Consider the following scenario:
You have held conversations with Precision Part's leaders and obtained the following information, which you want to use in the development of a 4-year strategic management plan.
* PPQ Parts employees now number 5,000, and all are currently employed in the United States. It plans to grow to 10,000 employees in 4 years.
* New facilities will be needed in international expansion, and PPQ Parts anticipates building most of those (80%) outside the United States.
PPQ Parts holds 5% of the world market share on small SUVs, but its goal is 9% in 4 years.
* Current stock price is $10 per share. The goal is $22 a share.
Profit margin 3-year average is 6%. Industry average during this time has also been 6%. The company goal is 13% in 4 years.
* PPQ Parts has averaged 28% employee turnover during the last 3 years. This is compared to an industry average of 25%. The companyâ??s goal is to increase employee retention by lowering annual turnover to 17%.
* PPQ Parts contributes to all the local communities in which it is doing business. This is one of its corporate values. Current charity is 0.5% of total profits, but the company would like to raise that to 5% in 4 years.
A strategic management plan is vital for the company business today. Review the company scenario at the beginning of the course for additional information regarding growth goals. Create a basic strategic management plan for PPQ Parts including quantifiable goals and measures. Include the following in your report:
* Provide environmental scanning of current conditions in the area of expansion including economy, competition, political stability, and so forth.
* Address internal resource analysis such as managerial and financial strengths and weaknesses.
* Please include short-term and long-term strategic goals.
* Location consideration for implementation is vital. Please explain the benefits and limitations for expansion in your chosen area.
Precision Parts is an American company that is a leading manufacturer of precision parts for SUVs. The company has developed because of its technological superiority and high quality precision parts. Increasing demand world wide for SUVs has enabled Precision Parts to invest in machinery to produce an extensive range of SUV precision parts. Precision Parts uses state of art fully automated facilities to produce its precision parts. The overall objective of Precision Parts is to provide precision parts of unrivaled quality at the most competitive prices.
Precision Parts has an the advantage of political stability. Currently, there is no political upheaval or civil war in the areas in which Precision Parts plans to operate. In the USA there is no threat of military invasion, the legal environment for contract enforcement is excellent, and there are laws in place to protect the trade mark of intellectual property rights. There are no pricing laws that impinge on Precision Parts. The industrial safety regulations and labor laws are reasonable.
Currently, the economy is weak and that has affected the sales of SUVs in the United States. Car buyers are seeking low fuel consuming cars and do not want to buy SUVs. The overall economy is weak but the economic system is sound. The government intervention is minimal. Even though there are fluctuations in exchange rates, there is stability. The unemployment rate is relatively high, the inflation rate is low, the interest rates are low, and the economic growth rate is weak.
Competitors: There were several ancillary industries in Detroit that made precision parts that were used by car companies. However, the quality of these parts was directed at the requirements of specific manufacturers. A large number of these have ...
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