Strategic Management In Global

Read Complete Research Material


Strategic Management in Global Context

Strategic Management in Global Context

Q1. Executive Summary

Based on the Classification of Economic Activities in the European Community (NACE)? the industry of manufacture of parts and equipment for motor vehicles and engines (NACE 34.3) is placed within the industry of motor vehicles? trailers and semi-trailers manufacture (NACE 34)? which is part of the group of activities related to manufacture of transport vehicles (NACE DM). According to the latest data available? during the year 2004 the transport vehicle manufacture industry generated a Gross Value Added (GVA) of EUR 450 million? which covers only 2% of Croatia's total GVA. At the same time? the industry employed approx. 23?000 people? which is around 1.8% of the total people employed in Croatia (Agrawal? 1994? 26-48). Combined revenues earned during the year 2004 by the companies registered in Croatia? whose main activity is manufacture of motor vehicles? trailers and semi-trailers (NACE 34)? totalled HRK 1.55 billion? while they employed a total of 3?132 people. At the same time? companies with more than 10 employees and registered under the NACE 34 generated combined sales revenue of HRK 862 million.

Expenditures for primary materials amounted to HRK 455 million? while those for other intermediary goods amounted to approx. HRK 131 million. The abovementioned data lead to a conclusion that the companies in question generated a gross value added of HRK 387 million during 2004. Approximately 70% of material consumed in the production of vehicles and trailers was supplied form foreign markets? which indicates a strong import dependence of this industry (Agrawal? 1994? 26-48).

In analyzing the 2004 total revenues structure for the industry of motor vehicles? trailers and semi-trailers manufacture? it is evident that 77.2% of the total revenues were generated by companies dealing in motor vehicle parts and equipment manufacture (NACE 34.3). Companies dealing exclusively in motor vehicles manufacture (NACE 34.1) earned only 12.2% of the total revenues? amounting to HRK 188 million. The revenues earned by companies manufacturing vehicle bodies? trailers and semi-trailers (NACE 34.2) were even lower? amounting to only HRK 165 million? or 10.7% of the total revenues in the industry.

There is a similar distribution in the structure of workforce employed? whereby the industry of motor vehicle parts and equipment manufacture employed almost 75% of all workforce employed within motor vehicles? trailers and semi-trailers manufacture in 2004. Slightly less than 20% or approx. 570 workers were employed in motor vehicles manufacture? while only 240 people? approx. 8%? worked in manufacture of vehicle bodies and various types of trailers (Agrawal? 1994? 26-48).

During the year 2004? the motor vehicles and trailers industry imported EUR 1.314 million worth of products? which amounted to almost 10% of the total imports. Such high level of imports within the industry was mostly generated by import of automobiles? which have been seeing significant increase in sales during the last five years? bringing the total to more than 70?000 new vehicles sold in 2004. Import of used vehicles from EU countries has also been making ...
Related Ads