Morgan Car Company Case Study: A Detailed Analysis
Task: Provide a short note on the Morgan car company case study.
It was after the industrial revolution in the later stage of the 19th century that the area of the automobile industry has witnessed a rapid evolution. The science and technology wing of the automobile engineering has contributed a lot to the area of industries and its development. The sales of the automobile is a vast market and is spread all over the world, though the major manufacturers are limited to only a small number of companies. The instance of the Morgan car company case study is being taken into account in this report to discuss the strategies drafted to secure the marketing position, future development, culture of the company, and competitiveness.
Background of the Company
The company of Morgan Motor Company has been established in the soil of England in the year of 1909. The organization still comes under the classification of a family business and is being exclusively controlled and owned by the Morgan family. Though it is a very interesting fact that in the hundred years of its existence, the company was only headed by three members of the Morgan family. Nevertheless being the forerunner in manufacturing area of four-wheelers, the company was only able to introduce the sports cars in the later period of 1936. The products of the Morgan company still provide the models which retains the traditional style along with which a customized form of steel chassis is used. Such models could be customized by the aluminum-made ash-colored body frames which resembles modern drive trains provided by the Ford company. The sole aim of customizing the product is to provide the customer with the genuine experience of riding a classic and premium vehicle.
If looked back to the history of the Morgan company, the first model defined under the genre of the modern vehicle named as the Morgan Aero was introduced in the year of 2001. The body weight of the new model was very low because of the use of aluminum chassis and hence was considered to be one of the brilliant British racing cars with stunning road presence. The use of Britain’s high quality aluminum chassis along with the high-end technology makes the model an overall efficient vehicle for the customers. Along with the advantage that the vehicle is a very light weighted one, the inclusion of the BMW 4.4 V8 engine adds the factor of immense power to it. The model of Aero 8 delivered by the Morgan company could be considered one of the most competent car models in the global market for traditional cars.
Marketing Mission for the product
Unlike other ordinary car manufacturing companies which are operating in the global platform, the company of Morgan is considered to be a unique automobile manufacturing brand. The major characteristic of the company is to provide hand made and customized cars ash frames to the customers. Though it should be understood that the magnitude of the Morgan’s customer base is very small as compared to other global car manufacturers. The efficiency of the manufacturing units of the company is also very low as compared to its competitors. The company has not changed its business processes or altered any models as the current competitors have done and the same parameter has earned the Morgan brand a unique position in the market. If the company management would decide it blindly to follow the market trends then the products would lose its brand value. Though from the above-provided discussion, the reader should not perceive it that the organization is hesitant in adopting modern technologies and hence is abiding with the obsolete technologies. In the course of time, the models of the Morgan brand have displayed a very substantial progress in their products. The priorities of the company are very sorted and hence they have no intention to compete with the products delivered by other rival companies. The aggravated production of modern car models would attract rivalry from the major car manufacturers in the global market. The major strategy of the company is to sustain its mediocre rank in the market and the same strategy has been effective in avoiding unwanted competition from other companies. The morgan car company case study could be utilized by the readers under the major ideology or approach behind the project market mission of the company. Please refer to the detailed discussion provided in the below section of this morgan car company case study.
Porter’s Generic Strategy
As per the observations made by Porter in the year of 1980 and 1985, the major issues encountered by the company is regarding the selected methodology and approaches on how to conduct efficient marketing plans and how to increase the potential scope of the products delivered by the company. The strategies of the company are majorly focused to gain the highest profit from the current situation in the market (Pearson 1999). The three factors which are:- focus, cost leadership, and differentiation are the three crucial factors that would help the company to gain a cutting edge over all other similar organizations in the same marketing platform.
The usual and comparatively safer markets are being targeted by the companies if the focus strategies are being implied by the company. To imply this strategy effectively, the potential factors in the market which have the ability to affect the business are being identified by the company. These factors include the major requirements and expectations of the customers, uniqueness, and the cost of the product.
The brand of Morgan Motors could be classified under the tag of differentiation focus if considered under the background of Porter's generic. This is because of the high prices allocated to the models delivered by the company. As mentioned in the above section of this Morgan car company case study, the products of the company are both premium and high costed at the same time. If the market in which the companies which deliver handmade automobiles is taken into consideration, the company of Morgan could be placed at the zenith because of its high brand value and reliability. It is only a particular section of the consumer base that the company is focussing upon, unlike other companies which would focus on every corner of the market.
Apart from the factors of differentiation and cost leadership, it is the crucial element or the important resources of the company which could make the highest impact on the business as per the opinion of Parnell. Parnell has stated it on multiple occasions that the significance of the valuable resources is much higher than that of other factors, which should be taken seriously by all the companies. The competitive advantage or the cutting edge over the rivals could obviously be obtained by the company if they could develop resources that are very unique, valuable, and inimitable, consequentially entailing the products of the company with a very strong value proposition (Parnell, 2006). The approach described by Parnell is very suitable for the company of Morgan since it possesses a very wide range of unique and wide resources. The below section of this Morgan car company case study would provide the details regarding the tracking down of inimitable and valuable resources.
To analyze the current situation of the company in the operating market by considering the background of cost or differentiation advantages, the use of tools like strategy clock could be done by the management team of the company (Bowman & Faulkner, 1996).
Both the approaches of the focused differentiation and liberal differentiation are being implied in a very amalgamated manner under the generic strategy model. The approach of the focused differentiation is being applied in Porter’s Generic Strategy as mentioned in the above section of this Morgan car company case study. The value perceived by the loyal customers of the company of the Morgan Brand is much higher and the actual area of customers is much smaller than the competitive companies.
The background of competitive strategy could be described well from behalf of both the available resources and the operative market by the effective implementation of Strategy Cube (Jenkins, 2004).
In the below section of this report, a customized framework
- The comparative or relative cost of the product from the perspective of the producer.
- The level of product benefits perceived by the consumers.
- The relative price of the product from the perspective of the customer.
Taking the context where strategy clock and porters generic strategy is being compared with the tool of Cube, it could be observed that the point designated as A are very alike with that of the Differentiation Focus. In simpler words, it could be stated that the factor of higher price, high business benefits, and the operational benefit of working in the business would be assigned to the brands which are being positioned at this point. Apart from point A, point E would signify the element of Cost Focus as mentioned in the Porters generic strategy, though there are some similar aspects of both the position 1 and position 2. If taken into account the Morgan car company case study, it could be detected that the brand is positioned at point A. This is because the company retains the character of high price, high cost, low market niche, and high perceived benefits.
To understand the culture followed in the selected working environment of the company, the use of cultural web could be done. By the means of the cultural web, closely related six factors could be used to analyze the factor of paradigm as mentioned by Johnson and Scholes. By the term paradigm, the model followed in the working environment is being signified. If each of the factors would be taken into consideration by the management for analysis, a wider outlook of the culture followed in the company could be understood. The analysis would help in focussing on the elements which requires further improvement. The six factors are listed down in the below section.
- Control Systems
- Rituals and Routines
- Power Structures
- Organizational Structure
As mentioned in the initial section of this Morgan car company case study, the company was being owned by the Morgan family from even the very initial stage of its establishment. In the present scenario, the company retains a human resource with a magnitude of around 150 employees. All the employees are allowed to communicate their concerns in a very amiable way before the higher authorities and to facillitate the perfect platform for it, the managers enjoy their tea break along with the employees. The presence of highly skilled laborers would impact on the overall productivity of the company. The company has not changed its headquarters or units of manufacturing since its inception and hence most of the employees are working in the company for decades. The employees of the company are closely related to the Morgan family and hence have a strong loyalty towards the company. Hence the working environment of the company has a very monotonous culture, which makes it much different and unique from other companies.
Various activities and resources retained by the company
Value chain analyses: As per the statement of Porter in the year 1990, a value chain framework is several systems that are interdependent from each other though they have a strong presence of network in between them. If the factor of high communication is being utilized by the company then it is quite evident that they would gain a cutting edge against their competitors (Pathania – Jain, 2001). The whole business processes are divided under the classification of support and primary activities when the process of value chain analysis is conducted.
In the below section of this report, the concepts of primary and secondary activities are described. Let us have a detailed look at it.
Primary Activities: As per the opinion of Porter, the below factors come under the factor of Primary activities
- Inbound Logistics: All the processes which involve the incoming from suppliers, storage of all such incoming factors, and the subsequent management of them could be brought under the category of inbound logistics. The company of Morgan is delivering the units in which premium quality raw materials are used. Over time, the company has made major improvements to their models. The company has also taken the decision of including the BMW engines in their vehicles to increase the overall performance and quality of the model.
- Operations: All the services and productions which are involved in the manufacturing process of the product could be classified under the category of operations. All the product units in the company via handmade process using the ash frame. The same factor makes the Morgan company a unique and valuable brand among the customers. The manufacturing time for the Morgan branded cars are much higher than that of the customers, though the customer base is not at all affected by it and hence are ready to wait any period for its products. The company also provides the provision to customize the products as per the individual demand of the customers.
- Outbound Logistics: The process which comprises all the processes ranging from the output of products from the manufacturing units to that of the distribution of each unit to the hands of each customers comes under this category. The manufacturing process of the company is very slow which is already described in the above section of this Morgan car company case study. If looked at the average time taken to complete a single unit, it would lengthen from 6 months to two years as per the demands of the individual customers. Though the business of the company is widespread all over the world, its manufacturing unit is established in the same place from its time of inception. This factor would make the process much clearer and more transparent before its customers.
- Marketing and Sales: In this phase of the business process, the major trend in the market, and more obviously the requirement and the expectation of the customers are taken into account. The campaigns of the company regarding spreading the awareness and consciousness regarding the product is stressed upon to augment the sales and consecutively the overall turnover of the company. The majority of customers on the global platform may be still unaware of the products of Morgan. Though a specific section of the customer base is fond f the Morgan products and are ready to wait any period to obtain the customized products. The same characteristics make the company a unique brand in the global market. The demand rate of the Morgan products always remains high in the market since the supply rate is much lower than that of the demand rate.
- Service: Every company should sustain the after-sales service so that the loyalty of the customers could be sustained and further sales and profit could be sustained from them. The service department of the company deals with both the pre-sales and after-sales aspects.
The processes involved in the support activities are mentioned in the below section of this Morgan car company case study.
- Procurement: It is in this phase of the support process that all the required elements to conduct the daily operation of the company are gathered.
- Human Resource Management: The department of human resource management would majorly deal with the activities of recruiting efficient candidates, providing them with proper training, and conducting motivational programs to sustain the efficiency of the employees. Since most of the manufacturing process is conducted in manual way, the employees with extraordinary skills are required in the Morgan car company. On a timely basis, the human resource department of the Morgan company conducts a training program to increase the efficiency of the employees. It is being described in the earlier section of this Morgan car company case study that the magnitude of the employees retained by the company sums up to around 150 and each one of them is in a strong relationship with each other.
- Technology Development: The aspect of technology development would majorly focus on the innovative move towards the derivation of modern technologies along with absorbing crucial knowledge and training convention to sustain in the global platform. There have been strong measures taken by the company to augment the quality of technologies and products delivered by the company. The decision of including the BMW engine in the model Aero 8 was a game-changing move and has helped the company to improve the quality of its products to another level. The factors of both speed and comfort were assimilated in the same vehicle by this decision.
- Firm Infrastructure: The processes of the company which comes under the genre of drafting the corporate strategy, finance, and the procedures in accounting are majorly considered as the factors of Planning and control systems and plays a very crucial role in the context of firm infrastructure (Lynch, 2003).It is by analyzing the competitive ability of the company that the value chain of the company is evaluated to its core (Macmillan et al, 2003).
The major ideology that the zenith of competitive advantage could majorly be attained by the appropriate allocation and sorting down of the available resources to the market where improvement is needed, is the core of resource-based view theory. The parameters which come under the category of company resources are customized capabilities, skills, and assets. The resource available for the company could only provide them with a cutting edge against the rivals in the operating market if they are of premium quality, not accessible to everyone, its absence could be alleviated by any substitute factor, and is very hard to imitate (Barney, 1991). If taken the context provided in the Morgan car company case study, its resources come under the category of a premium, rare and hard to attain class. The parameter of quality is being very strictly scrutinized by the company and to satisfy the same, the parts with premium quality are used in the manufacturing process of the vehicles. The company has always taken care to build its four-wheeler units by using steel chassis and ash frames. It could be observed that even in the new model of Aero 8 that use of ash frame is done. The use of the ash frame would provide the vehicle with the benefit of extra strength and high flexibility or room to include the related pieces of machinery. While conducting the impact test in the phase of research and development it has been observed that the use of ash frame has increased the safety and strength of the company. The company provides a wide range of colors and textures for its vehicles which sum up to around 50,000 varieties. It is by the amalgamation of various factors that the brand of Morgan car manufacturers has made the image of a unique brand in the global platform. The cars of Morgan company are much different in even its outlook from the cars of other companies which look almost alike. The handworks and all the personal and individual effort made by the workers of the company would display on the aesthetics and quality of the vehicle produced by the Morgan company. It is the interior section of the cars which displays the high premium quality in itself and draw the consumers from the global platform who are in search of automobile comfort. The company would majorly focus on providing high satisfaction to its customers by customizing the Morgan products as per the demand and requirement of the respective buyers. The assembling process of the company is done itself in the hour said to be the company premises and the quality of each unit is certified and ascertained by the higher authority. These characters could not be countered or imitated by the competitors on the global platform.
It is being discussed in the earlier section of this Morgan car company case study that whatever the company possess and retains with itself could be considered as its resources and by its analysis, the identification of factors could be done which provides the company an image of unique brand. It is also mentioned earlier that the resources possessed by the company would be counterproductive for the company only if it will be in a well-organized manner, much valuable to the context of the respective organization, very hard to be accessed and imitated by others, and very rare in occurrence.
- The collection of colors made available.
- The factor of uniqueness assimilated.
- The character of limited editions.
- Retaining highly skilled labors.
- Design of the product
- The rare materials used in the products
- The craft skill of the labors.
- The reputation and goodwill possessed by the company in the operational market.
- Use of Ash tree.
- Brand name or the specific logo of the company.
- The strategies utilized in the tea breaks by the higher officials.
- The amiable working environment made available by the company to its workers.
- The mode of drafting the strategies.
- The availability of skilled workers.
Competitive background concerning the Morgan car company case study
The basic necessity or the need to generate the cutting edge over the competitors by relying on the available or restricted investment as compared to the ordinary output delivered by the normal companies paved the way for major theories and ideologies which were developed by the scholars in the era of 1980s (Thurlby, 1998).
In the year of 1998, Porter had put forward the model of original competitive forces and as per this ideology, the major five forces were recognized which could augment the performance of a company in the operative market. The five forces are described in the below section of this Morgan car company case study. Let us have a detailed outlook on it.
- The availability of any substitute product and the threat caused by it in the organizational market.
- The influence of the impact of the suppliers over the operational market and the relevant business.
- The ability or the power of customers makes a significant impact on the market.
- The level of competition or the extent of rivalry existing between the competitors.
- The risk of new entrants in the market and the level to which they could impact on the business of the organization.
If the particular organization would try to analyze all these factors thoroughly, the specific section where the augmentation process is required could be revealed and could be stressed upon for the betterment of the company and its cause (Thurbly, 1998).
- Force 1: The extend of rivalry.
- Force 2: The level of enmity and competition between similar companies.
- Force 3: Threat occurred by the emergence of new substitutes.
- Force 4: The purchasing power of the buyer.
- Force 5: Extend to which the companies could make an impact on the market.
If taken into account the rivalry existing in the global automobile sales market, it could be ascertained that the competition between the companies is very fierce. Though if taken into account the Morgan car company case study it could be observed that the company and its product have a unique image in itself in the global scenario since it provides the customers with customized though very high quality and old fashioned cars. Because of its unique way of operation and manufacturing process there are no relevant or substantial competitors for the company. Hence it could be ascertained from analyzing the Morgan car company case study that the risk of any new entrants in the operational market of the company is very low. The preference or the targeted section of the company is a specific set of demography though the other companies have envisaged themselves in acquiring every possible sections of the global market. No company is well equipped or is able to deliver the handmade cars which have included in itself the aluminum frames along with ash body frame, furnished with old fashioned but classic materials, the fusion of both classic and modern styles, etc. which makes the Morgan brand much preferable to a specific set of customer demography. Though whatever the position of the company is, the entry barrier always exists for a company, since it is very hard for a new entrant to cope up with the new operational environment (Porter, 1980; Sanderson, 1998). The long history of the company in the field of car manufacturing could be traced if referred to the Morgan car company case study. Morgan's company has established itself at a very secure place and it is around impossible for a new entrant to compete and grab the position of Morgan.
Various crucial factors could be analyzed by the tool of PESTEL analysis by the companies, which could be later stressed by the management team for further development in its business. Consecutively, the stress could be given on the processes like change in the customer demography, alteration in the taxes, cope up with the changes in government policies, risk and barriers in the efficient processes of trade, new emerging laws, etc. The acronym of PESTEL stands for six different crucial elements which are Political, Economic, Social, Technological, Environmental, and Legal. The tool of PESTEL could be utilized by the management team of the company to analyze the dynamics like the course of the operation and its impact, the current path of the business, and its impact (Kotler, 1998). It could be ascertained from the observations obtained after the implementation of PESTEL analysis that all the positive movement of the company would rely on the factors which have a great impact on the business processes (Porter, 1985).
The factors that should be considered under the tool of PESTEL are: -
Political: The activities which majorly related to various taxation policies, trade conducted at an international and global level, etc.
Economic: In this parameter, the measure which would come under the category of various exchange rates, the magnitude of national income, Rate of interests, level of inflation, rate of unemployment, etc.
Social: When measuring the social aspect, the management should consider the societal aspects like the percentage of employed demography, what age group most of the population relates from, distribution of the income, the cultural trends followed, etc.
Technical: While measuring the technical aspect of the environment, the parameters related to the process of level of technological obsolescence, the development of the new product, etc.
Environmental: The major issues like deforestation, air pollution, exploitation of natural resources, global warming, etc. are considered under this tag.
Legal: The activities related to the laws related to the competition in the market, regulations regarding health and safety, rights, and regulations regarding working conditions and employment.
Product Life Cycle
The ideology of the product life cycle majorly consists of five cycles, which are described in the below section of this morgan car company case study. Let us have a detailed look over it.
- Product Development
As mentioned in the above section of this morgan car company case study, the process of product development is the first step in product life development and it is in this phase that the generation of the main plan or ideology takes place (Kotler and Armstrong, 2004). It is mostly at the instance of low sales that the company makes the move to generate a new product which could only be pursued in a very gradual pace (Porter, 1980; 1985; Kotler et al., 1996; Blackwell et al., Grant, 2002; Kotler and Armstrong, 2004). It could be said that the evolution of the product would be at a very rapid base in the product life cycle and only the major consumer who is at the forefront consumers could be considered in this phase.
It is the maturity phase of the product life cycle that would turn out to be a very crucial point in the current and future stature of the company. If considered according to the product life cycle, the morgan car company case study could be considered at a very mature stage.
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