, the rise of China and Asia as manufacturing hubs changed the course of the auto industry in the world. The market in China and India, seem to be picking up and the Chinese market which has only 2% of its population holding four wheelers is already the size of the Japanese market. This makes it an highly probable growth market in the future (Jianxi Luo 2005). With many of the European and American car manufacturers finding their market dwindling and having surplus capacities have been reducing their manpower. They need to look at fresh and growing markets like that of China and Asia. With only a few players controlling the car market of the world, players like Skoda who has been gaining ground in Europe and in Asia need to be watched. The rising market for Skoda and the increasing profitability of the company makes it a company worthy of analysis (Tulder RV & Ruigrok W Jun1997). Beating some of the seeded players in the European market is no easy task. But Skoda could do that successfully and looks forward to a major break in the profitability of the company in the current year. All this makes the company, the one that needs analysis of their policies and their strategies. This paper aims at analysing the company and its marketing strategy that has led it to the success that it is now facing.
4. Strategies of the Company
Skoda was formed in the year 1894 in Czechoslovakia with the aim of making bicycles. Subsequently, they moved into manufacturing motor cycles and later cars, trucks and buses. During the early twentieth century, the company started producing agricultural and other farm equipments for the east European market. By now the cars of the company found their way to the markets in the Western Europe and there was quite some market for them in UK. But the UK market always had a joke about Skoda particularly the appearance of Skoda. Skoda did make inroads into the West European market and in America because of its ruggedness and reliability. Though technologically poor, the engine under its hood was powerful enough to keep running even in the worst conditions. That made the machine one of the most reliable ones in the market at that time. This saw the population of Skoda increasing in UK.
After World War II, Skoda tied up with Volkswagen for technical collaboration. VW invested in the company and ensured that the basic design of the Skoda remained in the early days but soon replaced by the Volkswagen Design since the technology adopted by VW as superior. This brought another marketing strategy that had to break through the already crowded market in Western Europe and in USA as much as in the rest of the world (William Kimberley Jun 2001). The perception of Skoda as an ugly duckling was slowly changing but still persisted. 'Oh! It's a Skoda'. But then it was as usual thought to be efficient and reliable. Skoda now had to make use of some bold advertising and marketing strategy