Morgan Motor Company is a British luxury car manufacturer based in Worcestershire, UK. The company specializes in assembling all cars by hand and manufactures a few hundred cars a month. The first section of the essay will critically evaluate the strategic position of Morgan Cars using appropriate models and theories.
The competitive context of Morgan Cars
Morgan Motors competes in a niche market for luxury cars and on a relatively reasonable price range as their cars are made to be environmental friendly and out-competes its rivals in terms of environmental performance. Charles Morgan, MD of Morgan motors stated, “Other cars are built to price, ours are built to last”.
Porter’s Generic Strategy
According to Porter, a company can be successful if it achieves any one of the generic competitive strategies (Srinivasan, 2008) – cost leadership, differentiation in a broader market or a focus strategy in a narrow market, which help create competitive advantage (Porter, 1985). Morgan motors can be seen as achieving competitive advantage by following a focused differentiation strategy. But its market segment is narrow. The company was always able to fend off any competition with other large car makers due to its unique hand-crafted models. There was no automation of any kind within the automobile plant. This concept shows us that Morgan motors competes on differentiation focus strategy in a narrow market rather than just differentiation in a broad market. Morgan’s competitive strategy can be more elaborated using other strategic concepts. The new insight into environmental friendly automobiles has given the company a genuine edge in this era, where some researchers are talking about sustainability of automotive industry.
The new concept care, LIFE car - a fuel-celled electric vehicle, will be sporting a new lightweight engine as part of its “green” package. Such concepts force the competitors to launch similar technologies. Thus, Morgan motors by its unique differentiation strategy keeps out the competition from other automotive companies.
The Strategy Clock
Strategy Clock concept introduced by Cliff Bowman also takes cost and differentiation as its core variables. According the strategic clock, firms can gain a competitive advantage by following a cost advantage or a differentiation advantage and segmented into 8 options. Morgan motors uses the focused differentiation strategy in this case. The cars are manufactured keeping in mind only a particular segment and the company is able to obtain a decent customer loyalty even thought the wait time for a car is a couple of years. This shows that they can ask for a premium price as the quality of the products delivered is incomparable to other manufacturers. Customers perceive their brand image, styling and features worthy of a premium price (Thompson, 1993) which gives an edge to Morgan motors as each car is carefully hand-crafted and can be custom made to specifications.
Bowman’s strategy clock helps in assessing Morgan motors competitive strategies as it uses customer’s or market perceived value also to create strategy. The focus is not just on cost as it is not clearly proven if a change in cost alters market share.
(Strategic clock 2010)
The Strategy Cube
Morgan motors competitive strategy can be furthered discussed by using a strategy cube model developed by Jenkins. This model takes into account
1) The perceived product benefits
2) Price to the customer
3) Cost of producing the product
Morgan’s have been successful in most past as they occupy the position with high cost, high price and high benefits. The Morgan cars sell at a premium price and their added benefits compared to other cars in its range are the brand image, environmental friendliness and luxury quality. It seems a privilege to own a Morgan car and the company has been able to maintain this brand...