You have just joined the Crane Company as a General Manager and you are undergoing some induction, training and special project work. In this role you are working directly for the Managing Director, Mike Carr who is impressed with your recent MBA qualification and your specialization in International Business.
The Crane Company is a medium-sized UK based manufacturer of factory cranes and lifting equipment. The company specializes in the manufacture of electric overhead traveling cranes and manual and electric hoists. The market for cranes and lifting equipment is volatile; the business is adversely affected by recession, and excessive demand in prosperous times strains the resources of the company. Mike Carr had been concerned about the vulnerability of the Crane Company, and had taken action in an attempt to provide a buffer for the business. He had set up a crane service business to serve the UK market.
The establishment of the crane service company had been a difficult exercise but, in the Mike's view, the move was a vital one. The Crane Company had a very large investment in plant and equipment, and the asset-turnover was low. He needed a business with low capital requirements, which would generate cash and profits. He had observed that, in good times, customers would buy new cranes but, in times of uncertainty or times of recession, they spent their limited budgets on servicing, repairing, and/or refurbishing existing cranes. However, the Crane Company, like most original equipment manufacturers (OEMs), despite having brilliant engineers, was much more concerned with manufacturing than with 'after-sales service' and, impatient with the company's attempt to develop a service orientation, Mike had decided to set up a new, autonomous crane service company. The new Crane Aid Services had quickly established a strong presence in the market, had enjoyed exponential growth in sales and earnings, and Mike was delighted with the progress.
Because the company has no marketing department you have conducted your own preliminary investigation of the crane service business and you have found:
a) There is a strong market need for safe and efficient cranes and lifting equipment to enable production personnel to meet their targets and operate effectively;
b) There is a population of over 80,000 crane and hoists in the UK spread throughout manufacturing and distribution industries. The main industrial sectors served are metal manufacture, forgings, castings, fabricated metal products, transport and equipment, mechanical, electrical and civil engineering and machinery and equipment;
c) Maintenance crews in factories and government organizations are being run down or outsourced;
d) The Health and Safety at Work legislation emphasizes the safe operation of cranes and lifting equipment in view of the number of accidents associated with this equipment;
e) The 'decision-maker' in customer companies is usually the works engineer;
f) Competition for crane service work comes from three main sources:
i) other crane companies servicing their own cranes, e.g. Demag,
ii) the 'cowboy' syndrome - ex service engineers from crane companies who have started small businesses operating with low overheads, poor systems and untrained staff,
iii) 'in-house' service teams, where maintenance staff are employed directly by customer companies to carry out the work, e.g. Steel companies. This is still the major source of competition.
g) Increased competition for cranes from Asian countries - but limited service cover.
Mike is impressed with your initial research and from his casual visits to a few overseas markets he feels that a Crane Service company could prosper there too. He has told you that he feels that there is a limited, five year, window of opportunity in overseas markets.
Mike has asked you to prepare a plan to build business in overseas markets. To this end you need:
1) To analyze and prioritize which markets to enter - a maximum of THREE given the resources of the Crane Company.
2) How will you market your services in these markets?
In discussion with your professor on the MBA program and with other experienced managers that you have worked with you come to the conclusion that you need specifically to:
a) Develop or use existing frameworks that will enable you to assess objectively the desirability and drawbacks of potential markets;
b) Consider the strategic options for giving the business a distinctive presence in the market;
c) Make recommendations after due consideration of costs and benefits of each recommendation.
Please see ** ATTACHED ** file(s) for complete solutions and details!!
I have attached my comments and my idea's in a doc file. One of the problems that you will face when dealing with this situation is the fact that most of the crane markets now are stagnating due to the global crisis and it's hard to comment on a marketing strategy now when most of the projects are put on hold and banks are not lending and companies do not want to take risk.
You should use the file as a mere idea ...
The file contains content which could be used to look at the PEST analysis of Crane manufacturing companies in the region of Dubai, South Korea and Brazil