PROJECT : Strategies and Company Politics

Case study : DACIA Automobile Company Dacia Duster

1. STRATEGIC OBJECTIVES

The project examines the goals that the company Automobile Dacia SA has
proposed to meet through launching Dacia Duster on the Romanian market.
The main quantitative targets which the company has proposed to meet over the
launching of Dacia Duster brand on the Romanian market are :
Increasing the turnover from the sale of Dacia Duster vehicles , accessories, spare parts ,
maintenance and after-sales service ;
Increasing the renewal of Dacia vehicles within the brand ;
Increasing awareness ;
Increasing the territorial coverage ;

The Duster type, first manufactured by Dacia Renault on a platform in Romania and later
in other countries, had 4826 orders last year. We conclude that Dacia Duster definitely led
to an increase in the turnover of the company. Therefore the rate of renewal of Dacia cars
increased within Dacia brand. Dacia Duster completed the awareness extent within Dacia
brand, not only in our country but especially abroad, where prices played an important role
for those who chose the Duster to the detriment of choosing another second hand S.U.V.
In terms of territorial coverage increase, the investments of Renault company gradually
increase from one year to another. There are improvement projects dedicated to Mioveni
factory , which right now , it is the fifth important factory for those of Renault. There are new
manufacturing centers built in strategic locations all across the globe.
Among the main qualitative targets, there are :
Manufacturing of Dacia Duster at the highest standard of quality;
Creating a strong link between Dacia and its customers;
Protecting the Dacia customer portfolio facing the competition. Objectives related to
positioning;
ISO Standards;
Objectives related to creating and maintaining a certain image;
Making the customers become loyal and devoted to this brand.

For Dacia , quality means fundamentally following three aspects:

1 . On the design activity level : The product should meet the customers expectations.
Thus, the design team has the responsibility to offer priority to quality.
2 . At the industrial system : It seeks the quality practiced in the factory and of the suppliers;
the latter must have ways of organizing and procedures that allow them to replicate every
spare part , every vehicle, in the same way and at the same level of quality. All the spare
parts that equip Dacia Duster are 87% recyclable.

3. At the commercial network level we are talking about quality in contact with the customer;
through this , Dacia representation emerges into the customer's eyes.

2. THE SWOT ANALYSIS OF THE COMPANY

The SWOT analysis is an overall assessment of strengths, weaknesses, of threats and
opportunities of the company. The purpose of the analysis is to corroborate, on the one
hand, the strengths with the attractive opportunities in the given environment, and on the
other hand, to remove or overcome the weaknesses and minimize the threats.

Strengths

The latest equipment used in the manufacturing of cars , improves continuously from year to
year and the cheap labor that is not less than 15000 employees only in Romania, represent
the first strengths of the company. Logan customers in 2004 are also customers today,
forming what we call steady customers. The existing distribution channels and the
information and processing systems represent strengths of the company.

Weaknesses

The impossibility to satisfy all the customers with the risk that some of them turn their
attention towards the competition.
Given the fact that the car will be available for export too, by land on trucks and trains, and
by ship in Constanta, we can say that a weak point is the high costs of distribution. These
expenses, besides the transport costs, also include ensuring goods duties and reshipment
expenses when traveling by ship , unloading expenses and insurance expenses for the
stocks.
The infrastructure in the community area represents a weakness as it makes it a difficult
process of the above mentioned distribution.

Opportunities

Among the main opportunities encountered by Dacia on the Romanian market, we can
mention:

The rapid growth of the market;
Possibilities of expanding of the product portfolio, a fact that has happened in the past four
years, and current efforts are made in the same direction of development and creation of
new models . Possibilities of vertical integration .
This involves the purchase of companies that represented suppliers of raw materials for
Dacia or represented strategic points on the market.
Possibilities of concluding alliances and beneficial agreements. Dacia Group seeks more
and more profitable agreements with various companies with the aim of reducing the
economies of scale .An eloquent example is the alliance Dacia - Renault Nissan
Possibilities of concluding leasing contracts.

Ultimately it can also be regarded as an opportunity the state of stagnation or regress
demonstrated by the competitors.

Threats

The main threats to the Automobile Dacia SA company can be represented by:
The adoption of restrictive regulations and laws with a negative impact ; Entering into a
period of economic downturn on the national or international level ; Negative demographic
changes; Changes of the needs , tastes and preferences of the customers ; The entry of
new competitors on the market; The increasing demand for cars belonging to the
competition; Vulnerability to the changing of business environment ; The occurrence of
unforeseen circumstances such as strikes . This has happened on the market in 2007, and
the days when employees did not work, had negative repercussions, resulting in a loss of
30 million dollars due to the stagnating production.
Elaborating and Implementing Strategies to Launching Dacia Duster on the Market
Market Strategies

The market strategy intends to put the company in relation to the market and taking
advantage of its opportunity .The resources of Automobile Dacia SA, human resources ,
material and financial resources , constitute one of the main arguments of its strategic
option.

i) The growth strategy. Automobile Dacia SA company is a company in full expansion, with
high synergy and operating within a dynamic market. From year to year the company grew,
embracing new models of cars, increasing its market share turnover , and investing
considerable sums in sustainable development prospects.
ii) The concentrated strategy. This strategy conveys the idea of implementing a strategy to
focus on a limited number of consumer segments, adapting itself to the needs and
preferences of their requirements.
iii ) The active strategy . Dacia- Renault Group is a strong group, a modern one ,continually
preoccupied with upgrading and improvement.


The Global Offer Strategy .

Dacia management chose an undifferentiated strategy depending on the sales markets ,
supported by one hand of the massive effort of changing the image that demands a specific
attention from consumers and on the other hand , the positioning in the low -cost car
segment .Nowadays ,Dacia is available on 51 markets from Europe to Africa ,crossing
Maghreb and Turkey and will make its entry in Portugal but also in Scandinavia (Sweden ,
Denmark , Finland ) .Thus, Duster as well as Sandero will be available gradually on an
international scale .
Another strategy embraced by Dacia is the strategy concerning the area where the
products are manufactured.
To implement this strategy they are using the "just in time" delivery, noting that it must be
done exactly in the ordered quantity, with careful observing of the specifications and method
of packing. The tendency to reduce storage costs imposed the appearance of "warehouses
on wheels" ,meaning weekly deliveries to the date and time fixed by the beneficiary and the
amount fixed ,not to pauses on the mounting band because of the suppliers. For expert
suppliers, the reception of the components was disbanded by the beneficiary. They go
directly into labeled boxes on the mounting band, the responsibility belonging to the
manufacturer.


Price Strategies

Through the strategies that Dacia Renault have implemented, they aim to achieve the
objectives of increasing the sales volume, the cost recovery and long-term investments ,as
well as increasing the market share and counteracting the competition.
a) Dacia SA started with a penetration price strategy, based on low prices , meant to
discourage competition and then , once they have won a slice of the market , prices should
slightly increase at the same time with an increase in quality . This strategy was correlated
but with great flexibility in the equipping department for the same model, making prices vary
from the basic model to the one with full-option included, excluding the possibility of
perceiving the product as being of a weak quality.
b ) In relation to the competition , Dacia used the strategy of a lower price than the price
commonly used by the competition. Since this is a car produced in series, the Romanian
exporter has used the principle of comparison, determining the technical and economical
differences in the own product compared with the competing products.
Thus it turned to low -cost strategy that shows an increased interest in the context in which
a great deal of competitors reached a state of limit , or even decline. A lower price will
immediately bring to attention Dacia company and a product with a good quality price
report, adopting such a strategy , is likely to succeed .

The Distribution Strategy
a) As in the case of product policy and international distribution there comes the question of
standardization or adaptation. The main strategic alternative used by Dacia SA in terms of
the extension of distribution , it is represented by exclusive distribution , focusing on one
segment of potential consumers .
Thus, the targeted segment is given by the customers who believe that the SUV offers a
slightly better protection in case of accident, a high ground guard, ideal for the real pitfalls of
our roads, but also the imposing appearance , suggesting a higher social status , for which
the price is the main criterion for purchase of a car . By entering Duster model , Dacia
addresses a new challenge on the car market , offering an SUV with an attractive design
and a highly competitive price .
b ) In terms of size distribution , there were used long channels , and in terms of the degree
of participation of the company to the distribution process, it is conducted through
specialized agents. To remember is that the development of low cost programmes
represent for the producers an excellent opportunity to gain experience in the areas of
supply management ,of making maximum economies of scale and adapting the mechanical
platforms to the demands of different markets.

Promotion Strategies

a) Depending on the timing of the promotion policy, it was chosen the continuous promotion
strategy , selecting a message and a coherent and appropriate advertising concept,
corresponding to the selected target segment. The creative concept that underlies Duster
launching campaign was developed by Graffiti BBDO team , who declined conventional and
innovative media designs
b ) Depending on the way of influencing the target audience, Dacia SA . has chosen the
strategy of absorption, Dacia products being required by a large number of customers , in
other words , mass audience , adhering to the perception of the majority of consumers.
The campaign developed at a nationwide level, within a mix that includes TV , prints, OOH ,
radio and Internet. The first part of the campaign included the OPEN GATES OPERATION,
( invitations to Dacia showrooms) and the KEY GAME ( during which consumers were
invited to try the keys found in the inserts of the press, in order to win one of the cars
available in the contest ) .

Business Strategies
As a new player on the market of SUV-s, Dacia aims to reduce costs and to develop an
efficient management of resources ,so as production costs to be minimized. It starts,
according to the market principle of marketing approach , from the consumers demands in
the segment target - people who want some additional safety or some additional social
status , a robust and spacious car , with a low purchase price and low maintenance , given
the relatively low purchasing power . On the other hand , although the price has a significant
share in the assessment made in the purchase decision , more important is the created
value and delivered to the customers . So , although the price is low ( starting from 10,500
euros , taxes included ) , the quality standards are far above prices : three -star EuroNCAP
safety of passengers granted , the powerful engine of 110 hp 1.5 dCi recent in range , which
is quite particularly powerful and consumes less , and the design is modern one .
So Dacia Renault group strategy applied is one of the cost leader , using low -cost segment
experience - the success of the Logan and Sandero to get the lowest price of production.
Profit margin is one superior to other Renault models and competition ( for Sandero , the
same economic class , the margin was of 6 % ) , based on the upward trend of the market
of low -cost cars.
However, in parallel with the price differentiation strategy, and the fact that people with a
certain social status are the new target for the Dacia Duster and also their support through
the Customer Support Voice programme , there are elements that lead to brand
differentiation in the consumer's mind .
Given that the competitive position of the firm on the external environment is a strong one (
domestic market share is about 30 %) , the low -cost cars industry recorded the most
aggressive growth in the auto industry . After launching the Duster model in mid 2010, the
evolution of the company on the market was a very dynamic one.
Renault Technologie Roumanie annually invests approximately 2 million euros in training
programmes for employees, conducted both in Romania and in France.

Competition Strategies
Given that the car market in 2010 ( the launching of Duster model) was a mature and
complex one , the strategy that was used was that of reducing prices mainly , making out of
this an essential element of the mix , along with the diversification of the range of products
in an attempt to satisfy different consumer needs, thereby increasing the addressability of
products . On the other hand this limitation of price obtained by reducing the cost was a
barrier to new entrants but also to competitors.
Basically they resorted to creating a new product- the Duster - addressed to an existing
market - people with social status.

REFERENCES
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5. Kotler, Philip Kotler- About Marketing: How to create , how to win and how to dominate
markets, Brandbuilders Collection , Bucharest, 2004.
6. ***www.dacia.ro
7. ***www.daciagroup.com