The Slade Company was a small but prosperous manufacturer of metal products designed for industrial application. It was located in central Michigan with 500 employees. The plating department of Slade had formed certain informal team in which some employees had dishonest behaviors. In this paper, we will discuss Slade’s external environment, central problem, alternatives, analysis, and finally give some recommendation.
Slade’s competitive market is metal product market. It can be analyzed with the Porter’s Five Forces Model: risk of entry by potential competitors, rivalry among established companies, the bargaining power of buyers, bargaining power of suppliers, and threat of substitute products. Appendix 1 shows a summary of the five forces. The risk of entry by potential competitors is high. The capital requirement of small metal companies is not high, so building and establishing this kind of company doesn’t need a lot of resources. Also, Brand loyal of the current existence customers is not very strong thus new entrants are able to compete to enter the market. Also, the competition between existing players in this industry is high. There are about 619,000 metal enterprises in the USA in 2005 (IBISWorld, 2007).There are many companies that produce different kinds of metal products in the market. Besides, the bargaining power of buyers is high because product difference for the buyers of the metal products is small. It is not easy to differentiate the quality of one metal product from another. In addition, the cost of switching for the buyers is low. The number of substitutes of metal products is also high thus the buyers have great bargaining power. In addition, the bargaining power of the sources of inputs is high. The switching costs from one supplier to another are high because there are not many substitutes for the particular input for metal products. Besides, the number of suppliers who produce raw metals is small. The threat of substitute is high. There are many different kinds of substitutes for metal product company. These companies may also produce a large variety of product like Slade Company. Therefore, the substitute is low for this market. Only companies that produce high quality are able to not be substituted by the others.
The strategy for competing in the market was a broad-differentiation strategy. It was broad because it produced a large variety of products such as clamps, inserts, knobs, and similar items. Also, it differentiates from the other metal companies because of its good quality, good delivery, and reasonable price. Competitive Advantage
The competitive advantage of Slade can be analyzed by using the VRIO framework. First of all, Slade creates value by increasing revenue. The quality, delivery, and reasonable price are the factors for large and recurrent orders. Also, the skills of the employees enable the organization to expand and raise revenue. Besides, Slade is rare. Employees, company culture, technology, etc are the rare resources of Slade. The informal groups are the rarest element which makes Slade differentiates from other companies. In addition, Slade is inimitable and non-substitutable. The employees, talent management, and organizational cultures cannot be imitated. The employees cannot be copied, but the competitors can hire Slade’s people. However, the cost of hiring is high. Also, time-compression diseconomies and path dependence made it costly to imitable because Slade has been winning for long by plan but not by chance. Moreover, the organization itself creates competitive advantage. Although Slade is not a big company, it is able to get high sales volume and secured orders. Organization Structure and Culture
There were 7 departments in Slade with 485 employees (excluding President and Production Manager). Be specific to the plating department, there were 38 people. The...
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