1.1. Introduction to the organization
Molcon Interwheels is well-known for its tyres and wheels used in the agricultural sector, on and off-the-road-applications and industry. Since 2013, the organization has also sold truck tyres. The production of high-quality custom-made wheels, however, is one of their greatest assets.
Manufacturers and dealers who need fast delivery, personalised advice and technical know-how in order to guarantee mobility and continuity to their customers can turn to Molcon Interwheels. Working together with Molcon Interwheels, they can offer the customer a logistics service, diversified stock, individual customized solutions, high-quality tyres and (made-to-measure) wheels at competitive prices (Buelens, 2015).
The unique expertise and experience, combined with excellent customer relations built up over more than half a century form the basis for Molcon Interwheels’s leading position in the market. Molcon Interwheels are established in the Netherlands (Heinkenszand) and Belgium (Dendermonde). The Benelux countries make up the home market, but export to other markets is also an important part of their business. In part through the joint venture with the German company Grasdorf, Molcon Interwheels has grown to become a major player in Europe. In addition to supplying their own brand of wheels ‘Molcon’, they work together with other suppliers such as BKT, Alliance, Techking, Nokian, Antyre and GKN Wheels, also known as the global players (Buelens, 2015).
Since the 1950s, Molcon Interwheels Manufacturing has been the leading manufacturer of wheels for the agricultural market, forestry, industry and earthmoving/OTR.
The production unit has an annual capacity of 12.000 to 15.000 customized wheels. Their strength is in their flexibility. Since 2012, Molcon has adjusted its factory operations according to ‘quick response manufacturing’ philosophy. The result is a lean and agile production facility where lead times are short and delivery times are met in accordance with justintime principles.
Molcon is able to offer an extensive, high-quality range of wheels: thanks to their premium brand Molcon and various product lines such as their Rondofix, Masterfit and Economy Line, the organization is perfectly able to respond to the various requirements of the market (Buelens, 2015).
Molcon Interwheels distribute tyres from a range of high-quality brands such as Alliance, BKT, Techking, Nokian, Antyre and Stone among others. The main suppliers are described below:
BKT, or Balkrishna Tyres Ltd, is part of the Siyaram Poddar Group. BKT operates four factories in India and is one of the world’s leading manufacturers of tyres for OTR-applications and for diverse applications in the agricultural and industrial markets.
Alliance Tyre Company was founded in 1950 in Hadera, Israel. For the past several years, Alliance Israel has been part of ATG with factories and headquarters in India. Alliance has over 60 years of experience in the development and production of tyres for diverse applications in the agricultural and industrial markets.
The Chinese company Techking Tires Ltd was founded in 2005 and is specialized in OTR-tires, particularly in the area of radial tires . Techking is among the global leaders in this segment (Buelens, 2015).
The overview below shows the long history of Molcon Interwheels.
Figure 1: History overview of Molcon Interwheels (Buelens, 2015)
The objective of this thesis is to find strategies that can be used to increase sales of fixed wheels at Molcon Interwheels Manufacturing in Heinkenszand. This analysis will contain a thorough investigation of the internal and external environment of the organization in order to determine strategies that will contribute to an increase in sales. A plan with recommendations as to how and with what means Molcon Interwheels Manufacturing can approach the problem in order to prevent the continuation of seasonality and achieve higher sales in the future, will be provided.
1.5. Research problem
Currently, Molcon Interwheels produces annually 10.000 wheels for the agricultural sector in the Benelux. However, this does not meet the wishes of the organization. Because the organization is geared to the agricultural seasons this also affects the sales of fixed wheels. The busiest season of the year lasts from January to May and during the second half of the year the capacity within Molcon Interwheels is not optimally used. Therefore, Molcon Interwheels strives to increase the production to 15.000 wheels, without the need for additional investment.
The German joint venture with Grasdorf produces another 25.000 wheels annually, which are only sold in Germany.
Molcon Interwheels Manufacturing would like to increase the collaboration with Grasdorf in the field of fixed wheels in the future. Since the delivery time in Grasdorf is currently seven weeks and in Heinkenszand two weeks, Molcon Interwheels Manufacturing can provide help to reduce delivery times in Grasdorf.
Molcon Interwheels in Heinkenszand does currently face one problem. The organization is not sufficiently aware of the current trends developments and possibilities in the agricultural sector. This knowledge is crucial, to find out which trends will contribute to an increase in sales.
Molcon Interwheels has set itself the target of increasing production of 10.000 to 15.000 fixed wheels per year. Therefore, the purpose of this research is to provide Molcon Interwheels more insight into today’s market and to find out which supply chain management trends exist to increase the sales of fixed wheels. Only supply chain management trends are of importance in this research because of the fact that the director of Molcon Interwheels finds that there is much to be gained in this area.
Below, the supply chain is shown of which Molcon Interwheels is a part:
Figure 2: The supply chain of which Molcon Interwheels is a part
1.7. Central question
The following central question arises from the above-mentioned objective:
“Which trends in the Supply Chain will contribute to an increase of sales in fixed wheels?”
1. What are the most important trends and developments within the agricultural sector?
2. How can Molcon Interwheels Manufacturing also sell during the low season?
3. How should Molcon Interwheels Manufacturing differentiate within its industry?
4. What synergies from its Grasdorf joint venture could contribute to Molcon Interwheels Manufacturing?
2. Company profile
In this chapter, the company profile of Molcon Interwheels will be described.
2.1. Address details
Molcon Interwheels Manufacturing
The Netherlands Molcon Interwheels Wholesale
4451 HH, Heinkenszand
Tel: +31 113 569500
Fax: +31 113 563623
[email protected] Hoogveld 56
Tel: +32 52 25 90 20
Fax: +32 52 25 90 45
2.2. Molcon Interwheels
Molcon Interwheels is situated in Heinkenszand and Dendermonde. The location in Heinkenszand has a sales department, a purchase department and a production and logistics department. Dendermonde has a marketing department, a sales department, an aftersales department, a purchase department and wholesale logistics.
The fact that there is a sales office in Belgium as well as in the Netherlands prevents any potential alienation from the sales area. By keeping a presence in the different markets where Molcon’s products are sold, the organization hopes to be able to maintain optimal customer relations and stay on top of latest developments (Buelens, 2015).
Below, an organogram is shown of Molcon Interwheels and its joint venture in Germany:
Figure 3: Molcon Interwheels and Grasdorf (Mol, 2015)
Currently, there are 75 people employed in the Molcon Interwheels Group. Not only the products and services determine the success of the company, but the knowledge and expertise of these employees will contribute to this success as well. Human Resource Management is a very important aspect. Molcon Interwheels employees are carefully selected, trained and coached. In this way, the organization ensures that they are able to provide the best information from within every department.
Molcon Interwheels is an accessible, low-threshold company, and the competent staff is easy to get in touch with and ready with a quick answer to all sorts of questions. Furthermore, the organization has a professional external service of technically qualified representatives, who can quickly come to the customer’s location should a problem arise. Also, after delivery, the products are carefully monitored by the aftersales service. Through this service-oriented approach, the team strives to offer customers a total solution, which they believe is the basis for good, long-term customer relations (Buelens, 2015).
2.4. Style of work
Molcon Interwheels offers its products through the intermediate trade. Customers are able to place their order via mail, fax or phone. The organization sells its products from business to business. Molcon Interwheels features a website and the online shop will launch in April 2015. In the Benelux business is mainly done with three main customer groups, namely:
1. manufacturers of (agricultural) machines in the original equipment market;
2. the tyre service companies and;
3. machine traders in the aftermarket.
The organization works with a gross pricelist with a discount system.
In addition, there are exports to Germany, France, Switzerland, Austria and the Scandinavian countries.
Molcon Interwheels focuses on a B2B approach, they supply the wheels and tyres to the original market equipment and aftermarket.
Over the years, these markets in the Benelux have built up a wide network of customers, who offer the products to the end user.
In this paragraph, a clear overview of the turnover figures of Molcon Interwheels Manufacturing is shown. It becomes clear why an increase in sales is necessary to change the actual seasonal graphic.
Figure 4: Turnover figures Molcon Interwheels Manufacturing (Mol, 2015)
3. Theoretical framework
This chapter shows the key theories that have been discussed that are of interest to this research. These theories are weighed against each other, to see which theories can be applied and could be a basis for this research. Supply Chain Management (SCM), differentiation strategy, trends and developments in the agricultural sector, synergies, lean extended value stream, horizontal and vertical integration will be used to finally give a clear answer to the central question. These concepts are elaborated in the sections below.
3.1. Differentiation strategy
Creating a service of product with distinctive attributes, which sets an organization apart from its competitors is called a differentiation strategy (Saint-Leger, n.d.). Through competitive pricing, enhancements to functional design or features, distribution timing, expanded distribution channels, distributor location, brand reputation, product customization and enhanced customer support, differentiation can be achieved (Murcko, 2015).
The position of an organization within its industry can be determined whether a firm’s profitability is below or above the industry average. Sustainable competitive advantage can be described as the fundamental basis of above average profitability in the long run. An organization can have two basic types of competitive advantage namely, low cost or differentiation. Porter states that the two basic types of competitive advantage combined with the scope of activities for which a firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry namely, cost leadership, differentiation and focus (Porter, 1985).
Below, Porter’s generic competitive strategies are shown:
Figure 5: Porter’s generic competitive strategies (Porter, 1985)
Products sold by two different firms may be exactly the same, but if customers believe the first is more valuable than the second, then the first product has a differentiation advantage. The existence of product differentiation, in the end, is always a matter of customer perception but firms can take a variety of actions to influence these perceptions (Jaquier, 2010).
There exist two options to differentiate namely, products that create value for buyers and products that cannot easily be copied or matched by rivals.
Anything a company can do to create value for buyers represents a potential basis for differentiation (Jaquier, 2010).
However, a differentiation strategy may not be ideal for every company (Saint-Leger, n.d.). For small businesses, a product differentiation may provide a competitive advantage in a market dominated by larger companies (Kelchner, n.d.). It is difficult to maintain differentiation for an indefinite amount of time because of competition. Many companies attempt to find the right balance by competing on price, service and quality or on any combination of attributes that it believes are important to its customers to gain a competitive advantage (Saint-Leger, n.d.).
The differentiation strategy the business uses must target a segment of the market and deliver the message that the product is positively different from all other similar products available (Kelchner, n.d.).
3.2. Trends and developments within the market
A new trend in the agricultural sector is that the consumer asks for sustainable products. In order to respond to this, it is necessary to make sustainable investments, the continuous accumulation of knowledge and changes in the production process (ING, 2014). That farming had to become more sustainable, is confirmed by the Dutch government. Nowadays, the agricultural sector is focused on sustainability. This is crucial because of the fact that Holland is the second largest exporter of agricultural products, after the USA (Agency, 2013).
The growth and profits that can be achieved in this sector is due to several success factors namely, controlling figures and cost, market oriented production, the supply chain collaboration and developing a vision for the medium term (ING, 2014).
In addition, trend watchers are positive about the future of the agricultural sector. Agribusiness can especially benefit from global developments. Because there is an increasing need for food, the sector is a major growth business. According to the Dutch trend watcher Adjiedj Bakas in the field of high-tech agriculture. Incidentally, there are not only opportunities; there are also things that can cause problems. These include animal welfare. Many people are more aware of animal welfare in the production of food, but that has some consequences for agribusiness (Profnews, 2013). Besides the animal welfare, developments in urbanization, recreation, biodiversity and biofuel are not helping the expansion of the agricultural sector. (Victoria, 2013) Most favorable are arable farming and dairy farming in contrast to the stock farming (Profnews, 2013).
According to ABN-Amro, the agricultural sector is an important building block for the recovery of the Dutch economy. With a growing world population that asks for more high-quality food, and food production systems, there are still plenty of opportunities for Dutch companies (Luiten, 2013). ING endorses this in another article. The agricultural sector is the only commercial sector that has grown since the crisis in 2009. However, the growth perspective differs from sector to sector. As a result of the downward trend in prices, the perspective for the balances in the intensive livestock farming is still more favorable than in 2013. Farmers are still taking advantage of tight stocks and the favorable price trend. The export perspective for producers of potatoes and onions is good because the chains are internationally oriented and innovative and global population is growing by 200 million people each year.
In addition, the rise in the use of of Social Media in the agricultural sector is an important new trend. The sector only runs behind in the use of Social Media, but it is catching up. More and more wholesale are exploring the possibilities of Social Media and see opportunities. The growth forecast for 2013 of agriculture and horticulture businesses that are using Social Media is 50%.
A survey among Dutch farmers and market gardeners in 2012 showed that 33% of the farmers are using Social Media. The main reason why these farmers are using Social Media is because of the fact that they want to follow news about the sector, its products and machines. They also maintain contacts and 75% share tips. In addition, 44% want to receive information from their suppliers via Social Media. This was only 19% in 2011.
A practical advantage of Social Media is in increasing the customer base. With Social Media, the chance that potential customers will be able to find a company, or that the company knows how to find the right customers is increasing. New contacts can lead to diversification of products. In this, the pull and push strategy is important (Schouten, 2014).
3.3. Value proposition
Value proposition and creating value will contribute towards giving an answer to the central question.
Value proposition is the bundle of products and services that create value for a specific customer segment (Olsen, 2012). It is important to consider the value you want to provide to customers, what products and services you want to offer your customers and to determine why customers want to buy your specific product from your organization. When this becomes clear, the value that could be created can be examined.
Value is what makes someone decide to take out her wallet and hand her money, because she is going to get something she wants ‘ something in which she finds compelling value (Kahan, 2013). All products of real value are embedded with specific ways of serving customers. Through that service, value is created (Rosenblatt, 2013).
3.4. Supply Chain Management
The goal of SCM is to maximize customer satisfaction in terms of order promising, delivery reliability, flexibility, and responsiveness at the lowest possible cost (Sabri & Shaikh, 2010). It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective and efficient ways possible. Supply chain activities cover everything from product development, sourcing, production and logistics, as well as the information systems needed to coordinate these activities (Handfield, 2011).
The implementation of SCM can be both beneficial and challenging to a business. Determining supply chain challenges before they happen is critical to SCM success, as the failures and successes are extremely visible to trading partners. An article written by Marie Lamm says that SCM does not fixe everything, the organization should not use the past to predict the future, both suppliers and customers should not forget to communicate and that the organization should not forget about a supplier’s capability (Lamm, 2015). The supplier’s capability indicates the long-term effects.
Michael Saracini also shows supply chain risks and what an organization can do to avoid them (Saracini, 2009).
However, there exists timeless challenges to reach supply chain excellence says Dr. J. Paul Dittmann of the Office of Corporate Partnership at the University of Tennessee. (Sabri & Shaikh, 2010) agrees on this. Push versus pull, variability and complexity and supply demand balance are the most important challenges.
3.4.1. Collaboration in the Supply Chain
Supply chain collaboration is of growing importance as an approach to competitive advantage through reducing costs and improving service levels (Elkington, 1994). Greater connectivity and collaboration between an organization and its trading partners creates numerous benefits for both the suppliers and customers (SCM, 2007).
Companies that collaborate effectively across the supply chain have enjoyed dramatic reductions in inventories and costs, together with improvements in speed, service levels and customer satisfaction.
With pricing under pressure from recession-scared consumers, the temptation for retailers is to transfer the pain upstream to their suppliers by passing on price reductions and forcing them to bear an increasing share of costs. On the supply side, however, there is less and less room for manufacturers to absorb additional costs. This means, volatile input prices put the squeeze on margins and the marketing investment required to differentiate branded products from private-label competitors continues to rise (Benavides, 2012).
Since 2008, a number of analysts have forecasted the demise of long-term supply chain relationships because of increased competition within the supply chains for thinner slices of the margin pie. As markets become tighter, energy and raw materials prices increase, and as working capital become harder to procure, supply chain collaboration will suffer in a Darwinian struggle for profitability scraps. Yet two reassuring developments are undermining that premise.
First, most supply chains are finding enormous amounts of waste, which they are trimming away to keep working margins. Second, supply chain partners are finding innovative ways to make collaboration work for mutual benefit in previously unexplored ways. As a result, while a number of supply chain partnerships have deteriorated over the past eight business quarters, most have survived. In fact, many companies credit their own survival largely to their working relationships with buyers and suppliers (Myers, 2010). In addition, the need for sustainable development and circular economy promotes cooperation in the supply chain.
A synergy is an abstract concept that refers to a result that arises from interacting processes. (Synergy, 2015). Also known as a capital gain of the whole in relation to the parts. The essence of synergy is to value differences and to respect them, to build on strengths and to compensate for weaknesses. The way to achieve synergy is through the creative process (Gray, 2015).
Businesses often try to create synergies because of the advantages they provide. When two or more people or organizations combine their efforts, they can accomplish more together than if you added their accomplishments achieved separately. Working together adds more value than working apart.
Despite the benefits of synergy, several disadvantages exist. The incidence of group thinking, the costs of collaboration may be high, collaboration often leads to longer decision times and a conflict within the group may arise (Jones, 2010). These aspects should be kept in mind. If there is a negative synergy, the whole is less than the sum of its parts. In other words, more can be accomplished by working alone rather than working together.
Companies often attempt to achieve synergies by merging with other companies with which they are compatible. In addition, companies can create synergies by creating or combining products or markets (Grimsley, 2003-2015).
3.6. Lean Extended Value Stream
An extended value stream is both value-creating and wasteful required to bring a product from raw materials into the arms of the customer. The relevant actions to be mapped consist of two flows. Namely, order traveling upstream from the customer and products coming down the value stream from raw materials to customer (Enterprise, 2015).
A lean extended value stream is one that works to eliminate transportation, unnecessary inventory, inappropriate processing and defects. Eliminating such wastes results ultimately in dramatically shorter lead times (Dolcemascolo, 2006). Furthermore, the total value stream crosses many different organizations and suppliers for a typical product. The supply chain consists of several links including Molcon Interwheels. The strength of the chain is determined by its weakest link. If there is one weak link in the supply chain, this will influence the performance of the whole supply chain (Dolcemascolo, 2006).
3.7. Horizontal and vertical integration
Vertical integration is the process in which several steps in the production and distribution of a product or service are controlled by a single company or entity, in order to increase that company’s or entity’s power in the marketplace. Backward integration, forward integration and balanced integration are three classifications of vertical integration. The definition of backward integration is where the company tries to own an input product company. Forward integration stands for a business that tries to control the post product areas, namely the distribution network. Last but not least, the definition of balanced integration is a mix of the above two definitions (Himanshu, 2011).
Vertical integration gives a company more control over the various aspects of the value chain from the raw materials to the consumer. It usually results in lower costs and improved quality control, as the company in question oversees a wider range of activities and can set their own prices raw materials (Hunt, 2013). The drawback to vertical integration is that companies can fall into the trap of expanding their repertoire without the necessary expertise (Beare, 2007), lack of resilience and flexibility (Hunt, 2013).
On the other hand, horizontal integration is a strategy to increase market share by taking over a similar company. This take over can be done in the same geography or probably in other countries to increase the reach (Himanshu, 2011).
The purpose of horizontal integration is to grow the company in size, increase product differentiation, achieve economies of scale and reduce competition or access new markets. When many firms pursue this strategy in the same industry, it leads to industry consolidation.
Lower costs, increased differentiation, increased market power, reduced competition and access to new markets are the advantages of horizontal integration (Vassoughi, 2013). One disadvantage of horizontal integration is that losses from a recently acquired business may cut into the profits from an existing one (Hunt, 2013).
Horizontal integration is different from vertical integration, where a firm usually expands into another production stage rather than merging or acquiring the company in the same production stage. A company is vertically integrating if it expands from manufacturing industry to retailing industry, while horizontal integration would mean buying other firms in the same manufacturing industry (Vassoughi, 2013).
3.8. Strategic planning
Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization’s direction in response to a changing environment (Rohm, Wilsey, Perry, & Montgomery, 2014). However, strategic planning faces problems. If a company is completely comfortable with its choices, it is at risk of missing important changes in its environment. Planning, cost management, and focusing on capabilities are dangerous traps for the strategy maker (Martin, 2014). An online article from Forbes describes that understanding the value of and need for a strategic plan is a great place to start, but just wanting something is not enough. Developing a strategic plan takes discipline, foresight, and a lot of honesty (Entrepreneurs, 2011).
The strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise (Rohm, Wilsey, Perry, & Montgomery, 2014).
3.9. Abell’s framework
Nowadays, every company wants clarity and insight into its customers and their customer needs (Vliet, 2014). The standard two dimensional way of looking at a business, which consists of products and markets, has serious shortcomings (Jaswal, 2008). Abell suggests a three dimensional model
Figure 6: Abell’s framework (Vliet, 2014)
This framework states that an organization’s business will be defined by answering the three main questions, namely: who is being satisfied? What is being satisfied? And last but not least, how are the customers needs being satisfied?
All above mentioned questions are valuable to provide an insight in the position of the organization, however the second question is the most valuable of all. Consumers do not really care about things. Rather, consumers care about how things make them feel (Canhoto, 2013). Disadvantages about the Abell’s framework are hard to find.
This chapter shows the research design, the operational capability of concepts and the research methods.
4.1. Research design
This research into finding the most appropriate strategy for increasing sales of fixed wheels will be qualitative. This is true to the fact that there are no hard numbers and facts needed to formulate an answer to the central question. This question is broadly formulated and is dominated by gaining new insights and views on the application and use of a strategy. In addition, the research will be explorative. An exploratory research is research, which explores frequencies, associations and differences so as to come to a theory (Baarda, 2014).
4.2. The operational capability of concepts
During this research multiple concepts will be discussed. These concepts are further explained in the theoretical framework based on theories and matching literature.
4.3. Research bias
Research bias is a process where the scientists performing the research influence the results, in order to portray a certain outcome. Some bias in research arises from experimental error and failures to take into account all of the possible variables.
Other bias arises when researchers select subjects that are more likely to generate the desired results, a reversal of the normal processes governing science (Shuttleworth, 2009).
In qualitative research, bias should be reduced whenever it is possible (Group, 2009-2012). Rick Penwarden summarizes four things that should be avoid when conducting a survey namely, asking the wrong questions, surveying the wrong people, using an exclusive collection method and misinterpreting data results (Penwarden, 2015). In addition, design problems by understanding the limitations of the sample group should be avoided. Research participants should get enough time to complete interviews; errors in data collection and measuring processes should be kept in mind and variables arising from the experiment to ensure that there are no experimental errors should be reviewed. Last but not least, results of the research that are accurately recorded in literature to avoid reporting bias should be ensured (Finch, 2009).
4.4. Research methods
In this paragraph, the research methods for each sub-question are formulated. Several sub-questions will be answered by semi- structured in-depthinterviews. This type of interview will be chosen due to the fact that in this way the chance to obtain the most input is great (Baarda, 2014). A total of ten interviews will be conducted. The interviews will be conducted by a contact person from Molcon Interwheels’ main supplier GKN, four employees of the Marketing department, Purchase department, Sales department and the Export department from Molcon Interwheels, two customers; tyreservice Zuidwest and Agrifac, a contact person from its joint-venture in Grasdorf and last but not least the former Director of ‘Koninklijke Maatschap de Wilhelminapolder’ (KMWP). KMWP is an arable farm, which is situated north of Goes. The company occupies a surface area of more than 1,800 hectares. This arable farm is a customer of Molcon Interwheels. In this way, each person of the supply chain will be interviewed.
What are the most important trends and developments within the sector?
To answer this sub-question, it is necessary to describe what the definition of a trend and a development is. When these concepts have been identified well, trends and developments in the agricultural sector can be collected.
Often can be started with collecting all kinds of actual data (Trendslator, 2007 – 2015). The data that are collected do not clarify anything yet. That is why it is crucial to understand what is important in the short and in the long run. The trend levels are translated into the trend pyramid:
Figure 7: Trend pyramid (Trendslator, 2007 – 2015)
Researching short-term trends is based on an inventory of products and market trends. In addition, consumer trends can be identified in which the product is not of importance. The organization searches for the wishes and needs of the consumer in abstract form. When the organization wants to focus on trends for the long term, then the social trend is of importance (Trendslator, 2007 – 2015).
Ultimately, the collected trends need to be selected. Trendslator uses already existing studies for identity or brand values. The relationship between developments in the time and the place that occupies the company or brand is of importance. Therefore, there is a distinction between behavior and personality, character and the genetic material of the organization, as shown in the following figure:
Figure 8: Selecting trends (Trendslator, 2007 – 2015)
The trends that are most important for Molcon Interwheels using above figures, shall be adopted.
How can Molcon Interwheels Manufacturing also sell during the low season?
In order to obtain an answer to this sub-question, the Abell model will be used. The purpose of this model is to provide an insight in the companies’ possibilities. Because Molcon Interwheels Manufacturing wants to determine how the production capacity can be increased in order to increase sales, the Abell model will give a clear overview of the possibilities to do this.
Besides using the Abell model, semi-structured in-depth interviews will be conducted with the main customers of Molcon Interwheels Manufacturing. These are Agrifac and tyreservice Zuidwest. The interviews will be conducted with Frank-Jan Evers from Agrifac and Jaap Vollaard from tyreservice Zuidwest. In addition, four employees of Molcon Interwheels will be interviewed to give a clear answer to this sub-question.
How should Molcon Interwheels Manufacturing differentiate within its industry?
To answer this sub-question, it is important to make clear what value is crucial for the customer to meet his desires. Through conducting semi-structured in-depth interviews with Agrifac and tyreservice Zuid-West, an answer to this sub-question can be given.
In addition, the current position of Molcon Interwheels compared to its competitors will be mapped out. SWOT is an acronym that stands for strengths, weaknesses, opportunities and threats. These elements are crucial in assessing the strategic position of an organization (Olsen, 2012).
Through research and by organizing meetings with employees of Molcon Interwheels Manufacturing, important input will be collected in order to be able to finish the SWOT-analysis. After the SWOT-analysis has been set up, the data will be merged in a confrontation matrix. In a confrontation matrix, elements from the external environment will be confronted with elements from the internal environment
(Dingena & Dishoeck, 2000). Eventually, the confrontation matrix will lead to a number of main points of interest and it will become clear in which direction Molcon Interwheels has to go to obtain a stronger market position compared to its competitors.
What synergies from its Grasdorf joint venture could contribute to Molcon Interwheels Manufacturing?
To be able to obtain an answer to this sub-question, horizontal integration and strategic alliance issues will be considered. The Managing Director of Grasdorf and Erik Mol from Molcon Interwheels are working together since 2004 and both have much experience in terms of horizontal integration and strategic alliance issues. In this way, these issues can be properly identified. These matters will be discussed during a semi-structured in-depth interview with Michael Weissbach, Managing Director of Grasdorf.
Horizontal integration occurs when there is a merger between two firms in the same industry operating at the same stage of production. A semi-structured in-depth interview with the Managing Director of Grasdorf will provide insight into this field. It remains to be seen if horizontal integration can be applied to ultimately increase sales.
Identifying strategic issues will contribute to provide insight into the problems that the organization currently encounters.
When comparing horizontal integration and identifying strategic alliance issues, the concept of synergy comes in. The word is used for a situation where the effect of cooperation is greater than each of the collaborating parties or departments could achieve separately. Synergy is essential to pull the organization to the next level (Effectory, 2011).
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