Land Rover: Situational and SWOT Analysis

Introduction

Land Rover is one of the most iconic brands of all time. When examine the company, it is clear to see that they have always and will always thrive under pressure. With that said, it is important to remember that the preceding year was one of the most difficult for all of humanity. The Covid-19 epidemic caused widespread pain and suffering, as well as a negative influence on the world economy. Businesses, not just individuals, have bore the detrimental consequences. This resulted in weaker customer demand as well as interruptions in manufacturing, supply chain, and retail networks for Jaguar Land Rover. This was worsened by the uncertainty surrounding future trade relations with the EU following Brexit.

That said, the firm was still able to generate a strong performance during the previous year. Regardless of its financial and market success, Jaguar Land Rover and its well-known British brands made an important contribution to the Tata Group's global efforts to aid its communities and people. The company has found solace and strength in providing compassion over prioritizing wealth — reflecting well on the brand image.

Although a 14% fall in revenue to $26 billion, the company increased its EBIT margins by 250 basis points to 2.6 % and produced $245 million in positive free cash flows. Retail sales dropped 14% year on year, with China being the outlier, rising at a healthy 23%. The all-new Land Rover Defender had a distinguished performance throughout the last 12 months, selling 45.2K units and receiving the 2021 World Car Design of the Year award.

The Industry:

Sales

The automobile sector in the United States generated 3% of the country's GDP in 2020. Between vehicle manufacturing and sales, that equates to $627 billion of the entire $20.93 trillion US GDP for that year. As of Q1 2021, the sector employed 4.1 million workers on average in the United States.

• The worldwide vehicle sales industry's market size, as measured by revenue, is $3.6 trillion in 2021 — with a 7% rise expected in the following year.

Growth

From 2020 to 2030, the industry is predicted to increase at a CAGR of 3.71%. The automobile sector, an important economic barometer, is on the edge of new technology and breakthroughs.

• The worldwide luxury automobile market was worth USD 449.7 billion in 2019 and is expected to be worth USD 655.0 billion by 2027, growing at a 9.3 percent CAGR over the forecast period.

Automobile demand continues to climb, despite controversy of chip shortages hampering production. This implies that, despite lost opportunities to fulfill vigorous demand, the vehicle manufacturing sector will have high profit margins.

Advancements

The automobile industry's technology is fast advancing, notably in terms of electrification, digitalization, and autonomous driving. Trailing behind on technological trends increases the danger of failing to fulfill the expectations of both prospective and current consumers, as well as a possibly elevated risk of struggling to uphold regulatory and legal standards across foreign markets.

The rapid rate of electrification in response to customer demand and a more stricter regulatory environment continues to provide unique problems. In the 2021-21 fiscal year, the ongoing global impact of Covid-19 paired with dramatic trade negations and dangers inherent of Brexit did not make things easier. In fact, they dominated the historical narrative.

Trends

As with every major industry — the automobile sector continues to face enormous problems while also presenting possibilities, most notably with the growth of electrification. Furthermore, the anticipated economic recovery following Covid-19, as well as growing incomes, could increase sales in both new and current geographical areas. It also opens the door to existing and future categories.

The Company:

Land Rover — “Above and Beyond”

• The Go-Anywhere Vehicle

*Note: Land Rover is supported by the parent conglomerate Tata Motors who groups the brand alongside its sister company, Jaguar. Though at times the report references “Jaguar Land Rover” as an entity, its singular focus is Land Rover.

Mission

To enable people to make more of their world; to challenge what's possible, grow through new experiences, and surprise themselves by what they can do and who they can be.

History

In the year 1947, a man by the name Maurice Wilks sketched the silhouette of a car in the sand of a Welsh beach. The vehicle? The Land Rover. He went on to become chief designer at the Rover Company as the car proceeded to alter the industry forever. Tough and intrepid — Land Rover was able to master all manners of terrain and win over hearts around the globe.

2021 Reimagine Strategy:

• Land Rover promises to become an electric-first company as a part of Reimagine. Electrification is the central ideology that will govern decisions moving forward. However, they will not define and/or restrict themselves as a purely electric brand.

• Land Rover will introduce six fully electric models over the next five years as it maintains its position as the world leader in premium SUVs with its three families of Range Rover, Discovery, and Defender. The first all-electric model will be available in 2024.

• By 2039, the goal is to have achieved net zero carbon emissions across their business. This includes the supply chain, goods, and services.

In short: “Set against a canvas of true sustainability, Jaguar Land Rover will become a more agile creator of the world’s most desirable luxury vehicles and services for the most discerning of customers. A strategy that is designed to create a new benchmark in environmental, societal and community impact for a luxury business.” — JLR Press Release

The Product:

Story

Land Rover, with its distinct British connection, is steeped in a history of timeless designs that emotionally resonates with its customers. Decades of dedication fostered unparalleled brand equity.

Products

2022 Range Rover. MSRP from $92,000
“The Range Rover is the ultimate all-terrain vehicle and serves as the flagship of the prestigious Land Rover brand. Its legendary design, luxuriously-appointed interior, and proven performance capabilities help the Range Rover set the benchmark for a luxury SUV.”

2022 Range Rover Sport. MSRP from $69,500
“The Range Rover Sport is by far the most agile and dynamic Land Rover. From enticing powertrains and innovative technology to elegant design and versatile seating configurations, its capabilities are virtually endless.”

2021 Range Rover Velar. MSRP from $56,900
“Positioned between the Range Rover Evoque and Range Rover Sport, the Range Rover Velar blends the outstanding on-road performance of its siblings while adding it’s own off-road DNA and rugged character.”

2022 Range Rover Evoque. MSRP from $43,775

“Experience luxury, versatility, and practicality packaged into a compact SUV. The eye-catching Range Rover Evoque lets you experience dynamic performance, precision craftsmanship, and a go-anywhere attitude.”

2022 Land Rover Discovery. MSRP from $53,900
“Searching for versatility? The Discovery remains the most adaptable SUV in the Land Rover lineup. From your daily commute to exploring rugged mountain passes, the Discover is never out of its element.”

2022 Land Rover Defender 90. MSRP from $47,700
“Capable by nature. The Defender can tackle several extreme terrains and confidently takes you from the urban jungle to shifting sands and icy environments.”

2022 Land Rover Defender 110. MSRP from $50,500
“A true icon, the Land Rover Defender 110 has helped drivers conquer the most inhospitable environments and challenging terrains all across the globe. Now, it’s your turn to write your chapter in the storied legacy of the Defender 110.”

2022 Land Rover Discovery Sport. MSRP from $42,375
“Take your journeys to new heights with the adventurous and capable Discovery Sport. From a cruise down a downtown boulevard to an exciting cross-country road trip, the Discovery Sport helps you get the most out of every mile and every memory.”

Differentiating Qualities

Land Rover is gifted many benefits from being a part of the Tata Motors. Most competitors must rely primarily on external alliances and compromise, but Land Rover has seamless access to some of the world's greatest players in technology, software, and sustainable energy, allowing the corporation to move ahead confidently and quickly. This puts them in a strategically competitive position.

Examples:

This allows Land Rover to expedite the components necessary for modern luxury by design, such as Advanced Driver Assistance Systems, autonomous capabilities, linked services, and Electric Vehicle infrastructure.

Every year, an investment of roughly $3.3 billion will include initiatives in electrification technologies and the advancement of linked services to better the customers' journeys and experiences. Further expenditure will seek data-centric solutions to improve their ownership ecosystem.

Product Research

Land Rover believes data is the backbone of every vehicle it designs, the production quality, its supply chain, and the support and services it offers to its consumers.

Sales History:

Sales

439,588 retail sales FY 2020/21 — down 13.6% from 508,659 in FY 2019/20.

The reduction in retails was mostly due to the first Covid-19 lockdown, which had a significant impact on the first quarter, followed by a rebound in sales.
Retail sales in China surged by 23.4% year on year as the area recovered significantly from the impact of Covid-19 following the lifting of stringent lockdown measures in early 2020. Everywhere else, retails fell significantly year on year, including Overseas (-26.8%), Europe (-26.0%), the United Kingdom (-22.2%), and North America (-14.3%), as strict social distancing measures were implemented in the first quarter and then reintroduced in many markets in the third and fourth quarters.

• It is important to remember: The rate of post-Covid-19 economic recovery varies by market.

In FY 2020/21, Covid-19 had an influence on sales of all models, although retail sales of the newly released Land Rover Defender increased dramatically over the year.

The Range Rover family accounted for the majority of the retail sales mix, with 213,047 vehicles (48.5% mix), followed by Discovery 83,628 vehicles (19.0% mix), then Defender, which reached 45,244 retails (10.3% mix). The Jaguar PACE family fills the remainder with 62,513 vehicles (14.2% mix).

Profit History: $700 million profit (BEFORE TAX AND EXCEPTIONAL CHARGE) FY 2020/21 — up from $400 million in FY 2019/20.

$19.7 billion revenue FY 2020/21 — down from $23 billion in FY 2019/20.

Share of Market:

Share of Market Industrywide

All Land Rover models were back to pre-Covid levels in the last quarter, lifting JLR’s market share to 6%. That was up from 4.4% in the first three months of the financial year, with the new Defender sport utility vehicle spurring gains.

Potential

The goal is to concentrate on Land Rover’s personal end-to-end supply chain to ensure that the company can provide clients with the right car, at the right time, and at the right quality. By capitalizing on possibilities in established markets and paying close attention to the potential for business in China, profitable market share will be increased.

The Market:

Who and Where

Land Rover uses psychographic, demographic, and geographic segmentation strategies. It targets customers from upper-class social groups, professionals, and executives from rich families as these are the people for whom Land Rover will be affordable. It uses a selective targeting strategy.

The company's target audience is an active male, high net worth demographic between the ages of 34-54. Looking to reach and engage this affluent, on-the-go demographic, Land Rover does not senselessly run advertisements. Every campaign is purposeful and intertwined with the brand’s message: adventure.

Why

“Something about Land Rover makes the adventurous attempt the seemingly impossible.” — Land Rover Press Release

Past IMC appeals

Successful — as discussed below in the section titled “Promotions”.

Distribution:

History

To maximize market performance, sales channels must be linked with clients' purchasing patterns, including conventional showrooms, but also by embracing progressively creative sales channels such as virtual showrooms and online shopping. To continue to successfully appeal to prospective and current consumers, dealers must reflect the brand vision and effectively express the brand values through qualified and skilled representatives. Service and repair capacity must be aligned with the demands of consumers in each major region.

Relationship

The happiness and retention of existing customers, as well as the acquisition of new consumers, are directly affected by sales and service performance. Poor sales and service performance may have a detrimental influence on the brands' reputation. Failure to provide exceptional sales service through retail channels would result in a loss of competitive advantage, thereby affecting the company and financial performance. Covid-19 has had and continues to have an impact on the retailer network, with increased lockdown measures resulting in showroom closures, most notably in the United Kingdom and Europe, and such external disruption might similarly damage the retailer network in the future.

Current Status

• In order to maximize production, sales, and inventory, Land Rover market and retailer demand is continuously monitored.

• "Click and deliver" services offered online have allowed shops to maintain sales during more recent Covid-19 lockdowns, and has increased the application of electronic sales channels.

• Merchant and consumer relationships are strengthened with the assistance of digital solutions.

Pricing Policies:

Price

JLR CEO Thierry Bollore told investors in February that the Range Rover has been one of Jaguar Land Rover's most profitable vehicles since the current generation was launched in 2012.

The new 2022 model uses the automaker's new MLA (modular longitudinal architecture) platform designed to accommodate electric, plug-in hybrid and full hybrid drivetrains. JLR has confirmed it will make a fully electric Range Rover, but that is not to be expected until 2024.

"There is nothing else like a Range Rover, and it will continue to be that way. And in fact, our next generation of products will become even more desirable," JLR design chief Gerry McGovern stated. In the same investor call, he labeled the new Range Rover and Range Rover Sport as "transformational," implying that the significant improvements will be made with the technology and interior design of the new cars.

The next Range Rover's pricing is projected to rise in order to compete with ultraluxury SUVs like the Bentley Bentayga and Aston Martin DBX. "Land Rover has the equity to push higher in the market," Bollore remarked at the investor day. Throughout the current model's nine-year existence, Land Rover has gradually increased the price. In its home market of the United Kingdom, the Range Rover now begins at $115,065 (up from $97,865 in 2015).

Past Price Objectives

Previously JLR has commented on the steepening of purchase prices by saying, “This increase in price is purely inflationary and we are certain that the two global iconic brands, Jaguar and Land Rover, will continue to attract existing and new customers.”

Competition:

Who

Mercedes Benz, Porsche, BMW, Audi.

Toyota (9.5%), Volkswagen (7.4%) and Ford (5.9%) hold the lead worldwide in terms of market share, but are not within the same luxury league as Land Rover — making a comparison between the two irrelevant.

Mercedes Benz and BMW are the closest in competitors in terms of popularity, but their price point is significantly lower making them more accessible to the average buyer. Nonetheless, the shares of market are similar which is extremely telling. For

Land Rover to retain a similar market share whilst being a more expensive vehicle is no small feat.

• Land Rover is not meant for the typical consumer. The brand is rich in luxury and doesn’t aspire to attain a large share of the market. Rather, the aim is to create an addiction between itself and its loyal costumer base.

Comparison to the Competition

Land Rover’s Performance and Preference Analysis (Range Rover Sport vs Audi Q7)

Expect nothing less than unsurpassed brilliance in engine power from the Range Rover Sport when it comes to high-end performance. The base 340-horsepower Supercharged V6 has enough power to tow trailers weighing up to 7,716 pounds, making it perfect for towing a family camper or boat. Choose between a 254- horsepower Turbocharged diesel engine, a 380-horsepower Supercharged V6, or go green with the Plug-in Hybrid Electric Vehicle (PHEV) model, which provides 398-horsepower with a 2.0-Liter 296-horsepower engine and a high-capacity 102- horsepower electric motor.

If you're looking at the Audi Q7, you'll only have two engine options. The regular 252-horsepower 2.0 liter TFSI four-cylinder engine, which can only tow a trailered weight of 4,400 pounds, and the 333-horsepower 3.0-liter six-cylinder engine, which can only tow a trailered weight of 7,700 pounds. The Range Rover Sport is the superior pick for performance power because to its restricted power and engine options.

Marketing Comparison

Land Rovers are generally purchased by well-off middle-aged males. While it is true that affluent older men do watch television, using TV advertisements is ineffective and may even be counter-productive.

For starters, while television advertisements may reach nearly all Americans, just 1% of those individuals are potential customers of luxury automobiles such as Land Rovers. As a result, marketing on television is a costly waste of time and money because all an advertisement can ever accomplish is entertain individuals who cannot afford to buy a Range Rover Sport. Furthermore, advertisements for low- cost automobiles are already prevalent on television. This implies that by showing their advertisements alongside those for Toyota and Nissan, luxury producers like Land Rover risk cheapening their brand identity and even becoming laughable.

Promotion:

Expenditures

In 2020, Ford Motor Company invested 2.8 billion U.S. dollars in advertising activities worldwide, while Jaguar Land Rover only spent up to $500 million a year on media and marketing. With a more narrowly focused target market, Land Rover can condense its advertising budget.

In a dynamic automotive industry with increased competition from current competitors and future innovative entrants, brand positioning is becoming exceedingly challenging. The Reimagine plan will drive development in the companies most profitable areas. Land Rover will introduce battery electric choices on six of its models by 2026 — driving buzz about the brand.

IMC Programs

Synergy is what Land Rover does best. The brand stands for not only the most capable premium vehicles but a state of mind where a sense of curiosity, exploration, and wonder informs all of life’s adventures. This ideology appears seamlessly throughout all of the companies ventures.

Land Rover’s strength is that it focuses its advertising energies on individual products, rather than on brand campaigns. Further, the brand’s purpose — to take their customers on adventures that go above and beyond — is present in all forms of publicity.

Examples:Paid — Land Rover strategically works alongside brands who represent and connect them to their target market. The partnership between the Bond franchise and Land Rover reaches back to 1983 when a Range Rover Convertible appeared in Octopussy. Celebrity ownership of a significant car often does little to bolster its value. Only the biggest names, such as those of Elvis Presley or Marilyn Monroe, might increase worth, says Jonathan Klinger, Hagerty’s vice president for car culture. But a role in a Bond film adds, on average, more than 1,000% to the value of a car compared to those that didn’t feature. Some vehicles in 007 films have gained even more—up to nearly five times that over their non-movie star equivalent. This directly connects the brand to its target audience.

Owned — Land Rover Magazine showcases stories from around the world that celebrate inner strength and the drive to go above and beyond. Encounter this throughout the latest issue of Land Rover Magazine, from meeting a herd of Ice Age survivors on the Dutch coast with the Land Rover Discovery to the most innovative sustainable architecture on a Californian journey with the Range Rover Evoque. This puts Land Rover in control of their own narrative.

Earned — The Land Rover Instagram account boasts 9 million followers. These are loyal individuals who spread the word of the brand into their own communities. In doing so, these spokespeople produce organic advertisements.

SWOT Analysis:

Strengths

Huge margin for profit

• In comparison to its competitors, Rover Land charges a premium.

Strong brand identity that is easily identifiable

Unsurpassed all-terrain capability

Luxurious reputation derived from unparalleled attention to detail within the productsCompetitors simply cannot match the quality. Long product life cycle

• Land Rovers are known for holding their value. People that have a lot of money can afford to buy new

• Innovation within the industry occurs rapidly. This audience is not afraid to discard of a relatively recent purchase to replace it with a better model. Thus, your customers return sooner than other brands observe.

Weaknesses

Costly to fix

• Being that the car is expensive to begin with, consumers do not want to spend vast amounts of additional money every time a small problem arises. SUV market is crowed leaving limited room for market share growth Restricted target audience

Opportunities

Potential law to tax drivers per mile driven in a vehicle fueled by gas

• The new taxation policy will have a substantial influence on how businesses operate and will provide new opportunities for established companies such as Land Rover to boost their profitability — being that they are light-years ahead in the game of electrification.

The upper middle class has expanded significantly, while the middle class has shrunk from 50% to 36%

This means there are more people for whom a Land Rover will be an affordable product.

Threats

Pandemic backlash

2021 is a difficult time to afford luxury, let alone convince a consumer to spend their money on a car while there are much more deserving causes in the world.

Not made in America

• If borders were to hypothetically close, Land Rover in the United States would be nonexistent.

Skyrocketing gas prices

Worldwide inflation

Supply chain shortages

Conclusion:

Land Rover’s strength is that it focuses its advertising energies on individual products, rather than on brand campaigns. Further, the brand’s purpose — to take their customers on adventures that go above and beyond — is present in all forms of publicity. Customers are pleased with the products time and time again, always returning for more. There is uncharted territory within the world of electric cars that Land Rover will soon claim — a move that likely will increase business tenfold.

However, the singular focus on the rich, elder male alienates other potential buyers. The company would benefit greatly from investing efforts into reaching new communities. Women can drive Range Rovers too! What about efforts to make the “cheaper” models actually come across as affordable? That must be the next move.

Ultimately, Land Rover not only nails the ‘unified message’ portion of properly integrated marketing communications, but has an incredibly strategic business plan. Profit margin speak for themselves. Money talk aside — there has been a creation of a two-way dialogue with its customers. The relationship between Land Rover and its consumers is more than likely lifelong once properly established.