Strategy Evaluation

This report evaluates the value of clear Purpose, Mission, Vision and Objectives in devising strategic direction and assesses the competitive advantage of the entity through VRIO Analysis and analyses the external environment of the company with PESTLE Analysis. It further appraises the attractiveness of a sector, industry or market and reviews the organisational strategy. The report uses Morgan Motors Company as a case study to evaluate the concepts of strategy evaluation.

Strategy Evaluation

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Critical evaluation of value of clear Purpose, Mission, Vision and Objectives in devising
strategic direction of company.....................................................................................................1
2. Assessing competitive advantage of the entity by using VRIO Framework...........................2
3. Analysing external business environment by using PESTLE Framework..............................4
4. Assessing competitiveness of the company through using Porter’s Five Forces Model.........6
5. On the basis of analysis, reviewing strategy of the company..................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategy is termed to a long term plan about what to do with the hope of achieving certain
goals. Purpose of strategy is to pursuit of competitive advantage in sustainable manner.
Likewise, strategy evaluation refers to a stage to of strategic management process wherein
managers undertakes attempt for assuring that strategic choices are properly executed to meet
business objectives (Zou and Hyland, 2020). It looks beyond short term state of company as well
as examine fundamental factors which governs success of establishments. It helps in assessing
health together with productivity of business and its future endeavors. For understanding concept
of strategy evaluation, Morgan Motors Company is considered. It is a motor car manufacturer
established by Henry Frederick Stanley Motors in 1910. Its headquarters are located at Malvern,
UK.
The report evaluates value of Objectives, Purpose, Vision and Mission in devising
strategic direction and assess competitive advantage of entity through VRIO Analysis and
analyse external environment of the company with PESTLE Analysis. It further appraises
attractiveness of a sector, industry or market and review organisational strategy.
MAIN BODY
1. Critical evaluation of value of clear Purpose, Mission, Vision and Objectives in devising
strategic direction of company
Strategic direction is said to a plan which require to be executed for company to progress
towards fulfilling goals (Azizi Shalbaf, Mian and Sohaib, 2021). Actions which organisation
requires to undertake for reaching at great heights are strategic direction. It ensures owners in
addition to management communicate prominence of employees work together with their
contribution to achieving business objectives. It ultimately supports business to achieve its vision
as well as assist in fulfilling goals of its strategy. Furthermore, strategic direction unites
company's strategies and provides for greater stability into the future.
In case with Morgan Motors Company, value of Mission, Vision, Purpose and objectives
in establishing strategic direction are as critically evaluated:
Purpose: It is motivating force that moves, guides together with deliver organisation to
perceived goals. Purpose of Morgan Motors Company is to provide fitting antidote to mass
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produces automotive manufacturing and bringing with it an exceptional mix of appropriate
modern technology addition to traditional craftsmanship (Morgan Motors Company, 2021).
Mission: Mission statement is delineated to a concise explanation of reason of existence of
an establishment. Mission of Morgan Motors Company is to provide unique blend of heritage,
vehicle craftsmanship along with pure driving experience through leveraging modern technology
so to innovate for future generation.
Vision: Vision statement is said to desired future position of business (Keshavarz Turk and
Nikooye, 2017). Vision of Morgan Motors Company is to deliver unforgettable driving
experiences with great standards of craftsmanship that lasts and innovating for benefits of future
customers.
Objectives: Objectives are described to short and medium term goals which business seeks
to attain. Objective of Morgan Motors Company is to design cars that are rich in craftsmanship
and modern technology with elegance. Organisational objectives are values for devising strategic
choices as they assist in planning all companywide practices to one single direction.
2. Assessing competitive advantage of the entity by using VRIO Framework
VRIO framework is an analytical model to assess competitive advantage. It is an acronym
of Value, Rareness, Imitability along with Organisation (Knápková, Pavelková and Friedel,
2020). Using VRIO Framework, business managers uncover as well as protect resources and
capabilities which provides long term benefits in competitive environment. It is particularly
designed for assisting companies to uncover and protect resources and capabilities that stretches
long-term competitive advantage. In case with Morgan Motors Company, VRIO Framework is
used for assessing internal situations that are resources, competitive implications together with
possible potential to make improvements within a resource to assess competitive benefits.
Evaluation of attributes of VRIO Analysis of Morgan Motors Company is as follows:
Resources and
capabilities
Valuable Rare Imitable Organised Competitive
implications
Service quality Yes No No No Partly
competitive
advantage
Human resources Yes Yes No No Sustainable
competitive
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advantage
Distribution network Yes Yes Yes Yes Sustainable
competitive
advantage
Research and
development
Yes Yes No No Competitive
advantage
Product design Yes Yes Yes No Competitive
advantage
Valuable: The extent to which company is able to exploit opportunities and neutralise
extrinsic threat by the help of particular resource and capability is termed to valuable (Alizadeh,
Allen and Mistree, 2020). In aspect to Morgan Motors Company, all its resources such as service
quality, distribution network, research and development, product design as well as human
resources are valuable to company. Service quality of Morgan Motors Company is valuable
resource because it is highly differentiated which makes perceived values for it by target
audience high. Distribution network of the company is valuable capability because it assists in
reaching out to more number of customers and convert them into loyal ones so to enhance sales
volume against competitors. Research and development of Morgan Motors Company is valuable
resource as the entity have huge innovative models that are manufactured within definite costs.
Human resources available to the company are valuable as they are highly trained and performs
actions to contribute productive output that translates greater values for end users of automotive.
Product design of the entity is valuable resource as it attracts wider customer segment and make
revenue through designing unique car having craftsmanship and advanced technological
attribute.
Rare: The extent to which controlling of resources and capabilities are in hands of few are
named as rare resources as these are absolutely unique in existing and potential environment of
competitors (Koklu and Basmaci, 2017). In case with Morgan Motors Company, brand and
reputation, distribution network, product design as well as research and development are rare
resources as these are not available with its rivals resulting to achieving competitive benefit.
Human resources of the entity are categorised as rare resources as these are highly skilled and
trained, which is not in case of other firms. Distribution network of the establishment are rare as
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the huge investment and efforts to provide its services to end consumers that other businesses
failed to do so. Research and development of Morgan Motors Company is rare as the
investigative practices leads to desired result of discovery to create automotive and services in
unique manner. Product design of the entity is based on core elements that are ash, leather as
well as aluminium which harmonise working with materials to manufacture cars in the manner
that competitors fail to design.
Imitable: The extent to which firms without a resource face cost disadvantage in acquiring
and improving them as compared to businesses that already possesses it, known as imitable
resource (Gcaza and Von Solms, 2017). In case with Morgan Motors, resources such as
distribution network and product design and are imitable resources because these assist in
exploiting external opportunities and neutralise threat for gaining competitive benefit.
Distribution network adopted by Morgan Motors Company to reach target users of its
automotive is costly to imitate by other firms as the entity have developed its system over the
years. Moreover, product design of the company is also costly to imitate by rivals because
designs of automotive are unique blend of craftsmanship, charisma addition to performance that
other businesses fails to imitate. Moreover,
Organised: The extent to which establishment is organised, ready together with able to
exploit or capture values is said to organised resource (KHashei, Heidari and Pourabbasi, 2017).
When resources are organised successfully then it increases chances for company to enjoy
duration of sustained competitive benefit. Network distribution of Morgan Motors Company are
categorised as organised resources to realise competitive benefit. Network distribution of the
automotive is organised as it uses simplified network so to reach out target customers through
ensuring that its offerings are available to end users that is its key resource for competitive
advantage.
3. Analysing external business environment by using PESTLE Framework
External business environment plays wider role in shaping future of individual businesses.
It is uncontrollable in nature and impact adversely on strategies adopted by a company to carry
out activities (Johnson and Et. Al., 2017). It includes group of factors which are outside
boundaries of venture but effect practices in wider contexts. In relevance to Morgan Motors
Company, PESTLE Analysis is used for assessing external environment wherein the company
carry out its working. It is a tool to scan and monitor factors or elements which impacts the
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operations. Description of all factors of PESTLE Analysis in context to Morgan Motors
Company are as assessed:
Political: It enumerates effects of trends and conditions related to political system on
business performance (Monaghan, 2020). Within UK, activities that are majorly associated to
many types of taxation policies, trade restrictions, political stability, environmental regulations
and tariffs that are part of political factor. In case with Morgan Motors Company, stable political
system of UK bring huge opportunities for the company to grow in competitive environment.
Government decision about policies at local to federal level impacts business in many ways as it
adds risk factor and results in major losses.
Economical: Measures which come under category of various exchange rates, rate of
interests, unemployment rates, inflation level and magnitude of national income are economic
factors (Burgelman, 2020). Economy of UK is rebounding sharply from pandemic situations and
changes in business cycle. For example, Covid-19 pandemic threatens and creates uncertainty for
people, businesses and economy. The economic situation have negatively impacts on sales of
cars of Morgan Motors Company as many of its target customers were not able to purchase and
drive cars because of restrictions. Moreover, increase in prices of material to manufacture
automotive has resulted in enhancement of cost price that decreases profitability of the company.
Social: At the time of measuring social aspect, organisational managers are required to
look towards elements including income distribution, percentage of employed demography,
cultural trends followed, attitude and behaviour of target audiences (Chaabouni and
Khemakhem, 2018). In UK, population are favouring or preferring to buy heritage products and
are getting sensitive towards craftsmanship as well as advanced innovation. Morgan Motors
Company do not have strong market position in UK, however, its cars and other offering that
includes unique blend of traditional craftsmanship along with appropriate modern technology are
grabbing attention of population that impacts positively on its sales volume addition to retaining
existing customers.
Technological: In UK, new technologies are continually emerging as well as rate of
changes are itself increasing (Chen and Vincent, 2018). Technological factor includes measures
about technical aspects of environment which comprises parameters like technical incentives,
automation, innovation level and technological awareness amount. In relevance to Morgan
Motors Company, adoption of new technologies such as 3D Experience platform along with
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CATIA Application have impacted positively on organisational practices. These were
considerable opportunities that Morgan Motors Company have adopted to provide competitive
and heritage automobiles in market.
Legal: Elements concerned with laws and regulations for working of company are legal
factors. In UK, there are multiple laws governed by political system for companies to adhere
while carrying out practices. For example, legislations that are adhered by Morgan Motors
Company includes Consumer Protection Act 1986, Health and Safety at Work etc. Act 1974,
Equality Act 2010, Data protection Act 2018 and many more (Morgan Motors Company, 2021).
It impacts positively in working with knowledge about what is as well as what is not legal so to
trade successfully together with ethically. Moreover, it is also essential for the entity to look
towards changes in legislations and act accordingly.
Environmental: Elements of environmental factors are important to be considered by a
business concern (Farzin, Fotuhi-Firuzabad and Moeini-Aghtaie, 2017). It has become
significant because of increasing pollution targets, carbon footprints, scarcity of resources and
hence forth. In UK, companies are taking initiatives to save aspects of ecology or environment
including climatic changes, weather and environmental offsets. It is assessed that Morgan Motors
Company is getting more as well as more involved in practices including corporate social
responsibility as well as sustainability to develop society and contribute in reducing emission
that positively impacts on the image of company. The practices satisfy expectations and interests
of stakeholders that improve performance of the automotive to address environmental and
ecological concerns.
4. Assessing competitiveness of the company through using Porter’s Five Forces Model
Porter’s Five Force Model as defined by Michael Porter to help businesses in analysing
industrial structure and corporate strategy (Azizi, Nemati and Estahbanati, 2017). In case with
Morgan Motors Company, use of Porter’s Five Force Model is to measure intensity of
competition and assess attractiveness together with profitability of the market or industry. The
five forces of the model are assessed in context to the company underneath:
Competitive rivalry: It is defined to number of competitors as well as their potentiality in
undercutting a business. In case with automotive industry, there are key players including BMW,
Toyota, Mercedes and many more that offers similar products in market that creates high
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competitive rivalry for Morgan Motors Company. All these players offer undifferentiated cars or
other automotive that reduces market attractiveness for Morgan Motors Company.
Threat of substitution: Substitute products are those which are often used in place of
offerings of a company that poses a threat. In automotive industry, growth in unprecedented. As
Morgan Motors Company offers rich combination of heritage craftsmanship and advanced
technology, it creates low substitution threat due to higher demand for traditional cars and
modern innovation. Also, the entity is moving towards sustainability as well as its unique
offering is crated less threat of substitute automotive (Azizi Shalbaf, Mian and Sohaib, 2021).
Threat of new entrant: It have been assessed that profitable market gran attention of new
entrants that erodes profitability and productivity of existing firms. Automotive industry
possesses strong entrance barriers and huge policies for new companies to enter and make huge
market share. Morgan Motors Company is successful in making unique market image that new
entrants require intense efforts and investment to build that leads to low threat of new entrant.
However, unless incumbents have strong barriers and restricted economies of scale then it
declines organisational profitability to competitive rate.
Bargaining power of buyer: The force elaborates about easiness of buyers to drove prices
of organisational product down. In automotive industry, customers or buyers provides long term
contract. In case with Morgan Motors Company, switching cost of buyers depends on offerings
that creates moderate bargaining powers of customers. It is because market of automotive
industry is concentrates in which business and customers need each other to meet requirements.
Bargaining power of supplier: Suppliers are organisation, people or group that provide
raw material and other production factor to company so to carry out production and delivery
practices (Gcaza and Von Solms, 2017). Within automotive industry, suppliers hold power due
to integration cost with the entities. There are huge number of suppliers with which organisation
have strong relationship. in context to Morgan Motors Company, when one supplier increases
prices of any production factor then company switches to another supplier that gives suppliers
low bargaining power.
5. On the basis of analysis, reviewing strategy of the company
On the basis of analysis, it is assessed that Morgan Motor Company has adopted
differentiation strategy which comprises of manufacturing cars or other automotive different,
unique and more attractive against competitors in automotive industry (Morgan Motors
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Company, 2021). By using differentiation strategy, the company stay in agile with product
development processes and increase competitive advantage. Through the strategy, the
organisation provides fitting antidote to volume manufactured automotive that bring exceptional
mixture of heritage and heritage craftsmanship with suitable modern technology. Advantage of
differentiation strategy to Morgan Motors Company is that it permits to compete in market or
industry with something that others do not manufacture and offer.
When automotive of the company are differentiated as well as turned towards more
quality offering then it creates ample opportunities to make larger revenues and more profit
margins (Farzin, Fotuhi-Firuzabad and Moeini-Aghtaie, 2017). Effective differentiation creates
brand loyalty among target audiences in case when company maintains perceived product quality
and enhances its value in competition. However, working with differentiation strategy results in
adding risk factor in practices of company to make profitability. Also, intense investment is
required for differentiation strategy which often fails to generate returns on investment impacts
negatively on business decisions.
CONCLUSION
As per presented information, it is concluded that strategy devises vision along with
direction for entire company. It prevents resources to lose insights from organisational aims and
provide guidelines about future aspects. Strategy evaluation assesses the ways in which business
have performed in relation to desired goals. It is significant aspect to reflect towards
achievements addition to shortcoming in different circumstances. It is a process to control,
reward, review and feedback that aids successful culmination of strategic management in
enterprise. VRIO Analysis is an internal analysis technique that is used for categorising resources
of company on the basis of certain traits that are valuable, rare, imitable and organised. It allows
the business to look towards resources and capabilities that are successful in providing
competitive advantage. The framework also helps in analysing relative significance of various
activities and make decisions related to resource allocation through determining areas or
capabilities which offer greatest potential returns on investment. It provides effective
mechanisms for prioritising efforts which enhance efficiency addition to decrease costs. PESTLE
Analysis is important framework to scan in addition to gain macro image of factors impacting
business and industry. The framework facilitates broader understanding about environment of
business and encourages companies for developing strategic thinking. Porter’s Five Force Model
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is effective to look competitive environment of the entity and understanding factors that effects
on specific industry or market.
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Online:
Morgan Motors Company. 2021. [Online]. Available through: <https://www.morgan-
motor.com/>
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