Professional Documents
Culture Documents
SM Mes
SM Mes
Table of contents
1
Introduction ............................................................................................................ 4
2.1
2.2
2.3
Vision .............................................................................................................. 5
2.4
Values .............................................................................................................. 5
2.5
3.2
3.3
3.4
3.5
VRIN ............................................................................................................. 10
4.2
4.3
Strategic crafting................................................................................................... 15
6.1
6.2
6.3
References .................................................................................................................... 18
Index of figures
Figure 1 Current WWA Business Model .................................................................... 4
Figure 2 WWA Roadmap ........................................................................................... 7
Figure 3 Strategic group mapping............................................................................... 9
Figure 4 MES Software technology S-Curve ............................................................. 9
Figure 5 WW is everywhere ..................................................................................... 11
Figure 6 Value chain analysis against customer value proposition .......................... 12
Figure 7 ARC insight ................................................................................................ 14
Figure 8 WW customer value proposition ................................................................ 16
Figure 9 Microsoft WW Alliance ............................................................................. 17
Figure 10 Proposed WWA Business Model ............................................................. 17
Index of tables
Table 1: Manufacturing Status in Australia ................................................................... 6
Table 2: Competitive strength assessment ................................................................... 10
Table 3: Opportunities and Threats.............................................................................. 10
Table 4: Strength and Weakness .................................................................................. 13
Table 5: Completed SWOT analysis............................................................................ 13
Table 6: Synthesis of TOWS to WWA ........................................................................ 14
Introduction
In recent years, the market demand for MES solution has escalated in Australia
(source: http://www.frost.com, 12/3/2014). Riding this growing wave is MES project
implementations, predominantly carried out by system integrators (SI). WWA has
identified this lucrative revenue from MES projects and has initiated a strategic plan
to endeavour opportunities through reorganisation of its business model (Cravens,
Piercy & Baldauf 2009) thus, gaining new customers and market segments (Kanti
2012). This paper has been put together to elucidate this plan.
This paper has seven main sections. First, the guiding cornerstones for WWA will be
defined followed by a scan of the market landscape that includes an internal and
external assessment. Outcomes of these assessments will be strategically synthesised
using the SWOT-TOWS analysis. The strategic crafting will then be discussed
followed succinctly by implementation, execution and evaluation considerations.
Guiding cornerstones
Product Training
Technical support
WW Product sale
Consulting Service
2.3 Vision
A company needs a direction, where it wants to take the business to survive, what
markets to serve and products and/or service to develop and offer to the target
customer (Box 2011). Due to a lack of vision statement currently at WWA, the
following is suggested:
Making Australia the number one manufacturing hub in the world with our solution
The vision above emphasises our drive to make our target customer, Australia,
predominantly in the manufacturing, the top destination with our innovative product
and services. This is in line with becoming customer centric as postulated by
(Cravens, Piercy & Baldauf 2009).
2.4 Values
It's not hard to make decisions when you know what your values are Roy Disney.
Values are an emotional creed, which provided a sense of belonging towards the
company, mission and vision (Williams 2008). Following are five core values
proposed for WWA. The prefix of each statement with a first-person-plural pronoun
is intended, as it instils a sense of group affiliation with the audience (Williams 2008)
We will show respect for all individuals regardless of backgrounds, styles and
ideas.
We will collaborate within and outside the company to give the best.
Note that last two values are customer centric. This is intended as the company must
also consider the value proposition of the customer (Box 2011) to provide their
importance to the company.
To be able to leverage the market presence in the F&B industry and move
aggressively into all manufacturing sectors in Australia within the next 1 year.
Banham (2010) identified that tools and models bring clarity to complex issues, by
providing a useful roadmap for enabling planning, implementation and tracking. The
following roadmap is defined for WWA, referring to Figure 2.
Micro environmental
factors
(Five competitive
forces)
Resource
Capability
Value Chain
Situational Synthesis
(SWOT &
TOWS)
Vertical integration
Implement
Strategic alliance
Let us begin with the external environment, as we can better anticipate and plan for
any business impact (Banham 2010).The business is constantly bombarded with
changed from the environment in a very broad context (Cravens, Piercy & Baldauf
2009) and we will look at this in detail in the next sections.
also mentions how the model is complementarity to other approaches, one of which is
Resource-Based Perspective, which we will cover later.
WWA focus will be on industry rivals who are involved in the F&B area and this will
be covered in the next section as it has the most strongest downwards pressure. New
entrants and substitutes pose some weak threats and do not contribute to any major
downward pressure in the near future as the MES product is an integrated system not
easily replaced.
The next forces are the suppliers and buyers. WWA, being a distributer and a major
customer of the Invensys Group, experiences weak supplier bargaining power. The
buyers are the manufacturing industries, business buyers that inherently have weak
bargaining power. The cost of switching is also expensive, so this would deter new
entrants and substitution.
Based on the data compiled by Gartner in Figure 3, we can posit four key rivals in the
global market across various industries. Focusing on the F&B industry, Invensys,
represented by WWA, Siemens, Rockwell Automation (RA) and GE Intelligent
Platform (GEIP) are identified. These vendors are all scrambling for market share as
MES is in the starting growth phase as depicted by Figure 4.
4.1 VRIN
Box (2011, p.116) stated that Core competencies that lead to significant competitive
advantage are valuable, rare, difficult to imitate and essentially non substitutable
Empirical analysis (Talaja, 2012) has also shown that companies achieve higher levels
of sustainable competitive advantage and performance owning valuable and rare
resources.
10
WWA has a strong staff technical capability, whereby engineers are able to multitask
on the core business. This is both rare and valuable in other industries, where
engineers focus is in only one area. WWA enjoys a large install base and history in
Australia, refer Figure 5 below.
Source: http://www.techvalidate.com
Figure 5 WW is everywhere
WW is a leader in the industry, being the first to embrace Microsoft technology while
the rest was catching up (http://www.controldesign.com , 2005). WW provides value
to customers allowing operational excellence (http://www.processonline.com.au,
2012). These traits of value and rareness provide WWA with a competitive advantage
(Talaja 2012). These traits also make WWA inimitable and non-substitutable thus
giving it a sustainable advantage (Talaja 2012). For example, WWA high penetration
and long-time relationship with the customer gives it the advantage as the cost of
switching can be high. The integrated nature of the product into the manufacturing
system requires retraining, testing and new technical support infrastructure if
substituted.
Finally (Talaja 2012) has concluded that the VRIN framework supports the
importance of these resources, thus supporting the strategic management concepts to
allow companies to compete in different markets. This paper agrees with the
hypothesis.
11
WWA
(Secondary activities)
(Primary activity)
Technical Support
PROJECTS
WW solution implementation
throughout F&B vertical scope
(Core Business)
Training
Customer value proposition:
(Core Business)
Consulting
(Core Business)
WW Products
(Core Business)
Project
Management
12
The combined SWOT, Table 5 is displayed below and illustrates WWAs competitive
advantage, having the highest score:
13
Internal Strength:
Internal Weakness
1. Small workforce
2. Multi-disciplined workforce
3. Regional presence
External Opportunities:
Strength to Opportunities(SO)
Weakness to Opportunities(WO)
2. Vertical Integration
3. Automation Integration
External Threats:
Strength to Threats(ST)
Weakness to Threats(WT)
1. Intense competition
2. Low-cost providers
3. Increased Globalisation
Noted observation from Table 6, weakness of small workforce with threat of low cost
providers can be offset with Lean management philosophy (Box 2011) as well as
focusing on short project lifecycle using off-the-shelf software. Thus providing a
competitive advantage in terms of time dimension (Box 2011)
New Business model has been formulated (Cravens, Piercy & Baldauf 2009) to
combat the changing market landscape emphasising on project management, here
cross-referencing ST2 to SO1 in Table 6. Relationship and hence added strategy can
be identified, for example between SO3 and WT1. To elaborate, refer to the following
excerpt from ARC insight, which correlates to Lean philosophy (Box 2011), figure 7.
14
Strategic crafting
WWA has the advantage of speed due to its size and capability. Time dimension
(Box 2011), in which speed of performing an operation has a competitive advantage is
supported with processes that WWA possess in other words, templates of project
management methodology and technical documentations that can be reused. In
addition to small multidisciplinary project team and WW software that is out-of-the
box. The software and the team structure also allow tasks within the projects to be
carried out in parallel. All these increases speed of execution
WWA suitability towards focused differentiation, vertical integration and flexibility
thru alliances will be discussed next.
15
Source: http://www.techvalidate.com
Figure 8 WW customer value proposition
16
Source: http://www.techvalidate.com
Figure 9 Microsoft WW Alliance
Product Training
Technical support
WW Product sale
PROJECT
17
Consulting Service
From the analysis conducted and taking into consideration, the external and internal
environmental forces and the tools utilised within this framework, we have identified
some key strengths of WWA that can be capitalised to exploit opportunities and
deflect threats in a dynamic market, thus positioning WWA in a sustainable
competitive advantage against business rivals.
It is recommended that WWA uses all the experience gained from its core business to
funnel into MES projects, which would span the entire customer value chain from
inbound warehouse to process to packaging and to outbound warehouse. WWA is
then able to provide a comprehensive packaged solution differentiated from other
vendors. Venturing into projects is also bi-directional to the business as more of the
core business offerings will be required by the customer. Finally, alliances with SI
would ensure additional engineers are available to support the project.
It is imperative that the strategy is communicated to the entire WWA team to be
actioned, and the upper management team takes the role of enforcing and monitoring.
References
Banham, HC 2010, 'External Environmental Analysis for Small and Medium
Enterprises (SMEs)', Journal of Business & Economics Research, 8, 10, pp. 19-26
Box, TM 2011, 'SMALL FIRM STRATEGY IN TURBULENT TIMES', Academy of
Strategic Management Journal, 10, 1, pp. 115-122
Burt, G, Wright, G, Bradfield, R, Cairns, G, & Van der Heijden, K 2006, 'The Role of
Scenario Planning in Exploring the Environment in View of the Limitations of PEST
and Its Derivatives', International Studies of Management & Organization, 36, 3, pp.
50-76
Cravens, Piercy and Baldauf, D, Piercy, N, & Baldauf, A 2009, 'Management
framework guiding strategic thinking in rapidly changing markets', Journal of
Marketing Management, 25, 1/2, pp. 31-49
Grundy, T 2006, 'Rethinking and reinventing Michael Porter's five forces model',
Strategic Change, 15, 5, pp. 213-229
18
Kale, P, & Singh, H 2009, 'Managing Strategic Alliances: What Do We Know Now,
and Where Do We Go From Here? Academy of Management Perspectives, 3, 3, pp.
45-62
Kanti, T 2012, 'Market Segmentation and Customer Focus Strategies and Their
Contribution towards Effective Value Chain Management', International Journal of
Marketing Studies, 4, 3, pp. 113-121
Ormanidhi, O, & Stringa, O 2008, 'Porter's Model of Generic Competitive
Strategies', Business Economics, 43, 3, pp. 55-64
Talaja, A 2012, 'TESTING VRIN FRAMEWORK: RESOURCE VALUE AND
RARENESS AS SOURCES OF COMPETITIVE ADVANTAGE AND ABOVE
AVERAGE PERFORMANCE', Management: Journal of Contemporary Management
Issues, 17, 2, pp. 51-64
Weihrich, H 1982, 'The TOWS Matrix -- A Tool for Situational Analysis', Long
Range Planning, 15, 2, pp. 54-66, Business Source Complete, EBSCOhost, viewed 11
August 2014, http://www.usfca.edu/fac_staff/weihrichh/docs/tows.pdf
Williams, L 2008, 'THE MISSION STATEMENT', Journal of Business
Communication, 45, 2, pp. 94-119
19