Morgan Engine Company Circumstance Study

Automobile industry has a long background, since 19th century it has been constantly developed. The auto industry is often regarded as one of the most global of most sectors. Its products have pass on about the world, which is dominated by a small amount of companies with worldwide reputation. In this assignment I am going to discuss Morgan Electric motor company's tactical position which include: marketing position, culture of the company, competitiveness and the future development.

Profile of the Company

The Morgan Engine Company is unique in building autos in England since 1909 and still being privately had by the Morgan family. Indeed in its 100-12 months lifestyle only three Morgans have headed the company. Because the first four-wheeled car in 1936 the factory has only built athletics cars. The original Morgan is still being built using the distinct steel framework, with an ash body framework panelled in aluminium, but using excellent modern drive trains from Ford. This combines the pleasure of driving a real basic with today's day performance and new car consistency.

The kick off of the new Morgan Aero 8 in 2001 was the first new Model since 1936. It was also an all aluminium ultra car incorporating the very best of British contest car framework technology in a sensational road car. Powered with a BMW 4. 4 V8 the Aeros bonded aluminium framework used the Morgan tradition of great strength yet light and portable. Built alongside the traditional cars, the Aero 8 is showing its excellent competence to a fresh breed of Morgan owners.

The product market mission

Morgan is exclusive in a car industry. They regularly keep making the palm- made and ash-framed cars. They don't have as much customers as other car companies and its own market is relatively small than others. Their productivity is also small in comparison to other car brands. Morgan is not hoping to improve its vehicles to more modern cars and to increase its creation number, this is exactly what provides Morgan its uniqueness. If they start producing more modern autos and increase its productivity they may loos its uniqueness. This will not imply that Morgan is constantly using the same technology of producing vehicles as they used to, they may be continually improving the product quality. Morgan is a distinct segment operator and it generally does not compete with others. If they moderate their development with increasing the output and produce newer cars they'll face the competition with other car manufacturers. These are always residing at the position they are actually and keeping the same strategy, if indeed they keep doing this they'll not have many opponents in the market. There are amount of approaches to understand the product market mission in deep. I am going to discuss a few of them below.

Porters General Strategy

Porter (1980, 1985) advised that some of the most basic choices experienced by companies are essentially the range of the markets that the business would provide and how the company would be competitive in the preferred marketplaces. Competitive strategies give attention to ways that a company can achieve the most useful position which it possibly can in its industry (Pearson, 1999). Relating to Porter, there are three generic strategies a company can take on to achieve competitive benefit: cost control, differentiation, and concentrate.


Companies that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of this market and the initial needs of customers within it, develop exclusively low priced or well-specified products for the market.

In Porter's General Strategy model Morgan Motors can be located in differentiation emphasis, because Morgan vehicles price is quite high so it cannot follow the price command strategy, they are not retailing their product in a typical market price. Morgan do deliver high quality product and service, their cars are unique in car industry market, as mentioned previously above, Morgan is the oldest hand-made car producer. The company concentrates on a particular market and is different from other mass production car manufacturers.

Parnell's Idea

Parnell recommended that valuable resource is more very important to the company than cost control and differentiation. He thought that valuable resources could help the company to attain more success. He said that if company can have inimitable, exceptional and valuable resources it might help the company to gain the competitive advantages. Organizations possessing exceptional, valuable and inimitable resources possess a greater capability to perform a strong value proposition than those without such resources (Parnell, 2006)

In case of Morgan the idea of Parnell can be aplicable because Morgan uses valuable resources and they're inimitable. What are their valuable resources and why is these to be inimitable will be discused after.

Strategy Clock

The "strategy clock" is another appropriate way to analyze a company's competitive position to cost or differentiation advantages (Bowman & Faulkner, 1996).

The strategy clock uses differentiation and concentrated differentiation in a similar manner compared to that of the generic strategy model.

As it has already been described above in Porter's Generic Strategy Morgan Motors in Strategy Clock requires the same place which is the centered differentiation. Morgan Motors product price is high and the market niche is relatively small it concentrates on particular niche market. Customers perceived value is also high.

Strategy Cube

A model which allows the conversation of competitive strategy from both market and reference perspectives has been explained by Jenkins (2004). A platform is proposed where products/services are identified by three parameters
  1. Relative degree of consumer perceived product benefits
  2. Relative product price to the customer
  3. Relative product cost to the producer

If we compare the cube with porters general strategy and strategy clock point A in the cube is similar to Differentiation Focus in previously listed models, meaning the companies which are placed in this point offers high price, high benefits, particular market niche market. The idea E is comparable to Cost Target in Porters common strategy and it is similar to 1 1 and 2 positions in tactical clock. Regarding Morgan Motors Company in this model it is positioned in a point A due to its high cost, high recognized benefits, low market niche and high price.

The Cultural Web, which I will discuss below will help us to comprehend the business's culture. The Cultural Web identifies six interrelated elements that create up what Johnson and Scholes call the "paradigm" - the structure or model - of the task environment. By analyzing the factors in each, the firms can start to see the bigger picture with their culture: what's working, what isn't working, and what must be transformed. The six elements are
  1. Stories
  2. Rituals and Routines
  3. Symbols
  4. Organizational Structure
  5. Control Systems
  6. Power Structures

Company has been owned by Morgan family since it's been founded. Company has about 150 employees. The professionals seat together with the employees on a normal tea break in the action and talk to them, this is actually the way to learn better all employees and show their thoughts. For the Company it is very important to have high skilled staff. Company can be found at the same place as it was since it has been established, almost all of the employees have worked for the Company for more than a decade, mainly the employees are from the same area and additionally they can be from the same family. All of the employees have a very close relationship with each other. All of this makes the Company to have a different culture from other manufacturers.

The activities and the sources of the Company

Value string analyses

The value string construction of Porter (1990) is "an interdependent system or network of activities, connected by linkages". When the system is supervised carefully, the linkages can be a vital way to obtain competitive edge (Pathania-Jain, 2001). In order to conduct the value chain analysis, the business is put into key and support activities. The principal and secondary activities of the company are discussed at length below.

Primary activities

The most important activities (Porter, 1985) of the business include the following
  • Inbound logistics

These will be the activities concerned with getting the materials from suppliers, keeping these externally sourced materials, and handling them within the organization. Morgan is using high standard and high quality materials. Morgan continue to keep improving their quality and they are carrying on using the aluminium and recently they bought the BMW's engine motor to make their vehicles better and faster.

  • Operations

These are the activities related to the creation of products and services. Morgan vehicles because the Company has established are made by hand with ash-frame. This is what makes Morgan autos so special and valuable. All Morgan cars will vary from each other, they are created according the tastes of the customer. Contrasting to other car manufacturers, to produce Morgan cars needs much longer time, but this won't make to shorten their customer holding out list and folks are still willing to get Morgan car which can be made according to their taste.

  • Outbound logistics

These are the activities worried about distributing the ultimate product and/or service to the clients. As it has already been detailed above, because of Morgan car is made by hand, it takes a lot longer time than other car manufacturers. The hanging around time till Morgan car is completed is between one and two years, but sometimes it takes much longer to get the car to its final face. Morgan has only one plant, but it has dealers across the world what makes much easier for the customers to get their car more easily.

  • Marketing and sales

This efficient area essentially analyses the needs and wishes of customers and is in charge of creating understanding among the mark audience of the company about the firm's products and services. Morgan Company doesn't do many marketing activities. For many individuals the brand still can be undiscovered. For the reason that of its low output, but their uniqueness and brand still brings them enough customers. It really is obvious using their holding out list. Demand is much higher than resource.

  • Service

There is often a need to provide services like pre-installation or after-sales service before or after the sale of the product or service.

Support activities

The support activities of an company include the following
  • Procurement

This function is accountable for purchasing the materials that are necessary for the business's operations.

  • Human Source Management

This is a function worried about recruiting, training, motivating and rewarding the workforce of the business. For Morgan well trained and high skilled employees are extremely important as it is for most Companies. As with many Companies Morgan also has working out programs to develop their staff skills. As above mentioned there remain 150 employees in Morgan Company and all of them are in a good romantic relationship with each other. The heads of the business is also attempting to truly have a good marriage with each of their employees member and also to show their thoughts with one another.

  • Technology Development

This is an area that can be involved with technological innovation, training and knowledge that is vital for some companies today to be able to make it through. Morgan consistently is bettering their product and technologies. For instance: releasing the Aero 8 model, and purchasing the BMW's engine to make their vehicles much comfortable and faster.

  • Firm Infrastructure

This includes planning and control systems, such as money, accounting, and commercial strategy etc. (Lynch, 2003).

The value chain should be analysed with the key competence of the company at its very heart and soul (Macmillan et al, 2003).

Resource Centered View

The resource-based view theory is dependant on the assumption that a competitive benefits is the result of optimal reference allocation and mixture in imperfect markets. Resources are assets, skills, and functions. The resources resulting in competitive advantages have to be scarce, valuable, non substitutable and it must be hard to imitate them (Barney, 1991). In case there is Morgan, the resources they are employing are extremely special, high quality and valuable. They pay very big attention of the quality they are really producing, using high quality materials to produce vehicles. The Morgan car is definitely built around an ash-frame, and a metallic chassis. The new Aero 8 also has an ash body. Thus giving unique strength, versatility and amazingly, research proved that the framework made the car safer on impact testing. You will discover approx 50, 000 colors to choose from. You can find many things which makes Morgan autos so special. It's uniqueness in an environment of look-alike automobiles. Its handmade quality the utilization of timber in many regions of structure - long standing 'hands-on' craftsmanship displayed in the bodywork and interior by the highly skilled workforce. Capability to tailor a model to the customer's exact requirements. Most of the components of Morgan cars are created in-house. All of this gives to Morgan to be inimitable.

VRIO Analyses

Given that almost anything a firm possesses can be viewed as a tool or potential how in the event you attempt to slim down those that explain why strong performance differs? To be able to lead to a lasting competitive benefits a learning resource or potential should be Valuable, Rare, Inimitable, and Organized.

Value: Rarity:

Materials (Ash tree) 1. Limited edition

Reputation 2. Rare materials

Craft skill 3. Design

High experienced staff 4. Unique cars

5. Selection of colour

Inimitable: Company:

Skilled employees 1. Strategy

Design 2. Tea break

Materials 3. Friendly atmosphere

Brand name

The competitive framework of the Company

Five Forces

The ideas and models which surfaced through the period from 1979 to the middle-1980s (Porter, 1998) were based on the theory that competitive gain came from the ability to earn a profits on return that was much better than the common for the industry sector (Thurlby, 1998).

The original competitive makes model, as suggested by Porter (1998), recognized five pushes which would impact on an organization's behavior in a competitive market. These include the following
  • The rivalry between existing vendors in the market.
  • The vitality exerted by the clients on the market.
  • The impact of the suppliers on the sellers.
  • The potential risk of new sellers getting into the marketplace.
  • The risk of replacement products becoming available in the market.

Understanding the type of each of these forces offers organizations the required insights to allow them to formulate the appropriate strategies to achieve success in their market (Thurlby, 1998).

  • Force 1: The Degree of Rivalry.
  • Force 2: The Risk of Entry.
  • Force 3: The Risk of Substitutes.
  • Force 4: Buyer Ability.
  • Force 5: Distributor Power.

The rivalry in global automotive industry is very powerful. However in the situation of Morgan Motors, the business is very unique in support of the main one in motor vehicle industry using its old fashioned hand made cars. Morgan doesn't have competitors and there is absolutely no rivalry between Morgan Motors and other car manufacturers. There is absolutely no swap of Morgan automobiles. The risk of substitutes to the automotive industry is quite light, numerous of other car manufacturers are rivalling with each other in the global car industry, but do not require offer the same kind of automobiles as Morgan does. Do not require can provide to customers the side- made, with an ash body structure panelled in aluminium, the traditional outdated and herewith modern car, which may be made out of the taste of customer. Admittance barriers exist whenever it is difficult or not financially feasible for an outsider to reproduce the incumbents position (Porter, 1980b; Sanderson, 1998). In the case of Morgan as I have mentioned previously before it offers a long history using its unique production, the Company has already obtained a good position on the marketplace and from my perspective it will be hard rather than feasible for new entrants to reproduce them.

PESTEL Analyses

PESTEL Analyses help organizations to analyse factors such as taxes changes, new laws, trade obstacles, demographic change and administration plan changes. PESTEL stands for: Political, Economic, Sociable, Technological, Environmental, and Legal. PESTEL research is a useful proper tool for understanding market development or decrease, business position, potential and path for procedures (Kotler, 1998). PESTEL analyses also means that company's performance is aligned positively with the powerful pushes of change that are impacting business environment (Porter, 1985).

Typical PESTEL factors to consider include


e. g. international trade, taxation policy


e. g. interest levels, exchange rates, national income, inflation, unemployment


e. g. ageing human population, behaviour to work, income distribution


e. g. innovation, new product development, rate of technical obsolescence


e. g. global warming, environmental issues


e. g. competition rules, health and safeness, employment law

Applying PESTEL to Morgan Motors

Political: Politics decisions can impact on many vital areas for business, but in circumstance of Morgan the politics factor will not impact on the company's environment.

Question 2

Product Life Cycle

The typical Product Life Circuit consists of five main aspects.

  1. Product development
  2. Introduction
  3. Growth
  4. Maturity
  5. Decline

The Product Life Routine begins with product development, during which time the firm devises and creates a new product (Kotler and Armstrong, 2004). The launch of a fresh product onto the marketplace is normally characterised by very slow-moving sales, which might expand only very slightly over a long time frame. (Porter, 1980; 1985; Kotler et al. , 1996; Blackwell et al. , 2001; Give, 2002; Kotler and Armstrong, 2004). The expansion level in the PLC typically will involve a rapid development in sales as early on adopters replace pioneers as the main consumer group.

The maturity level in the PLC is an important factor for a company because it signifies the turning point in the product's success. Morgan Electric motor Company in Product Life Routine takes Maturity level.

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