Harvard-Businees-School-Land-Rover-Case-Study

HarvardBusinessSchool9-596-036Rev.August30,1996ProfessorSusanFournierpreparedthiscaseasthebasisforclassdiscussionratherthantoillustrateeithereffectiveorineffectivehandlingofanadministrativesituation.Copyright©1995bythePresidentandFellowsofHarvardCollege.Toordercopiesorrequestpermissiontoreproducematerials,call1-800-545-7685orwriteHarvardBusinessSchoolPublishing,Boston,MA02163.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,usedinaspreadsheet,ortransmittedinanyformorbyanymeans—electronic,mechanical,photocopying,recording,orotherwise—withoutthepermissionofHarvardBusinessSchool.1LandRoverNorthAmerica,Inc.CharlesHughes,presidentandCEOofLandRoverNorthAmerica(LRNA),smiledashereviewedthecompany'slatestfieldreports.LRNAregistered4,503totalunitssoldinfirst-half1994,morethandoublethevolumeinfirsthalf1993.TheDiscovery,thecompany'sfirstnew4X4(four-wheeldrive)vehicleintwentyyears,wasshapingupasquitethesuccessstory:over2,000unitssoldandnearly4,000customersondealerlistsawaitingproductavailability.OtherchangestotheLandRoverline-up,includingatotalredesignoftheRangeRoverandimprovementstotheLandRoverDefender,promisedfurthersalesgainsinthecomingyear.Witha$110minfusionoffundsfromnewparentBMW,HugheshadreasontobelievethathisdreamofmakingNorthAmericathe#1LandRovermarketworldwidewaswellwithinreach.ThegamehadchangedsinceLandRover'sNorthAmericansubsidiaryopeneditsdoorsin1987.LRNAhadgrownfromadistributorshipsellingonlyoneLandRovermodeltoamulti-productfirmwiththreevehiclesunderthecorporateumbrella.Buthowbesttomanagethatline?MuchhingedongettingthepositioningfortheDiscoveryright.Thecompanyhadstraddledthefencewithitslaunchadvertising,runningsomeadstargetedtofamilieswithTheDefinitiveFamily4X4positioning,andsometo4X4enthusiastswithTheEvolvedLandRovertheme.SomesuggestedthefirmshouldstressDiscovery's$20,000pricedifferentialversusitsup-marketsiblinginstead,andpositionthemodelasTheMoreAffordableRangeRover.Itwastimetostopwafflingandgetoffthefence.Astutelinemanagementrequiredcarefularticulationoffiscalyearmarketingplansaswell.Decisionsconcerningthecompany'sexperiencemarketingefforts,sponsorshipactivities,andretailingstrategieshadtobemade.Themanagementteamhadtodeterminewhatsupport,ifany,toputbehindthecorporateLandRoverbrandversusindividualmodelsintheline.Soundrecommendationsconcerningtheallocationoffundsacrossbrandsandmixelementsrequirednotonlyadeepunderstandingofthemarketingtasksathand,butastrategicvisionofthecompany,itsproductline,andthebrandswithinitaswell.LRNAwasgrowingfast,andHughesknewthatdecisionsmadenowwerepivotaltothefuturetrajectoryofthefirm.Hughespackedupthedatahisresearchmanagerhadcompiledforhimandheadedforhome.TomorrowhewouldjoinmembersofhisPresident'sCabinetonLongIslandanddesignthemarketingstrategiesandtacticsthatwouldmakeLRNAthe#1LandRovermarketworldwide.DivergentviewsofthestrategicrolesofthedifferentmodelsintheLRNAline,andopposingvisionsofthegluethatheldthemalltogetherpromisedalongmeetingahead.LandRoverNorthAmerica,Inc.596-0362HistoryofLandRoverTheLandRoverTheRoverGroup,whichbeganasasewingmachineandbicyclemanufacturingconcerninSolihull,Englandin1860,conceiveditsfirstfour-wheeldrive(4WD)utilityvehiclein1947.Designengineersintendedthenewvehicleassomethingrathersimilartoapost-warJeep,butmoreusefultoafarmer,muchmoreversatile,abletodoeverything!Itwastobeavehiclefortheland:aLandRover,asmanagingownerWilkschristenedtheproject.Wilks'productphilosophywastobuilditsimpleandstrong;creaturecomfortsintheLandRoverwouldbevirtuallyabsent,andgadgetrykepttoaminimum.TheLandRover'saustereappearancewouldserveasadesignhallmark:itwastobestarklypracticalandnotexactlyugly,butpossessiveofadistinctlyattractiveappearanceallitsown.Thevehiclewasreceivedwithgreatenthusiasmatits1948AmsterdamMotorShowlaunch.Thereisnowsomethingwhichcaneitherberegardedasaprivatecarabletoperformvaluabledutiesotherthansheertransport,orasageneralpurposecountrysideworkercapableofprovidingcomfortable,efficienttransportation.ThisdualroleoftheLandRovercannotbetoohighlystressedbecauseitopensuppossibilitiesofthegreatestvaluetothosewholiveinthecountry,whetherundercultivationorinthewildstate.(TheAutocar30April1948)LandRoversquicklybecameawell-establishedpartoftherural,industrial,civil,andmilitaryscenesintheUnitedKingdom.Policeandfirefighterswereoutfittedinspecially-designedLandRovers.AfullsixintenLandRoversweresoldtomilitarycustomers.Withinfiveyearsofitslaunch,80%ofLandRoversweredestinedforThirdWorldcountrieswherethevehicle'sfunctionalutilitywasgreatlyvalued.WhileLandRoverdesignevolvedthroughtimeinresponsetochangingcustomerneeds,carewastakentomaintainthecharacteristicLandRoverimage.Thechassis,wheelbase,bodystyle,suspension,andgenerallayoutremainedunchanged,asdidthebasicaestheticsofthevehicle.TheRangeRoverTheRangeRoveraddressedmanagement'sdesiretorespondtochangingmarketplaceneedsforamorestylish4WDvehiclewithouttartinguptheLandRover.TheRangeRoverwasstillconsideredfirstandforemostasautilityvehicle,however.AccordingtochiefdesignengineerSpenKing,theRangeRoverresembledaLandRoverinperfo