Valourec Case Analysis - Essay Example

Executive summery The present world is considered as the era of science and technology. The adoption of better technology in the production process yield stunning result in its outcome. If the company chooses most feasible and comfortable method of production in its operation, they can come up with unique feature to the market with modest feature. However its implementation process requires high cost and it cannot affordable to the small and medium scale enterprise due to heavy initial investment. Vallourec was a well motivated a strong personality who aimed to upgrade his production in to world class. Hence due to his well wish, his company could reach countries top most metal tubing manufacturer within a short time. The chemical and gas field requires a huge investment, Technology, Skilled labor and mechanism. If the company follows modern technology and unique production method, they can come up with most efficient low cost product in to the market. The quickest process called by the injunction molding process, which is a highly developed technology adopted by the Vallourec under its steel production process. So here the company was highly interested in developing the quickset process to reduce the production process and to increase the efficiency in the production process. Yet it is a unique production method and it is a adoptable to the metals due to its microscopic layer. The development of technology may incur several time with different stages throughout the process. However the strong desire of the management helped the company to become one of the major manufacturers of metal tubes in the country. However this case study is an attempt to give information on the adoption of modern technology and unique production method than the traditional method of production. Hence this case study reveals the truth, which is involved in the production process by the application of best practice in its operation. Identification of key issues, problems, and opportunities and Evaluation of alternative strategic approaches to deal with the identified problems Vellore's Venture case is one of the most successful cases in the Metal melting process industry. The ultimate aim of every business magnate is to maximize their wealth with a limited risk and prospects. So they require higher return to their heavy investment with in a limited period. Hence the business would modify according to its area of business and the best available methods to operate. Similarly in this case they corporation applied several techniques and methods to get higher return and outcome with a limited effort than the market competitor. The technological innovation gives most suitable and feasible solution to the conventional method of production, where the company can avoid the traditional method of production and come up with unique product to the market. Due to its operation it may suffer several internal as well as the external problems. Let us evaluate the main problems and how it helped to the Vellore's venture to become no one metal producer in the country. Similar to the other metal melting industry the Vellore's has its own issues and problems in the business mater. Yet the company could manage the problem with its effective future plans and strategies. The first and foremost issues related to the process are raising cost. The cost problem is common to almost all business enterprise in the world. However the cost is the major problem and it caused to rise in its price. The rising in the general price of Gas and its material would be a great burden to the Vellore's industry. The slumping sales in the major market hit a heavy burden to the company due to constant increase in the operational cost. So it leads the company in to the situation, where it couldn't estimate the operational cost of its north steel process. Yet on the ultimate stage it could recover its cost in to profitable on due to fell in the oil price in 1979. However it is generally reflecting the issues that the company had been following the conventional method of production. Where it's cost set higher than the modern system of production. The second most important issue for the backwardness is the conventional mode of process. As earlier mentioned in the cost facts, the company failed to adopt modern technology in its manufacturing plant. This factor contributes a greater share in the increase in cost. The tubing process is an enormous cost cutting method, where it will improve the quality to its ultimate product. The lowering cost to a level that would enable its montboard plant to compete in the robust lower priced segments in the growing market. The extreme fault done by the company is lack of technological application in its manufacturing process. However its decision to stop conventional or traditional method will be a symbol to its enormous success. Since the tubing market is very limited in size and low publicity, the company would sufferer to market its ultimate product. However the alternativeness to mechanize the process would yield cost effectiveness to the company in its tubing process than other market competitor. However the technological up gradation requires a huge investment and high maintenance cost to the big enterprise. Here they adopted technological innovation in the plant and could beneficial to the entire industry to get cost effectiveness in the market. The company has a strong corporate goal and they failed to keep environmental policy. The irresponsibility in the plastic burning and consuming in the manufacturing plant hit a great hazardous to the company. While having a strong corporate objective the company must maintain its social respect and assurance properly and it shouldn't harm to the society and environment by its dangerous chemical usage in the manufacturing plant. The technological constrains that had very limited in the plant. It has found in the implementation process of MIM. It is the low strength application seemed to have been surmounted. While its implementation, it requires skilled professionals to look and maintain its proper operation. But the trouble related to the MIM is engineers allowed to learn the process while its operation. It may cause for the damage in its operation due to learning process and unskilled labor. The Top most issues or the problem, which is find in the company is, the employee's mistake. Generally the customer is the king and the industry should give its service in a better way to satisfy his needs and wants as he require. The prompt service and the quality in the service delivery will help to the company to acquire more customers. Since the customer satisfaction is the prime objective, it should focus in to that aspect rather than its profit making objectives. In this case the company has got the recognition as it is one of the top quality providers in industrial product, but due to increases demand, the company totally forgot the quality aspects like prompt delivery, delay in replacement, and delay in almost all transaction. Since their motto is to maximize their profitability, they couldn't give mush attention to the customer aspect. Hence they failed to maintain proper quality in service delivery, which is they assured to the customer at initial stage of order booking. However when compared to the other manufacturer in the same field, Vellore's has majority share in the market. So it could it could call itself as the worlds premier MIM producer and it business has expanded more higher than any other producer company. Hence most of the recognition comes from the unsatisfied customers by the quality service provided by other MIM companies. The concentration towards the Profitable business is a common aspect in all most all corporate entities in the world. But meanwhile they should take care about their customer also. The business cannot exist if they cannot serve the need of their customer. In growing stage the company looks to make more profit, while if they give greater concentration towards the profit making objective rather than customer needs, the company will find downward slopping under is maturity stage. Regarding the issue it may suffer from the government regulations by the expensive workers lay off. However the problem is the new system may not contribute to its production order. Material specification is another issues which prevailing in the metal industry. It should have proper quality and specification. Where, the industry must avail necessary material according to the customer specific requirements. Generally almost all company providing the necessary materials according to their convenient rather than customer. Hence it is the fact that avoiding the customer requirement and providing unsatisfied service. Therefore it should have a proper strategy to focus on its customer requirement and to achieve its business goal. Selection of a preferred strategy among the many possible strategies The strategy can be say as it is a tactics or plan designed to achieve the goal. It may contain several methods and actions to achieve the objectives. In business world every corporate entity has its own unique business strategy. It may be the uniqueness in production, Product, cost and service. The greater differentiation will lead to the growth of market share and they can come up with uniqueness to the market, which may have higher cost advantage to the customer as well as the business. Here the company adopted most appropriate method or system to get higher level of cost advantage. Initially the company had followed some traditional method in its operation, but later it applied the modern technology in its manufacturing plant. For example in Tubing production, it got higher cost advantage and the metal strength significantly improved. While rising oil price helped to the company to find best method and technology in the plant. Under its future strategy, the company took better decision to acquire neither 40 % stake in nor steel. By this acquisition they could revamp their process in material and technical field. However it promises of significant cost reduction over Vellore's business strategy. However in the later stage Vellore's offered to take ownership of Nor Steel for a symbolic purchase price. However its efficiency in almost all field increased a lot. Another most strategy adopted by the company is formation of various kinds of program to increase the efficiency is research and development and Marketing up gradation. The result of the program can be shown in the form of its cost effective and Quality in the service. It could solve the quality problem through its strong R&D. However the team work in the industry contribute high share in its enormous success. Concrete plan to implement the strategy The strategic implementation process includes several major constraints like action planning, organization structure, Human resources, business plan, monitoring and controlling etc. However its success is ultimately depends on the management decision towards best strategy implementation. In this case the company adopted best feasible strategy and got succeed in its way. For concern the main strategies like cost advantage, new product in to the market, Acquisition, Technological advancement, Uniqueness in product and service delivery and the team work. By following all these unique strategy the company could become no 1 position in the metal production. Hence I can suggest to the case as the company should focus more towards its customer queries rather than its profit maximization objectives. So that they can expand their market share further in the relative field. Hence I could say that the business cannot exist, until they survive the needs of the customer. Read More