Saipa's Case Study

Presentation of the company:

Saipa is the second largest Iranian auto manufacturer. Saipa (an acronym for Societe Annonyme Iranienne de Production Automobile) was established in 1966 as an Iranian-based car company. The focus of the company is the production of care, predominantly for the Iranian market.

Facts

 Industry: Automotive

 Founded:1966

 Headquarters:Tehran, Iran

 Products:Automobiles, Engines

 Employees: 18,500

 Owned by the government for 48%

 Second largerst after Iran Khodro Company IKCO

A big part of Saipa success has been it's ability to adapt several strategic approaches. They produce existing overseas design, licensed versions of existing design and their own products.

Saipa began by assembling the Citroën Dyane, in 1968. The same car went under the name Jyane in Iran. After these, the Baby-Brousse followed in 1970 until 1979. In 1975 Saipa began manufacturing a licensed versions of the original Renault 5 and later Renault 21. The production of Citroëns ended in 1980.

After the Citrioën cars, in 1986 Saipa build the Z24 pickup, a license built version of the 1970 version of the Junior model by Nissan. In 1998 Saipa took over the Zamyad company, who then undertook the production of the Z24. Since 2003, this truck is sold under the Zamyad brand.

After IKCO took over the Renault 5 production in 1994, the Renault 21 was taken out. In 1993 a relationship with Kia began, and production of the Kia Pride commenced. Saipa's Pride was marketed under the names Saba and Nasim. Since 2001, Saipa also produces the Citroën Xantia under license as well as assembling sedan models of the previous generation Kia Rio since May 2005, using parts imported from Korea.

Through these joint-ventures Sepia was allowed to develop it's own unique manufacturing competences. By using co-branding and the partner's resources, Saipa build its own brand equity and product values.

I. How is Saipa's network of relationships different from the relationships of typical Western car manufacturers?

The network of relations of the Saipa differs to western automakers by the intervention of different actors. We can see that Saipa has a special relationship with the government which is not common for Western car manufacturers. Indeed Iranian government owns 48 per cent of Saipa and influences the marketing policy of the company and the image it wants convey to consumers. We also note the presence of religious bodies in the network of Saipa relationships. Saipa holds several partnerships with French companies such as Citroën, Renault or Japanese with Nissan. However Saipa signed a memorandum with the Malaysia to strengthen the links between Muslim countries. These initiatives are not common for Western car manufacturers. Indeed the religious and the politic are completely separates and they rarely involved in decisions of companies. There is also that the logic of profit is not the same for Saipa to major Western European manufacturers of cars. For instance the Iranian State it serves of the reputation of Saipa to promote Iranian culture and family values. Western European manufacturers of cars don't care about conveying the values of their country but rather that of the company to convey a good image which will increase the number of sales. In conclusion we can say that a Saipa network relationship is different from those western car manufacturers by several aspects. Firstly we note the omnipresence of the Iranian Government in the marketing and communication policies of the company. Finally there is also the power of the religious clergy who holds an important place in Iran.

II. Explain the fundamentals of Saipa's market communication strategy.

A powerful marketing communication strategy should serve to make a business stand out from the crowd.

First of all, Saipa differentiate itself by its unusual positioning. In fact, Saipa objective was to exert leverage on ties that exist between Muslim countries. The main aim of the company is to encourage other Muslim countries to adopt this approach in order to better serve new markets collectively. Secondly, Saipa has conduct and succeed business in countries seen as "axes of evil" by the US, such as Syria and Venezuela. Moreover, some US and European car manufactures show now more interest than in the past in collaborating with Saipa. Saipa also has an effective marketing program.

Firstly, what differentiate Saipa from the other Iranians companies is its people centred approach, driven by human resource management and relationship marketing principles.