Strategic Management

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UNIVERSITI TEKNIKAL MALAYSIA MELAKA

(MTKM 5083)

STRATEGIC TECHNOLOGY MANAGEMENT

Proton-Perodua Merger case study

29-July 2010

As a Marketing Manager for Proton Holdings, the strategy of merging Proton with Perodua would be a success because of the following factors:

First, lets understand the strengths of Proton:

1. Proton is supported by the government as a major national car producer. This means that Proton would have government funding and tax breaks. With this advantage, Proton has a bigger budget to perform R&D activities and advertising.

2. Proton has a legacy of engineering expertise that builds good quality cars. They have partnered with Lotus to tune Proton engines and handling.

3. Proton was Malaysia’s first national car producer, hence having the first market share of national cars in the country; they have conquered the Malaysian initial market of car buyers.

4. Proton’s strength was to beat the car industry in Malaysia by introducing cars are more cost savvy than international cars.

5. Proton has a brand impression on the Malaysian society.

6. Proton has an opportunity to marketing to the the Asean Free Trade Area and ASEAN market.

7. Politically, Proton would be used as the poster boy of Malaysian Car technology to penetrate the international car industry.

8. Proton is a public company where it’s shares are traded in the KLSE.

Strengths of Perodua:

1. Perodua is well known for fuel efficient cars.

2. Perodua’s product niche has started with compact cars but today, they diversified to multipurpose vehicles like the Alza.

3. Perodua has a engineering legacy from Daihatsu which is a Japanese car manufacturer.

4. Market research says that Perodua has a better quality in upholstery, engine efficiency and reliability of electonics compared to Proton.

Weakness of Proton:

1. Proton cars are not fuel efficient.

2. Certain replacement parts are expensive

3. Quality of...