HR Management Assignment

Business Strategy Report: Motors and More

MBA 533

January 11, 2015

Business Strategy Report: Motors and More

Motors and More Inc. pursues an ingenious strategy that has enabled it to sustain its competitive advantage in the automotive industry. Nevertheless, the competitors in this industry have also devised some inventive techniques for increasing their market shares and attracting more customers. Many of these competitors have succeeded because of their vibrant HR departments and sound strategic initiatives. The Porter’s five forces analysis of competitive position can aid to evaluate the attractiveness of the company’s business strategy and highlight the nature of the automotive industry where Motor and More primarily operates.

According to Wheelen & Hunger (2012), one of porter’s forces is the threat of new entrants. On the competitive landscape where Motors and More operate, the threat from new entrants is relatively low. This is because this industry is capital intensive and prospective investors require immense capital to compete with the already established firms. Furthermore, there is stringent government regulation overseeing this industry and it is very difficult for new entrants to achieve economies of scale. Since Motors and More Inc. already has the capabilities and resources for operating efficiently, the threat of new entrants does not have a significant implication on its strategic cascade.

The other force that affects business strategy and competitive advantage is supplier power (Noe, Hollenbeck, & Gerhart, 2011). In the automotive industry where Motor and More operates, the supplier power is weak. This is because suppliers are many in number and the materials for manufacturing automobiles such as metal and plastic are widely available. This is advantageous to the company since it can be able to acquire raw material at friendly prices and minimize operational costs (Pearce & Robinson, 2011). The other important force in Porters model is the bargaining power of buyers. In the automotive industry, the buyer power is strong.

There are various reasons for the buyer power being strong. First, the number of buyers is significantly high. Furthermore, the buyers can easily choose among alternative car brands and it does not cost them much to switch to other vehicle brands or use other transportation modes (Iveta, 2012). In order to attract more customers, Motors and More has embarked on a strategy that focuses on product quality and customer responsiveness. The company manufactures customized vehicles and ensures that all its products meet the federal and international specifications governing issues such as safety and sustainability standards.

The threat of substitutes in the industry, which is the other important force, is relatively strong in the automobile industry. This is because there are many alternative modes of transportation with which to choose from including bicycles, planes, trains and motorcycles (Nieuwenhuis & Wells, 2003). These substitutes can provide the same convenience, making them appealing to many customers. Moreover, most of the alternative modes of transportation cost cheaper and are sometimes more environmentally friendly, which can make them attractive choices. Motors and More Inc. has strived to utilize environmentally friendly practices in various spheres of operation in order to ensure that it appeals to its wide customer base.

The other force in Porter’s model is competitive rivalry. As Noe, Hollenbeck, & Gerhart (2011) vividly point out, the intensity of rivalry or competition can have significant implications on the capacity of the firm to generate adequate margins. In the automotive industry, the competition is very stiff. Some of the major competitors of Motors and More include Toyota Motor Corporation, Mazda, Hyundai, Peugeot and Ford. These competitors have invested heavily in research and development (R&D) as well as advertising campaigns to reach more customers. Motors and More strives to confront the competitive rivalry through investment in quality production, continued emphasis on emergent technologies and leveraging on cost effective mediums of advertisement such as social networking platforms. These mediums harnessed by Motors and More have the possibility of reaching a wider target clientele at relatively lower costs and yielding valuable feedback that can help in product developments/modifications (Wheelen & Hunger, 2012).

It is worth noting that strategy plays a very critical role in company performance. First, it helps in creating goal clarity. Management and other senior executives at Motors and More can use strategy to align the operational aspects of the business to the vision and mission of the organization. This can help employees to develop shared goals and synergy needed to meet strategic objectives (Pearce & Robinson, 2011). In addition, strategy is also an important tool for managerial decision-making. The senior management for companies such as Motors and More can use strategic plans to guide them in important decisions such as those related to restructuring, mergers and acquisitions, corporate social responsibility as well as international expansion.

Nevertheless, for business strategy to realize its intended outcomes, various measures must be in place. For example, the senior management should play an instrumental role in all the phases of strategy formulation, design, implementation, control and evaluation (Wheelen & Hunger, 2012). The senior management also has the responsibility of ensuring that it provides all the required resources for successful strategy implementation. Some of these resources include the financial, human capital and material resources. Strategic management allows companies such as Motors and More to understand their internal and external environments via the use of tools such as SWOT analysis, Porter’s five forces analysis and PESTEL. All these can aid management in formulating sound strategic decisions that can translate to overall profitability of the organization (Noe et al., 2011).

From the case, it becomes apparent that various components to the HR strategy will be important for supporting the overall company strategy. First, Motors and More should create a HR Department since it currently lacks one. This department will be responsible for overseeing all the needs of the employees including employee development and employee relations. Another vital component in the HR department should be continued emphasis on training and development. The training should primarily focus on multicultural competence (Iveta, 2012). This is because Motors and More currently have employees from diverse cultural backgrounds but has failed to integrate them into leadership positions. The training will aid to ensure that all employees appreciate and embrace diversity, which is essential for increasing cohesiveness and inclusivity.

The other HR component that will be critical for supporting the overall company strategy will be introducing new incentives for the employees. Even though Moto and More currently offers some incentives, it can motivate more employees through increased financial, material and nonmonetary rewards such as paid vacations (Noe et al., 2011). This will aid to reduce the high turnover rates and increase employee engagement. The other important component will be empowering the HR department with the function of conducting employees’ appraisals and evaluation. This will aid to identify the weaknesses and impediments that are preventing employees from accomplishing their tasks effectively and institute contingency measures for better performance.

References

Iveta, G. (2012). Human Resources Key Performance Indicators. Journal of Competitiveness , 4 (1), 117-128.

Nieuwenhuis, P., & Wells, P. (2003). The automotive industry and the environment : a technical, business and social future. Cambridge : Woodhead Pub.

Noe, R., Hollenbeck, J., & Gerhart, ‎. (2011). Fundamentals of Human Resource Management (4 ed.). New York, NY: McGraw-Hill/Irwin.

Pearce, J. A., & Robinson, R. B. (2011). Strategic management : formulation, implementation, and control (12 ed.). New York: McGraw-Hill/Irwin.

Wheelen, T. L., & Hunger, J. D. (2012). Strategic management and business policy : toward global sustainability (13 ed.). Upper Saddle River, N.J.: Pearson Prentice Hall.