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Strategic Global Management for Precision Parts

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 company'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:

1) Provide environmental scanning of current conditions in the area of expansion including economy, competition, political stability, and so forth.

2) Address internal resource analysis such as managerial and financial strengths and weaknesses.

3) Please include short-term and long-term strategic goals.

4) Location consideration for implementation is vital. Please explain the benefits and limitations for expansion in your chosen area.

Solution Preview

1) Provide environmental scanning of current conditions in the area of expansion including economy, competition, political stability, and so forth.

PPQ Parts must be mindful of their operations, as well as any peripheral factors which can manage those operations. Strategic planning can clearly differentiate PPQ Parts' objectives, and evaluate their external and internal conditions to develop their strategies, execute their strategies, assess their developmental abilities, and build the essential adjustments required in meeting their goals. Dynamics can straightforwardly influence their internal operations, as well as PPQ Parts' strategic objectives. External influences can rapidly and significantly transform, becoming remote of their control; however, these factors can produce novel opportunities, or develop into imminent threats. External factors should be projected, observed, appraised and incorporated by the use of environmental scanning; and are encompassed by economic, socio-cultural, technological, political, and financial data (Wheelen & Hunger, 2007).

Economic Factors - With globalization comes augmented opportunities. Furthermore, globalization pilots the construction of the worldwide consumer, someone who is familiar with the brand and anticipates the same superiority of merchandises and services despite their location. Secondly, the exchange rate may influence financing and cash flow causing the company to take risks, based on the fluctuating rates. Also suppleness in corporate spending, inflation or deflation, or the global recession could affect the demand for personal equipment which could negatively influence investments and profit margins.

Political Factors - Political fluctuations can have an adverse influence on PPQ Parts. Political instability among singular markets can be very demanding. Managing federal, state and local legislation while running internationally dispersed personnel could pose to be a threat to PPQ Parts. Furthermore terrorist attacks and political volatility would also negatively influence investments and profit margins. PPQ Parts is also subject to at home and at broad competition, piracy, laws and regulations.

Technological Factors - Since the conception of the internet, companies have been vastly transformed. E-business has eliminated geographical barriers and time zone boundaries for organizations. PPQ Parts has played a major role in technical connections, and with that connection, came the awareness to improve quality, advance technology and advance consumer relations. Technology has also aided in reducing operational costs, and has made the business unit run more efficiently.

Socio-Cultural Factors- PPQ Parts is dedicated to being a conscientious ecological leader and has developed and implemented various programs to ease their environmental footprint. PPQ Parts is committed to technological innovations that assist people and companies around the globe improve their environmental settings.

Financial Factors - PPQ Parts intends to grow their workforce to 10,000 employees in the next four years; additionally PPQ Parts is looking to globally expand, building 80 percent of their operations outside the continental US. Currently, parts hold 5 percent of the world's market; however PPQ Parts is looking to increase that number to 9 percent in four years. Presently PPQ Parts stock price is over $10 a share, and their 3-year profit margin in currently 6 percent. PPQ Parts is looking to increase both the shares and profit-margins in the next four years.

2) Address internal resource analysis such as managerial and financial strengths and weaknesses.

In order to create a 4 year strategy, we would need to address an internal resource analysis. Information would need to be gathered by means of the Board members, stakeholders, suppliers, vendors, personnel and consumers. The information provided would be deemed a vital asset to PPQ Parts (Amaldoss et al., 2008). The strengths and weaknesses, or PPQ Parts internal data, would need to be collected and analyzed; as information processes would be greatly involved in PPQ Parts strategy formulation. The strength to, and weight given in this analysis, would play a vital role in PPQ Parts strategic processes (Sharman, 1998). This information would come from a SWOT analysis; where all information would be gathered that could potentially promote or damage PPQ Parts, based on: corporate culture, social, economic, demographic, ecological, legal, political, technological, and from the competition (David, 2011). This data would be vital in creating a strategic formula to having competitor advantage and future success.

Additionally, information would need to be gathered regarding PPQ Parts financial records, marketing tactics, research and development data, distribution processes, product plans, supplier ...

Solution Summary

The response provides 2933 words which detail the economic, political, technological, socio-cultural, and financial factors of environmental scanning as well as the means of gathering information and strengths and weaknesses of precision parts. Eleven references are also provided.