To meeting to determine the suitability of the

To
redesign company car’s surface, Perodua’s
employees need to spend a lot of time to consider their marketing mix variable
which are product, price, place and promotion. Product that produced can be
offered to the market for attention, use or consumption that satisfy the
consumer’s needs and wants. The examples of products such as car and service.
On the other hand, Perodua have to spend some time to implant price for
different models of cars. When different target markets have different
needs, a number of place variations may be changed. Thus, Perodua spent time to
do research on urban areas and suburban areas. Then, Perodua decided to target
most of its sales, service and showrooms on the urban areas because of high
population.

5.1.2 Equity Strategic Alliance

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            Perodua need to
spend time to gather data and do research for potential partners. Then, Perodua
have to conduct the first meeting to determine the suitability of the partner.
To measure the value of a potential partnership by accessing the quality of
solutions, Perodua could provide for their customer’s problems, needs, and
wants.  After making decision, Perodua could
assign an intermediary to communicate with the partners. Therefore, an
intermediary might always travel to overseas to draft, negotiate and enforce the
agreement with the cooperate partner. Once they have established what their
partnership be like, they could start testing the promotion out and introducing
it to the consumers. Thus, those activities might be consumed 3 to 4 years to
complete.

5.1.3 Product Differentiation Strategy

On
the other hand, the new electric vehicles model developed by Perodua could take
as much as 36 to 48 months to develop, as there
is a lot of local input in terms of research and development. Besides, Perodua
could provide training programme by sending group of elite company’s engineers
to overseas for advanced study. There are several university such as
University of California in Berkeley and University of Michigan. Although training
program could consider as a time consuming programme, but this could improve
the skills and knowledge of the employees on the development of new electric
vehicles model.

5.2
Cost

5.2.1 Product Development

Perodua
have to advertise their new design car model in different types of media such
as television, internet, and billboard to allow the consumers alert that
Perodua has redesigned car surface. Furthermore, Perodua advertises a lot in TV
commercial especially during public holiday such as National Day, Chinese New
Year, Deepavali, and Hari Raya Puasa. Thus, these might be a huge expenses for
the company. On the other hand, Perodua’s Research and Development department
has around 350 engineers in the industry to produce the vehicles. However, the development
cost for Perodua’s own model is estimated at RM300 million to RM400 million a
year. Although it is a big amount but it is manageable. If Perodua develop its
own platform and engine by not sharing platform and engine with their partner,
Daihatsu, the total development cost could be about RM800 million and RM900
million, which this amount is not feasible according to Perodua yearly sales
volume of about 200,000 units.

5.2.2 Equity Strategic Alliance

            Perodua have to spend money on hiring researchers in
order to do survey and gather data for potential corporate partners. Further,
Perodua have to pay salary and transportation fees to the intermediaries for
dealing with partner. In strategic alliance, it also involved transaction cost
between Perodua and the partner. However, transaction costs are unobservable
which using the price mechanism for business transaction. For example, it is
including attributable costs such as costs of negotiating and concluding a separate
contract for each of the transaction.

5.2.3 Product Differentiation Strategy

Furthermore, to develop Fortwo Electric Drive, it could cost
Perodua a big amount on the research and development. Also, the expenses on the
components for the car. Besides that, it costs a lot when the organization have
to send their employees for training. Also, Perodua would keep reinventing the
new strategy to attract loyalty from customers, but product differentiation
involved a lot of resources fees to carry out a market research to determine
the customer needs, product development, advertisement and monitoring. However,
customers might bear the burden of these costs by consuming these product at a
higher costs.

 

5.3 Risk

5.3.1 Product Development

            Perodua may not conducting the sufficient research into
market requirements and leads to developments that do not meet customer needs
and wants. Besides, the product development process carried out by the
technician may involve technical hurdles and operation risks. For example,
there may be components that should be supplied on a regular basis, and sourcing
these materials can be a problem. Further, product development may also involve
financial risk. It is possible that the new design development will not be able
to generate enough demand at a price that will bring profit for the business.
In another words, the cost of the production may not be covered by the selling
price.

5.3.2 Equity Strategic Alliance

            When Perodua cooperate with another company, company may
lose some degree of control over the way Perodua is perceived. When the
business is engaged in foreign country, there is a risk that the country have
authorities to seize this local business so that the domestic organization can
have all the market as its own. Further, once Perodua cooperated with Chinese
manufacturer, they should share resources and profits. Also, they will share
their knowledge and skills as well. However, sharing knowledge and skills might
be problematic if they involve trade secrets. On the other hand, Chinese
manufacturer may become Perodua’s competitor. If Chinese manufacturer company
profited enough from the alliance and grew enough to finish the partnership.
Then, they have the capacity to operate their own business in the same market
segment.

5.3.3 Product Differentiation Strategy

            If the new electric vehicles model fail to deliver on the
promises on decrease the cost of fuel price, the consumers may be disappointed.
This is a risk for a costly goods that did not meet the consumer needs and
wants. Besides, overdoing differentiation that may overtaxes or overextend the
company’s resources. However, excessive differentiation can affect the
competitive advantage and profitability of company. Since Perodua already have
ecosystem for the previous car model, now, developing new electric vehicles
model which may confused the customer with the wide variety of offerings.