Morgan Motor Company - Case Study Example

Strategic Report Executive Summary Henry Frederick Stanley Morgan (H.F.S) , W.O. Bently and Henry Royce are talented men who venture into the business of motor vehicle industrial in early 1900s after leaving school (Miller, 2004). In 1930 when there was worldwide depression in the market W.O. Bently was forced to sell his business to his competitor Henry Royce. The Bently and Rolls-Royce were universal symbols of superiority and wealth. Butin 1960 Rolls-Royce got broke and was distributed up at the government power. Stanley Morgan (H.F.S) is the only company that still surviving and function with same plant services; it has working with since 1919.In 1992 there was ten year order of potential customer waiting list for delivery of a “mog” as Morgan had a great brand image to the potential customer as a genuine sport car. Though it had some fault, it has also some strength and prospects created by its own and others (Miller, 2004). The Morgan Company still stands with its well organized strategy management and choice from then to now. Today in the international market it competes with strong competitors such as Ford. Strategic Analysis In hundred years of involvement in business, Morgan Company faced a lot of challenges and obstacles (Miller, 2004). The Morgan Company has always been a hand manufactured car brand and this why its potential buyer love it. From 1908 to date the Morgan Company manufactured a lot of automobile that made a different type of desire among its customers. Today the Morgan company cars have the best engines performance, environmental friendly and efficient and people love to drive it with passion (Miller, 2004). From the beginning The Morgan Company tried to maintain its business to capture this niche to get to the competitive superiority but now it’s the only competitor of its own. The Morgan company production process is to slower, it may manufacture around six hundred cars annually in this current condition using the same plant since the opening (Miller, 2004). But as an alternative of having thirty to forty percent of labor cost of manufacturing, though in contrast to other car producers, it is too expensive, but the Morgan Car Company services its car at the lowest cost among the European car manufactures. This is one of the benefits of keeping the philosophy of the company. Though the plant automation is costly, but they are trying to adjust their plan. In this will be helpful although the company’s backlog is its waiting list and it is an opportunity for the company although in future the Morgan Company will be faced with a huge penalty in positioning. Customers are very devoted to the company’s motor brands and this is the reason why they are willing to wait even for ten years to get their car delivered since the cars are customized suit their personal needs (Miller, 2004). At times customers cancel their order thus presenting an opportunity for the company to sell the unique cars to other customers. In this era people want everything right present whenever they order it. Other motor companies compete with Morgan motors to fill in the gap of long waiting lists. Other motor companies like Nissan, Toyota and Mazda are competing with Morgan Motors thus posing a great threat to the Morgan’s although their target market is very narrow and they have a limited niche. Strategically it is very risky to do a business that targets a single niche and this is the reason why the company is trying its best to make its business a form of concentric expansion. The company has launched some sports gears and are already manufacturing branded sports watches named Hublot (Miller, 2004). In the report below I have discussed the company’s competitive analysis using the S.W.O.T tool and offered some recommendations of how it can improve the way it does its business. Introduction Strategic management is a continuous process which assesses and manages the business in which the firm is involved; evaluates its opponents and sets objectives and strategies to meet current and potential competitors; and then reexamines each tactic after a certain period or regularly so as to decide how it has been executed and if it has prospered or needs to be replaced with another strategy so as to accomplish changed surroundings, current technology, new competitors, a new economic settings ., or a new societal, or political surroundings. Company Background The Morgan motor Company was begun as a family company and is still the same throughout the years. Normally, due to high demand, decision making were invented on production quotas which kept supply slightly low. Even if the company made a profit, there was rise in costs due to poor method of production this made the company unable to sustain itself in the future. The main area of development was strategic planning based on comprehensive and correct information. There was need to assess the human resource management performance and also the implementation of the strategic plan in order for (MMC) to grow into a business that value constant innovation. The introduction of the SWOT analysis in Morgan motor company it enable to gain valuable information about its environment which could be used to update strategic planning decisions. The Morgan motor company MMC survived tough situation for example the Second World War and prove its ability to spread through the manufacture of the weaponries’. Also there was international demand for their distinguished products. The demand for national and international for their product lead to appeal enlargement of its worldwide customer’s area. But the Morgan motor company possible threat was general environment, political and economic and legal factors in a country that could affect the company sales as the event in 1960s when there was collapse in the US market due to harsh emission control regulation. In the case like this or change in environment, the domestic demands need to captivate its effect and emphasized the importance of keeping various customers so as to protect the company for any possible threat. Problems faced by Morgan Motor Company Low production capacity The Morgan Motor Company produces nine cars per week instead of the required ten cars per week yet they have in the industry of producing cars for 30 years. The cause of this low production is due to the unwilling workforce who wants to stick to their old ways of producing cars. The company has enough man power required to produce the ten cars per week (Morgan, Charles, and Gregory 2012). Backlog in orders. Morgan Motor Company has a long waiting list for their customers. The long waiting list makes some of their customer reluctant to buy their cars. It can take four to five years to have a car delivered to them. The company takes long causing the customers in the waiting list to leave their services. Long time for training Employees Before an employee starts working for Morgan Motor Company he has to be trained for four years before starting the manufacturing of cars. This long period of training derails the production process. The company is not willing to invest heavily on the production (Morgan, Charles, and Gregory 2012). The product market mission Morgan motors is a unique car company since they manufacture handmade and ash framed vehicles(Morgan, Charles, and Gregory 2012).The company does not have many customers as compared to other car manufacturing companies who have big market niche. They also have a small output as compared to other car brands. Morgan Motor Company is a unique in that it does not try to change their cars to look like the modern cars. To make their customers have a sense of belonging. They engage them in the Morgan Motors club where they get a chance to participate in meetings and car races. These social gathering in the sports club create a very strong bond between the company and its customers and they a get a sense of identity. Owners of Morgan cars are also represented in the club thus creating strong customer relationships. Members of the club feel appreciated since they are given a chance to air their opinions on how the car brands can be improved. In terms of technology the company is keeping up with the latest technology by manufacturing the latest electric cars (Morgan, Charles, and Gregory 2012). They also ensure that their car models comply with the latest EU legislation concerning engine emissions and crash safety standards. In order to survive in the car manufacturing industry Morgan Motors have maintained a strong relationship with their partners Ford and BMW. Target Market Most of the people who purchase the Morgan motors are customers who like traditional cars which have sporty feel and performance that needs real driving. The normal clients are from the age of forty six years old with a discretional disposable income. The Morgan motors occupies thirty percent of the British market (Morgan, Charles, and Gregory 2012).Also women who are considered rich in their own right purchase the cars as an extra car to suit their lifestyles of their own choice. The Aero 8 car is built to meet the needs of this customer segment. In North America the number of Morgan cars distributors has increased in the past years, women occupying 39% of the people who own the Morgan cars. Morgan customers are not terribly rich and the car shows an exceptional value for their money (Morgan, Charles, and Gregory 2012). Competitive analysis S.W.O.T Analysis Strengths: Unique niche markets concentration: Morgan Motor Company only concentrates on a niche market. It manufactures sports cars and has a restricted supply. Low cost of production: The cost of manufacturing is not automated thus the cost of production is low. All the processes in the factory are carried out by hand. Customized cars: The Morgan Company produces the cars based on the customer specifications and wants. Customers have the freedom to choose different colors and the kind of stereo system they want in their cars. Customers are given a chance to inspect their car as it is being manufactured in the factory thus giving them a sense of belonging. High gas mileage: Despite the Morgan cars having engines with fuel injection, pollution control devices and electronic ignition the cars have high gas mileage (Morgan, Charles, and Gregory 2012). Only primitive car make: Morgan Company is the only company in the world market that still produces old school cars as from 1919 using the same production process they used during the 1919(Morgan, Charles, and Gregory 2012). As compared to other car manufacturing companies which have changed their cars design and the producing the cars. The design of cars produced by Morgan Motors makes their cars stand out since they are unique. Strong survival mentality: Morgan Motors possesses a very strong survival mentality. This is evident we can see that the company that the company has been faced with different situations that have threatened its survival. To overcome these situations the company introduced new dynamic models such as the electric car. The continuity of the company makes it stand out as compared to other motor manufacturing companies. Weaknesses: Poor factory production: The factory production processes are not automated and everything is done by hand. This slows down the production of cars leading to the long waiting lists of customers which in turn can lead to customers being reluctant to buy the Morgan cars. Lack of reliable labor: In cases where some laborers fail to show up the manufacturing works remain unfinished thus it causes longer waiting time for the car to be delivered to a customer. Also some of the workers are reluctant to work hard in the company thus producing fewer cars in a week which can affect the company sales and its relation with its customers. Unwilling to accept change: The management team at the Morgan motor company is reluctant to change since they believe that changing the way they produce their cars will damage the company. They assume that most of their customers are patient and willing to wait for their cars to be manufactured. The company has a visual based stock management system which makes it so hard for their customers to place orders and unpredictable. Opportunities The longer waiting list which are due to the longer production time. These long waiting periods can be expressed in such a way that the company is making the car with the proper needed care and by adding more value to it. The Market development is promising and this evident by the long waiting lists. The company also has forty two dealers countrywide. In United Kingdom alone there are 19, Western Europe there are 17 (Morgan, Charles, and Gregory 2012). The company should concentrate on producing sports cars which have high reputation and are expensive so that they can increase their profit margin. Threats The long waiting lists might lead to customers cancelling their order. Some customers have to wait for even ten years for a car to be delivered while others had to sell their cars to a third party at a profit. Morgan Company highly depends on supply chain management. To assemble their cars the Morgan Company heavily relies on different suppliers to buy the parts for assembling the cars(Morgan, Charles, and Gregory 2012). An example is that Morgan Company buys engines from Ford Company. This means that if Ford decides to discontinue its business, the Morgan Company will be threatened. S.W.O.T Analysis External Factors External Factors Opportunities Threats Consumer/social Stability of the future market is highly predictable Low priced products may evident that the quality of the products is quite low Competitive Differentiated cars and prices make the Company to be quite unique in the market Products of high technology are being presented into the marketplace by other competitive firms. Technological Break-through in technological changes is a better course for the Company to advance on the quality of its cars. Economic Increased customer income has made it suitable for the Firm to penetrate into the market People opting for other products since they have enough disposable salary Legal/Regulatory Regulatory procedures ensuring fairness in the market place to prevent over-exploitation by other opponents. Competitive Positioning/differentiation Morgan’s Vehicle Company competes in a niche market for luxury vehicles. Their price range is relatively reasonable since the cars they produce are environmental friendly and out-competes their competitors based on the cars environmental performance. According to Morgan their vehicles are built to last as compared to others which are built to price. Porter’s Competitive Strategic Model Porter’s strategic framework establishes a major contribution to the creation of a strategic management literature. According to Porter, a business can be prosperous if it accomplishes the generic competitive tactics which are; cost leadership, differentiation in a larger marketplace or a concentration tactic in a narrow market, which helps produce competitive advantage. Morgan motors achieves its competitive advantage by using a focused differentiation tactic. However, its market segment is small. The company is always able to keep away from any competition from other large car manufacturers because of its unique hand-crafted car models. The automobile plant makes its cars without any automation thus we can see that Morgan Motor company competes on differentiation strategy in a small market rather than differentiation focus tactic on a large market. Another competitive strategy is that the company makes cars that are environmental friendly thus giving it a genuine edge in this age where most researchers are discussing about a sustainable automotive industry. Marketing Goals and Objectives Morgan motors have stayed in the industry of manufacturing cars for long thus they have a great advantage in meeting industry growth. The number of people in need of vehicles is constantly increasing, thus creating a bigger marketplace for Morgan motors. There is perceived significance of having a car because of increased travelling needs in today’s world is constantly increasing as well. The Morgan Motors company keeps making quality and uniquecars and make it a law not to compromise on this, and not to concede to its competitors’ pressure and increase their prices then customers will remain loyal to the company. Strategies for Future Development For the Morgan Motor Company to grow its business it has to diversify its manufacturing process. This diversification can be achieved by using new technologies that will shorten the long waiting lists. They can also implement ordering systems that their customers prefer since the customer needs come first. Since the Morgan Motors have a launched new sports car by the name Hublot which is popular in the European market, they can organize for sports events where they can advertise their cars. They can also sponsor sporting events such as car races and safari rally where they can make their brand known to the public. Most people will love their sports car especially the young thus the company should create an interest of the car in them. Morgan motors can also strengthen their brand by using the media to advertise their cars are unique in terms of performance as compared to others. The company can also organize campaigns on importance of road safety and safe driving. By doing this the public will recognize them and will change their perception towards their cars. References Morgan, Charles, and Gregory H. Bowden. Morgan 100 Years: The Official History of the World's Greatest Sports Car. London: Michael O'Mara, 2012. Print. Morgan, Charles, and Gregory H. Bowden. Morgan 100 Years: The Official History of the World's Greatest Sports Car. London: Michael O'Mara Books, 2012. Print. Miller, Peter. Morgan Three-Wheeler. Ramsbury: Crowood, 2004. Print. Harvey-Jones, John, and Anne Laking. Morgan Motor Car Company. London: BBC, 1990. Cravens, David W. Strategic Marketing. Homewood, Ill: R.D. Irwin, 1982. Print. Strategic Marketing. Abington, Oxon: Taylor & Francis Ltd. / Books, n.d. Internet resource. Proctor, Tony. Strategic Marketing: An Introduction. London: Routledge, 2000. Internet resource. Brady, Erica, David W. Cravens, David A. Maister, J P. Peter, Arthur A. Thompson, and Orville C. Walker. Strategic Marketing. North Ryde, NSW: McGraw-Hill Custom Publishing, 2007. Print. Read More