Morgan Motor Company Case Study

Morgan Motor attach to Case StudyAutomobile industry has a long history, since 19th century it has been endlessly developed. The auto industry is often thought of as one of the most global of all industries. Its products shed spread around the world, and it is dominated by a small number of companies with worldwide recognition. In this assignment I am going to controvert Morgan Motor companys st come outgic built in bed which includes market placeing position, gardening of the company, conflict and the future development.Profile of the CompanyThe Morgan Motor Company is unique(p) in building railroad cars in England since 1909 and still creation privately owned by the Morgan family. hence in its 100-year existence barely three Morgans have headed the company. Since the first off four-wheeled car in 1936 the factory has only built sports cars. The traditionalistic Morgan is still being built utilise the separate steel chassis, with an ash body frame panelled in alumini um, exactly using excellent neo drive trains from Ford. This combines the pleasure of whimsical a real classic with a modern day performance and new car reliability.The launch of the all new Morgan Aero 8 in 2001 was the first all new Model since 1936. It was likewise an all aluminium super car incorporating the very best of British race car chassis engineering in a stunning road car. Powered by a BMW 4.4 V8 the Aeros bonded aluminium chassis followed the Morgan tradition of great strength yet lightweight. Built on base the traditional cars, the Aero 8 is proving its outstanding competence to a new breed of Morgan owners.The product market missionMorgan is unique in a car industry. They consistently keep making the clear- do and ash-framed cars. They dont have as often customers as otherwise car companies and its time out market is relatively small than others. Their output is also small in comparison with other car brands. Morgan is not trying to change its cars to more modern cars and to increase its production number, this is what gives Morgan its uniqueness. If they start producing more modern cars and increase its output they may loos its uniqueness. This does not mean that Morgan is consistently using the same technology of producing cars as they used to, they be continually improving the quality. Morgan is a niche operator and it does not compete with others. If they moderate their production with increasing the output and produce more modern cars they will face the competition with other car manufacturers. They atomic number 18 always staying at the position they are now and keeping the same strategy, if they keep doing this they will not have many competitors in the market. There are number of approaches to understand the product market mission in deep. I will discuss some of them below. gatekeepers Generic StrategyPorter (1980, 1985) suggested that some of the most basic choices faced by companies are essentially the scope of the marke ts that the company would serve and how the company would compete in the selected markets. Competitive strategies emphasis on ways in which a company throne achieve the most benefitous position that it possibly can in its industry (Pearson, 1999). gibe to Porter, there are three generic strategies that a company can undertake to attain competitive advantage comprise leadership, note, and focus. snapCompanies that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely low cost or well-specified products for the market.In Porters Generic Strategy framework Morgan Motors can be placed in differentiation focus, because Morgan cars price is quite broad(prenominal) so it can not follow the cost leadership strategy, they are not selling their product in a standard market price. Morgan do deliver high quality product and service, their cars are unique in car industry market, as already mentioned above, Morgan is the oldest hand-made car manufacturer. The company concentrates on a particular niche market and is different from other mass production car manufacturers.Parnells IdeaParnell suggested that valuable resource is more important for the company than cost leadership and differentiation. He believed that valuable resources could help the company to achieve more success. He said that if company can have inimitable, rare and valuable resources it could help the company to elucidate the competitive advantage. Organizations possessing rare, valuable and inimitable resources possess a greater capability to perform a strong take account proposition than those without much(prenominal) resources (Parnell, 2006)In object lesson of Morgan the idea of Parnell can be aplicable because Morgan uses valuable resources and they are inimitable. What are their valuable resources and what makes them to be inimitable will be discused after.Strategy timeTh e strategy clock is another appropriate way to analyze a companys competitive position to cost or differentiation advantages (Bowman Faulkner, 1996).The strategy clock uses differentiation and focused differentiation in a equal manner to that of the generic strategy model.As it is already apologiseed above in Porters Generic Strategy Morgan Motors in Strategy Clock takes the same place which is the focused differentiation. Morgan Motors product price is high and the market niche is relatively small it concentrates on particular niche market. Customers perceived value is also high.Strategy CubeA model that allows the discussion of competitive strategy from both market and resource perspectives has been described by Jenkins (2004). A manakin is proposed in which products/services are described by three variables comparative level of consumer perceived product benefitsRelative product price to the customerRelative product cost to the producerIf we compare the cube with porters gene ric strategy and strategy clock point A in the cube is similar to note Focus in above mentioned models, which means that the companies which are placed in this point has got high price, high benefits, particular market niche. The point E is similar to Cost Focus in Porters generic strategy and it is similar to 1 and 2 positions in strategic clock. In the case of Morgan Motors Company in this model it is positioned in a point A because of its high cost, high perceived benefits, low market niche and high price.The Cultural Web, which I will discuss below will help us to understand the Companys culture. The Cultural Web identifies six interrelated elements that help to make up what Johnson and Scholes call the paradigm the condition or model of the work environment. By analyzing the factors in each, the companies can begin to see the bigger picture of their culture what is working, what isnt working, and what needs to be changed. The six elements areStoriesRituals and RoutinesSymbo lsOrganizational StructureControl SystemsPower StructuresCompany has been owned by Morgan family since it has been established. Company has about 150 employees. The managers seat together with the employees on a traditional tea break and talk with them, this is the way to know better all employees and share their thoughts. For the Company it is very important to have high experient staff. Company is situated at the same place as it was since it has been established, most of the employees have worked for the Company for more than ten years, mainly the employees are from the same area and besides they are from the same family. any the employees have a very close relationship with each other. All this makes the Company to have a different culture from other manufacturers.The activities and the resources of the CompanyValue chain analysesThe value chain framework of Porter (1990) is an interdependent organisation or network of activities, connected by linkages. When the system is ma naged carefully, the linkages can be a vital source of competitive advantage (Pathania-Jain, 2001). In order to conduct the value chain analysis, the company is split into primary winding and support activities. The primary and secondary activities of the trusty are discussed in detail below.Primary activitiesThe primary activities (Porter, 1985) of the company include the sidelineInbound logisticsThese are the activities refer with receiving the materials from suppliers, storing these externally sourced materials, and handling them within the firm. Morgan is using high standard and high quality materials. Morgan always keep improving their quality and they are continuing using the aluminium and recently they bought the BMWs engine to make their cars better and faster.OperationsThese are the activities related to the production of products and services. Morgan cars since the Company has established are made by hand with ash-frame. This is what makes Morgan cars so special and va luable. All Morgan cars are different from each other, they are made according the taste of the customer. Comparing to other car manufacturers, to produce Morgan cars takes much longer time, barely this doesnt make to shorten their customer waiting list and people are still keen to get Morgan car which can be made according to their taste.Outbound logisticsThese are all the activities concerned with distributing the final product and/or service to the customers. As it is already described above, because of Morgan car is made by hand, it takes much longer time than other car manufacturers. The waiting time till Morgan car is finished is between one and two years, but sometimes it takes much longer to collect the car to its final face. Morgan has only one plant, but it has dealers all over the world what makes much easier for the customers to get their car more conveniently.Marketing and salesThis functional area essentially analyses the needs and wants of customers and is responsib le for creating awareness among the target audience of the company about the firms products and services. Morgan Company doesnt do many marketing activities. For many people the brand still can be unknown. It is because of its low productivity, but their uniqueness and brand still brings them enough customers. It is obvious from their waiting list. Demand is much higher than supply.ServiceThere is often a need to provide services like pre-installation or after-sales service earlier or after the sale of the product or service.Support activitiesThe support activities of a company include the followingProcurementThis function is responsible for buying the materials that are necessary for the companys operations.Human Resource ManagementThis is a function concerned with recruiting, training, motivating and rewarding the workforce of the company. For Morgan well trained and high skilled employees are very important as it is for many Companies. As in many Companies Morgan also has the t raining programs to develop their employee skills. As above mentioned there are around 150 employees in Morgan Company and all of them are in a good relationship with each other. The heads of the Company is also trying to have a good relationship with each of their staff member and to share their thoughts with each other.Technology DevelopmentThis is an area that is concerned with technological innovation, training and association that is crucial for most companies today in order to survive. Morgan consistently is improving their product and technologies. For example launching the Aero 8 model, and purchasing the BMWs engine to make their cars much comfortable and faster.Firm InfrastructureThis includes planning and control systems, such as finance, accounting, and corporate strategy etc. (Lynch, 2003).The value chain should be analysed with the core competence of the company at its very heart (Macmillan et al, 2003).Resource Based ViewThe resource-based view theory is based on the assumption that a competitive advantage is the result of optimal resource allocation and combination in imperfect markets. Resources are assets, skills, and capabilities. The resources leading to competitive advantages have to be scarce, valuable, non substitutable and it has to be grueling to imitate them (Barney, 1991). In case of Morgan, the resources they are using are very special, high quality and valuable. They pay very big attention of the quality they are producing, using high quality materials to produce cars. The Morgan car has always been built around an ash-frame, and a steel chassis. The new Aero 8 also has an ash frame. This gives unique strength, flexibility and surprisingly, research showed that the frame made the car safer on impact tests. There are approx 50,000 colours to choose from. There are many things that makes Morgan cars so special. Its uniqueness in a world of look-alike cars. Its handmade quality the use of wood in many areas of construction long sta nding hands-on craftsmanship displayed in the bodywork and interior by the highly skilled workforce. Ability to tailor a model to the customers exact requirements. Most of the components of Morgan cars are made in-house. All this gives to Morgan to be inimitable.VRIO AnalysesGiven that almost anything a firm possesses can be considered a resource or capability how should you attempt to narrow down the ones that explain why firm performance differs? In order to lead to a sustainable competitive advantage a resource or capability should be Valuable, Rare, inimitable, and Organized.Value RarityMaterials (Ash tree) 1. Limited editionReputation 2. Rare materialsCraft skill 3. DesignHigh experienced workers 4. Unique cars5. Choice of colourInimitable OrganizationSkilled workers 1. StrategyDesign 2. Tea breakMaterials 3. Friendly atmosphereBrand nameThe competitive context of the CompanyFive propelsThe ideas and models which emerged during the stop from 1979 to the mid-1980s (Porter, 1998 ) were based on the idea that competitive advantage came from the ability to earn a return on investment that was better than the average for the industry sphere of influence (Thurlby, 1998).The original competitive forces model, as proposed by Porter (1998), identified five forces which would impact on an organizations behaviour in a competitive market. These include the followingThe disputation between existing sellers in the market.The power exerted by the customers in the market.The impact of the suppliers on the sellers.The potential threat of new sellers entering the market.The threat of step in products becoming available in the market.Understanding the nature of each of these forces gives organizations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market (Thurlby, 1998).Force 1 The Degree of Rivalry.Force 2 The Threat of Entry.Force 3 The Threat of Substitutes.Force 4 Buyer Power.Force 5 Supplier Power.The rivalry in global automotive industry is very intense. However in the case of Morgan Motors, the Company is very unique and only the one in automotive industry with its old fashioned hand made cars. Morgan doesnt have competitors and there is no rivalry between Morgan Motors and other car manufacturers. There is no embossment of Morgan cars. The threat of substitutes to the automotive industry is quite mild, numerous of other car manufacturers are competing with each other in the global car industry, but none of them offer the same kind of cars as Morgan does. None of them can offer to customers the hand- made, with an ash body frame panelled in aluminium, the classic old fashioned and herewith modern car, which can be made with the taste of customer. Entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents position (Porter, 1980b Sanderson, 1998). In the case of Morgan as I have already mentioned before it has a long history w ith its unique production, the Company has already obtained a steady position on the market and from my point of view it will be hard and not feasible for new entrants to replicate them.PESTEL AnalysesPESTEL Analyses help organizations to analyse factors such as tax changes, new laws, trade barriers, demographic change and government policy changes. PESTEL stands for Political, Economic, Social, Technological, Environmental, and Legal. PESTEL analysis is a useful strategic tool for understanding market growth or decline, seam position, potential and direction for operations (Kotler, 1998). PESTEL analyses also ensures that companys performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985).Typical PESTEL factors to consider include(P)oliticale.g. international trade, taxation policy(E)conomice.g. interest rates, exchange rates, national income, inflation, unemployment(S)ociale.g. ageing population, attitudes to work, income distribution(T)echnologicale.g. innovation, new product development, rate of technological obsolescence(E)nvironmentale.g. global warming, environmental issues(L)egale.g. competition law, health and safety, employment lawApplying PESTEL to Morgan MotorsPolitical Political decisions can impact on many vital areas for business, but in case of Morgan the political factor does not impact on the companys environment.Question 2Product smell CycleThe typical Product Life Cycle consists of five main aspects.Product developmentIntroductionGrowthMaturityDeclineThe Product Life Cycle begins with product development, during which time the firm devises and creates a new product (Kotler and Armstrong, 2004). The introduction of a new product onto the market is typically characterised by very slow sales, which may grow only very slightly over a long period of time. (Porter, 1980 1985 Kotler et al., 1996 Blackwell et al., 2001 Grant, 2002 Kotler and Armstrong, 2004). The growth stage in th e PLC typically involves a rapid growth in sales as early adopters replace pioneers as the main consumer group.The maturity stage in the PLC is a key point for a firm because it marks the number point in the products success.Morgan Motor Company in Product Life Cycle takes Maturity stage.