Opel AU case study Essay
Decision Making Exercise 3
Founded in Rüsselsheim in 1862, Opel is one of the most technologically advanced vehicle brand in Europe which has a long and rich history. However, after 11 months of effort proved unprofitable, Opel declared to exit Australian market with lower than 10% of the sales target reached(Spinks 2013). This essay aims to give a objective evaluation of Opel’s business activities. To achieve the target, this essay will use the relevant elements in PESTLE framework to critical analyze the external environment, followed by critical evaluation of the business response using evaluation criteria provided.
Case study overview
Opel was highly aggressive when the …show more content…
The exactly number of return on investment was not able to found because Opel Australia has refused to disclose how much money it has spent on its investment to the Australian market and claimed that the information is ‘commercially privileged’ but according to the fact that 20 franchisers all over the country who invested between 500,000 to 3,000,000 each only sold less than 1,500 cars a rough calculation is easy to make, details shows below(Spinks 2013).
1,500*30,000(the price of Astra)*10%(estimated commission)/(500,000+3,000,000)*20/2=12.9%
Cost such as rentals and salaries are not included thus the real number would be much lower than that. Even the ROI of 12.9% is unsatisfactory.
In terms of sales forecast, 1,500 sales is more like a joke than sales number.
The influence on Australia customers should be very small because the after sale servicing and warranties will be completely upheld via Holden’s dealer network. In the mean time, the company has already wrote a letter to all its customers informing them of the change in situation(Park 2013). But to the 20 franchisers it is a different thing. Obviously franchisers was anger at Opel exit because the massive losses from their