Snap-On Incorporated is the major player in the commercial and industrial business, they are considered as an international innovator, manufacturer and distributor of tools, diagnostics and equipment solutions for professional clients. The products that the company distributes are power tools, tool storage, diagnostic software, information and management systems, shop equipment and other accessories for vehicle manufacturers, dealerships and also acts as repair centers, they cater clients in the said industry, government, agriculture construction.
The company has franchisers, direct sales and distributor channels, and of course in the Internet. The main branch of the company is in Kenosha, Wisconsin. The company also belongs to Diagnostic and Information Group because they also provide their clients some diagnostic equipments, vehicle-service information, business management systems, equipment repair services. Definition of the Industry The economic situation of the commercial and industrial equipment has long been characterized with highly active and dynamic exchange of goods and services through increased participation of business firms in line with the globalization trends.
Contract management and outsourcing strategies have been the result of the complex and sophisticated demands of the market and the objectives of business companies to offer excellent customer value through quality products and services. Generally, the international market consist competitive and innovative businesses that are interconnected through partnerships and agreements. In this regard, Snap-on Inc can develop further its diversification initiatives particularly in establishing chains of operations.
Labor could be outsourced to cut expenditures and create opportunities for service innovation to strengthen the quality of the services offered The economic description of the region is reflective of the present socio-cultural trends that characterize its people. As active consumers of products and clients of services, the market was provided with the continuous supply of products and services that meets the complex needs and ever-changing requirements and specifications of the public.
With the technological infrastructure that characterizes the operations of Snap-On Inc, service quality and customer value and satisfaction can be increased. The services of the company should be in synch with the sophisticated lifestyle of the people through creating means of more efficient service delivery and innovative logistics. External Environment Analysis Snap- On Inc has a complex environment. Due to this complexity, the department is considering all the factors that affect its task environments.
Some factors such as political-legal and economic climates are encouraging to the growth of the department. However, the socio-cultural climate is posing a challenge. Nevertheless, Snap-On Inc is generally having a stable environment. The political-legal climate of corporations globally has been generally encouraging. This is especially for yahoo in which it reciprocates the government’s trust on the company by sharing 30 percent of its shares to the government.
Likewise, the economic climate globally has seen the growth of systems of wealth production, distribution and consumption. However, inflations and recessions affect the operation of Snap-On Inc. These are the factors over which we have little control. The socio-cultural climate represents the attitudes, values, norms, beliefs, behaviors and associated demographic characteristics of the population within which an organization operates (Crook et al. , 2003). In operating and managing Snap-On Inc applications that support users, we have to consider our customers’ values and beliefs.
To do this we conduct studies to identify the concerns of our customers. The technological climate includes scientific and technological advancements in the production of goods and services (Henrik, 2003). Technology for Snap-on Inc is of particular importance because it has been and continues to be the main source of increases in productivity, which means it can either provide a competitive advantage to organizations that can use it effectively, or pose a threat to those that lack it.
To remain competitive therefore, it is important that we need to understand current technology developments affecting their ability to offer desirable products and services. The pace of change in that industry, of course, is accelerating, and its scope and impact are widening. Spectators of the technology can trace that change from the earliest antecedents of Snap-on Inc, to the most recent developments. Spectators can also scan the entire Snap-On Inc continuum from the 19th century to the 21st or pinpoint, year by year or decade by decade, but the focus of this paper will only be from 1998 to 2003.
These are the years and key events that have led to the Snap-On Inc of today and it has shown through the use of the company’s corporate strategy (McCarthy, 2003). It is said that people are living through an era in which organizations within industrialized societies are experiencing a prolific growth in the development and deployment of information and communications technologies. The development of an IT-strategy discourse has thus been partly the result of technology developments. The rapid growth of the information technology has been able to established great impacts in the society.
The company is currently using its website for customers’ easy access of their products and services. In the website of Snap-On Inc, the clients can browse and search for the available tools and equipment where they could easily order and Snap-On Inc will just deliver the purchased equipment. Another technological advancement of Snap-On, Inc. is on production and delivery of products and services to meet customer requirements and to increase the productivity and revenue of the businesses.
Technological advancements in the form of effective tracking and monitoring equipment of the goods and services being delivered, heightened security efforts, and the utilization of the electronic media to transact highly demanded services online should be considered by the company to adapt with the modern social setting it operates in and meet the needs of the customers. Moreover, the use of information technology has also impacted the society by means of the internet. Through the internet, many people have been able to be knowledgeable and intelligent (David, 2003).
The internet has made it easy for the society to access the information they are searching provided with graphical interface, still images and motion pictures and sounds. In addition, through the on-line marketing many people had been able to search for the best company that could offer the quality services and products that would satisfy them. Most importantly, these new information technologies also involve new deployment strategies that will bring broadband internetworking applications to the domestic mass market.
As part of these new methods of interactions between humans and computers, more individuals have been dependent on the electronic creation, storage and transmittal of personal, financial and other confidential information which demands highest security. Five Forces Analysis Buyer’s Power Based on Porter’s five forces analysis, companies in the commercial and industrial business sell to a few large customers/buyers. Likewise, the industry also displays an apparent impracticality for customers/buyers to switch from one source of supply to another.
This is reflected by the cost of raw materials as well as the costs of operations. Moreover, the products offered by companies in the industry are not exactly essentially interchangeable and indistinguishable. The product could also be considered as a commodity for the industry. Moreover, the industry shows that the cost of the product and service represents a relatively large percentage of the buyer’s and customer’s total cost. Nonetheless, the customers could if desired backward-integrate specifically by acquiring a company in the industry to which Snap-On Inc is included.
Suppliers’ Power Many suppliers provide raw materials to the commercial and industrial business. Moreover, companies in the industry are not likely to backward-integrate. On the other hand, it could also be posited that the companies in the industry are the primary source of revenues for the suppliers. This makes the competition among suppliers more rigid. Likewise, if raw -material costs get out of line, companies in the industry would be able to have a hard time using a different type of raw material to produce the product.
The industry is also characterized with the quality and costs of raw materials having a significant impact on the quality and price of the products and services produced by the industry. Moreover, the raw materials provided by suppliers are not essentially interchangeable and indistinguishable. The raw materials are essentially commodities. Likewise, in an industry where loyalty is also considered necessary, there is also the possibility for the suppliers to forward-integrate. Rivalry Among Competitors
Companies in the industry considered to be diverse in their history and culture and in how they do business. Moreover, the product/service sold by the industry has low storage costs or is not perishable. Nonetheless, the industry is experiencing fast market growth. It has also been established that the product provided by the company is a commodity to a major part of its stakeholders. Moreover, it also shows that there are considerable numbers of large competitors that dominate the industry. In the said industry, companies in the industry have high fixed costs and spend a lot of money on tools and equipment.
Likewise, production capacity, to be economically feasible, must be done in large, expensive increments. Significant barriers as well hinder companies that want to exit the industry. These include regulations, labour agreements, costs of closing facilities, and the absence of secondary market for assets. In addition, it could also be observed that staying in the industry is of great strategic importance to companies in the industry, probably because they have nowhere else to go. Threats of New Entrants
The economies of scale play a significant role in the cost of produce the product and service. Companies in the industry have low fixed costs and spend relatively little on plant and equipment. Moreover, competitors in the industry are not likely to cut their price to defend their market position. In an industry experiencing fast market growth, patents, proprietary knowledge, and brand reputation are also considered as barriers for companies entering the industry. Threat of Substitute Products The price of substitute products is more expensive.
This provides the industry a great following. Moreover, the quality, features and benefits of substitute products are generally lower. The Greatest Impact of the Driving Forces Innovation and the risk to implement change are examples of the driving forces behind Snap-0n Inc. This can be reflected when Snap-0n Inc made the risk to acquire and run service businesses. For Snap-0n Inc, service businesses offers opportunity, but they should not forget about the importance of product innovation as well. Financial services and media were some of the ventures of the company (Owens et al, 1998).
Currently, 60% of Snap-0n Inc. ’s profit comes from services. Globalizing the service and manufacturing products has also been given importance and has been considered as one of the keys in Snap-0n Inc. ’s success (Slater, 1999). Those who have tried to oppose the economism and determination of conventional accounts be inclined to put all their efforts on restoring agency to rationalizations of globalization (Sauter, 1997). Globalization is corresponding to a project that is likely to be the cognizant political actions of meticulous individual and collective driving forces.
To distinguish the globalist prominence on technological and economic development, globalization as either encouraged or opposed by governments within idiosyncratic national capitalisms (Smith, 2003), by a transnational class with common interests in a neo-liberal global order, or by new social movements engaged in an anti-globalization struggle. While such diverse perspectives have restored political agency to the globalization debate, there are no remains too little attention paid to the contested and contradictory dynamics of social change.