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Precision Parts (PPQ)

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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. 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.

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

The current environment of the US is growth in the GDP but the recovery is slightly slower than that predicted by the Federal Reserve. In the small SUV parts market, PPQ Parts has an advantage. There is improvement in the infrastructure for both hybrid SUVs and electric SUVs the manufacturers of these cars are likely to buy parts from PPQ Parts. The business cycle stage is recovery and this means that the demand for PPQ Parts products will increase. The competition is currently weak. Small part makers have gone into liquidation and those that survive will not have the speed, and flexibility required to survive in the SUV parts market.

PPQ Parts has another advantage. There is political stability. There is low risk of any military aggression. The pricing regulations do not apply to PPQ Parts. The taxes, wages, and labor laws are moderate. In particular there are not many trade regulations to restrict PPQ Parts from exporting its parts to all over the world. The social attitudes towards US products are positive all over the world. In case of PPQ Parts the SUV makers are positive towards American suppliers. Most importantly, as PPQ Parts is using the latest technological developments, its products will be bought by car makers all over the world.

The main threat that PPQ Parts can face is foreign ...

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