PPQ Strategic Management - Essay Example

?Problem How will PPQ cope with the increasing competition in automotive industry and improve employee loyalty with its current locationand other locations to establish? Objective: To be one of the top 5 players of the SUV automotive parts industry and increase PPQ’s global presence in the next 5 years, winning loyalty from its customers and employees. Goals: 1. Grow its current number of 5,000 employees to 10,000 employees in 4 years. 2. Increase market share from 5% to 9% in 4 years. 3. Increase current stock price from $10 to $22 per share. 4. Increase employee retention by lowering annual turnover from 28% in the last 3 years to 17% this year. 5. Increase charity from 0.5 of total profits to 5% in 4 years. SWOT Analysis: Strengths 1. Company attends to its corporate social responsibility by doing charity work. 2. PPQ is in par with the industry’s average profit margin for the last 3 years. Weaknesses 1. High employee turnover rate. 2. The market share of 5% is just fair. Opportunities 1. Japan’s increasing need for auto parts industry companies after the tragedy last March 2011. 2. More females are using SUV cars and market share of SUV type is increasing. 3. One of Japan’s road to recovery is to boost employment. Threats 1. There are low cost countries such as India, China, and even Korea that are already competing in this industry that could possibly be one of the leading players in SUV cars in the future. 2. Costs for new facilities that will be built when entering a new location. Alternative Courses of Action/Analysis of PROs and CONs 1. Build new facility in Japan and continue with its operations in US. Advantages: The latest tsunami tragedy that happened in Japan made other existing companies close out and this is an opportunity for PPQ to lead the industry in Japan. Since PPQ attends to its corporate social responsibility, opening a facility in Japan would be an opportunity to provide jobs to families there. PPQ will be able to gain revenue while also helping people have jobs. Japanese employees are most likely to be more cohesive as compared to their existing employees since they are recovering from their recent tragedy encounter. Disadvantages: The industry in Japan is starting up again and so competing globally may somehow be difficult. Continuous operations in US would mean that PPQ has to work on building their loyalty from their employees so as to increase employee turnover. 2. Build new facility in one of the following countries: India, China or Korea where industry is already growing and continue its operations in US. Advantages: There are more buyers in the said countries especially that the SUV industry is heating up in China. Disadvantages: PPQ has to cope up with the existing companies established in any of the said countries. The SUV industry which is growing could also mean that there are several competitors already. Continuous operations in US would mean that PPQ has to work on building their loyalty from their employees so as to increase employee turnover. 3. Focus on opening new facilities in different locations and close its US location since there is very high employee turnover rate already. Advantages: PPQ would no longer need to invest on time, effort and costs on winning their employee loyalty in US region if they will be giving up the said location. Disadvantages: Possible risk will be encountered since PPQ will be investing in a very new location which it has not made operations yet. It will not have another location as a backup or to exchange parts with just in case there is a shortage in the new location. Recommendation It is recommended that PPQ take ACA#1 which is to invest in Japan to pursue on entering the SUV industry of the said country and work on making it grow there. It should also continue with its current location in US right now and decrease its employee turnover rate. The US location has always been PPQ’s home headquarters and so the company knows the business in the region, the market share and average revenue of PPQ in US is coping with the industry and so only employee turnover rate needs to be improved and PPQ would have a stable business in US that would suffice in sustaining the costs that will be incurred initially as the Japan facility will be established. Entering Japan region will help on increasing their market share since the country’s players mostly closed down already and this would be a big opportunity for PPQ to keep the industry alive in the said country and even lead it as it grows in the future. The good image PPQ is showing on helping individuals from the said country have jobs would greatly build the company’s image worldwide which may be a big break for PPQ for its global presence in the next years to come. Action Plan Short Term: 1. Increase employee participation in decision making and encourage inputs to boost employee morale. 2. Increase sales in US by investing on marketing SUV cars and possibly, advertising its plans of building a new facility in Japan. 3. Invest on the new facility to be built in Japan. 4. Continue with its charity work in US and eventually focus on charity in Japan region where help is mostly needed. As a short term charity work, PPQ could provide free trainings to the uneducated people of Japan and soon provide them work in the company. An outreach may be made for the elders. Long Term: 1. Work on a flat organization so that it would be easier for upper management to get inputs from employees and get to know what they feel about the organization. 2. Encourage more investors and stock holders. 3. PPQ could offer jobs even to the females of Japan and not only men for manufacturing. Japan government encourages providing employment to women. Establish sales teams where women may be assigned to. Works Cited Manufacturing in Japan. (n.d.). In wikipedia. Retrieved from http://en.wikipedia.org/wiki/Manufacturing_in_Japan Japan earthquake: Tsunami hits north-east. (11 March 2011). In BBC News. Retrieved from http://www.bbc.co.uk/news/world-asia-pacific-12709598 Eisenstein, P (1 June 2011). The hollowing out of Japan’s auto industry. In MSN. Retrieved from http://today.msnbc.msn.com/id/43222394/ns/today-today_news/t/hollowing-out-japans-auto-industry/ Cremer, A and Reiter, C (22 April 2011). Cars Battle for SUV market share heats up. In China Daily. Retrieved from http://www.chinadaily.com.cn/bizchina/2011-04/22/content_12376087.htm 2011 Article IV Consultation with Japan Concluding Statement of the IMF Mission. (7 June 2011). In International Monetary Fund. Retrieved from http://www.imf.org/external/np/ms/2011/060711.htm Read More