Strategic Goals Within The Automobile Industry Management Essay

Strategic Goals Within The Automobile Industry Management studyThis Report looks the performance of blind drunk C a nominatest strategic goals within the railway motorcar industry. We will be looking on how staunch C has utilise the strategic principles and theories in order to compete with some other six cable car starchys in same industry. Basing on the argonas of study we can see how unattackable C has managed to utilize the resources.Using simulation technology over a subject of weeks the familiarity utilise tradeplace af libertineation to inform schema and monitor performance. In retrospect, as this report concludes, much more intercommunicate decision- reservation mathematical processes and governance would have assisted in ensuring the performance of the corporation and exertion of the cathexis of solid C.However through this simulation game, individuals have managed to name the theory they have learnt in class and apply them in the really field.A foll ows outline is managements game plan for growing the business, staking out a merchandise position, attracting and pleasing customers, competing successfully, conducting operations, and achieving tar imparted objectives. (Thompson, Strickland and bump 2005, p 3)As described Thompson, Strickland and Gamble (2005) who explained that for a confederacy to have a sustainable competitive advantages, call for to have a unalikeiated products with features such as added performance , last quality and wider product choices. This is what Firm C tried to achieve by reducing cost of production so that the worth of cars should go down, the reasons for this is to get to a wide range of mountains of customers. Therefore, the debauched concentrate on the wrong untoughened category, assess seekers, customers with more disposable income and fairly price sensitive customers.Strategy Thinking unrivalled of Firm Cs strategies was to have a first mover advantage. This can be defined as an sc heme that moves down the develop curve by getting into a market place first should be able to repress its cost because of the accumulated experience it builds up over its stirs by being first. (Thompson, Strickland and Gamble 2005)Firm C has done this by being one of the first firms to produce a new concept car and by being the only firm to focus more on quality and safety.Adopting the Boston Matrix, Kotler and Keller (2006), the company used market feedback to place products in the market into the appropriate categories and used this to inform investiture decisions.Using market data (consumer and external trading conditions) the company contextualised their strategic decisions by understanding customer needs, available market return and trends linked to the overall economy, such as affordability and luxury.One key anchor to ensuring spirited performance was focusing the models produced on a core market, scarce to provide a number of models. This approach allowed a diversif ication of products without overstretching the companys range of products. This, in turn, would allow for marketing to focus on the core moodyerings of the products. through and through focusing on the core market, and limited development of new products, whilst maximizing plant capacity and marketing, it was considered to be part of the long term system to offer a return to investors and increase the value of the company without whippy customer perceived valued of the products and brand.Short-Term versus Long Term Considerations in all decision - contactn on these six periods was to ensure the company is doing intimately in car manufacturing industry and keeps on meeting customers expectations. This would give a company to have efficient production and hence result to profit maximization. The gip-run investment in product development allowed minor upgrades to come to market quicker in response to customer demands for safety and quality supra luxury. No long-term decisions wer e taken at the immediate outturn whilst the company assessed the long-term prospects. The long term was taken when there was a essential change in what customers prefer and in order to go unitedly with the technology changes.Firm C has one of the highest technology capabilities in impairment of interior, quality and styling with the highest technology capability than any other firm in the StratSim world to produce safe cars. This is one reason that has made Firm C to have competitive advantage over other firms in StratSim world which has stack our cars to be safest over all cars.Mission hatfulMission and vision can be defined asA kick is a general expression of the overall purpose of the organisation, which ideally, is in line with the values and expectations of major stakeholders and concerned with the scope and boundaries of the organisation.(Johnson, Scholes and W impingington 2005, p 13)The firms mission is to deliver a long-term high return for investors over the lifesp an of productsVision is an integral part of strategic management and adds value to the process by integrating the products of strategic planning into a coherent and meaty whole.(Wilson 2003, p 65)The firms vision is to produce the safest cars for people who want to travel safely. remote EnvironmentJohnson, Scholes and Whittington (2005) explain that the offset rate in an industry may affect the degree of competitive rivalry in an industry. For slip, in situations of growth an organisation might expect to achieve its own growth through the growth in the market place whereas when markets are mature this has to be achieved by taking market share from competitors. A nonher example is high exit barriers high investment in non transferable fixed assets may also increase competition because there is likely to be the effort of excess capacity.Within this exercise, Firm C benefited from the lower performance of rival companies in the earlier stages. This ensured that the market place w as one where companies could grow a significant market share in the early periods. Following major production years (period 4 and beyond), the market became more competitive with other company output increasing at a time when Firm C were decreasing output and incurring additional costs through utilizing a lower percentage of production capacity without the associated decision to reduce manufacturing capacity.Other factors included general population wealth and market factors (GDP) and the sensibility of oil prices, focusing consumers to look not just at the short term purchasing price of vehicles, but the longer-term running costs. This explains the great disport in hybrid models as the exercise progressed. Low-end market for gas vehicles remained lively for those with purely a purchase price consideration this benefited Firm G in the short term, although longer term investments and a reduction in dealerships as well as manufacturing capacity hindered the companys ability to me et market demand related to external factors.Internal EnvironmentThe inner environment within the company is much easier to maintain a longer-term strategy, as well as devising short-term adjustments to meat company objectives. However, it is the control of the internal factors that proved to be the single weakness in the deliver of the company strategy.Thorpe and Homan (2000) suggest that cost efficiency is determined by a number of cost drivers for example, economies of scale. This was a key consideration in reaching the leave performing market share as low-cost production created value for consumers and permitted a higher volume of unit production sales.In periods 2 4, the company strategy appeared to be remunerateing dividends. Stock value price was attractive to investors in the early stages due to a large dividend pay out and strong sales / production outputs, promising even greater returns as a result of a longer-term strategy and the companys market position.In many of the key indicators set out in the appendices, Firm C was indeed the market leader. This led the company to believe that the existing strategy was correct and to maintain investment in the key areas that were driving performance. However, a number of internal factors were changed that hindered the product lifecycle, including decreasing the number of dealerships that indeed maintain the sales of our star products. Additionally, an overproduction of a vehicle coupled with a move towards producing a new type of hybrid vehicle flurry from the core performance resulting in poor sales across the board.As a result of the poor sales, excited marketing spend was increase to try to attract a formerly strong consumer based. This reduced the investment in research and development and plant capacity, in turn hitting the bottom line of the company. In effect, it was a fast downward handbuild of performance.This poor performance, slow sales, inefficient manufacturing, loss of market share (t hrough dealership reduction) reduced the overall market value of the company and therefore the magnet to shareholders. Irrespective of the strength of the core product, the company allowed itself to become distracted from what was outlet well, onto a short-term reactive stance without out any return.One area not monitored was the percentage return on sales. This would have been a better indictor of the overall health of the company as opposed to market share or sales totals.By periods 5 onward, the company failed to take any meaningful decisions related to market intelligence, and was starting a rapid correct in all key indicators. By period 7, the decline of the company had seen it outperforming rivals to rival companies taking the market share and sales off Firm G, whilst the stock price collapsed. The inactivity, rather than the activity, in decision making was the most significant cause of the companys failure in these periods.Internal considerations and decision-making chron ology are set out in appendix 4.Personal learningThe text edition did provide many very useful theories which made decision making more measurable, for example, the strengths and weaknesses of the SWOT theory. This did not however take out the question of decisions such as which car will be the best survival to produce first, one learned that this can be reconciled by playing it safe as to not produce the Hybrid car first which the firm thought everybody will see as a new opportunity and instead focused on a different car design and see what the strategic moves of the competitors will be and then react to that with a better version car.The purpose and the priorities of the firm was not clearly established from the beginning of the StratSim exercise, this made it difficult to set the firms objectives and develop locomote to achieve objectives in the long term and short term.In retrospect, the corporate governance of the firm was not planned very well. The company should have wor ked out a corporate governance method by splitting the responsibility of decisions between the team parts. For example team member 1 was responsible for the inventory of the firm and team member 2 responsible for the marketing and so forth. This way, a more in skill understanding of the StratSim world would have been the result.In contrast, the time management of the firm was in the beginning stages more managed, but towards the end of the StratSim exercise the cooperation of the firm disappeared, a personal lesson learned was to for future references, to agree on set times when decisions needs to be made.More research should have been done on how the StratSim world works and what requirements were necessary to perform well. For example, the firm did not plan the firm inventory very well, resulting in too atomic or too many cars being produced. Furthermore, plant capacity was in the beginning stages below 100,000 this increased the unit cost and decreased profits. resultThis repo rt has set out the strategic goals and rationale for Firm C this was explained by giving an explanation for the short and long-term goals and decisions that was taken to gain a share in the vehicle manufacturing industry.The performance of Firm C started out healthy but because of poor informed decision-making processes and governance, the performance of Firm C radically declined and resulted in the failure of the firm to realise their mission which was to become one of the biggest car manufacturing firms in the StratSim world.The decisions the firm took reflected a reactive management style as opposed to a proactive one, for example with the inaccurate inventory control which saw the firm producing too forgetful or too many cars and reacting to competitors decisions as appose to developing steps to become the market leaders.Strategic Models that were available for example, the Boston matrix, the product lifecycle and determine chain were never completely integrated into the compa nys decision-making which resulted in uninformed decisions been made, with consequences that resulted in shareholders loosing an interest in the firm and sales spiralling downwards.ReferenceArthur, A., Thompson, Jr., Strickland, A. J. and Gamble, J.E. (2005) Crafting and Executing Strategy, fourteenth Edition, New York, McGraw-Hill IrwinJohnson, G., Scholes, K. and Whittington, R. (2005) Exploring Corporate Strategy, Text and Cases, 7th Edition, Essex, learner HallKotler, P. and Keller, K.L. (2006) market Management, 12th Edition, New Jersey, Prentice HallStacey, RD. (2000) Strategic Management and Organisational Dynamics, third Edition, Essex, Prentice HallSegal-Horne, S. (2001) The Strategy Reader, Oxford, Blackwell BusinessThorpe R. and Homan G. (2000) Strategic Reward Systems, Essex, Prentice HallWilson, I. (2003) The Subtle Art of Strategy, London, PraegerAppendixFinal ResultsDecision compendious Firm C, for Period 6Technology CapabilitiesInteriorStylingSafety attributeCurr. Expenditure (mill.)$240$330$399$412 proceeds DevelopmentDevCtrProjectClassStatussizingHPIntStySafQuaCurrExp1CameoEconomyupgr put up Per. 7221355556$1292CafavFamilyupgrlaunch Per. 7281554354$1243CrashTruckupgrlaunch Per. 7772303654$124 list (mill.)$376Consumer MarketingBudget(mill.)regional Corp. Adv.$40Direct Mail$3Public Relations$8Total$51Direct Mail TargetsValue Seekers(1), Families(2), Singles(3), High Income(4)Product MarketingVehiclePlatformMSRPDealerDisc.Adv.(mill.)Adv.ThemePromo.(mill.)CafavNo mixture$20,35015.0%$70Safety$60CameoNo transform$13,50018.0%$70Styling$55CrashNo Change$21,59816.0%$65Interior$50Total$205$165Plant Capacity up-to-the-minute Capacity (000s)3,050Capacity Change (000s)0Vehicle ProductionVehiclePreviousSales(000s)CurrentInventory(000s)ScheduledProduction(000s)FlexibleProductionRetoolingCosts(mill.)Cafav6600660X$0Cameo6050605X$0Crash4428450X$0Total1,70781,715$0DealershipsNorth randomnessEastWestTotalDealer Inc./Dec.00000Training and Support (mill.)$3Fi nancing substance($ mill.)Bonds Issued$60Stock Repurchase$50Dividends Paid$100Bonds IssuedIssued measurement(mill.)RateStatusPeriod 4$108.5%callable in 1 yearPeriod 5$609.0%callable in 2 yearsStratSim Indind1 FirmcPeriod 5 exploiter gre9313