This paper undertakes a critical examination of the performance of Starlight Plc, an automobile
manufacturer, with a focus on understanding the underlying rationale for key decisions that have
shaped the company over the past six years. This firm-analysis critically scrutinizes the performance
of Starlight Plc using academic theories and frameworks to elucidate the company's decisions,
drawing on internal director meeting notes and data from the Industry Masters (2023) portal.
Additionally, real-world examples are utilized to support and contrast the analysis.
Starlight Plc's vision is to become a sustainable provider for customers through innovation, with an
overarching objective of contributing to a better world through sustainability. The automobile
industry is currently experiencing a significant shift towards sustainable mobility and electrification,
driven by government incentives for electric cars and regulations discouraging conventional cars due
to carbon emissions.
The author of this paper, having served as the marketing director at Starlight Plc and a member of
the executive team of directors, brings an insider's perspective to the analysis. The analysis evaluates
three key functions of Starlight Plc across separate chapters: Strategy, Innovation, and Marketing.
These functions are explored to elucidate the decisions made to enhance the company's value-added
score. The analysis focuses on these three functions due to their strong interconnections and their
collective influence on the company's performance.
Starlight Plc's strategy is characterized by differentiation and needs-based positioning. Innovation
plays a pivotal role in differentiating its products to cater to a diverse consumer base with varying
needs, preferences, and wants. Marketing, in turn, positions these products in the market through a
carefully crafted marketing mix and market segmentation strategies to reach and satisfy consumer
needs. Starlight Plc's strategic alignment and core competencies provide it with a unique strategic
position, resulting in competitive advantages as well as a first-mover advantage in certain market
segments. The company's three primary competitive advantages—sustainability, customer
convenience, and mass manufacturing—are underpinned by its fourth advantage: innovation capital.
Marketing plays a crucial role in promoting Starlight Plc's products and highlighting their
distinctiveness, positioning them as an appealing mobility option for consumers. These three
functions collaboratively work towards achieving Starlight Plc's vision of becoming sustainable
mobility providers for customers and its objective of fostering a more sustainable world.
In conclusion, this firm analysis contends that companies that craft their corporate strategy around
their core competencies and competitive advantages are successful in harmonizing their internal
activities. It further posits that successful companies capitalize on their business situations, seizing
opportunities and taking calculated risks in the external environment. Given the interdependencies
and interconnectedness of decisions across the three functions, this analysis employs recurring
concepts and explanations across multiple chapters. Starlight Plc's broader strategy encompasses
these interdependencies and decisions, leading to the initial chapter on Strategy.
Strategy
This chapter employs the structure outlined in Table 1 to critically analyze the process by which
Starlight Plc formulated its corporate strategy. The company adopted the ESCO framework, as
conceptualized by Heracleous et al. (2009), as the underpinning for this process. The ESCO
framework facilitated Starlight Plc's assessment of its strategic alignment with respect to the
environment, strategy, competencies, and organization, thereby contributing to the development of
its corporate strategy (Paroutis et al., 2016).
In the initial phase, Starlight Plc utilized both SWOT and PESTEL analyses to scrutinize its internal and
external environments, establishing a foundation upon which to shape its strategy. As emphasized by
Johnson et al. (2008), these analyses facilitated the assessment of the business environment and
strategic competencies, contributing to an understanding of their influence on strategy formulation.
For a more comprehensive analysis, Starlight Plc supplemented its SWOT analysis with an extensive
PESTEL analysis to evaluate the broader environment. The SWOT analysis identified strengths such as
robust sales, exceptional employee morale, and economies of scale; weaknesses including inefficient
factory utilization, high inventory holding periods for certain existing cars, and escalating wage
demands; opportunities like electrification and backward integration; and threats such as increasing
financial penalties for CO2 emissions, fluctuating raw material costs, and resource constraints from
existing cars. Similarly, the PESTEL analysis revealed factors such as government promotions and
financial incentives for electric cars; the potential impact of economic growth or recession on
consumer purchasing power; growing customer preferences for carbon-neutral mobility, car-sharing,
and the potential for autonomous driving technology; obsolescence risks from rapid technological
changes; rising environmental regulations; and increasing civil liability and data privacy risks.
Development stage
In this stage of the strategy, Starlight Plc assessed the insights from the SWOT and PESTEL analyses
conducted in the analysis stage and proceeded to design its vision, objectives, and strategic
positioning. The company's vision was to become a sustainable provider for customers through
innovation, underpinned by its aim to create a better world through sustainability. The short-term
objective involved a gradual transition from existing conventional cars to hybrid cars, addressing the
threat of existing cars straining resources, reducing CO2 penalties, and moving towards the long-term
objective of achieving zero emissions. This strategy resulted in increased revenues and a larger
investment budget for future electric cars, aligning with Starlight Plc's strategic orientation as
explored in the PESTEL analysis. The long-term goal was to achieve zero emissions, innovate in the
electric car market, and capture the luxury entry segment, as further explained in the Marketing
chapter. Tesla's strategy of innovation in electric cars and bringing radical technologies to mainstream
markets serves as a fitting example of Starlight Plc's strategies (Furr and Dyer, 2020).
Starlight Plc's competitive strategy was differentiation with a price premium for perceived added
value, This approach aligns with the strategy clock model (Figure below), which is a tool used to
analyze and categorize competitive strategies based on price and perceived value. In the context of
the strategy clock, Starlight Plc's approach falls under the "differentiation with a price premium"
category. This strategy involves offering products or services with unique features or benefits that are
highly valued by customers, justifying a higher price point. Like Tesla, Starlight Plc positioned itself in
the luxury entry segment. Commercializing electric cars required significant long-term investments,
and targeting this segment provided higher margins to recoup future R&D costs. Global forecasts
showed that China and Europe accounted for over 85% of global electric car sales in 2021, followed
by the United States with 10%, where sales more than doubled from 2020 to reach 630,000 (IEA,
2022). Consequently, changing consumer preferences towards sustainability led Starlight Plc to target
the luxury entry segment, supplemented by a price-accessible offering.
https://www.researchgate.net/profile/RangaminiWerawatta/publication/352159498_Tools_for_Generating_Strategic_Options_in_Strategic_Manage
ment_Process/links/60bbccad299bf10dff9c6fdb/Tools-for-Generating-Strategic-Options-in-StrategicManagement-Process.pdf
Regarding strategic positioning, Starlight Plc employed a needs-based positioning targeting a specific
consumer segment, as detailed by Lawton (1999) and Porter (1996). With this positioning, Starlight
Plc aimed its products at the luxury entry segment ($35k-$90k) to meet the needs of a wide range of
consumers with varying requirements. Porter and Lawton (1999) postulate that consumers in this
segment are moderately price-sensitive and require variable features such as autonomy, connectivity,
and range. Thus, Starlight Plc launched a luxury entry version of each car type, initially with hybrid
cars and later transitioning to electric cars.
In Starlight Plc's case, its strategy of sustainable mobility through innovation with price
differentiation, investments in electrification, innovation capital, and large-scale lean operations
created complementary activities (activity systems map: Figure 2,) and an inimitable strategic
positioning. The dramatic shift in Starlight Plc's strategies after launching electric cars can be
explained by Miller and Friesen’s (1984) quantum theory of strategic change. This theory postulates
that organizations follow a two-pronged behavior contingent on context: a specified strategy based
on stability (continuous improvement) and rapid responses to environmental shifts (strategic
revolution) (Mintzberg, 1987). Applying this to Starlight Plc, the company followed a steady
hybridization strategy that balanced its product fleet between conventional cars and CO2 penalties.
As the environment radically shifted towards sustainability (through changing consumer preferences
and regulations), Starlight Plc transformed its established plans (hybrid cars with price premium
differentiation) to attain a new steady state (electric cars with price premium differentiation). This
process created a new strategic orientation for Starlight Plc with unique plans, designs, and culture,
as predicted by Broekstra (1991) and Mintzberg (1987). The quantum theory is evident in the case of
Volkswagen (1950-1970), where it neglected radical market shifts, clinging to a rigid strategy and a
bureaucratic structure. Between 1968-1971, the strategic revolution posited by the theory
transformed Volkswagen, resulting in a new strategic orientation led by a new leader (Mintzberg,
1987; Rieger, 2010), galvanizing innovation and making it the market leader. The quantum theory
also explains how Starlight Plc's innovative strategies were initially restrained as they were unsuitable
for its early hybridization strategy. After the strategic revolution of launching electric cars, these
strategies became suitable and alleviated the need to craft new strategies or reproduce its
competitors’ tactics (Miller and Friesen, 1984; Mintzberg, 1987).
Execution stage
In this stage, Starlight Plc used an activity systems map (Figure below) to evaluate its strategic fit and
connect its complementary activities, as recommended by Johnson et al. (2008) and Porter (1996).
Porter advocates using the activity systems map to understand areas that need strengthening and
eliminate superfluous activities to improve efficiency. With this map, Starlight Plc corroborated its
competitive strategy of differentiation centered around the strengths of its activities and competitive
advantages (innovation capital, sustainability, consumer convenience, and large-scale lean
manufacturing).
In conclusion, the Strategy chapter critically scrutinized the analysis, development, and execution of
Starlight Plc's strategy creation process. The corporate strategy was founded on Starlight Plc's vision
of being a sustainable provider for its customers through innovation (electric cars with revolutionary
technologies), leading to the Innovation chapter.
Innovation
Innovation allows adaptability and fosters growth for the company while playing a significant role in
the overall performance of the company.
https://online.hbs.edu/blog/post/importance-of-innovation-inbusiness#:~:text=Innovation%20is%20often%20necessary%20for,in%20today's%20highly%20compet
itive%20world.
Starlight Plc's long-term objective of transitioning to a 100% electric-car fleet reflects the company's
strategic approach to creating value through financial value, brand enhancement, environmental
responsibility, and technological leadership. After analysing the company through swot and Pestle it
was recognised that the future of mobility is electric- cars. The director of innovations mainly dealt
with launching products with the right features like autonomous driving or connectivity technologies
to maximize return-on-investment. Therefore, Starlight Plc started early investment in Electrification
like Home charging stations ($300M), High power charging ($200M) and E drive Modules ($600M)
also connectivity technologies ($250M), Infotainment services ($160M), Big Data ($150M), CrossPlatform Technology ($200M) to enhance product-offerings. Starlight Plc's corporate strategy is
underpinned by a strong commitment to innovation, which has conferred upon it a distinct
competitive advantage in the marketplace. Firstly, the company adopts a customer-centric approach,
ensuring that its tailored to meet the needs of its clientele. Secondly, Starlight Plc is dedicated to
sustainability, to achieve the ambitious target of zero carbon dioxide emissions. This not only reflects
the company's environmental responsibility but also positions it as a leader in sustainable business
practices. Thirdly, the company excels in efficient mass production, demonstrating an impressive
capacity to produce large quantities of products without wasting resources. At the heart of these
strengths is the company's innovation capital, its ability to create and monetize new ideas. This not
only drives Starlight Plc's strategy but also boosts the perceived value of its products, leading
customers to pay a premium. This aligns with the company's differentiation strategy and has been
key to its success.
Evidence indicates that early substantial investments focused on value creation can lead to
significantly enhanced growth potential in the long term, as demonstrated by Starlight Plc's ambition
to penetrate the luxury segment. Such upfront investments, while offering the potential for rapid
growth and market capture, initially resulted in a lower value-added score for Starlight Plc. This is
evident in the value-added KPI, which saw a sharp 65.34% drop between Q5 ($1283.8m) and Q12
($444.9m). This trend can be attributed to the company's significant investments in innovative
technologies, which temporarily tightened liquidity and increased capital costs. However, from Q13
($531.9m) onwards, the value-added KPI witnessed an impressive growth of 1034.8% by Q28
($6036.2m), underscoring the long-term benefits and growth potential of prioritizing innovation.
In the realm of idea generation, Starlight plc adopted the strategy of open innovation, a term coined
by Chesbrough. This approach enabled Starlight plc to accelerate technological advancements, tackle
intricate challenges, explore novel business models, reduce costs and risks, enhance customer value,
maintain competitiveness, and cultivate an innovative culture. In the context of the innovation
challenge, Starlight plc strategically chose to acquire a company rather than engage in a joint
venture. This decision was rooted in a thorough assessment of the company's objectives, influenced
by its commitment to open innovation. Open innovation, as a concept, encourages organizations to
look beyond their internal resources and collaborate with external entities to stimulate innovation. In
this context, Starlight plc perceived the acquisition of a company specializing in electric cars as a
potentially profitable venture, aligning with their competitive edge in sustainability and customer
convenience. Several considerations informed the decision to acquire a company. First, acquisition
would provide Starlight plc with complete control over the acquired company's assets, operations,
and decision-making, enabling seamless integration with its electric cars. Second, the acquisition
would grant immediate access to new knowledge, patents, and exposure, crucial for driving
innovation. Third, by adopting a decentralized approach to innovation, Starlight plc recognized that
the acquisition would bring in new technologies and talent, further fostering innovation and
expanding idea generation. In summary, the acquisition would not only yield a new revenue source
but also strengthen Starlight plc's competitive position in the electric car market. This is exemplified
by the Volkswagen Group, which has embraced open innovation through its partnership with Aurora,
a self-driving technology company, to develop autonomous vehicles. Volkswagen also acquired a
stake in Quantum Scape, a battery technology company, to develop solid-state batteries for electric
vehicles. These initiatives have enabled Volkswagen to remain competitive in the rapidly evolving
automotive industry.
Starlight plc successfully integrated Open Innovation with stage-gate processes to enhance its
innovation strategy, effectively managing risks, allocating resources, accelerating product launches,
and making informed decisions. This approach supported the company's long-term goals of achieving
zero carbon emissions and entering the luxury segment. By collaborating with the marketing
department, Starlight plc's innovation team gathered insights from market research across three
markets and real-world cases to identify current customer needs and preferences, enriching their
product ideas. The company then evaluated the strategic fit and return on investment of these ideas,
ensuring their viability. Post-launch data analysis confirmed that the products met expectations. A
prime example of this success is Starlight plc's high-end luxury electric car and affordable electric car,
both targeting different customer segments. These product ideas, generated through the stage-gate
process, became market leaders. Similarly, Porsche's Taycan, an all-electric sports car, exemplifies the
successful implementation of a strategy that incorporates innovative technologies into products and
commercializes them to deliver customer value. The Taycan, showcasing Porsche's commitment to
performance and innovation, offers advanced electric drivetrain technology, providing thrilling
performance while upholding the brand's luxury and quality standards.
Initially, between Q4-Q13, Starlight Plc ventured into hybrid cars equipped with advanced
technologies while offerings alongside their conventional automobile portfolio, highlighting their
capacity for innovation. However, these hybrids deviated from their pure electric vision, leading to a
rising CO2 penalty until Q10, which plateaued until Q16. This period marked a deviation from their
core strategy, with multiple non-electric car launches. Yet, the company eventually realigned with its
original vision, phasing out non-electric and hybrid models in favor of purely electric ones, resulting
in a significant drop in CO2 penalties."In the subsequent phase commencing in Q14, Starlight Plc
introduced the LUX electric automobile, a high-end luxury vehicle with a price range of $85k to
$105k, spanning three distinct markets. This automobile, distinguished by its level IV autonomous
capabilities, level IV connectivity attributes, and extra long batter range, epitomized Starlight Plc's
commitment to innovation. Notably, the LUX electric luxury automobile, attributed to its pioneering
features, emerged as a significant contributor to Starlight Plc's revenue, generating $1334M and
securing a significant 7.2% of the market share, despite its elevated average price point of $86.2k.
In further addition of Starlight Plc's adept utilization of the stage-gate process, the company
introduced an economically priced micro electric vehicle like the competitors in the market , the
Sparklite EMicro 3X, during Q15. Priced between $30k and $41k, this vehicle was strategically
positioned to enhance the brand's accessibility to a broader consumer demographic. Importantly,
the Sparklite EMicro 3X was equipped with advanced autonomous and connectivity capabilities.
Drawing inspiration from strategies like that of the Renault Zoe priced at an accessible $33k,
targeting the affluent younger demographic wherein luxury brands introduce cost-effective entrylevel options, as a gateway to their higher-priced models. Given that Starlight Plc's strategic
positioning emphasizes appealing to millennials, the Sparklite micro electric vehicle was designed
with a focus on sustainable urban mobility and consumer convenience, resonating with the
company's competitive edge. This vehicle proved to be a pivotal innovation for Starlight Plc,
contributing substantially to its revenue ($1523M) and securing 8.8% of the market segment. The
success of this model can be attributed to its alignment with Starlight Plc's strategic positioning
within the luxury-entry segment and its competitive strategy emphasizing price-premium
differentiation."
Marketing
This chapter explores the marketing-function, involving marketing-strategies, product positioning,
and other elements. Starlight Plc’s competitive-strategy was differentiation with a price-premium,
and its innovation created the perceived added-value adequate to sustain the products’ price
premium. Hence, marketing provided the means to advertise Starlight Plc’s products and how they
are different, positioning them as a sustainable mobility-option for customers.
Based on De Swaan Arons et al.'s (2014) research on high-performing marketing organizations,
Starlight Plc sought to define its marketing objectives and strategies.
What values and goals guide Starlight Plc's brand-strategy?
The company's brand strategy is guided by values such as customer focus, innovation, quality, and
sustainability. Starlight Plc prioritizes customer focus, innovation and sustainability. The company's
goals include establishing a strong brand identity, building customer loyalty, achieving market
leadership, entering the luxury market segment and ensuring sustainable profitability
What capabilities drive marketing excellence?
Marketing excellence is driven by a combination of strategic positioning, differentiation, innovation
capital, economies of scale, and market presence in Asia, USA and Europe These capabilities enable a
company to achieve a competitive advantage, attract and retain customers, and achieve sustainable
growth and profitability.
What structures and ways of working will support them?
The foundations and operational practices that underpin marketing excellence encompass several
elements, including an umbrella marketing strategy that unifies all marketing endeavors under one
overarching framework. Additionally, the pivotal role of marketing directors in making key decisions,
informed by their expertise and insights, is essential. The adoption of well-established decisionmaking methodologies ensures that marketing decisions are made in a systematic and objective
manner. Furthermore, the reliance on data-driven decisions and the formation of agile, collaborative
teams are crucial. Collectively, these components contribute to a methodical and efficacious
approach to marketing that yields results and aligns with the company's strategic goals.
Starlight Plc further shaped its marketing-strategy on the “winning characteristics” proposed by De
Swaan Arons et al. (2014):
Big-data and insights- Starlight Plc utilized its marketing data to discern consumer preferences and
motivations, enabling the company to address their needs through the application of the 4P
framework (to be elaborated upon subsequently). For example, data analysis revealed that the
company's electric SUV, the EcoPioneer eSUV, was well-received in the American market due to its
advanced autonomous and connectivity technologies. Starlight Plc examined the product lifecycle of
the electric SUV and determined that it was in the introduction phase. Employing the product
lifecycle implications framework (Levitt, 1965; Rudd, 2020), the company established a marketing
objective of "building" the product, with a strategic focus on "expanding the market." The
promotional strategy centered on "creating awareness by Print and TV campaign, " by augmenting
the electric SUV's marketing expenditure by 2.80%, accompanied by a price increase of 1.8%.
Consequently, the electric SUV's market share in America rose to 10.6% between Q13 and Q28,
yielding $746 million in revenue from the American market. Similarly, the marketing directors
evaluated other markets, recognizing that consumer needs varied across regions. They concluded
that both existing and new car models should be marketed based on insights derived from big data.
Purposeful Positioning: Starlight Plc strategically positioned itself in the market by adopting three key
brand objectives proposed by De Swaan Arons et al. (2014). These objectives encompassed:
positioning its cars as tools for mobility; presenting its cars as status symbols through luxury-entry
positioning, with customers perceived as early adopters of innovation; and promoting sustainability
by encouraging customers to use its electric cars. Consequently, Starlight Plc's vision of becoming a
provider of sustainable mobility through innovation enhanced its marketing strategy by delivering a
consistent message and identity (Brook, 2020; Holbrook et al., 2016).
Total Experience: Starlight Plc partially implemented this strategy by adjusting its pricing across
various markets.
Turning now to marketing-mix, Using this approach, Starlight Plc targeted differentiation through its
marketing-mix to maximize its marketing-resources. The company’s reasoning was driven by
empirical-evidence that customers in the same market react comparably to different marketingmixes by businesses (see Bahadir et al., 2015; Sheau-Ting et al., 2013). Hence, differentiation helped
Starlight Plc create an inimitable strategic-positioning and offer unique products and meet the needs
of a particular segment: luxury-entry. Starlight Plc designed, launched (via innovation) and priced (via
marketing) its every product using Boulding and Lee’s specialization-approach.