HOLDEN SPECIAL VEHICLE
Socio-cultural, political, and market factors
With around 33 years of industry experience and a partnership with the British Tom Walkinshaw Racing (TWR) group, Holden Special Vehicles has made a decision to expand its business into the UK automobile market. There will be countless segments with varying risks in terms of cost and degree of control before the company to consider, but the consequences of entering a new geographical area will be influenced to a certain extent by the two factors mentioned above.
The UK market comes with an equal volume of opportunities and challenges, which for a new venture like HSV has to consider well in advance and plan their business strategies accordingly for the greatest chance of success. Follows below are some business strategies which HSV cannot afford to ignore –
In order to gain benefit by entering a new market (UK), the company has to do an introspection of its revenue, this is mandatory as the entire marketing script will be written based on it. The company’s revenue since the first quarter of 2019 till present reveals some crucial insights –
Over the course of 2.6 years, they have a good number of acquisitions and subsidiary alliances –
- SecureCom AB in Jun02, 2020
- Silverado on May 10, 2020
- Nordic Defence Industries on Sep 08, 2019
- Strobe on Jan 30, 2019
- Phaeros Group on Aug 05, 2018
- GMAC Leasing GmbH on Mar 29, 2018
- Clifton Motors on Mar 07, 2018
The UK attracts investors in every segment and automobile is not an exception, the present UK market is flooded with automobile companies which are probable competitors for the HSV. The list is quite big with companies from Germany and France, willing to in-cash the UK opportunity. As a new entrant, HSV has to understand the market by analysing what all models in the motor vehicle segment are present, they also have to understand the offerings which the brands are providing. To understand this need and provide a solution so that they can add value to your business is highly recommended for HSV, they have to closely monitor their competitors and their offerings. A holistic view of HSV’s competitors with their capital base (Zoom info — 2017) –
After the revenue and competitors analysis, HSV can move a step further by understanding the wage and associated factors. London (or the UK) has a different pay regime based on an hourly rate which may or may not include overtime (Daniel Clark, Statista). In order to operate the company needs some manpower who could run the setup with an intention to maximize profits. For the automotive industry, the pay rate can be broadly classified into two categories of entry and experienced level, which is further categorized into age criteria –
- Under 18– 4.35 British pound
- Between 18 to 20 years — 6.15 British pound
- Between 21–24 years — 7.70 British pound
- Employees over the age of 24 are benefited with the national living wage which is 8.21 British pound
Let us see some stats based on positions (PayScale) –
- A project manager on an average receives 43K British pound
- Marketing manager — 38k British pound
- Account manager — 31k British pound
- Executive assistant — 36k British pound
Focusing on the UK economics reveals several facts and stats which from a business perspective is tough to ignore, HSV definitely has to understand and plan accordingly. The GDP will drop down to 8.5% (in 2020) to 6.1% (in 2021). The UK population has grown to 66.9 million (in 2019) from 65 million (in 2015). In 2019 the GDP per capita is 42k USD, which means a slow economic growth of 1.4%. The investments, exports, and imports have suffered from a slower growth rate and stand at 0.6%, 4.8%, and 4.6% respectively (focus economics).
The absence of capital or limited control over it is a very unpleasant and unacceptable criterion to consider when we have our eye set on being a business-centric country. The UK government has taken every possible initiative to cure such business suffocation practices by building a hassle-free retrieval and transfer of funds within the country and outside world. This could be seen with the number of options available and also the range of participating banks that work constantly to safeguard the business interest of individuals and companies like HSV. From a huge list of merchants to mediums we have gathered some prominent one and mentioned below (as per compare remit) –
- Net banking
- Debit/credit
- Online
- Mobile payment
- A cryptocurrency (they have gone one step beyond to install and facilitate this)
Companies like remit2india, Icici, InstaReM, TransferWise, Azimo, PayPal, Western Union, and OrbitRemit are just a few to name who are working towards better money retrieval and transfer.
Well, a slogan of “Strong ties, growing stronger” underscores the Australia and UK investment relation. Both claim to have a shared history, common values, and strong personal links. The two-way investment between Australia-UK lies over $815 billion which crosses every sector under each economy. The FDI (foreign direct investment) stats reveals some crucial insights into the two countries shared investments –
- UK is Australia’s 2nd largest FDI destination (austrade.gov.au), this has grown by 19% from 2010–2017. At present, the value is $84 Billion.
- UK is Australia’s 3rd largest FDI source (austrade.gov.au), this has grown by 55% from 2010–2017. At present, it is $83 Billion.
The two-way trade investments are good to consider when talking of the Australia-UK investment relationship, with $26 Billion (in 2017) the UK is Australia’s 7th largest two-way trading partner and 3rd largest two-way service trading partner. In terms of Investments, the growth is recorded at 22% highest from 2010–2017 and which is now at $815 Billion.
Research
Public holidays are occasion when most of the business activities get to slowdown, and one can easily understand by seeing the number of holidays that the country enjoys and celebrates people from different cultures and origins. Not on all the holiday banks and other financial institutions get closed, but during some prominent holidays, they prefer to. There is a certain period of time when the business slows down due to financial crises, which are hard to predict, and times when COVID pandemic like special scenario can turn the table into a business nightmare.
A concept of Global Britain was in highlights a few time back when the UK government announced themselves as the best place for Startups and business. Their claim of providing the best chance for international success with great talented minds and a huge customer base reflects their ease of doing business. Basically in the UK, business culture is characterized by a number of factors like business communications, business etiquette, internship, and student placements, cost of living, and work-life balance (Jamil Anderlini — FT correspondents). A report on the UK daily shows that people welcome new business initiatives but not everyone has similar and good experiences, many of them struggle and collapse. One different thing is an eye to appreciate new initiatives, unlike many other business spots where every start-up is a different version of another start-up. In London and UK, there is more time and space which is good for new businesses to germinate and flourish (Anne Morris, MD of Davidson Morris).
Recommendation
So, for HSV to mark their presence in the UK, the best suitable recommendation would be to buy a local firm, since they have previously done several acquisitions and subsidiary alliances, this would be much familiar. Also, to buy a local firm they will be at lesser risk, which is good when you are new to a country. They will get time to observe, understand, and finally act.
