Professional Documents
Culture Documents
An analysis on
Internal and external environment
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Table of Contents
Executive Summary .................................................................................................................. iii
1.0 Current Situation.................................................................................................................. 1
1.1 Current condition ............................................................................................................. 2
1.2 Strategic Posture .............................................................................................................. 2
2.0 Corporate Governance......................................................................................................... 6
2.1 Board of Directors............................................................................................................ 7
2.2 Top Management ............................................................................................................. 9
3.0 External Environment: Opportunities and Threats ............................................................ 11
3.1 Physical Environment: Raw Material ............................................................................ 12
3.2 Societal Environment ..................................................................................................... 14
3.3 Task Environment .......................................................................................................... 15
4.0 Internal Environment: Strength and Weaknesses ............................................................. 20
4.1 Corporate Structure ........................................................................................................ 21
4.2 Corporate Culture........................................................................................................... 30
4.3 Corporate Resources ...................................................................................................... 31
5.0 Analysis of Strategic Factors (SWOT) ................................................................................. 55
5.1 External Factors Analysis Summary (EFAS) Table: ..................................................... 56
5.2 Internal Factors Analysis Summary (IFAS) Table: ....................................................... 57
5.3 SWOT Analysis ............................................................................................................. 58
6.0 Conclusion .......................................................................................................................... 61
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Executive Summary
This Strategic Management report on Morgan Motor Company is a complete analysis
of Companys Internal and External environment. The main objective of the report
was to analyse the SWOT matrix of the company. In the first step, the company
mission, objective, current situation have been highlighted. Corporate Governance
featured the Board of Directors and Top Management of the company. In the External
environment analysis, raw materials for the automobile industry, STEP analysis for
the societal environment and Porters 5 forces for Task Environment have been
analysed. In the internal environment, corporate resources, culture and structure have
been analysed in detail. Corporate Resources section featured the major activities of
Operation, Marketing, Finance and HR. The last section of the report deals with the
SWOT analysis shown in SWOT matrix. The report includes EFAS table and IFAS
table and the scores regarding importance of the factors and the companys response
to the particular factor. The report is based various data fetched from different
journals and websites which are referenced in the appended part. The objective of the
report is giving a reader a detailed glimpse about internal and external factors of
Morgan Motor Company.
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performance.
Morgan electric plus E: A purely electric demonstration vehicle.
EVA GT: To bring more fuel efficiency and more environment
friendly engine system.
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1.2.1 Mission:
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than focusing on growth in the market. It has a long desire to hold and share
its heritage of handmade car and design with the people even after 100 years
of immense technological advancement and changes.
1.2.2 Objective:
To be the most prestigious car producer around the Globe with its unique and
traditional production procedure and designing. At the very beginning,
Morgan motor sold their cars in the Great Britain. But gradually they entered
in the Global market and become one of the most luxurious car producers in
the world.
Expand in other continents gradually: The Company operates in most of the
countries of Europe. It started selling cars in all other countries except the
South America. It is now aiming at spreading its royal touch to most possible
1.2.3 Strategies:
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8. Donald T. Nicolaisen
Mr. Nicolaisen has been a director since 2006. He served as Chief Accountant
for the U.S. Securities and Exchange Commission from September 2003 to
November 2005.
9. Hutham S. Olayan
Ms. Olayan has been a director since 2006. Ms. Olayan is a senior executive
and director of a private multinational enterprise, The Olayan Group, a major
investor worldwide as well as a leading diversified business in Saudi Arabia.
10. James W. Owens
Mr. Owens has been a director since 2011. From 2004 to 2010, he was the
Chairman and Chief Executive Officer of Caterpillar Inc., a manufacturer of
construction and mining equipment, diesel and natural gas engines and
industrial gas turbines.
11. O. Griffith Sexton
Mr. Sexton has been a director since September 2005. He is an adjunct
professor of finance at Columbia Business School and a visiting lecturer at
Princeton University, where he teaches courses in corporate finance.
12. Ryosuke Tamakoshi
Mr. Tamakoshi has been a director since July 2011. He is a senior advisor of
The Bank of Tokyo-Mitsubishi UFJ, Ltd., a position he assumed in June 2010.
Mr. Tamakoshi served as Chairman of Mitsubishi UFJ Financial Group, Inc.
13. Masaaki Tanaka
Mr. Tanaka has been a director since May 2011. He is Representative Director
and Deputy President of Mitsubishi UFJ Financial Group, Inc.
14. Dr. Laura D. Tyson
Dr. Tyson has been a director since 1997. She has been S.K. and Angela Chan
Professor of Global Management, Walter A. Haas School of Business,
University of California at Berkeley, since January 2007.
15. Rayford Wilkins, Jr.
Mr. Wilkins has been a director since 2013. He is former CEO of Diversified
Businesses of AT&T, where he was responsible for international investments,
AT&T Interactive, AT&T Advertising Solutions, customer information
services and the consumer wireless initiative in India.
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The members of the board of directors are not from Morgan family and all of them are
external board members. The board members in the Morgan Motor Company take
place in the decision making process and in the policy making of the organization.
The Board of Directors of Morgan Motor Company is from various fields and they
provide their knowledge, skills and connections in the betterment of the organization.
In the decision making process and in the strategy making process all the board takes
part actively and they suggest future direction to the top management.
Top
Management
Finance
Aero Racing
HR
Accounts
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Technical
Supply Chain
R&D
Logistics
Design
Inventory
Marketing
Promotion
Sales
Distribution
Conference
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Iron Ore, Magnesium Ores, Bauxite give Iron, Manganese and Aluminum
Wood as trim
Iron ore: the lower grade ochre ores are especially common in the hills surrounding
Winscombe and the Lox Yeo Valley. Ochre was being mined on Auxbridge Hill in
the 1920s, and old workings exist on Banwell Hill and on the northern side of
Sandford Hill. Iron ore is also imported from China, Brazil and Australia is higher
grades of metals at lower costs.
Silica is used to fabricate glass: The basic ingredient of silica glass is the silicon
dioxide which is found in nature especially in quartz and beach sands. Silica glass
powder is obtained by sintering a green compact in a diverse atmosphere. This glass is
used in Morgan cars as its lighter than the previous version
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Taxation policies.
Economical
Socio-cultural
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Social norms that impact the decision to own and use automobiles versus other
means of transport.
Technological
Political Climate of
Different Countries
Stability of
Government
Taxation policy
Legal Provisions
Relating Safety
Measues
Lifestyles and
Preference of People
Social Norms
PoliticalLegal
Environment
Sociocultural
Environment
Technological
Environment
Economic
Environment
Technology Relating to
Automobile Designs
Technology Relating to
Automobile
Manufacture
Technological
Development
Populations Figures
and Automobile
Buying Capacity
Level of Economic
Activity
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and promotion.
network.
Government Policy: Governments can limit entry to an industry through
licensing requirements by restricting access to raw materials.
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Prices: Prices matter in the industry because buyers shift to the product which
Access: Access in the automobile industry for buyers has become much easier
than it was in the beginning of automobile industry.
to work with several suppliers and each of the suppliers supply single product.
UK automobile market.
Threat of forward Integration: The threat of forward integration is present
in the automobile industry because supplier can integrate with customers to
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not.
Capacity: In order to increase capacity of an automobile manufacturer the
company has to build another manufacturing plant that will run at full capacity
to minimize cost.
Diversity of Rivals: The rivals with new and different ideas of competing will
likely cross each others path and challenge others position.
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Economies of Scale
Product Differentiation
Capital Requirement
Switching Cost
Access to Distribution Channel
Number of Supplier Company
Uniqueness of Supplied Product
Availability of Substitute
Threat of Backward Integration
Purcfhasing Industries Purchase
Behavior
Switching Cost
Prices
Access
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properties.
Aluminium: The aluminium body consists of a blend of panel beaten sheets
and Super-formed blown aluminium panels. Super-forming is an aerospace
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4.1.2 Capabilities:
Capabilities are the subset of the resources like how company takes advantage of its
resources whether tangible or intangible. Capabilities alone enable firm to envisage
and implement strategy in to the company. This is the relation between resources and
capabilities of the firms.
Handmade Cars: The link between traditional and modern follows through to
the physical car themselves. Each one is entirely handmade. However the cars
feature the very latest in chassis, engine and drivetrain technologies, along
with subtle driver assists, passive safety systems and superplastic aluminum
forming techniques.
Management: Efficiency is designed into to the organizational layout to
enable perfection. The directors and owners manage the company and receive
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VRIO framework
Value
Rareness
Imitability
Organization
Experienced assimilators
Labor based car production
Design
Rare materials
Craft skill
Unique cars
Skilled workers
Strategy Design
Materials
Friendly atmosphere
Brand name
Design materials
Production materials
Resource utilization
Decision making
Lead time
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durability of the niche market is always higher. On the other hand, Morgan
Motor Company has a bunch of eleven qualified innovative designers who are
developing Morgan cars design. This capability of Morgan Motor Company
is durable.
Transparency: A capability that requires a complex pattern of various
resources is more difficult to comprehend than a capability based on a single
key resource. The capability of Morgan Motor Company is much complex
with various types of resources. So, the transparency for other competitors to
acquire the knowledge of making handmade cars is lower. Competitors can
only get to know about the materials used in producing the latest model of the
Morgan car while Morgan releases a new model only. Because of very high
information security and better security on the classified information, it is very
tough for the organizations to know about the resources and the capabilities.
Transferability: Transferability is the ability of competitors to gather the
resources and capabilities necessary to support a competitive challenge. Here,
it will take a long time for the competitors to get the resources used and the
capability acquired by Morgan Motor Company. The raw material collection
from those reliable organizations may be taken the only time in creating a
others.
Resource Sustainability:
Resource sustainability indicates how sustainable the resource of the
organization is. Morgan Motor Company is actually holding sustainable
resources shielded by patents; geography, strong brand image and customer
preference. These resources and capabilities provide a sustainable competitive
advantage. So, in this case for Morgan Motor Company we can say that, the
organization has slow-cycle resources.
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Inbound logistics: These are the activities concerned with receiving the
materials from suppliers, storing these externally sourced materials, and
handling them within the firm. Morgan is using high standard and high quality
materials. Morgan always keep improving their quality and they are
continuing using the aluminium and recently they bought the BMWs engine
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Outbound logistics: These are all the activities concerned with distributing
the final product and/or service to the customers. As it is already described
above, because of Morgan car is made by hand, it takes much longer time than
other car manufacturers. The waiting time till Morgan car is finished is
between one and two years, but sometimes it takes much longer to collect the
car to its final face. Morgan has only one plant, but it has dealers all over the
world what makes much easier for the customers to get their car more
conveniently.
Marketing and sales: This functional area essentially analyses the needs and
wants of customers and is responsible for creating awareness among the target
audience of the company about the firms products and services. Morgan
Company doesnt do many marketing activities. For many people the brand
still can be unknown. It is because of its low productivity, but their uniqueness
and brand still brings them enough customers. It is obvious from their waiting
Support activities
The support activities of a company include the following:
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purchasing the BMWs engine to make their cars much comfortable and faster.
Firm Infrastructure: This includes planning and control systems, such as
finance, accounting, and corporate strategy etc.
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Firm infrastructure
HRM
Research on technology
Continuous development
Outsourcing
Technological development
primary activities
Installation
After-sales
marketing
& sales
Less marketing
activities
High demand volume
outbound
logistics
Unique product
Customization facility
High lead time
operations
High quality
raw materials
& engines
from BMW
inbound
logistics
Shipping efficiency
Single production plant
Clear contracts
Highly talented employees with negotiation skills
Proper and quality material purchase
procurement
service
support
activities
Top
Management
Finance
Aero Racing
HR
Accounts
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Technical
Supply Chain
R&D
Logistics
Design
Inventory
Marketing
Promotion
Sales
Distribution
Conference
Labor based
Morgan motor company is a totally labor based or labor intensive firm. Every
car is made out by hand crafted materials and the production process is solely
based on labor operation. The company uses very few machineries and it even
labor union.
Strong Survival Mentality
The company has actually a very strong survival mentality. For the past 80
years, it is making car for the niche market and it still is making profit where
its rivals had faced bankruptcy for several times. Morgan motor company also
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Demographic Market:
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take the necessary measures to ensure that the needs of a population group that are
met by Morgan Motor Company.
The target age demography for Morgan Motor Company is described as the people
above the middle age are granted. The cost occurred in purchasing Morgan car cannot
be carried out by most of the young or below middle aged people. On the other hand,
it takes time to deliver the product required to the customer.
Male and Female both are the target market of Morgan Motor Company. But, in most
of the cases males are the most potential customers for Morgan cars as male are more
likely to be attracted by the classic models of cars. Though Morgan Motor Company
is focusing in the R&D to develop new models like EvaGT to attract the below
middle aged male and female buyers.
Family size is an important fact to consider in buying Morgan cars. As most of the
Morgan cars are two seated, people having a small family with spouse are primarily
attracted to buy a Morgan car. The bigger families are less likely to have one.
Though social norms are not affecting on purchasing Morgan cars but social values
and status are the biggest fact to purchase a Morgan car. Again the point arises that,
Morgan cars are the signature of dignity and status. Most of the people are not
purchasing the car because of the high price. This premium price is charged with the
cars just because of the royal look and usage of the cars. People having higher social
status and more royal value are the primary and main market for Morgan Motor
Company.
Geographic Market:
helpful in this area. On the other hand, United States has a huge population density
that is actually eager to have classic and unique cars like Morgan at their garage.
That does not mean that Morgan cars are not being sold in the other markets. Morgan
cars have a huge market which can be ranked after UK and US in UAE. People of
UAE maintains the social characteristics that Morgan Motor Company targets. They
les targeted area by Morgan Motor Company is those countries which are
underdeveloped or developing. Besides, Morgan Motor Company has less focus on
the nations having higher tax on car imports.
Besides, Morgan Motor Company has only 7 service centres around the globe from
where the customers can get the services and claim the warranties. This makes the
people from most of the countries being discouraged to buy a Morgan car.
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In the introduction level of Product Life Cycle, there is the newly introduced model of
Morgan cars named Eva GT. Eva GT is a 2+2 grand tourer, and as such it is longer in
the body. The Eva GT has BMW N54 twin-turbo straight-6 producing 302bhp, this is
Euro-6 emissions compliant. Shown at Pebble Beach in clay in 2010 and went on sale
in 2012.
The new Morgan Aero Plus 8 is a classic body version of the Aero Super Sports and
Aero Coupe, sharing their bonded aluminum chassis, bodywork, suspension, and
engine. It was launched at the end of 2011. Price 86,000 and it is not available in the
USA stands on the growth level. There is another model stands on the growth and
simultaneously grabbing customer attentions. The Morgan Aero Super Sports is a
targa-roofed version of the Aero Max, sharing its bonded aluminium chassis and
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lower bodywork with the coupe. It was launched at the 2009 Pebble Beach car show
in California, Price 126,000 also stands on the growth level.
Morgan +8 just started its journey in the maturity. Faced with the decreasing
availability of large four-cylinder engines for use in their +4 models, Morgan began to
install the recently available Rover V8 engine in their cars in 1968, giving these cars
the model designation "+8". There are other two models also. First one is Aero 8.
During its customer production lifetime (20022009), the Aero was configured in five
official versions, (I, II, III, IV and the Aero America) with variations in styling,
engines, transmissions, braking and suspension. Another model is Roadster. In 2004,
Morgan came out with a traditional styled model to replace the departing Plus 8. The
new model, named the "Roadster" was powered by a Ford UK Mondeo V6 producing
204 bhp (152 kW; 207 PS).
Finally, in the decline stage there are the oldest two models from Morgan Motor
Company are standing. One is Morgan +4 and Morgan +4+. The Morgan +4 was
introduced in 1950 as a larger-engine ("plus") car than the 44. The +4 used the 2088
cc Standard Vanguard engine. A version of the +4, designated the +4+, was made
from 1964 to 1967 with a contemporary fiberglass coupe body. The light weight and
reduced drag characteristics improved the performance of the +4+ over the regular +4
in every aspect.
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Product
Price
Place
Promotion
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4.3.2 Finance
Morgan motor company finances so many ups and downs in the past 10 years. The
company sometimes gets huge profit and sometimes it is submerged with a total loss.
In this report the income statement, balance sheet, Employee figures and audit opinion
is shown for two financial years 2009, 2010.
Income statement:
Income Statement
2010 2009
Revenues
15,673,000
17,281,000
11,553,353
13,501,243
Gross Profit
4,119,647
3,779,757
4,828,771
4,444,845
Payments to Directors
Depreciation
654,692
582,038
218,794
236,199
(252,890)
167,141
(386,140)
119,979
252,525
(386,140)
372,504
Balance Sheet:
Balance Sheet
Current Assets
Cash and Cash Equivalents
2010
7,373,260
598,461
2009
6,094,033
14,941
Accounts Receivable
1,276,766
450,189
Inventory
3,216,369
3,290,729
1,154,069
1,265,670
1,127,595
1,072,504
Non-Current Assets
6,069,087
6,529,008
2,684,450
2,546,399
Intangible Assets
3,384,637
3,982,609
13,442,347
12,623,041
Total Assets
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Current Liabilities
7,256,773
5,871,216
Accounts Payable
3,283,204
2,978,191
29,144
503,524
Bank Overdraft
2,037,718
1,372,963
1,906,707
1,016,538
Non-Current Liabilities
343,307
211,707
14,092
211,707
Total Liabilities
7,600,080
6,082,923
Stockholders Equity
5,842,267
6,540,118
6,185,574
6,751,825
Dividends
72,000
Employee Figure:
Employee Figures
2010
2009
Total Employees
159
163
Productivity
98,572
106,018
Audit Opinion
2010
2009
Auditor
Rabjohns Llp
Rabjohns Llp
Audit Services
21,500
23,350
Audit Opinion:
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LIFE car
The Lifecar project has seen the development of a hydrogen fuel cell vehicle
involving a collaboration between Morgan and its partners at QinetiQ,
Cranfield and Oxford Universities, BOC and OSCar Automotive and part
funded by the DTI (now BIS). Its been designed to run optimally at cruising
speed making it cheaper and lighter than a conventional fuel cell. Its 45%
efficient, compared to 30% efficiency for a traditional petrol engine, according
to Car Magazine with the only emissions being water, heat and 22kW of
electricity.
Power is directed to four electric motors providing drive directly to the wheels
with the motors capable of recapturing up to 50% of the energy in comparison
with a 10% recapture for current applications. The regenerative braking
system provides stopping power equivalent to 0.7g and Charles Morgan
claims that the switch at low speeds between the regenerative brakes and
conventional hydraulic brakes is seamless.
The Morgan LIFE car can achieve 150mpg on a 250 mile range, reach 85
mph, and sprint to 62 mph in under 7 seconds. There have been some changes
to the original brief, making the car more practical, while retaining the
revolutionary features that made LIFE car unique. The use of sustainable
lightweight materials will ensure that not only is the vehicle fuel efficient with
a low carbon output, but that at the end of its very long life, it will be easily
recyclable.
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Component supply and storage has been complicated by the Morgan customisation
model. Customers can choose from myriad variants of body, engine size, paint colour,
dashboard and leather trim. But this has been simplified where possible to make it
easier for the business to deliver product. For the entry level Classic 4/4, the choice is
limited to six outer body colours, one interior and the car is standard. A customised
car range affects inventory. For example, four years ago the company had eight
dashboard variations. Today it has 24 variations, when including left and right hand,
MPH and KPH versions. With a heavily specified hand-built car, suppliers are key
and Morris singles out a few as being vital to Morgans success.
Radshape Sheet Metal in Birmingham is a very good supplier to us, whove been with
us for 10 years. Morgan have turned themselves into a big spend, crucial supplier.
Glasurit, part of BASF, supply all Morgans paint either directly as custom colour
formations or mixed on site in by in-house paint specialists. Super form Aluminium is
another key account, supplying the carmaker with all its preformed SPF aluminium
panels (see below). Is supply chain risk an issue in the recession? Morgans biggest
supply chain risk is mainly from the biggest people who supply the mainstream
OEMs. The company deal with people who are supplying JLR, Aston Martin and
Bentley. If schedules have been cut sharply it affects these people, but Morgan have
not had as many problems as we envisaged. Forecasting last year we expected more.
Interestingly, supplies from Germany have been less reliable, with more interruptions
than forecast due to more short-time working and extended holidays at some German
companies. Morgan has felt it could be left last on the list for some companies that
supply to the bigger OEMs, which has been an issue.
Lean and professional development
Morgan is operating a lean program in collaboration with Birmingham City
University where the aim is to have all factory-based employees trained in lean
processes. Its an interactive program, Morris says. They take operators from different
areas of the business, mix them up and put them in groups of 12 in the same training
room. Staffs run through the program, finishing with a project that is certificated by
the university. The program uses all the main lean techniques applicable to most
businesses, tailored to Morgan, and then they try to make it as interactive as possible.
Its not purely academic; they are looking at the real benefits of single piece flow,
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and team-building etc. At the end of it, they do a project which assesses the tangible
benefits, so they can really apply the learning into something very relevant in the
workplace.
How a Morgan is made
through
the
record
of
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The Classic chassis station has a totally different set-up, due to the fact there is
a lot of configuration later on with the Classic, and its not as advanced as the
Aero series cars at this stage theres no wiring for example so there are
more chances to access parts of the Classic as it is being assembled. As the
cars go through the production line they start to jockey together at different
stages, with some models overtaking others on lines.
entirely
Morgan to deliver cars that match their light and fast ethos, which Morris
says also reduces CO2 emissions making Morgan extremely environmentally
friendly. The Classic car uses a mixture of hand cut and Laser cut blanks
which are then very skilfully shaped and panelled onto the body frame, which
exemplifies the traditional skills of the workforce in contrast to Super forms
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other auxiliary parts such as lights are fitted. Upon completion of the build
process the cars are all road tested, they then go through a full technical PDI
before having an under body protection. When this process is complete the car
then receives a full PDI in preparation for Dispatch to either the customer or
dealer.
Shipping:
Morgan ships via UPS, U.S. MAIL or FED-EX FREIGHT for larger items. Morgan
ships domestic and international. No COD's on parts sent by truck or international. All
shipments are F.O.B COPAKE, NY
Terms of Payment:
Morgan accepts cash, credit card (MasterCard, Visa, Discover, Amex), money orders,
or personal/company checks. All COD orders over $300.00 will be sent certified
check or money order.
Exchange/Core Items:
Certain items Morgan sells are rebuilt and require a core in exchange. All cores must
be in rebuild able condition as determined by the company. Items deemed non-rebuild
able or failure to return a core will be assessed a core charge.
Backorders:
When customer places an order, Customer has to let know if he desire items to be
placed on backorder. Morgan does not charge for backordered items until they are
shipped.
Returns:
If customer receives an item not as ordered or defective, Morgan will correct it to
customers satisfaction. The parts must be as new and in the original packing or box.
No returns will be accepted after a period of 60 days. If the part is not to be
exchanged then a 20% restocking fee will be applied.
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Warranty:
All parts sold by Morgan Spares Ltd. have warranties against defects in materials and
workmanship by the original manufacturer. Warranty on defective items will not
cover labour, failure of a related component or failure resulting from faulty
installation. Liability by Morgan Spares Ltd. on merchandise proven to be defective,
for any reason, shall not exceed the cost of the original component.
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Tim Whitworth the Finance Directors looks over all the financial issues of the
company and permits the future investments on making cars and he also
supervises four departments, the Aero Racing, Accounts, HR and Co
Secretary. Mark Evans the Aero Racing Managers also supervises Service and
an automobile.
Mark Ledington the Marketing Director who is responsible for all the
marketing and promotional activities of the company. He is working hard to
promote the automobiles Morgan Motor Company is producing and how they
produce the automobile and how they take care of each individual customers
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preference and make tailor made automobiles for the customers. Sales and
Stories
Symbols
Control Systems
Organizational Structure
Power Structures
Company has about 150 employees. The managers seat together with the employees
on a traditional tea break and talk with them, this is the way to know better all
employees and share their thoughts. For the Company it is very important to have
high skilled staff. Most of the employees have worked for the Company for more than
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ten years, mainly the employees are from the same area and moreover they are from
the same family. All the employees have a very close relationship with each other. All
this makes the Company to have a different culture from other manufacturers.
In Morgan Motor Company, there is a clear evidence of the structure of the company
not being organized. In addition to this the unwillingness of Peter Morgan to change
the production pattern and sticking to the ancient form of production could have
hindered the progress of the organization. The old pattern of production carried a
series of drawbacks namely too much expenditure and increased time period to reach
the target. This behaviour of not being open to change is related to a world with set
cultural beliefs, values and concepts that are expressed and reaffirmed through a
variety of dominant or root metaphors. The basic matrix structure led by Peter
Morgan consisted of four sections namely production, sales and marketing,
information technology, design development and technology. The basic coordination
mechanism that was adapted was of mutual adjustment. However in spite of all the
difficulties faced the MCC has succeeded in changing their view by becoming an
open environment.
The Development Team
There are eleven people working within Morgans development department. The team
is responsible for aesthetic and mechanical design, CAD, homologation, electronics,
managing on-going production issues, branding and marketing the vehicles. The
department is small but the benefits are clear: Morgan is in charge of all decisions
from concept to production and launch. The small and dynamic team all has the
opportunity to showcase their ideas, with the ability to truly influence the end product.
Close interactions between different professions creates a broader understanding of
the whole work flow. Most importantly, this close contact means, with the right tools,
the team can be fast - Taking new ideas from conception to birth in a fraction of the
time. Prototypes arent sent off to be tooled or evaluated by a separate group. The
team members simply walk on the shop floor to get the onsite craftsmen and women
to replicate their design accurately using precise drawings, traditional manufacture
methodology and natural ability.
Workers in the Morgan Motor Company receive a basic wage along with the
production bonus. Although this bonus may encourage some departments to step up to
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productions but the total output of the cars does not increases, because of the plant
bottleneck holds up to one or two operations. Furthermore, foremen are not paid any
bonus, so they have little interest to encourage productivity.
Like most of the manufacturing organization in the United Kingdom the labour force
of the Morgan Motor Company is unionized. The labour force of Morgan Motor
Company is dedicated to the firm but they do not always accept changes. This strict
adherence to the tradition may contribute the cost and nature of the Morgan
manufacturing process, although the relations with the labour union are excellent.
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Opportunities
O1 Reducing Waiting List 0.25
0.75
O2 New Plant
0.10
0.40
O3 Attractive Brand
0.30
1.50
Image
O4 Dealers Worldwide
0.30
0.6
Strong Distribution
O5 Customer Relation
0.15
0.15
Total Scores
1.0
3.40
Threats
T1 Chinese replica of
0.40
1.00
0.40
market
Morgan
T2 Japanese competitive
0.25
2.00
0.50
0.10
4.00
0.40
Bargaining power
T4 Waiting Cancelation
Reducing market
share
Cars
T3 Suppliers high
0.25
2.50
0.63
Waiting Customers
are never getting the
car
Total Scores
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1.93
Weight Ratings
Weighted
Comments
Scores
Strengths
S1 Efficient Production
0.15
1.00
0.15
Production should
be more efficient
S2 Unique Design
0.25
5.00
1.25
Must be kept
0.10
2.00
0.2
Labor cost
reducing
force
S4 High Customer Loyalty
0.15
2.50
0.375
Consumer
satisfaction should
be increased
S5 Strong Survival
0.10
4.00
0.4
the Company
Mentality
S6 Unique Niche Market
0.25
1.00
0.25
Must be protected
and Kept
Total Scores
1.00
2.625
Weaknesses
W1 Slow Production
0.30
2.00
0.6
Fast Production
might be necessary
W2 Outdated Equipment
0.30
3.00
0.9
Slows Production
W3 Outdated Production
0.25
2.00
0.5
Again Slows
Production
Process
W4 High labor Bargaining
0.20
4.00
0.8
Power
issues
W5 Less Diversification
0.05
Total Scores
1.00
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1.00
0.05
2.85
The SWOT matrix is derived from the calculation of EFAS and IFAS table.
Strengths
1. Efficient Production: Morgan operates in low cost facility where they
produce high value cars. The production is efficient. The company could be
more efficient if the labor cost is reduced.
2. Unique Design: The design of Morgan is unique. No other car company has
such design concepts which creates high demand in the market.
3. Highly Skilled Labor: The labor force of Morgan Car Company is highly
skilled and they and they give a unique finish to the car.
4. High Consumer Loyalty: One segment of total customer is highly loyal to
Morgan Motor Company and they dont switch to any other car.
5. Strong Survival Mentality: Morgan has a strong survival mentality and thats
why the company is operating for over a century.
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6. Unique Niche Market: Morgan has unique small market who are crazy to
have the product of the company.
Weaknesses:
1. Slow Production: Producing a car takes a long time for Morgan and even it is
more than 2 years.
2. Out-dated Equipment: Morgan uses old equipment to produce which are
sometimes 50 years old technologies.
3. Out-dated Production Process: Morgan is using same production process
from its birth which could be changed for productivity.
4. High Labour Bargaining Power: Morgan labours force possesses high
bargaining power as they are part of the labour union.
Less Diversification: The models of the car have very less diversification
where competitors are implementing more diversification.
Opportunities:
1. Reducing Waiting List: The Company can take limited order for any
particular model. This will reduce the waiting list and the customers dont
have to blindly wait.
2. New Plant: Morgan could make another plat on any other country and it
would capture more market and generate more profit.
3. Attractive Brand Image: Company possesses a highly attractive brand image
and logo which could be used for different purpose and could generate profit.
4. Dealers Worldwide: Morgan motor company has 42 dealers and they could
build a network of worldwide dealers.
5. Customer Relation: Personal touch always increases the loyalty of customers
and Morgan could maintain a very warm personal touch.
Threats
1. Chinese Replica of Morgan: Some local car manufacturers of china is
making exact replica of Morgan cars and Chinese Govt. is not taking any steps
to prevent them from making the cat copy
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6.0 Conclusion
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Morgan Motor Company (MMC) began as a family company and has remained that
way over the years. Decisions were largely driven by steady demand for their luxury
product. Traditionally, decision-making was premised on production quotas that kept
supply slightly behind demand. While the company made a profit, it was not enough
to sustain the company in the long term due increasing costs caused by inefficient
methods of production. The key area for improvement was strategic planning based
on detailed and accurate information.
MMC could gain valuable information about its environment through SWOT
analysis, which could be used to inform strategic planning decisions. The company
survived difficult circumstances (e.g. World War II) and demonstrated its ability to
diversify through the manufacture of munitions. Another key strength is the global
demand for their differentiated product. Its domestic and international appeal creates
an important opportunity to further expand its global customer base. However, the
potential threat associated with this opportunity is uncertainty in a number of
dimensions in MMCs general environment (Samson & Daft, 2009). Economic and
political and legal factors in other countries could potentially impact on MMCs sales,
as was the case in the late 1960s where strict emission control regulations caused their
US market to collapse. In this instance, domestic demand absorbed its impact and
highlighted the importance of maintaining a diverse client base that could absorb the
impact of any environmental changes.
A sales and marketing department that is production led is ineffective in improving
revenue and achieving the aim of increased profits. Additionally, this production led
sales creates an artificial view of demand for its product.
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