Matra Problem Definition Essay

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This paper addresses Matra’s focus, products and bargaining power (listing by priority): 1 – Specialization – Matra Automobile has no targeted market. Its areas of interest range from racing, to mass market “Mini Vans”, to niche market M72 (Garrette & Dumont, 2012, Matra Automobile Case, p.12). In addition, Matra is also trying to take part in both the designing process and the production process of their cars without the necessary resource to compete against the large car producers such as Renault and PSA. This lack of specialization results in Matra being a “jack of all trades, master of none” and makes it impossible to focus on innovation which is their main competitive advantage. 2 - No match between design and production capabilities – Matra is currently relaying on two main business functions: design and production. Matra has both innovative design and cutting edge technologies (p. 21, appendix 5) but the two do not complement each other. For example, Matra has designed the “Espace” which created a new “Mini Van” segment for the mass market. Matra also developed a cost effective SMC based factory to manufacture cars. Unfortunately the plants that Matra owns can only manufacture at “small lot” capacity and therefore cannot keep up with the demand of the mass market (p. 9, 14). This mismatch has forced Matra to become dependent on Renault for manufacturing. 3 – Weak bargaining power –Due to Matras’ dependence on a single client (Renault) (p. 8) it is in a weak bargaining position with its buyers. The contracts that Matra signed with Renault hinder their ability to work with other clients such as PSA, Fiat, or Peugeot, a client that would better fit the “small lot” production capabilities of Matra (p.14). This weak bargaining position has forced Matra to limit its designing to the “Mini Van” and it took Matra almost 19 years to developed a new design, the

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