Strategic Goals Within The Automobile Industry Management Essay

Strategic Goals Within The Automobile Industry Management EssayThis Report looks the performance of sign of the zodiac C a donst strategic goals within the automobile industry. We will be looking on how Firm C has used the strategic principles and theories in order to compete with other sixer automobile soakeds in same industry. Basing on the beas of study we can see how Firm C has managed to utilize the resources.Using simulation engineering science over a number of weeks the smart set used market place information to inform schema and monitor performance. In retrospect, as this report concludes, much to a greater extent informed conclusiveness-making processes and cheek would endure assisted in ensuring the performance of the connection and achievement of the mission of Firm C.However through this simulation game, individuals have managed to relate the theory they have learnt in class and apply them in the really field.A companys strategy is managements game plan for gr owing the business, staking out a market position, attracting and pleasing clients, competing successfully, conducting operations, and achieving targeted objectives. (Thompson, Strickland and guess 2005, p 3)As described Thompson, Strickland and Gamble (2005) who explained that for a company to have a sustainable competitive advantages, needs to have a differentiated products with features much(prenominal) as added performance , high quality and wider product choices. This is what Firm C tried to achieve by reducing cost of product so that the set of cars should go down, the reasons for this is to get to a wide range of customers. Therefore, the firm concentrate on the price sensitive category, value seekers, customers with more disposable income and fairly price sensitive customers.Strategy ThinkingOne of Firm Cs strategies was to have a first mover advantage. This can be defined as an administration that moves down the experience curve by getting into a market first should be able to reduce its cost because of the accumulated experience it builds up over its opposes by being first. (Thompson, Strickland and Gamble 2005)Firm C has done this by being one of the first firms to adduce a new image 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 investment decisions.Using market data (consumer and external trading conditions) the company contextualised their strategic decisions by understanding customer needs, available market spend and trends linked to the overall economy, such as affordability and luxury.One key strand to ensuring high performance was focusing the models produced on a essence market, except to provide a number of models. This approach allowed a diversification of products without overstretching the companys range of products. This, in turn, wo uld allow for marketing to focus on the core offerings of the products.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 strategy to offer a return to investors and increase the value of the company without compromising customer perceived valued of the products and brand.Short-Term versus Long Term ConsiderationsAll decision - taken on these six periods was to ensure the company is doing tumesce in car manufacturing industry and keeps on joining customers expectations. This would give a company to have high-octane doing and hence result to profit maximization. The Short-term investment in product development allowed minor upgrades to come to market quicker in resolution to customer demands for safety and quality above luxury. No long-term decisions were taken at the immediate outturn whilst the company assessed the long-term prospects. The long term was tak en when there was a necessary change in what customers prefer and in order to go together with the technology changes.Firm C has one of the highest technology capabilities in terms 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 make Firm C to have competitive advantage over other firms in StratSim world which has set our cars to be safest over all cars.Mission hallucinationMission and vision can be defined asA mission is a worldwide expression of the overall purpose of the organisation, which ideally, is in television channel with the values and expectations of major stakeholders and concerned with the scope and boundaries of the organisation.(Johnson, Scholes and Whittington 2005, p 13)The firms mission is to deliver a long-term high return for investors over the lifetime 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 meaningful whole.(Wilson 2003, p 65)The firms vision is to produce the safest cars for people who want to travel safely.External EnvironmentJohnson, Scholes and Whittington (2005) explain that the growth rate in an industry may affect the degree of competitive ambition in an industry. For example, 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 flash-frozen assets may also increase competition because there is likely to be the persistence 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 was one where companies could grow a significant market share in the early pe riods. 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 decrease 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 sensitivity 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 greater interest in hybrid models as the exercise progressed. Low-end market for gas vehicles remained robust for those with purely a purchase price stipulation 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 meet market demand related to external factors.Internal EnvironmentThe internal env ironment within the company is much easier to maintain a longer-term strategy, as well as making 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) call forth that cost efficiency is determined by a number of cost drivers for example, economies of scale. This was a key consideration in reaching the top 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 paying 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 legion(predicate) a(prenominal) of the key indicators set out in the appendices, Firm C was ind eed 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 whimsical performance. However, a number of internal factors were changed that hindered the product lifecycle, including decreasing the number of dealerships that then prevent the sales of our star products. Additionally, an overproduction of a vehicle coupled with a move towards producing a new type of hybrid vehicle distracted from the core performance resulting in poor sales across the board.As a result of the poor sales, reactive marketing spend was increased to try to attract a formerly strong consumer based. This reduced the investment in explore and development and plant capacity, in turn hitting the bottom line of the company. In effect, it was a rapid downward spiral of performance.This poor performance, slow sales, inefficient manufacturing, loss of market share (through dealership reduction) reduced the overall market value of the company and therefore the attractiveness to shareholders. Irrespective of the strength of the core product, the company allowed itself to become distracted from what was going 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 slouch 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 closely significant cause of the companys failure in these periods.Internal considerations and decision-making chronology are set out in appendix 4.Personal learningThe textbook 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 uncertainty of decisions such as which car will be the best option 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 developing steps 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 worked out a corporate governance method by ripping the responsi bility of decisions between the team members. 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 depth 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(prenominal) 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 little or too many cars being produced. Furthermore, plant capacity was in the beginning stages below 100,000 this increased the unit cost and reduced profits.ConclusionThis report has set out the strategic goals and rationale f or 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 ardor as opposed to a proactive one, for example with the inaccurate inventory control which saw the firm producing too little 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 Value chain were never completely compound into the companys 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, 14th 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) Marketing Management, 12th Edition, New Jersey, Prentice HallStacey, RD. (2000) Strategic Management and Organisational Dynamics, 3rd Edition, Essex, Prentice HallSegal-Horne, S. (2001) The Strategy Reader, Oxford, Blackwell BusinessThorpe R. and Homan G. (2000) Strategic advantage Systems, Essex, Prentice HallWilson, I. (2003) The Subtle Art of Strategy, London, PraegerAppendixFinal ResultsDecision Summary Firm C, for Period 6Technology Capabilities nationalStylingSafety theatrical roleCurr. Expenditure (mill.)$240$330$399$412Product DevelopmentDevC trProjectClass berthSizeHPIntStySafQuaCurrExp1CameoEconomyupgrlaunch Per. 722cxxxv5556$1292CafavFamilyupgrlaunch Per. 7281554354$1243 flopTruckupgrlaunch Per. 7772303654$124Total (mill.)$376Consumer MarketingBudget(mill.)Regional Corp. Adv.$40Direct turn on$3Public Relations$8Total$51Direct Mail TargetsValue Seekers(1), Families(2), Singles(3), High Income(4)Product MarketingVehiclePlatformMSRP principal sumDisc.Adv.(mill.)Adv.ThemePromo.(mill.)CafavNo Change$20,35015.0%$70Safety$60CameoNo Change$13,50018.0%$70Styling$55CrashNo Change$21,59816.0%$65Interior$50Total$205$165Plant CapacityCurrent Capacity (000s)3,050Capacity Change (000s)0Vehicle ProductionVehiclePrevious sales(000s)CurrentInventory(000s)ScheduledProduction(000s)FlexibleProductionRetoolingCosts(mill.)Cafav6600660X$0Cameo6050605X$0Crash4428450X$0Total1,70781,715$0DealershipsNorthSouthEastWestTotalDealer Inc./Dec.00000Training and Support (mill.)$3FinancingAmount($ mill.)Bonds Issued$60Stock Repurchase$50Dividends Paid$ 100Bonds IssuedIssuedAmount(mill.)RateStatusPeriod 4$108.5%callable in 1 yearPeriod 5$609.0%callable in 2 yearsStratSim Indind1 FirmcPeriod 5User gre9313