Morgan Motor Company: Stage 2 Critical Evaluation of Strategy

This report provides a critical evaluation of the Morgan Motor Company's strategy within the competitive landscape of the automobile industry. The analysis begins with an executive summary, followed by an introduction to the company and its market position. The main body of the report incorporates a PESTLE analysis, assessing the political, economic, social, technological, legal, and environmental factors impacting the company. Porter's Five Forces are then applied to evaluate the competitive intensity within the industry, including the threats of new entrants, substitutes, bargaining power of buyers and suppliers, and the intensity of rivalry. A VRIO analysis is conducted to assess the company's resources and capabilities, identifying its competitive advantages. The report also highlights potential issues faced by the company, such as its production processes. The conclusion summarizes the key findings and emphasizes the importance of strategic resource management for achieving a competitive edge. References and an appendix, including a detailed PESTLE analysis table, are included to support the analysis.

Stage 2 Critical
evaluation of the
strategy against the
industry success
factors.

Executive Summary
The present paper giving an analysis about competitive environment of automobile
industry, in context with Morgan Motor Company of UK. This company is known by its
highly skilled and dedicated workforce, who are able to work with cutting edge
technology and sophisticated automobile design. It would aid this firm to gain high
competitive advantage and build a strong brand image in respective sector. The present
paper has evident all such resources which proves that Morgan Motor Company has
run its business sustainably within automotive industry, with less carbon footprint in
ecosystem.

Table of Contents
Executive Summary......................................................................................................................2
INTRODUCTION...........................................................................................................................4
Main body.......................................................................................................................................4
PESTLE Analysis.................................................................................................................4
Porter’s five force...................................................................................................................4
VRIO analysis:......................................................................................................................5
Potential issues.......................................................................................................................6
CONCLUSION...............................................................................................................................6
REFERENCES..............................................................................................................................7
APPENDIX.....................................................................................................................................8

INTRODUCTION
Automobile industry is considered as one of the fastest growing sector that
focuses on increasing quality of life, via mobility, safety and comfort. It contributes main
role in improving and developing transportation, as well as in creation of employment
and skills development (Hanley, Shogren and White, 2019). The current report is
Morgan Motor Company which deals in automobile sector and founded in 1910. This
British manufacturer produces a number of innovative cars, with a variation of
motorcycle engines, to establish its image as best automotive firm. The main factors
which support this firm in achieving competitive its edge are supplier networks, excellent
customer services, brand management and excellence working condition. This report
contains a description regarding PEST, Porter Forces along with impact of industry life
cycle to determine success factor and VIRO analysis to determine competitive
advantage.
Main body
PESTLE Analysis
The automobile industry is growing sector which involve range of players working
toward offering more and more enhanced services to the customers for achieving
sustainability (Shaw, 2019). In context with Morgan Motor Company, this firm is known
by its innovative and unique design cars, which are assembled with handmade that
assures of great quality. It has a strong presence within motorsports which helps in
attracting and retaining targeted (rich and upper class people) audience towards its
business. But as due to changes in political environment, government interventions and
more, business environment has become more dynamic, which has huge impact on
automotive industry also (Pavlínek, 2020). Therefore, through PESTLE Analysis (as
shown in Appendix), it has been evaluated that currently the main issue faced by this
industry is impact of Brexit, which has created trade barriers for organisations. So, it
highly affects the business of Morgan Motor Company also, where due to ineffective
political relations among UK and EU, it doesn’t remain in position to earn high
profitability. But as this sector has contributed major role in developing economy,

therefore, government of both nations are going to undersigned a new referendum to
make tariff free trade for automotive companies.
This factor is considered to be a most crucial attribute that has its influence over
range of sectors, due to development of infrastructure and other facilities in different
countries it become easier to install higher technology for offering better services to
customers. This has created a tougher competition among several automobile
companies as they are continuously focusing over installing better technologies to
provide more satisfactory services. So, it gives opportunities to management of Morgan
Motors also, to focus more on innovation in its products, by making investment in
improving its production process and improve efficiencies in the same, so that
competitiveness of business can be earned. Furthermore, through legal and socio-
culture factors, it has been analysed that people demand more eco-friendly and fuel-
efficient cars today that protects environment from harmful emission of fuels (Gareche,
Hosseini and Taheri, 2019). Therefore, this would provide advantage for Morgan Motors
Company to increase its sales, because much of its products are manufactured by
using wood and covered electric engine type features.
Porter’s five force
It refers to a framework that focuses toward evaluating five major forces of an
industry that may affect business sustainability and its performance at marketplace
(Skeete, 2019). The five forces analysis of automotive industry to measure degree of
threat for Morgan Motor Company is given as below –
Threat of new entrant: - This threat in automotive industry is relatively lesser,
because to launch a new business in respective sector, entrepreneurs have to make a
huge investment on developing innovations and maintaining safety in vehicles, which
seems to be not possible for them at initial stage (Chaubey and Sahoo, 2019).
Therefore, degree of threat of new entrants for Morgan Motors is much less.
Threat of substitute: - The threat of any substitute to automotive industry is mild
because number of companies are dealing in this sector and compete with each other
at higher level, but none of them offer products having same features due to patent
rights. So, it reduces threat for business of Morgan Motors also.

Bargaining power of buyer: - As Morgan Motors offer handmade, unique
design and old-fashioned cars which are mainly manufactured by using wood, therefore,
threat of bargaining power of buyer is mild because it targets only rich people (Nazir and
Shavarebi, 2019).
Bargaining power of supplier: - Morgan Motors mostly manufacture classic
and old-traditional cars as per taste of customers, which are not used by other
automotive firms generally. Therefore, there are limited supplier of these raw materials,
so, threat of bargaining power of them could be high.
Intensity of Rivalry: - As Morgan Motors is the single manufacturing firm in UK
who offers old-fashioned cars, therefore, it has no major competitors in automobile
industry (Isac, 2019). It also helps in establishing its strong position at marketplace and
generating high revenue as well.
VRIO analysis:
This is a framework that focuses toward analysing the organisation’s resources
and capabilities in order to organise them in rightful manner so that long term
competitive advantage can be achieved (Yang and Jiang. et. al., 2019). The VIRO
analysis of Morgan Company Limited is presented below:
Factors Valuable Rare Imitable Organise
Long lasting and high performance ✔ ✔
Handmade and unique design ✔ ✔
Differentiated focus strategy ✔ ✔ ✔
Strong brand image ✔ ✔ ✔ ✔
Human resource ✔ ✔ ✔
From the above table it can be specified that high performance and strong brand
image in motor vehicles in rich targeted audience; differentiated focus strategy and
unique design of its product are some of the factors that form competence of Morgan
Motor Company in market place to deal with competitors (Bhattacharya, Robotis and
Van Wassenhove, 2019). Through VRIO analysis it has been analysed that the brand
image of respective firm is relatively higher than other car makers, as it is being trusted
for maintaining sustainability in business, with lesser carbon footprint because it uses

wood in its construction. Along with this, it has near about 246 employees only, but they
are highly skilled and hard-working, to work in classic and rigid-to-change corporate
culture. Along with this, uniqueness in design and equipped with latest technology,
make this firm able to gain customer loyalty, to run business competitively for longer
period.
Potential issues
The main issue with Morgan Motors Company is its slow and outdation
production process, which may arise problems in maintaining its competitive image till
longer period in automotive sector. Therefore, investing in new production process and
working on the Plug-in kind of electric vehicles, will give opportunity to this firm to
diversify its business and speed up the performance more easily in marketplace. Along
with this, it is recommended to respective firm to make investment in setting up new
plants that helps in increasing production, so that degree of threat of competition can be
created, which will prove beneficial in attracting more new customers towards its
business.
CONCLUSION
From the above performed study it has been identified that proper management
of resources and integral capabilities are very crucial for an organisation to achieve
competitive edge. For this purpose, companies that deal in automotive sector are
required to conduct both internal and external analysis on regular manner, to evaluate
factors which may reduce capabilities of their businesses. It would help in developing
better strategies to cope up from same. Along with this, through such analysis they can
measure on strengths and weaknesses also, so that timely alteration can be made in
operations to increase competitive advantages.

REFERENCES
Books & Journals
Bhattacharya, S., Robotis, A. and Van Wassenhove, L.N., 2019. Installed base
management versus selling in monopolistic and competitive environments.
European Journal of Operational Research, 273(2), pp.596-607.
Chaubey, A. and Sahoo, C. K., 2019. Enhancing organizational innovation in Indian
automobile industry. International Journal of Innovation Science.
Gareche, M., Hosseini, S. M. and Taheri, M., 2019. A comprehensive literature review in
competitive advantages of businesses. International Journal of Advanced
Studies in Humanities and Social Science, 8(3, pp. 223-309.), pp.223-240.
Hanley, N., Shogren, J. and White, B., 2019. Introduction to environmental economics.
Oxford University Press.
Isac, N., 2019. Sustainable Development in Renewable Energy: The New Strategy
Direction for the Automotive Industry. Ecoforum Journal, 8(1).
Nazir, N. M. and Shavarebi, K., 2019. A review of global automotive industry’s
competitive strategies. World Journal of Science, Technology and Sustainable
Development.
Pavlínek, P., 2020. Restructuring and internationalization of the European automotive
industry. Journal of Economic Geography, 20(2), pp.509-541.
Shaw, J., 2019. Competition, regulation and the privatisation of British Rail. Routledge.
Skeete, J. P., 2019. The obscure link between motorsport and energy efficient, low-
carbon innovation: Evidence from the UK and European Union. Journal of
cleaner production, 214, pp.674-684.
Yang, D. X. and Jiang. et. al., 2019. The government regulation and market behavior of
the new energy automotive industry. Journal of cleaner production, 210,
pp.1281-1288.

APPENDIX
Factor Trends Description
Political This factor helps in evaluating the political
situation and political relation between countries,
which has a wide impact on trading activities
across their border. The United Kingdom is
considered as a stable political situation and it
has good relations with its neighbouring
countries. But after Brexit, both domestic and
foreign companies that operate business within
territorial boundaries of UK, have highly affected.
In this regard, Morgan Motor Company which
deals in automobile sector, also faces a number
of problems, like restrictions or high trade tariff
rate. It has also created barrier in trading
products at global level especially in other
European countries that highly affect profitability
of Morgan Company.
https://
knowledge.wharton.upen
n.edu/article/brexit-auto-
industry/
Enforce strict but safety laws made by UK
Government, helps manufacturing companies to
put more focus on safe driving features and
create more innovation in business. This would
make it difficult for entrepreneurs to launch a new
business within automotive sector. Therefore, it
helps existing brand like Morgan Motor Limited to
maintain its competitive position at marketplace.
In this regard, respective company gain
advantage to remove threat of new entrance in
automotive industry and run business profitably.
https://
pestleanalysis.com/
pestle-analysis-of-the-
automotive-industry/

Economi
cal
Since there is a high demand of British Cars in all
over the world, therefore, government of this
nation is going to make a deal with EU for
delivering automotive products and services at
zero tariff rate, so that economic crisis can be
reduced. It would allow manufacturers as well as
suppliers to move their products across UK
without any kind of unnecessary restrictions. So,
this will prove beneficial for Morgan Motor
Company to generate high profitability and
maintain its economic growth.
https://www.smmt.co.uk/
industry-topics/europe-
and-international-trade/
Growing per capita income of people and
increasing demand of luxurious cars shows high
economic growth for present firm to earn more
profitability, by offering them more innovative and
luxurious cars on affordable rates.
https://
pestleanalysis.com/
pestle-analysis-of-the-
automotive-industry/
Social This factor involves an analysis regarding the
culture, norms, value, trend, preferences etc. in
order to determine the things that customers
actually want and factors that can influence their
choices. The major factor that may affect the
position of Morgan Motor Company in
marketplace, due to demand of sustainable
products, where people seek to purchase those
motor vehicles which are high fuel efficient and
impact relatively less on environment.
But on the other side, it also holds an opportunity
and growth prospect in its automotive sector also,
this is so because from changing socio-cultural
trends and preferences of people, vehicle makers
https://notesmatic.com/
2016/09/automotive-
industry-pestel/

like Morgan Motors Company have to introduce
more new features in its cars and other vehicles,
to consider demand of targeted audiences and
retain their interest in business, by offering
innovative products.
Technolo
gical
Technology is considered as one of the important
factor for automotive industry, where to meet
environmental needs, socio-cultural demands
and maintain economic growth of business,
organisations have to adopt new techniques to
create innovations and increase efficiencies of
vehicles. This would affect highly on sales and
profitability of automobile firms including Morgan
Motor Company.
https://notesmatic.com/
2016/09/automotive-
industry-pestel/
Self-driving cars and improved safety features
are some technological advantages that shift
business of automotive industry at high level. It
increases high competition among manufacturing
firms which proves both beneficial and drawbacks
for them. Creating better innovation in cars
considers as advantage of Morgan Company,
while competing in intense competitive
environment with Toyota, BMW, Volkswagen and
more, highly impact on its sales negatively.
https://
pestleanalysis.com/
pestle-analysis-of-the-
automotive-industry/
Legal Copyright issues are the most predominantly
problems faced by automotive industry, where
certain innovations or features has to be
protected by trademark or any patent law as per
legislations. So, it will assist management of
Morgan Company also to register its vehicles
https://
pestleanalysis.com/
pestle-analysis-of-the-
automotive-industry/

having new features under copyright.
Other than patent rights, automotive industry also
needs to go with a number of legislations
regarding with safety of customers, employees
and all associated people. Here, to maintain
safety workplace, Health and Safety Act 1974
has been adopted by Morgan Company and
comply its business with other laws also to
ensure that employees are working at safe
environment.
https://
www.marketingtutor.net/
global-automotive-
industry-pestle-analysis/
Environm
ental
The car industry is also considered as one of the
largest carbon footprints in environment, where a
number of vehicles which is run by diesel and
petrol, that emits harmful gases and pollute
environment. Therefore, concerning on protecting
the ecosystem, government has imposed strict
interventions, rules and tax-norms, to shift global
car industry towards electric as well as hybrid
vehicles, that are environment-friendly.
https://
www.marketingtutor.net/
global-automotive-
industry-pestle-analysis/
Switch to electric vehicles give opportunity to car
manufacturers in maintaining sustainability in its
business. In context with Morgan Motor
Company, this firm is known by its innovative
wheel cars where most of the construction is
done by using wood in manufacturing the same.
This would help in reducing carbon footprint from
its business and maintaining a high competitive
image as well.
https://
pestleanalysis.com/
pestle-analysis-of-the-
automotive-industry/