Executive summary

The report aims to focus on the launching of the Holden Colorado SUV' car in the market of

Canada. The report helps to identify the international marketing opportunities of Holden

using which the organization can improve the business in the Canadian market also. The

report includes the analysis of automobile market in Canada along with its population

distribution that impacts on the success of company. Existence of numbers of competitors,

existing brand loyalties and global dominance of Chinese NEVs are the major barriers in the

Canadian market. Whereas, increasing demand for new cars, better supply chain management

and current cordial agreement with Canada are the major market drivers.

Regarding the customer of Holden Colorado SUV, it is predicted that prime customers would

be middle-aged, married and male with tertiary education. The different product mix of

Holden has been presented in this report with wide range of products offerings at different

prices, all-time cheap pricing policy, distribution through existing intense merchants and

focus on fuel-proficient vehicles and priority to emotional aspirations as the promotions

measures. Toyota Hilux, Ford ranger and Mitsubishi Triton are identified to be major

competing products with similar product features in market among which Holden’s Colorado

is positioned to be cheaper.

The macro environmental factors have also been described that created opportunities and

threat to Holden company. Porters five forces model is also analysed with high competition

in market, medium power for potential new entrants, low power of suppliers, high bargaining

power of customers and high threat of substitute products. Product offerings with additional

services like shopper advice, fitting rooms and re-insurance added value to Holden products.

In addition to that, this report includes BCG matrix analysis and SWOT analysis of Holden.

Table of Contents

Executive summary

1 Introduction.............................................................................................................................1

2 Market Analysis......................................................................................................................1

2.1 Size of market and growth................................................................................................1

2.2 Population.........................................................................................................................2

2.3 Barriers in market and market drivers..............................................................................3

3 Organisational Analysis..........................................................................................................5

3.1 Customer audit and Buyer behaviour...............................................................................5

3.2 4Ps of Holden...................................................................................................................5

3.3 Competitors Analysis.......................................................................................................7

3.4 Competitor advantage of Holden’s Product.....................................................................7

3.5 Positioning Map of Competitors......................................................................................7

4 Macro environment.................................................................................................................9

4.1 PESTEL Analysis.............................................................................................................9

4.2 Porter five models...........................................................................................................10

4.3 Value chain.....................................................................................................................11

4.4 BCG matrix....................................................................................................................12

5 SWOT analysis......................................................................................................................14

6 Conclusion.............................................................................................................................14

7 References.............................................................................................................................15

1 Introduction

The demand for cars is usually connected to the income of the various consumers that participate

in purchasing cars. The necessity of the automobile as a modern life of the average citizen’s

everyday life, there is a certain level of inelasticity that economy car manufacturers possess

when constructing their vehicles as opposed to those companies that choose to specialize in

luxury automobiles. In this project, the growth of Holden Colorado in the international market

will be discussed and how the product of Holden Colorado will get success in Canada’s market.

The Canadian market is analysed in terms of market size, population, market barriers and market

drivers. The organisational analysis of Holden is done in terms of marketing strategies, customer

audit, competitor’s analysis and positioning map. Macro environmental analysis has been

presented I this project with PESTEL analysis, Porter’s five forces model, Value chain analysis

and BCG matrix analysis. Further, SWOT analysis of the Holden company is also provided in

this project.

2 Market Analysis

2.1 Size of market and growth

The automobile market provides inclusive analysis and forecasts of light commercial cars,

passenger cars, and heavy commercial vehicles in Canada. Evolving customer preferences,

business strategies and market analysis of industry leaders are also included. For overseas

investors in the automobile sector, Canada provides a planned location in the heart of one of the

world’s most lucrative and largest automobile markets (Radulovich, Javalgi & Scherer, 2018).

Unparalleled market access, cutting-edge R&D, and seamless combinations into the Great Lakes

automobile super cluster make Canada the best choice to flow automobile innovation into the

future. Canada is considered one of the largest automobile markets in North America.

The automobile industry is contrasted with its stare countries in the region for understanding the

current status of the industry in Canada. Global Trends and regional in the Automobile industry

are also added to this project. Possible market players and their market strategies are recognized.

All recent developments and their impact on the Canada automobile industry are analyzed in this

report.

(Source: GM Holden Ltd - Retail, 2018)

2.2 Population

The new economy in Canada brings with it a set of challenges in the form of mobile technologies

and digital platforms that are fast eroding all the conventional barriers to market entry and

democratizing the core transportation industry (Shaheen, Cohen & Jaffee, 2018).

Population plays an important role in automobile market growth in Canada market. There is the

Millennia’s, and impending impact of them on the economy. Almost one-third of Canadian

young adults are still living at home (Shaheen, Cohen & Jaffee, 2018). But as Canada's economy

shifts into higher gear, bringing more jobs and higher incomes, they will start moving out of their

parent’s shelter and spending some money that will boost inflate demand for sales of the vehicle

and the economy.

Capacity utilization is also important for Canada’s automobile market. It means how much of the

productive capacity of a firm, plan or country is used to generate services and goods. Canada

automakers are already putting the pedal to the metal, topping 85 percent of capacity utilization

in December 2016, which is an all-time high. This means this meeting the increased demand will

be an uphill battle for us without their Canadian counterparts. Canadian automobile sales to the

U.S. reached nearly $84 billion in 2016, the highest sales since 2002 (Uner, Çavuşgil &

Çavuşgil, 2018).

2.3 Barriers in market and market drivers

Market barrier

Trade in Canada became challenging from the time when North Atlantic Free-Trade Agreement

(NAFTA) was entered by Canadian government in 1994, having great influence in trade among

Canada, US and Mexico. If revision in NAFTA is made or if it can be even disbanded, the

automobile industry will need to think once again to remake the entire to boost up the strategies

of production in the region, and possibly further (Dubiel et al., 2018).

Foreign car makers are sure to undergo greater challenge. At present, domination in the New

energy vehicle (NEV) segment is posed by auto and by local makers which together covers over

95 percent of market share. Among numerous foreign EV makers, US-based Tesla is the only

one that falls under top 20 models. Contrast to this, number of car sales by the market leaders the

Volkswagen, Germany and General Motors (GM), US, is approximately 4 million per year in

Canada, and there are no NEVs (Sapouna et al., 2018). Furthermore, the Chinese government

might be willing to continue the trend. China intends to exercise global dominance through the

NEV programme in the vehicle industry. It can be a successful strategy. Currently, BYD auto

comes ahead of Renault-Nissan and Tesla as the world's number one seller of EVs (Sapouna et

al., 2018).

The market for SUV’s has been growing with increasing demands. This increased market would

encourage the investors for further investment and global distribution resulting more cost

efficient and advanced cars. Millions and billions of dollars are spent by the companies for

research and development of advanced EVs. Volkswagen has allocated US $ 24 billion to come

up its all cars with SUVs by 2030. Likewise, Ford earmarked US $ 4.5 billion and planning to

manufacture 13 global NEVs by 2022. General motors (GM) would be launching more than 20

EVs till 2023, whereas, BMW is planning for 15. Further, Chinese Volvo cars are said to launch

all its models with electric or hybrid option from 2019 (Watson et al., 2018).

Market drivers

In fact, compared to other sectors, the automotive sector is one of the most integrated supply

chains shared between Canada and the U.S. That’s why many analysts believe that sticking to

current agreements would have a positive and beneficial impact on both sides of the border.

To start with, the U.S. market is already demanding 18 million light vehicle sales per year. On

top of that, Americans have tended to put off buying new cars due to the long recession. Average

of vehicles in America is of 11 years old which reflects that new car buyers would not be waiting

longer (Jiang& Holburn, 2018). The demand for new cars is expected to continue to remain

similar or simply increase in coming days.

3 Organisational Analysis

3.1 Customer audit and Buyer behaviour

Similar to the truck –makers in competition, the inclination of the company is towards 4WD

dual-cab variants and launching more efficient, stylish and luxurious cars instead of just a

workhorse. It is predicted by Holden that the prime customer for these variants would be middle-

aged, married and male and nearly 42 percent would be covered by customer with tertiary

education (Shin et al., 2018). As trucks and high volume models brings more margin to car

makers, they contribute major profit and became major earners. Further, customers have a desire

for cars with lavish features that would add value to their lifestyle.

Customer Audit: Holden Colorado SUV

Who???Who are the occupants of the segments?

Occupants1. Customer: middle-aged, married and male2. Competitors: Truck and high volume automobile manufacturers

Reason1. desire for better cars2. more profit margins

What???What benefits does the customer seek?

good model, stylish, luxurious, lavish, economical

Where??? Seek information at: Internet, Car shows, Car dealers, support teamsBuy product at: Showrooms; car dealers, reconditioning houses

When?? Increase in economic conditionWhy?? efficient, stylish and luxurious at affordable priceHow??? Pay in full or installment basis

Pre -purchase and Post purchase behavioursales and support activitiesthis product adds value to their life style

3.2 4Ps of Holden

Product: The organization enables its clients to redo their vehicle by giving them the most

recent offers and adornments. Holden offers the various scopes of items all inclusive under its

brand name (Matsumoto, Chinen & Endo, 2018). Holden provides ranges of products covering

Sedan, small cars, SUVs, Ute and family cars. Holden products are of different price ranges and

product sizes that would meet the need of majority of the customer in the market developing a

better brand image and brand loyalty in automobile market.

Holden assembles its Holden Colorado SUV concentrating on brilliant; propel innovation,

inventive outlines and reasonableness of Canada.

Figure 1: Holden Colorado SUV

(Source: Matsumoto, Chinen & Endo, 2018)

Price: The pricing strategy of Holden is fundamentally in view of value, kind of vehicle,

geology being served in Canada and contender evaluating. The contributions are reasonable for

white-collar class clients and the contributions go till extravagance autos. Holden follows ‘all-

time low’ pricing strategy as compared to similar featured automobiles.

Place: Holden uses its system of merchants to offer offers its products in Canada. There are more

than 20,000 merchants trading with Holding in 125 countries and this solid system of merchants

provides worldwide nearness to Holden (Xu, 2018).

Promotion: Holden utilizes a far-reaching showcasing and promoting model to increase solid

brand mindfulness in Canada. The organization focuses on creating inventive answers for nature

by planning fuel-proficient vehicles. Further, the company focuses on emotional aspirations of

customers and reflect it in the outlook of its products.

3.3 Competitors Analysis

There is a cut-throat competition in market for Holden Colorado SUVs. Toyota’s Hilux, Ford’s

Ranger or Mitsubishi’s Triton are the major competitors and the market leaders in terms of on-

road ride and handling, paint and panel quality and noise suppression.

3.4 Competitor advantage of Holden’s Product

In 2017, Toyota Hilux was the market leader with sales of 35,161 where sales of Holden

Colorado was 18,520, of which eighty percent were 4WD variants (Harrison, Vilchez & Thiel,

2018). This is solely due to the competitive advantage of the company achieved due to the

quality of product and services at an affordable price. The lavish outlook, stylish design

accompanied by advanced features in reasonable price provides competitive advantage to the

company (Harrison, Vilchez & Thiel, 2018).

3.5 Positioning Map of Competitors

This year till July, the sales of 4WD Colorado versions was 9854, which is comparatively very

high to 2WD counterparts, sales of which was 1168 units. Colorado has been successful in being

second biggest seller of Holden, the first best seller being Commodore. However, there is high

potential for Holden to make extensive sales from this September (Matsumoto, Chinen & Endo,

2018).

Figure 2: Positioning map of Holden

(Source: Luo & Bu, 2018)

Quality, ride, handling and quietness are the prominent features of new Colorado which is

actually a mid-life upgrade. While considering these parameters, it is believed that Holden is in

pace with Ford Ranger, Toyota Hilux and Mazda BT-50, whereas it leaves Mitsubishi Triton,

Renault, Citroen, Volkswagen and other brands backwards (Luo & Bu, 2018). Audi, BMW,

Mercedes-Benz and Porsche are expensive in comparison to Holden.

4 Macro environment

4.1 PESTEL Analysis

Figure 3: PESTEL analysis of Holden

Macro environmental Components Relevant Factors Opportunity / Threat

1.  Government policies and strategies for public transportation and other alternatives

Threat

2.  High tax imposition on vehicles Threat3.  Political stability of country Opportunity1.  Higher growth rate of new market s Opportunity2.  Economic stability in targeted market Opportunity3.  Increasing competition Threat1.Increase in demand for EVs Opportunity2.Increase in demand for independent driving

Opportunity

3.Vehicle sharing, car pooling and ride- hailing programs

Threat

1.Implementation of self-driving vehicle technology

Opportunity

2.Rising fuel efficiency in automobiles Opportunity3.Increasing development of Evs Opportunity1.Changes in climate patterns Opportunity2.Concern of air quality from emmisions of automobiles

Opportunity

3.Rising concern for sustainability of business

Opportunity

4.Expanding regulations on automobile safety

Opportunity

5.Stricter emissions regulations Opportunity6.Expanding environmental regulations Opportunity

Political: Impacts of political situations on theactivities of the company

Economic: Economic factors having impact on automobile industries

Socio-cultural: Sociocultural factors determining consumers and employees responses that influence the automotive industry

Technological: Technological factors having impact on the firms strategies

Environmental: Environmental issues, ecological trends and changes affecting supply chains, product usage and the resources availability.

Legal: Laws and regulations imposing limits on business activities

(Source: "General Motors Corporate Strategy | GM.com", 2018)

4.2 Porter five models

Figure 4: Porters Five forces

(Source: Souza et al., 2018)

Competition in the market: The competition in market refers to level of competition among the

competitors offering similar product in the same market.

Potential of new entrants into the industry: The likelihood of new entrants in market depends

on the market structure. Need of high investment, monopoly market and market barriers create

less likeliness of new entrants into the industry.

Power of suppliers: Suppliers posses power and bargaining power as they provide the company

with necessary raw materials.

Power of customers: Customers are the demand creators. Products are manufactured and

targeted to meet the needs of the customer. Having alternatives in market regarding price and

quality for particular need creates bargaining power in customers.

The threat of substitute products: Availability of substitute products in the market should be

the major concern for the company. A customer can switch to any of the substitutes if a company

fails to retain its brand image and brand loyalty.

Forces Explanation Power(High/Medium/ Low)

Competition in the market

There are numbers of competitors in automobile market in Canada. Thus, Holden needs to consider strong competitive strategies for successful market share.

High

Potential of new entrants into the industry

There is requirement of huge capital requirement and substantial cost for brand creation (Maverick, 2017). There are threats of a new entrant in automobile market. However, the new entrants need to be strong in order to enter the competitive market of Canada (Seyoum & Lian, 2018).

Medium

Power of suppliers There are numbers of the supplier of raw material or the parts in the automobiles industry and Holden have ranges of suppliers.

Low

Power of customers There are numbers of competitors in Canada for Holden products. Customers have plenty of alternatives regarding their purchase choices.

High

The threat of substitute products

There are different products in market by the competitors that can substitute the luxury car produced by Holden (Souza et al., 2018)

High

Figure 5: Porter’s five model of Holden

4.3 Value chain

Value is created by Holden with used of raw materials in producing useful products. It brings

ranges of products and they introduce the products considering convenience of customers.

Holden also introduces products along with value adding services such as personal shopper

advice or fitting rooms. It further offers policies to clients backed with ample re-insurance (Tade

& Mmahi, 2018). By this, the company is bundling policies with products in buyer’s friendly

way and distributing the products to a global outreach (Tade & Mmahi, 2018).

Figure 6: Value chain analysis

(Source: Tade & Mmahi, 2018)

4.4 BCG matrix

The product portfolio matrix of Boston Consulting group is designed to facilitate Holden

consider growth opportunities with long-term strategic planning by reviewing. It helps the

company by giving the information of where further investment is to be made, discontinuance is

required or development of products is beneficial (Mutcherson, 2018).

The Matrix comprise of 4 quadrants depending on analysis of market growth and relative market

share, as shown in the diagram below.

Figure 7: BCG matrix

(Source: Mutcherson, 2018)

A dog in BCG matrix reflects products with low growth or market share in Canada. Question

marks or Problem Child reflects product with higher market growth with lower market share.

Star section included products with high market growth with high market share. Cash cow means

products with low market growth with high market share. BCG matrix analysis can be used to

develop marketing models and strategies and apply in real-world situations.

Holden Colorado is a problem child for Holden Company as the market growth rate for this

product is high and the market share is low. The popularity of this product is increasing because

of its advanced features bundled in comparatively lower prices in the market Mutcherson, 2018).

5 SWOT analysis

Strength

Established in 1856 in Australia

demonstrates the heritage of the brand

More than 6000 Employees

Known as the Australian Car

producer represent considerable

authority in SUV and Minivans

Solid brand picture esp. in Australia

and New Zealand

Weakness

Unequivocally a territorial player

with solid nearness just in Australia

and New Zealand

Worldwide nearness and the piece of

the pie is unimportantly contrasted

with other vehicle makers

Opportunities

The Chevrolet/Holden Volt is an item

which will get a great deal of chances

terms of offers

They can investigate the developing

markets of Asia other than China and

Africa

With the help of the parent company,

General Motors, they can build new

innovative models.

Threats

Expanding shift from conventional

fills to half and the half and electric

fuelled autos

Other Japanese players and Korean

Players have set up themselves much

solidly, in this manner recovery will

challenge

Its image isn't that outstanding

crosswise over geology

6 Conclusion

Market segmentation and Product differentiation are two of the most important factors used by

the companies within the industry to capture the business of the consumers, as they offer many

choices of economy cars and market them to the demographics that are most inclined to buy

them. There are numerous aspects the company needs to consider for taking the product to

Canadian market and thus this report concludes that launching the Holden Colorado SUV' car by

Holden company in Canadian Market will be profitable.

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