Strategic Management Plan for West End Precision Parts Company
The strategic management plan for the company presented seeks to chart the way forward for the West End Precision parts company (PPQ). The strategic planning outlines the various areas that companies should prioritize. The plan also ensures that employees and other stakeholders enjoy cordial working relationship that ultimately sees them achieve common goals. The plan is in relation to the company's expansion to Japan. This paper explores the environment in Japan as the target market for PPQ giving the advantages and disadvantages of the possible expansion. It also analyses the internal environment of the company especially the managerial and financial strengths and weaknesses.
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To provide customers with the best quality products available and in the most timely manner and at the best value
The company plans to set its foot in Japan with the main targets being the cities of Tokyo, Kawasaki, Toyota, Nagoya and Kawaguchi. Japan has one of the strongest economies rated as the third world wide by nominal gross domestic product and the second by purchasing power. Given that it is the third largest auto mobile and the largest electronic manufacturing country, Japan would automatically offer a fair market for the manufactured precision parts (Pettigrew, Thomas & Whittington, 2002). The creation of new businesses and increase in demand in the use of precision parts adds to the region's prosperity. The ready market and ever increasing economic growth will likely contribute to large scale manufacture of the precision parts. The economic capacity of the region ensures a continuous demand for goods and the company has a proven record of meeting the growing demand.
From the desk and field research carried out on about five hundred clients, it is clear that there is a considerable potential in the target market. The major customers in the market include various companies dealing with steel products such as the automotive, aerospace, and commercial firms. It has well established itself in the automotive industry and has held a TS 16949 certification for quality in the sector since 2005. In the aerospace industry, West End provides one stop shop which includes plating and finishing to customers' needs. In the commercial sector, the company has undisputed record for its large supply of precision parts (Kaplan & Norton, 2005). It has been able to satisfy the most demanding customers on quality costs and delivery targets.
Some of the major competitors in the market include DTF research consortium, JMC Corporation, Yuki Precision Company, Suzuki Precision Company and Yamonouchi Company. The largest market is the automotive market especially those located in Asia, South America, European and the domestic market. The major competitor, Suzuki Precision holds about 6% of the share market with West end Precision Parts Company holding 5%. Quite interestingly the competitors are growing though at a slower rate. However, the rate of growth of West End Precision Company is encouraging (Kaplan & Norton, 2005). The company is working to see a market share of 9% after 4 years. The company is working also to ensure sustenance in its production in terms of product quantity. West End is also seeking to ensure that it comes up with quality products in the aerospace industry, an industry that has not been exploited by many other competitors.
As part of the company's goals, large economies of scale will ensure that the company production prices reduce and the products are affordable to the customers. This will help it edge out the rest of the companies. As part of its plan constantly to keep the customers and their needs at heart, the company seeks to introduce new products. These products will include; hydromats and prototype and low volume capabilities. In order to remain distinct in its venture, the company looks forward to investing heavily in bespoke systems (Hill & Jones, 2007). The systems are known to be subject to the rigorous quality control standards. The company also is striving to specialize in high capacity machining and offer total reliability to the customers.
Political stability is a key component in location of a business. The business performance is highly affected by the political environment around it. The aspects of the political environment that should be considered include the stability of government, international relations of the government and the bureaucracy in the systems. The Japanese government is gaining political stability, which is best for the growth of different sectors of the economy. Business future looks promising after a long stagnation due to political interference. There are also reforms in the national tax systems underway. The reforms will see a vibrant economic growth in the country. Some of these business changes will make it possible for the establishment of close relations with other foreign governments, which in turn would then create directly or indirectly an attractive environment for the company. The company must have in mind that the systems with a lot of regulations or procedures must be eliminated while setting up new facilities outside US (Hill & Jones, 2007).
Managerial and Financial Strengths
The staff is upbeat and friendly. Scheduled training of staff is carried out every year to ensure that the right skills are incorporated within them. The staff is dedicated and upbeat about the company's vision. They are focused and result oriented. The staff and managers work hand in hand to ensure that teamwork is enabled, and delivery of the company's mission is enabled.
Managerial and Financial Weaknesses
The staff and managers of West End Precision Company have a challenge to manage the performance and keep up with changing and the dynamic fields. The company has a challenge to embrace technology and new applications in fields such as in robotics and accounting processes and procedures (Pettigrew, Thomas & Whittington, 2002). They have to come up with new financial systems and better accounting and customer response systems that will cater for any arising cases in real time.
Short term Strategic goals
The company aims at reaching the clients one on one in order to get firsthand information from them regarding their products in the market. This move is to see the company establish itself strongly and make any changes in its products if the need arises.
Long term Strategic Goals
West End Precision Company aims at growing steadily within the next 4 years, becoming the premier provider of Precision Parts in the local and international market. The profit margin over 3 year period has been an average of 6%. The company aims at increasing its margin as well as Industry profit margin to a respectable 13% in the next 4 years. The company has employed a number of strategies to ensure that it achieves its goal (Hunger & Wheelen, 2003). These strategies include extensive public relations, recruiting of well trained and enthusiastic staff, delivering superior product knowledge and then providing high quality service. Employing these strategies in the long run will help the company achieve its goals.
West End Precision Company is located in Caddsdown Ind Park on the Clovelly road, in North Devon. This location has ensured easy management of its logistics and reach on the target market. In choosing a Japan as its location for the business expansion, the company considered the advantages of the scenarios, such as the readily available market. The company also had in mind the program offered by the government that pertain offering of tax incentives to newly created companies. Enhanced access to suppliers and delivery logistics are also crucial factors that were considered when choosing the named cities of Japan for the business venture (Shang & Seddon, 2002).
Benefits of Expansion
The expansion of the business will see an opportunity to staff the firm with new and qualified personnel. The firm has a target of increasing the employees from 5000 to 10000 in four years. The personnel brought on board can help streamline processes, inject fresh ideas and bring a sense of camaraderie (Pettigrew, Thomas & Whittington, 2002). Expanding the business will result into a wider target. The increased number of customers can dramatically improve the sales, resulting into profitability to the firm. Successful expansion of the firm would help in easy acquisition and access to financial support. Increase in market share from 5% to 9% would ensure easy access of funds through loans. During expansion outside the country, the company plans to create more of the facilities out of the state. There are plans that about 80% of new facilities be located in the United States (Hunt, 1990).
Limitation for the Expansion
Business expansion can pose problems for the company especially if the growth challenges are not well cushioned. Therefore as, the company expands, it should strive to view successful expansion on profitability level, not just from a sales growth level. During the expansion period, the business owners should periodically review the returns that accrue on investment from the expansion (Pettigrew, Thomas & Whittington, 2002).
With the right consideration of logistics such as the location of expansion, the increase in staffing and profit margin, West End Precision Company can be the people's choice. The strategic management plan crafted is to see the company grow to greater heights and then ultimately give back to society in charity form. The growth of the company will see the charity contribution increased from the current 0.5% based on profits to a better value.