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VCC - Saiful

VCC has strengths in its patented batteries which provide differentiation and barriers to entry for competitors. Venture capital funding also allows for further battery research and development. The Verdant Eco-Plus has lower running costs than petrol cars and zero emissions, appealing to cost and environmentally-conscious customers. Common components across product lines could lower manufacturing costs through bulk purchasing. However, the Eco-Plus has a higher manufacturing cost than petrol cars due to lower production volumes and shorter driving range. High marketing costs also impact profitability as a new company. Opportunities exist in government tax incentives and policies supporting electric vehicles. Threats include increased competition from new entrants encouraged by government support, and lack of charging infrastructure limiting market growth.

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Saiful Rafiq
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23 views2 pages

VCC - Saiful

VCC has strengths in its patented batteries which provide differentiation and barriers to entry for competitors. Venture capital funding also allows for further battery research and development. The Verdant Eco-Plus has lower running costs than petrol cars and zero emissions, appealing to cost and environmentally-conscious customers. Common components across product lines could lower manufacturing costs through bulk purchasing. However, the Eco-Plus has a higher manufacturing cost than petrol cars due to lower production volumes and shorter driving range. High marketing costs also impact profitability as a new company. Opportunities exist in government tax incentives and policies supporting electric vehicles. Threats include increased competition from new entrants encouraged by government support, and lack of charging infrastructure limiting market growth.

Uploaded by

Saiful Rafiq
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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VCC

Strengths :

VCC has an advantage over its competitors due to the protection it enjoys on
the patented batteries. This would help VCC to differentiate itself from
competitors and could also act as a barrier to entry as new entrants might not
be able to come up with their own inventions. VCC could also further exploit the
patent by issuing licensing agreements to other manufacturers to gain
additional revenue streams.

With backing from a venture capital firm, VCC should have sufficient funds to
further invest in the development of lithium ion batteries. The findings of the
research could help to improve the overall performance of VCC's products
hence increasing the appeal of electric cars to customers.

A Verdant Eco-Plus has a running cost of 0.08p/km, which is significantly lower


than other cars. This feature may attract customers who are sensitive towards
the fluctuating price of petrol as it offers more stability.

Also, the Verdant Eco-Plus does not release any C02 emissions as it fully
operates on electricity. This attribute might be able to win over green
customers as it provides them with an alternative to travel around without
polluting the environment

Given that majority of the components used throughout VCC’s product lines
are similar, the company might be able to lower manufacturing costs hence
making it more competitive. This could be achieved by buying components in
bulk which may entitle VCC to a discount. Also, this could provide VCC with an
opportunity to build a strong relationship with a supplier which would
eventually facilitate VCC in its future business

Weaknesses :

Despite benefitting from low rental and labour costs, the manufacturing costs
of a Verdant Eco-Plus (15000) is still higher than other cars. This might be due
to low production volumes which causes higher cost per unit. VCC would not
be able to benefit from economies of scalelike the other car manufacturers with
higher production volumes.

Next, a Verdant Eco-Plus could only go as far as 175km before recharging,


which is significantly lower than other cars. Customers looking to buy a car for
long journeys would be discouraged hence VCC would lose some potential
customers.
High levels of marketing costs incurred by VCC is also considered a weakness
as it would considerably affect profitability. VCC may have to incur these costs
as it might be a relatively new company compared to its competitors hence
they may want to increase brand awareness. Going forward, marketing costs
might be lower and therefore would no longer affect profitability

Opportunities :

Tax incentives offered by the government may help VCC to save more costs
and reinvest the savings to develop better products. This would help VCC
become more competitive and gain more market shares.

Government intervention such as the introduction of higher tax for petrol might
encourage more people to switch to electric cars. If that happens, VCC might
benefit from early mover advantage over the other car manufacturers who
might not even have the expertise and technology to manufacture electric cars

Threats :

Government support of the electric car industry might encourage more


companies to enter the market. This would cause competition to become
intense and VCC might lose its market share if it is unable to adopt a
competitive strategy.

The market for electric cars is heavily dependent on the availability of charging
points throughout the country. If there is no increase in the number of charging
facilities provided, consumers might not be encouraged to switch hence the
market size would remain stagnant

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