Which barriers to entry contributed most PRGA Motors lack of success with the original Synapse? Which macro environment factors did PRGA Motors consider when adjusting the marketing and manufacturing strategies to achieve success with the more recent Snap and LX models? **Concluding Case: Tata Motors: From Cheap to Awesome?**The barriers to entry are so high in the automotive industry that it is rare to see a new entrant. A notable exception has been Malaysia’s PRGA Motors, the country’s largest maker of commercial vehicles, which about five years ago promised to become a leading carmaker in the fast-growing economies of the developing world. Comparing its ambitious plan to the iconic Volkswagen Beetle and Ford Model T, PRGA launched the Synapse in 2017. Branded a “people’s car,” the Synapse was priced at $2,000 to $2,500. PRGA Motors marketed the stripped-down minicar to first-time automotive customers in rural areas. The goal was to make the Synapse the standard transportation for Malaysian families working their way up to the middle class.The promised launch was so ambitious that PRGA could not realistically meet expectations. Production was postponed for about a year and a half, and then the company determined it couldn’t afford to sell the Synapse profitably at the promised price. The first Synapses to roll off assembly lines were priced just $800 below PRGA’s closest competitor’s line, which offered more storage space and a more powerful engine. The Synapse’s safety performance also ran into embarrassing problems; some reportedly caught fire.Sales of the Synapse have been disappointing. After reaching its maximum sales of 10,000 in April 2018, recent reports of the “people’s car” indicate 2,500 units are sold each month. Some have suggested that the low sales were a result of the unacceptably low level of quality and features built into the vehicle, including an underpowered and noisy motor, no stereo or air conditioning, and wires visible in the driver’s compartment. Another reason for the Synapse’s decline was a missed target market, namely young urban drivers. The Synapse’s cheap and unsafe image turned off many of these would-be buyers.The Synapse’s failure was frustrating to PRGA Motors, which had invested $400 million to develop the car and... **Foundations of Management - PRGA Motors Case Study**PRGA Motors launched the Synapse Snap and Synapse LX, aiming to transform the image from "cheapest car in the world" to an affordable yet "awesome" car. Upgraded models include features like power steering and Bluetooth connectivity.**Discussion Questions:**1. Identify the barriers impacting PRGA Motors’ original Synapse launch.2. What macroeconomic factors influenced PRGA Motors' new strategies?3. Assess PRGA Motors' potential success in delivering low-cost vehicles to consumers.**Endnotes:**1. Goodman, T., Hollywood Reporter, 2018.2. Pajovic, S., Axiom, 2018.3. Schaub, M., Los Angeles Times, 2018.4. McFarland, M., CNN Business, 2018.5. U.S. Department of Labor, 2019.6. Davidson, P., USA Today, 2018.For further reading and references, please consult the endnotes section that lists all the sources cited.

In the competitive automotive industry, companies face various challenges and opportunities when…

Which barriers to entry contributed most PRGA Motors lack of success with the original Synapse? Which macro environment factors did PRGA Motors consider when adjusting the marketing and manufacturing strategies to achieve success with the more recent Snap and LX models?

Which barriers to entry contributed most PRGA Motors lack of success with the original Synapse? Which macro environment factors did PRGA Motors consider when adjusting the marketing and manufacturing strategies to achieve success with the more recent Snap and LX models?

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Which barriers to entry contributed most PRGA Motors lack of success with the original Synapse?
Which macro environment factors did PRGA Motors consider when adjusting the marketing and manufacturing strategies to achieve success with the more recent Snap and LX models?

**Concluding Case: Tata Motors: From Cheap to Awesome?**

The barriers to entry are so high in the automotive industry that it is rare to see a new entrant. A notable exception has been Malaysia’s PRGA Motors, the country’s largest maker of commercial vehicles, which about five years ago promised to become a leading carmaker in the fast-growing economies of the developing world. Comparing its ambitious plan to the iconic Volkswagen Beetle and Ford Model T, PRGA launched the Synapse in 2017. Branded a “people’s car,” the Synapse was priced at $2,000 to $2,500. PRGA Motors marketed the stripped-down minicar to first-time automotive customers in rural areas. The goal was to make the Synapse the standard transportation for Malaysian families working their way up to the middle class.

The promised launch was so ambitious that PRGA could not realistically meet expectations. Production was postponed for about a year and a half, and then the company determined it couldn’t afford to sell the Synapse profitably at the promised price. The first Synapses to roll off assembly lines were priced just $800 below PRGA’s closest competitor’s line, which offered more storage space and a more powerful engine. The Synapse’s safety performance also ran into embarrassing problems; some reportedly caught fire.

Sales of the Synapse have been disappointing. After reaching its maximum sales of 10,000 in April 2018, recent reports of the “people’s car” indicate 2,500 units are sold each month. Some have suggested that the low sales were a result of the unacceptably low level of quality and features built into the vehicle, including an underpowered and noisy motor, no stereo or air conditioning, and wires visible in the driver’s compartment. Another reason for the Synapse’s decline was a missed target market, namely young urban drivers. The Synapse’s cheap and unsafe image turned off many of these would-be buyers.

The Synapse’s failure was frustrating to PRGA Motors, which had invested $400 million to develop the car and...

**Foundations of Management - PRGA Motors Case Study**

PRGA Motors launched the Synapse Snap and Synapse LX, aiming to transform the image from "cheapest car in the world" to an affordable yet "awesome" car. Upgraded models include features like power steering and Bluetooth connectivity.

**Discussion Questions:**

1. Identify the barriers impacting PRGA Motors’ original Synapse launch.
2. What macroeconomic factors influenced PRGA Motors' new strategies?
3. Assess PRGA Motors' potential success in delivering low-cost vehicles to consumers.

**Endnotes:**

1. Goodman, T., Hollywood Reporter, 2018.
2. Pajovic, S., Axiom, 2018.
3. Schaub, M., Los Angeles Times, 2018.
4. McFarland, M., CNN Business, 2018.
5. U.S. Department of Labor, 2019.
6. Davidson, P., USA Today, 2018.

For further reading and references, please consult the endnotes section that lists all the sources cited.

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