Using Porter’s Five Factors Analysis of competitive position, analyze the business strategy and describe your findings.

Using Porter’s Five Factors Analysis of competitive position, analyze the business strategy and describe your findings.

As a team, review and discuss the company strategy, including industry realities, competitors’ analysis, and differentiation in the market. Be sure to focus on the role of strategy in the competitive position of Motors and More. Your report should address the items below.

1. Using Porter’s Five Factors Analysis of competitive position, analyze the business strategy and describe your findings.

 

Porter’s Five Forces Analysis tool is a simple but powerful tool that helps us understand where the power or weakness lies in a business situation.  This will help us understand the strength of our current competitive position.  The reason this is so important is because without a clear understanding of our strengths / weaknesses we cannot take advantage of a situation of strength, improve our weaknesses, nor avoid taking wrong and sometimes costly steps.  This tool can also be used to identify whether new services or products can be profitable.  Porter’s tool assumes there are five forces that determine the competitive power in a business situation. They are (1) bargaining power of suppliers (i.e. How easy is it for suppliers to drive up prices? The fewer suppliers you have the more control they have and the easier it is for them to have more control over you.), (2) bargaining power of customers (i.e. How many options do the buyers have?), (3) threat of new entrants, (4) threat of established rivals, and (5) the threat of substitute products or services. (Manketelow, 2008.)

How does this tool apply to the case of Motors and More, Inc.?  We know while this market is highly competitive there is still an increased demand for product.  Based on this we can assume that the bargaining power for suppliers is slightly higher while remaining normal for customers (We do not know for sure how many competitors Motors and More, Inc. has but we will assume that competitors for a small motor and accessories manufacturing company are not hard to find).  At the same time we can also assume that based on a combination of (1) the small labor pool of a town with 28 thousand occupants and (2) a low unemployment rate of 3.1% that it would be difficult for a competitor to set up shop without pulling its employees directly from the workforce.  So we will say that the threat of new entrants is on the low side.  As far as threats of established rivals and substitute products / services, we will also assume that based on an increased demand for product combined with no mention of the direct competitors’ strengths that these are low threat levels.

 

 

1. Review the role of strategy in company performance. What will be needed in the human resource strategy to support the company strategy?

 

Motors and More, Inc. uses the “prospector” strategy.  This strategy takes advantage of new markets and products.  Emphasis is on growth, innovation, and new product development.  They want to be the first to market as well as quickly respond to competitive and rapidly changing markets.  To support this they have a flat and decentralized organizational structure.

Currently Motors and More, Inc. has several issues that if not resolved will eventually (if they are not already) negatively affect the company’s goals and strategy.  HR will be able to implement policies to resolve these issues.  The high turnover rate is a direct result of multiple issues within the corporation.  These issues are with recruitment and promotion, lack of job satisfaction, and weak career paths coupled with Equal Employment Opportunity issues (we know this to be true due to a 12 % ratio of minority employees and 1 female employee).

Even though the high turnover rate is an issue, there is still an increased demand for product.  Such that output must be increased by 96%.  Also, the local labor market is 48% minority with a growing Hispanic and Kurdish population that has not yet been accepted into the community.  This is possibly an addition to the labor pool that can be a valuable resource. HR will implement processes that schedule reachable goals for improving the following areas it will strengthen the company in both labor force, performance, and efficiency:  (1) diversified workforce in regards to gender and race (possibly a Voluntary Affirmative Action Plan (VAAP)), (2) promotion / pay increase based on performance vice seniority, (3) career paths that allow for advancement, and (4) cost assistance for secondary education for those employees interested that meet certain standards (I do not yet know what that standard is…possibly a certain time period of satisfactory employment?)  The organization already provides some skills training, but if HR can support developing a training pipeline to train and prepare current employees for management or supervisory positions this may be positive in regards to job satisfaction, career path, and retention.

References:

James Manketelow. (2008). Retrieved from: http://www.mindtools.com/pages/article/newTMC_08.htm

 

HR Organization Design

1. Design a typical HR department and identify each HR unit. For each HR unit, provide roles/responsibilities and job titles. Develop an organization chart of a typical HR department.
2. Given the size of Motors and More, indicate which positions identified in your typical HR department should be combined or eliminated to reduce the number of HR employees. Provide new job titles and develop an organizational chart specifically for Motors and More’s new HR department. Provide the total number of staff for each HR unit.

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