Skoda Auto Case Study
Executive summary
Czech Republic was among the first to start the new age of automobile transportation. But by the end of the 20th century, its major manufacturer, Skoda was in a deepest crisis, heavily debt and with outdated technology and managerial system. The whole country was in transformation towards free market and decentralization after the fall of communism in Europe , while Skoda was state-owned company, and under new state economic policy, it was not expecting any help from the state budget.
At this point government decided to save Skoda by privatization. A big tender was organized, with 21 interested car-manufacturers registered. The main condition for the state was their aim to preserve brand of Skoda, save its suppliers and employees, and turn Skoda into modern company with prospects of growth.
At that time, 1989-1991 Skoda had relatively high brand recognition and strong ties with markets in CEE and Asia, where Western European manufacturers where underrepresented. Despite the crises in the company – high running costs, lack of innovation and problems with sales Skoda was interesting place for investment. Among bidders, German …show more content…
To answer this question, we should consider where Škoda started from and where it ended up. Before making any condemnatory conclusion, we have to realize that although Škoda was a well established brand all over the world by early 1990s, idleness would not prevent it from eventual decline and bankruptcy. It is disturbing to think that one of the oldest car manufacturers in the world, that was considerably successful on global scale prior to its nationalization, gradually stagnated and lagged behind its western competitors to such an extent, that when the markets opened up again in early 1990s, without appropriate remedy, it would have not only been crippled, but sentenced to
Czech Republic was among the first to start the new age of automobile transportation. But by the end of the 20th century, its major manufacturer, Skoda was in a deepest crisis, heavily debt and with outdated technology and managerial system. The whole country was in transformation towards free market and decentralization after the fall of communism in Europe , while Skoda was state-owned company, and under new state economic policy, it was not expecting any help from the state budget.
At this point government decided to save Skoda by privatization. A big tender was organized, with 21 interested car-manufacturers registered. The main condition for the state was their aim to preserve brand of Skoda, save its suppliers and employees, and turn Skoda into modern company with prospects of growth.
At that time, 1989-1991 Skoda had relatively high brand recognition and strong ties with markets in CEE and Asia, where Western European manufacturers where underrepresented. Despite the crises in the company – high running costs, lack of innovation and problems with sales Skoda was interesting place for investment. Among bidders, German …show more content…
To answer this question, we should consider where Škoda started from and where it ended up. Before making any condemnatory conclusion, we have to realize that although Škoda was a well established brand all over the world by early 1990s, idleness would not prevent it from eventual decline and bankruptcy. It is disturbing to think that one of the oldest car manufacturers in the world, that was considerably successful on global scale prior to its nationalization, gradually stagnated and lagged behind its western competitors to such an extent, that when the markets opened up again in early 1990s, without appropriate remedy, it would have not only been crippled, but sentenced to