The Verdant Car Company (VCC) was established six years ago as a commercial venture to exploit the patented inventions of Professor Kamm, a university engineering professor. Professor Kamm has patented processes for the production of lithium-ion batteries to power electric cars that can travel up to 175 kilometres before they need re-charging. With backing from a venture capital firm, Professor Kamm has established a small production plant in his university town, and has started to manufacture an electric car, the Verdant model. Setting up the plant was helped by the fact that another manufacturer in the town had gone into liquidation, leaving vacant premises that VCC was able to acquire for a low rental cost and a large number of unemployed skilled staff that VCC could recruit. VCC now manufactures three models of the Verdant: Verdant Green, Verdant Eco-Plus and Verdant Eco-Super. The Verdant Eco-Super is a luxury version of the Verdant Eco-Plus and these two models share 95% of the same components. The Verdant Green is a more basic model that has been designed for use in towns. It uses only 75% of the components used in the Verdant Eco-Plus. All three Verdant models can be re-charged from a domestic electricity supply and have no requirement for petrol to drive them. The table below provides a comparison of the Verdant Eco-Plus model with a similar-sized car that has a petrol-driven engine and a hybrid car that is driven by petrol with assistance from an electric motor. Verdant Eco-Plus Petrol-driven car Petrol-driven car Petrol-driven car Petrol- driven car with assistance from electric motor $14,000 Manufacturing $15,000 cost CO2 emissions Zero Performance Economy Range 0-100 kilometres kilometres per hour (kph): per hour (kph): 10 18 seconds seconds Maximum speed 80kph Maximum speed 120kph $4 per kilometre $0.08 per kilometre. electricity cost 550 kilometres on a 1,200 kilometres on a 175 kilometres before re-charging full tank of petrol full tank of petrol For VCC, manufacturing costs are kept down by two factors: the low rental cost of the manufacturing premises and low labour costs. The company's operations are based in an area of high unemployment and wage demands in the area are low. Production volumes are low in comparison with other car producers, and low volumes have the opposite effect of keeping unit production costs quite high. The company spends a substantial amount of money on selling and marketing its products, and the sales and marketing budget is relatively high in relation to total sales revenue, compared with other car producers. The government has taken some measures to encourage the use of electric cars. It offers tax incentives to businesses for using them and imposes high taxes on petrol and also on cars with large engines (because they emit more CO2 than smaller cars). Verdant model cars are purchased largely by 'green' consumers who are willing to pay more for an environmentally-friendly car for short-distance. travelling around their homes. They are also popular in the region around the town where the cars are produced. Only 5% of Verdant car production is exported. REQUIRED- $12,000 Performance 0-100 180 grams/kilometer 90 grams/kilometre 0-100 kilometres per hour (kph): 12 seconds. Maximum speed 170 kph $2.5 per kilometre CAT ONE: (10 MARKS) a) Discuss any three strategic issues discussed in the case study and identify strategies used to gain the firm competitive advantage. (5mks) b) Explain in which three ways that strategic planning can be of benefit to the company in question. (5mks) CAT TWO: (15 MARKS) a) Analyse the factors that would be considered in a SWOT analysis by the company's strategic planners (09mks) b) Explain how in any three ways the Internet technology have contributed to the success of the company in question. (6mks) The Verdant Car Company (VCC) was established six years ago as a commercial venture to exploit the patented inventions of Professor Kamm, a university engineering professor. Professor Kamm has patented processes for the production of lithium-ion batteries to power electric cars that can travel up to 175 kilometres before they need re-charging. With backing from a venture capital firm, Professor Kamm has established a small production plant in his university town, and has started to manufacture an electric car, the Verdant model. Setting up the plant was helped by the fact that another manufacturer in the town had gone into liquidation, leaving vacant premises that VCC was able to acquire for a low rental cost and a large number of unemployed skilled staff that VCC could recruit. VCC now manufactures three models of the Verdant: Verdant Green, Verdant Eco-Plus and Verdant Eco-Super. The Verdant Eco-Super is a luxury version of the Verdant Eco-Plus and these two models share 95% of the same components. The Verdant Green is a more basic model that has been designed for use in towns. It uses only 75% of the components used in the Verdant Eco-Plus. All three Verdant models can be re-charged from a domestic electricity supply and have no requirement for petrol to drive them. The table below provides a comparison of the Verdant Eco-Plus model with a similar-sized car that has a petrol-driven engine and a hybrid car that is driven by petrol with assistance from an electric motor. Verdant Eco-Plus Petrol-driven car Petrol-driven car Petrol-driven car Petrol- driven car with assistance from electric motor $14,000 Manufacturing $15,000 cost CO2 emissions Zero Performance Economy Range 0-100 kilometres kilometres per hour (kph): per hour (kph): 10 18 seconds seconds Maximum speed 80kph Maximum speed 120kph $4 per kilometre $0.08 per kilometre. electricity cost 550 kilometres on a 1,200 kilometres on a 175 kilometres before re-charging full tank of petrol full tank of petrol For VCC, manufacturing costs are kept down by two factors: the low rental cost of the manufacturing premises and low labour costs. The company's operations are based in an area of high unemployment and wage demands in the area are low. Production volumes are low in comparison with other car producers, and low volumes have the opposite effect of keeping unit production costs quite high. The company spends a substantial amount of money on selling and marketing its products, and the sales and marketing budget is relatively high in relation to total sales revenue, compared with other car producers. The government has taken some measures to encourage the use of electric cars. It offers tax incentives to businesses for using them and imposes high taxes on petrol and also on cars with large engines (because they emit more CO2 than smaller cars). Verdant model cars are purchased largely by 'green' consumers who are willing to pay more for an environmentally-friendly car for short-distance. travelling around their homes. They are also popular in the region around the town where the cars are produced. Only 5% of Verdant car production is exported. REQUIRED- $12,000 Performance 0-100 180 grams/kilometer 90 grams/kilometre 0-100 kilometres per hour (kph): 12 seconds. Maximum speed 170 kph $2.5 per kilometre CAT ONE: (10 MARKS) a) Discuss any three strategic issues discussed in the case study and identify strategies used to gain the firm competitive advantage. (5mks) b) Explain in which three ways that strategic planning can be of benefit to the company in question. (5mks) CAT TWO: (15 MARKS) a) Analyse the factors that would be considered in a SWOT analysis by the company's strategic planners (09mks) b) Explain how in any three ways the Internet technology have contributed to the success of the company in question. (6mks)