Strategic Management Plan for PPQ Parts Company - Essay Example

? 4-Year Strategic Management Plan for PPQ Parts Company Executive Summary PPQ Parts is a manufacturer of Sport Utility vehicles (SUVs) in the United States with little control of the market share. The company also experience other challenges related to high employee turnover, profitability and expansion of its operations globally. This strategic management plan formulates strategies that would define its best course of action. It defines functional strategies that would be implemented by PPQ Parts in order to realize its 4-year goals. They include employment rebranding strategy, marketing management strategy, strategic alliance and implementation of lean operations. These strategies will enable the company realize better performance and gain competitive advantage in the global market. Introduction A PPQ part is a manufacturing company that deals with the manufacture of Sport Utility Vehicles in the United States with 5000 number of employees and controls 5% of the world market share. The company intends to reorganize its operations beyond the boarders of United States in which the company intends to expand its employee base to 10000. However, the company has experienced high turnover rates of 28% which is above the market average. The company therefore intends to increase its employee retention through reduction of annual turnover from 28% to 17%. PPQ Parts also intends to increase its profit margin from 6% to 13% in 4 years in order to improve its performance in the stock market from the current $10 per share to $22 per share. The company through its corporate values contributes 0.5% of its profits to charity work and would like to raise it to 5% in 4 years time. Strategic Management Plan Employment Rebranding Strategy The ability of PPQ parts to attract and retain customers is one of the big challenges the company faces. Moreover, ability to attract and retain customers in the new global market that the company intends to venture will be even more challenging. According to McLaughlin & Fitzsimmons (1996), attracting and retaining talent is becoming the main competitive differentiator for companies around the world. While PPQ parts intend to cast a wider net across the globe, it will be imperative for the top management of the company to manage its internal HR systems. Employment branding is therefore the best approach that will guarantee long term talent development and retention thus reducing employee turnover (Kuruvilla, 2008). Major Goal: To increase employee retention by lowering annual turnover from 28% to 17% while increasing the number of employees from 5000 to 10000. Objective: Reduce the annual employee turnover from 28% to 17% through implementation of key HR strategies necessary to motivate employees and improve performance. Responsible Parties: PPQ Parts Board, and Senior Management staff Key Strategies: 1. Training and career development by coming up with a career development plan that will include systems for assessing employee performance and recommendation of training needs. 2. Performance Management by developing employee appraisal system that would keep employees focused to organizational direction and ensures employees are involved in the process of decision making with respect to training needs and career development. 3. Developing a HR function through implementing logical connections, that connects the renewal and integration capabilities, practical interventions and dynamic behaviors. 4. Develop HR operational procedures and enhance communication system within the organization. 5. Conduct a survey on the areas of employees’ satisfaction and implement the recommendations. Expected Outcomes: Increased employee referrals, retention rates improve, enhance employee motivation, develop a stronger corporate culture, reduce corporate negatives, ammunition for employees and managers and gain a competitive advantage Timeline: Implementation of these strategies is expected to take 6 months followed by evaluation process and finally addressing the challenges thus full implementation in two years. Marketing Management Strategy PPQ Parts control a small global market share of 5% thus identifies trading cross boarders as an opportunity to increase its market share. Competition dynamics in the global market present a challenge that requires planned strategies before venturing into the market (Miemczyk & Howard, 2008). Analysis of competitor actions is important in developing effective marketing plans to react to rivals’ activities in the global market. By implimenting its marketing management plan, PPQ parts would be able to increase its market penetration both locally and internationally. Major goal: Increase PPQ Parts market share from the current 5% to 9% while promoting lean operations in the global market. Objective: To construct greater beneficial relations by formulation and executing strategies that controls the product distribution, pricing and supply chain management in order to increase organizations revenue. Responsible Parties: PPQ Parts board, Marketing managers and line managers. Key Strategies: 1. Developing Strategic Alliances with complimentary companies that will provide expertise and contacts in order to fill the gap in company’s global operations in the short run. 2. Develop and implement a comprehensive marketing plan that would include global market segmentation, product positioning, promotion, advertisement and other marketing strategies. 3. Conduct a market research in the prospective global markets and use analytical tools to identify potential and viable markets for the organizations’ products. 4. Analyze political, economic, cultural, social and the legal environments of the viable global markets by identifying obstacles to smooth operations in certain markets Expected outcomes: Enhanced competitive advantage, increased availability of markets, lean supply chain management, effective distribution logistics, effective management of global competitive and technological dynamics Timeline: 2-3 years Lean Operations Management The easiest and cheapest way to increase profitability in an organization is to reduce costs (Appa, 2006). Costs can be reduced overwhelmingly by controlling wastes in all points of production. Lean operations are based on the principle of waste elimination by ensuring that products are produced and distributed at the right time and quality. In the SWOT analysis of PPQ parts, profitability was considered as one of the areas that need improvement. With the implementation of a comprehensive marketing management strategy that would increase sales turnover, the company must also focus on possible areas of waste reduction in order to reduce costs. This is the only way that the company would be able to increase its profitability, stock price and increase its charity through corporate social responsibility. Major goal: The main goal of this strategy is to increase PPQ Parts profitability from 6% to 13% thus increases company value and consequent stocks price from the current $10 per share to $22 a share. Objective: Reduce cost of doing business by reduction of wastes at all stages and process of production Responsible parties: PPQ Parts Board, Operations Managers, Line managers, Senior Management Staff. Key Strategies: 1. Develop effective measurements to monitor PPQ Parts’ business system that includes cost, quality and processes. 2. Integration of the non manufacturing functions of the organization in order to streamline value stream thus detect and manage non conformities proactively. 3. Realign the management system, leadership culture by providing infrastructure necessary for the implementation of effective practices. 4. Integration of the production system by systematic implementation of quality management system in order to achieve high quality results at lower costs. 5. Provide systems to effectively measure customers’ satisfaction and provide feedbacks necessary for continual improvement. Expectations: Reduced inventory levels, better productivity, improved quality of finished products, increased throughput, low cost of manufacturing better delivery performance and improved value chain management. Time line: 1-2 years. Conclusions The rapidly changing dynamics in the global marketing and supply chain management entails many challenges and opportunities. It is therefore imperative to note that such challenges and opportunities demands for organization to retain their core values while embracing effective and innovative strategies that change challenges into opportunities and exploiting the available opportunities as well. In light of this state of affairs, this strategic management plan outlines the next plan of action for PPQ parts. Employment branding strategy is necessary to reorganize its HR processes thus result into high talent retention. Effective marketing management will not only increase market share but also direct its global strategies, improve profits and increase sales revenue. In the short run, this plan proposes implementation of lean operations strategy necessary to cut costs thus improve profitability. These strategies would therefore help the company gain competitive edge, increase profitability, stock prices and its improve corporate social responsibility from 0.5% to 5%. Reference Appa, R. K. (2006). Globalization, social development, and operations research: An exploration of strategies for success. Annals of Operations Research, 143(1), 21-30. Kuruvilla, S. (2008). National industrialization strategies and their influence on patterns of HR practices. Human Resource Management Journal, 16(3), 22-41. McLaughlin, C. P., & Fitzsimmons, J. A. (1996). Strategies for globalizing service operations. International Journal of Service Industry Management, 7(4), 43-57. Retrieved from http://search.proquest.com/docview/233655175?accountid=45049 Miemczyk, J., & Howard, M. (2008). Supply strategies for build-to-order: Managing global auto operations. Supply Chain Management, 13(1), 3-8. Read More