Study On Competitive Strategy Of FAW “Red Flag” Intelligent Cars

Intelligent car is a big trend of automobile development in the context of a new round of technological revolution, with huge potential in increasing the utilization rate during trips, bringing down the traffic accident rate and reducing both environmental pollution and energy consumption. At present, major automakers, component manufacturers and IT companies are initiating the industrial deployment of intelligent vehicles. As a Chinese car brand with national recognition and historical heritages, the Red Flag is responsible for enhancing the competitiveness of Chinese high-end cars to compete with foreign luxury brands. For the FAW, building the “Red Flag” intelligent cars is not only a mission, but also a strategic behavior to verify this technology, build an industry-leading image, explore the business model, and enable overall transformation and upgrading.Through the SWOT matrix, this paper analyzes the competitive environment the intelligent Red Flag is faced with during its development. At first, our country has introduced various policies to encourage the development of intelligent vehicles. The MIIT has made specific suggestions on how to establish and improve key IDAS(intelligent driving assist system) technologies, independent research and development system and production supporting system by 2020. The FAW, with rich experience and domestic leading ability in passenger vehicle development and intelligent technology research, has now developed an overall development strategy of vehicle intelligentization. All of these constitute the advantages of intelligent Red Flag in its development. But the development of intelligent Red Flag is still faced with challenges posed by initial intelligent strategy planning and cooperative resources construction of domestic main competitors, strong bargaining power of component suppliers, as well as aggressive involvement of internet companies and IT firms. In addition, restricted by Red Flag’s management model and current market acceptance, the development of intelligent Red Flag is now focused more on local technical breakthrough due to the lack of clear strategic target and planning. The analysis result shows that, intelligent Red Flag has more chances than threats and more advantages than disadvantages, confronting both challenges and opportunities in its future competition. Thus the current situation shall be combined with the emerging problems to set a development goal for intelligent Red Flag. A platform for key generic intelligent technologies shall be built through development and application to build up the market influence of intelligent Red Flag and facilitate the company’s transition from a traditional OEM to an intelligent production service provider. It is expected that through three phases, namely “small-scale demonstration”, “multi-model product application” and “formation of integrated business model”, the overall R&D capability, resource platform, technical platform and business model of intelligent Red Flag can be grafted to other FAW brands in different classes in order to enable the transformation and upgrading of all the FAW products.On the basis of strategic target setting and strategy planning, this paper has compared and matched the internal and external conditions applicable to the three competitive strategies and the internal and external environments confronted by the company, and finally chosen the differentiated competitive strategy with specific implementation measures as the suitable strategy for intelligent Red Flag. At first, carry out the cross-border cooperation based on an intelligent vehicle industry chain, and develop a flexible and efficient development pattern. Write “core technology leading” into the differentiated strategy as an important content, and deploy in advance the interconnected technology resources on the basis of intelligent technical cooperation platform. Enrich the product line of intelligent Red Flag, launch multiple car models aiming to different consumer groups, and enhance the marketization power. Develop an intelligent vehicle service model with Red Flag features, evaluate the intelligentization effect through the first phase of demonstration, increase the public recognition of intelligent Red Flag, and thus lay a foundation for its overall commercialization. Improve the marketing service of Red Flag and increase its sales outlets, which are relied on to build a small demonstration base for vehicle application experience. Establish an e-commerce service platform and a “members club” for VIP users, and rely on strong presence of marketing service to win the competition. To ensure the effect of strategy implementation, this paper has formulated the measures to guarantee strategy implementation, mainly including: improving original organizational structure and co-founding, together with internet companies and IT firms, the “Overseas Research Center for Innovation Application”; increasing the research fund of intelligent vehicles and adjusting the pattern of R&D management; employing the talents with overseas working experience to ensure the HR supply in this new arena; strengthening the salary incentive and constantly attracting talents through the “brain shareholder” policy; creating the sharing-oriented corporate culture and stimulating the staff’s innovation vigor; and attaching more importance to intellectual properties(IP), and building the IP management & arrangement capacity of intelligent vehicles in the company.