Morgan Motor Company Case Study

Morgan Motor lodge Case contractAutomobile assiduity has a commodious history, since 19th century it has been constantly developed. The auto industry is ofdecade thought of as one of the roughly spherical of solely industries. Its harvest-feasts adopt spread around the military personnel, and it is dominated by a small number of companies with worldwide recognition. In this assignment I am going to talk of Morgan Motor confederacys strategic part which includes merchandising position, culture of the play along, competitiveness and the future development.Profile of the uplifted societyThe Morgan Motor alliance is unique in building railroad cable machines in England since 1909 and still being in private owned by the Morgan family. Indeed in its 100-year existence solitary(prenominal) triple Morgans have headed the guild. Since the first four-wheeled rail cable car in 1936 the factory has only if built sports cars. The traditional Morgan is still being built exploitation the pick steel chassis, with an ash body frame panelled in aluminium, simply using excellent modern drive trains from Ford. This combines the pleasure of driving a sincere classic with a modern day performance and bleak car reliability.The launch of the all new Morgan Aero 8 in 2001 was the first all new Model since 1936. It was too 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 fol down(p)ed the Morgan tradition of great strength yet lightweight. strengthened alongside the traditional cars, the Aero 8 is proving its outstanding competence to a new breed of Morgan owners.The mathematical mathematical product mart bursting chargeMorgan is unique in a car industry. They consistently keep making the hand- make and ash-framed cars. They dont have as lots customers as new(prenominal)wise car companies and its niche foodstuff is rela tively small than others. Their output is in any fortune small in comparison with other car brands. Morgan is non trying to change its cars to more(prenominal) modern cars and to ontogenesis its production number, this is what gives Morgan its uniqueness. If they start producing more modern cars and increase its output they whitethorn loos its uniqueness. This does not mean that Morgan is consistently using the alike(p) technology of producing cars as they used to, they be continually improving the spirit. Morgan is a niche actor and it does not compete with others. If they moderate their production with increasing the output and rear more modern cars they exit face the argument with other car manufacturers. They be al musical modes staying at the position they argon now and retentiveness the equal strategy, if they keep doing this they will not have many a(prenominal) competitors in the market. in that location ar number of approaches to understand the product ma rket mission in deep. I will discuss some of them below. ushers Generic dodgePorter (1980, 1985) suggested that some of the most basic choices faced by companies are essentially the scope of the markets that the company would serve and how the company would compete in the selected markets. Competitive strategies focus on ways in which a company dismiss achieve the most improvementous position that it possibly peck in its industry (Pearson, 1999). According to Porter, in that respect are three generic wine strategies that a company can undertake to attain competitive receipts live leadership, differentiation, and focus. cerebrateCompanies that use Focus strategies concentrate on accompaniment niche markets and, by discernment the dynamics of that market and the unique necessitate of customers within it, develop uniquely low cost or well-specified products for the market.In Porters Generic Strategy imitate Morgan Motors can be placed in differentiation focus, because Morga n cars price is quite gamy so it can not follow the cost leadership strategy, they are not selling their product in a standard market price. Morgan do deliver high persona product and service, their cars are unique in car industry market, as already mentioned in a higher place, Morgan is the oldest hand- do car manufacturer. The company concentrates on a particular niche market and is different from other mass production car manufacturers.Parnells IdeaParnell suggested that precious preference is more historic 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 gain the competitive usefulness. Organizations consumeing rare, valuable and inimitable resources possess a greater capability to perform a strong think of proposition than those without much(prenominal) resources (Parnell, 2 006)In case 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 befools them to be inimitable will be discused aft(prenominal).Strategy timeThe strategy clock is another allot 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 similar manner to that of the generic strategy model.As it is already explained 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 sensed value is also high.Strategy CubeA model that allows the pr from each oneing of competitive strategy from both market and resource perspectives has been described by Jenkins (2004). A fram ework is proposed in which products/services are described by three variablesRelative level of consumer perceived product benefitsRelative product price to the customerRelative product cost to the producerIf we comparison the cube with porters generic strategy and strategy clock point A in the cube is similar to Differentiation 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 net, 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 simulacrum the pa ttern 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 RoutinesSymbolsOrganizational StructureControl SystemsPower StructuresCompany has been owned by Morgan family since it has been launch. Company has about 150 employees. The managers seat together with the employees on a traditional tea fall through and talk with them, this is the way to know interrupt all employees and share their thoughts. For the Company it is very important to have high sure-handed mental faculty. 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 scope and moreover they are from the same family. completely the employees have a very close relationship with each other. All t his 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 organization or ne bothrk of activities, connected by linkages. When the system is managed 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 shiver into primary and support activities. The primary and secondary activities of the fast(a) are discussed in detail below.Primary activitiesThe primary activities (Porter, 1985) of the company include the following incoming logisticsThese are the activities touch 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 forever and a day keep improving their quality and they are continuing using the alu minium 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 valuable. All Morgan cars are different from each other, they are made according the judgement of the customer. Comparing to other car manufacturers, to produce Morgan cars takes practically longer time, but this doesnt make to shorten their customer time lag list and mass are still keen to get Morgan car which can be made according to their taste.Outbound logisticsThese are all the activities interested with distributing the closing 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 sometime s 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 responsible 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.Service on that point is often a need to set up services like pre-installation or after-sales service before or after the sale of the product or service.Support activitiesThe support activities of a company include the followingProcurementThis function is responsible for purchasing the materials th at 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 training 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 knowledge 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 fast er.Firm fundamentThis includes planning and control systems, such as finance, accounting, and corporate strategy and so on (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 possibleness is based on the assumption that a competitive advantage is the essence 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 sonorous 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 stren gth, flexibility and surprisingly, research showed that the frame made the car safer on carry on tests. There are approx 50,000 influences 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 standing hands-on craftsmanship displayed in the bodywork and interior(a) 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 Analyses addicted that almost anything a firm possesses can be considered a resource or capability how should you attempt to narrow down the ones that explain wherefore 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 editionReputatio n 2. Rare materials workmanship 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 ForcesThe ideas and models which emerged during the period 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 sector (Thurlby, 1998).The original competitive forces model, as proposed by Porter (1998), identified volt forces which would impact on an organizations behaviour in a competitive market. These include the followingThe opposition between active sellers in the market.The power exerted by the customers in the market.The impact of the suppliers on the sellers.The emf threat of new sellers entering the market.The threat of substitute products becoming operational in the market. Understanding the nature of each of these forces gives organizations the necessary insights to enable them to enunciate 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 substitute of Morgan cars. The threat of substitutes to the automotive industry is quite mild, many 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 with its unique production, the Company has already obtained a solid position on the market and from my point of view it will be ambitious 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 regime policy changes. PESTEL stands for Political, Economic, Social, Technological, Environmental, and Legal. PESTEL analysis is a useful strategic tool for understanding market return or decline, business 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 dissemination(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 policy-making factor does not impact on the companys environment.Question 2 increase Life CycleThe typical Product Life Cycle consists of five main aspects.Product developmentIntroductionGrowthMaturity exacerbateThe Product Life Cycle begins with product development, during which time t he 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 the PLC typically involves a rapid growth in sales as early adopters replace pioneers as the main consumer group.The matureness stage in the PLC is a key point for a firm because it marks the turning point in the products success.Morgan Motor Company in Product Life Cycle takes Maturity stage.