Page 1: Introduction
Do you ever think about what goes into a motor car, a power tool or a particular type of domestic appliance? If you were asked this question you would probably look for the technical features of each of the products, against which you can associate some form of tangible benefit, such as fuel-injection systems, ABS, a hammer drill, airbags, the time it takes for a kettle to heat up or the cool-wall in your toaster.
These technologies are all - to a certain extent - visible, known to us as products or identifiable with companies and what they do. What we don’t tend to see or even think about are the materials and components behind such technologies. Complex manufactured products are made up of numerous parts. For such products to operate in a way which provide the benefits we demand as consumers, the various components within the products must operate according to high specifications, which largely depend upon the materials used in their manufacture.
If we mentioned the name Land Rover, you would instantly recognise it. This is because Land Rover is a product largely targeted at consumer markets in which you operate as a buyer or user. In fact, the product publicises itself every time one is driven past you. Unlike the Land Rover, the name Morgan Crucible is not so recognisable because instead of operating in consumer markets, it operates within industrial markets, developing products for organisations rather than for individuals.
These are markets where organisations buy products which are either directly or indirectly used in the production of other goods. But this does not mean to say that consumers are not benefiting from such products, since these products provide the components and technology behind many of the things we frequently use, even vehicles like Land Rover. We just don’t realise how or when! This case study focuses upon the strategic operations of Morgan Crucible, a business which specialises in being able to develop, manufacture and market materials technology into new or existing products, used day-today by consumers and organisations across the globe.
Morgan Crucible Company plc is a UK-based international group which manufactures specialised materials and technologically advanced components for a wide variety of applications world-wide. To do this it employs more than 12000 employees in subsidiary and associated companies, in 40 countries around the world.
From its beginnings in 1856, the Group has developed into a world leader in its chosen fields, with an international network of companies supplying markets ranging from electrical, electronics, aerospace, telecommunications, biomedical, healthcare, automotive, rail traction and agricultural, to petrochemical, mechanical engineering, metal melting, heat containment, power transmission, building and site safety.
The Late 1970’s
Operating a business is not easy and few businesses run smoothly. At the end of the 1970s Morgan Crucible was a very different company to what it has become today. Though long-established, it was a small niche business supplying a few key industrial markets. Many of its operations were dependent upon the performance of customers within the UK. Operating in organisational markets can be a high-risk business. If your customers have problems and your operations largely depend upon key customers operating in one regional market, with such a narrowly defined base you are also likely to have problems. At the same time in world terms, where the key players operate, Morgan Crucible was losing its technological edge. This meant that not only was the business finding it difficult to compete in terms of products and markets, but also in terms of costs.
The late 70s were a critical time for British manufacturers because the period heralded a process of de-industrialisation with the onset of a recession, during which manufacturing industries started to employ fewer people and contribute less to national output. There were many reasons why this process took place. Many UK manufacturers were traditional mature industries, often suffering from low-wage international competition, the high pound and high interest rates, meant that British products were less competitive than competing products from other countries.
This pattern of de-industrialisation in Britain was typical of many major industrialised countries and over the period many famous manufacturing names were lost forever. Some might argue that for some industries decline was inevitable. However, one feature of this process of de-industrialisation was this loss of competitiveness. For Morgan Crucible to be able to survive this period and move forward, it was important to focus upon fundamental questions concerning the whole of the business through a process of strategic planning.
Strategic planning is about focusing upon important questions and issues involving the whole of the organisation’s activities. It is about doing things by taking appropriate decisions and actions, to achieve a range of objectives which tie into a corporate vision. In other words, it is about moving an organisation forward from where it is at a point in time, which for Morgan Crucible, given the realities of the 1970s, meant that key decisions had to be made about the long-term future of the business.