For over 60 years, Precision Castparts Corp. has been in Portland, Oregon. Growing from a small manufacturing company of investment castings for many different applications to a Fortune 500 company producing castings, and fasteners for aerospace, power and industrial companies in general, Precision Castparts’ growth has resulted in an increased market share, as well as many acquisitions that have been strategic in their overall execution. Precision Castparts has made significant contributions over the course of the company’s history with their three chairmen’s contributions (“Company Overview,” 2011).
Precision Castparts Corp. is a world-class organization relentless in their dedication to exemplary quality, low-cost and on-time production of products ensuring that each customer is satisfied and that there is continual growth in profit and overall customers. Every production facility within the company is focused continually on improvement and meeting the corporate objectives set forth. Precision Castparts Corp. adheres to high standards within the manufacturing base and all employees excel in the fast-paced, dynamic environment that the company prides itself in having.
Each employee is challenged to perform to their utmost potential in spite of a demanding marketplace. Precision Castparts Corp. is committed to maintaining a safe workplace for all employees and visitors (“Company Overview,” 2011). The company’s strengths lie in the marketplace performance and product line. Precision Castparts Corp. is the market leader in manufacturing large, complex structural investment castings and the leading manufacturer of airfoil investment castings used in jet aircraft engines.
Due to the complexity of the manufacturing process and the application of proprietary technologies, Precision Castparts Corp. is currently one of the few manufacturers that can consistently produce the largest and most complex structural investment castings in quantities sufficient to meet the needs required by its customers. Its three principal business segments include the aforementioned investment cast products as well as forged and fastener products (“Precision Castparts,” 2012). Precision Castparts Financial Performance is another one of its strengths.
Precision Castparts generated in 2012, $7. 2 million dollars in revenue, 1. 2 million in net profit, $10. 5 million dollars worth of assets and roughly $2. 7 worth of working capital. Precision Castparts also has a 17. 0% net profit margin, 11. 6% ROA, and a 79. 2% equity-ratio and 2. 0% debt ratio (“Precision Castparts,” 2012). These are good numbers given the manufacturing industry and the fact that Precision Castparts Corp. has been in business for 60 years. They continue to improve on their research also, which serves to strengthen their overall name in the marketplace.
Precision Castparts has departments involved in research and development in all three of its segments that are reportable. The R&D effort at these operations is often directed at the technical aspects of improving the manufacturing processes of its products. Expenditures for R&D amounted to $17. 1 million in 2011, $25. 6 million in 2010 and $13. 5 million in 2009. Much of Precision Castparts technological capabilities are a result of their engineering process and overall experimentation performance on the shop floor in conjunction with their process development and production of any new products.
The engineering work and experimentation are charged to the cost of the overall production and not usually included in any R&D expenditures (“Precision Castparts,” 2012). As with companies there are weaknesses associated with them. Despite the impressive aspects of their R&D area, Precision Castparts could improve on their R&D. Most people associate the research and development function of a company with the invention of new products, and while this is an important aspect, the continual development of current products is also equally important.
The task of product research and development is to come up with goods and services that meet the needs to customers that may have yet to find them out. R&D serves to keep the company in improving their operational processes and also serves to allow the company to function better (“Research and development,” 2012). With Precision Castparts, they must continually do perfect their R&D area in order to remain one of the leading manufacturing companies for the types of product they market. Another weakness that often happens with companies is their overall complacency in believing that they are the only ones in the marketplace.
Having a large ego can be a factor and may be a factor in the overall continual development of Precision Castparts Corp. While they have to continued to maintain a relative place in the market, competition always is present and they have to remain one step ahead of the competition. Staying one step ahead of the competition is also an opportunity that Precision Castparts Corp. can do. How does a company stay one step ahead of the competition? There are two tactics that Precision Castparts Corp. can try and implement that are opportunities that they can improve upon. One tactic is the engagement of social media.
It is important for Precision Castparts Corp. to consider this as a viable outreach to their existing customers and any new customers. Checking out competitors’ social media aspects is a good tool that Precision Castparts Corp. should consider. Precision Castparts Corp. needs to read between the lines of many of the social media profiles to suss out new product launches and growth plans. Another opportunity that Precision Castparts can implement is to harness technology. A simple but useful way to know what any competitor is doing is to set up alerts on that company.
Precision Castparts Corp. needs to sign up for their competition’s newsletters and RSS feeds to keep abreast of anything that their competition is creating or crafting (Lesonsky, 2011). Precision Castparts Corp. also has threats that could potentially affect their overall place in the market. One threat is substantial competition in all markets it serves. Components and products similar to those Precision makes can be produced by competitors just as easily using either the same types of processes or other more efficient forms of manufacturing.
Although manufacturing processes, technology and experience provide advantages to Precision Castparts’ customers, such as high quality, prices that are competitive but reasonable, alternative forms of manufacturing can be used to produce many of the components and products that Precision makes (“Precision Castparts,” 2012). Another threat to Precision Castparts Corp. is their intellectual property. When it comes to IP protection, manufacturers should follow a two pronged strategy according to Charles H. Mottier.
Manufacturers should work to protect their own rights and products, while making certain that they are not infringing on the rights of others, notes Mottier. Companies should follow the Golden Rule essentially – do unto others as you would have done unto you (Vinas and Jusko, 2004). The intellectual property is always a potential risk and threat to any company which is something that Precision Castparts Corp. should be aware of. Precision Castparts Corp. can capitalize on the opportunities by continuing to create stellar products and items in all three segments that they operate in within the manufacturing sector. Precision Castparts Corp.
can also capitalize on the opportunities by improving their supply chain process and creating products as quickly as demand allows. Supply is equally important as demand is. If demand is high and yet supply is low, then a company suffers and thus Precision Castparts should ensure that they always have enough supply in their midst to keep customers happy and to be able to obtain new customers if need be. Precision Castparts Corp. can neutralize any threats by making sure that they stay one step ahead of their competitors and keeping their intellectual property a secret and out of the spotlight. References Company Overview. (2011).
Retrieved from Precision Castparts Corp. website: http://www. precast. com/overview/financial_results/ Lesonsky, R. (2011, April 19). Managing: 5 Ways to Stay One Step Ahead of Your Competition [Web log post]. Retrieved from Score: http://blog. score. org/2011/rieva-lesonsky/manage-5-ways-to-stay-one-step-ahead-of-your-competition/ Precision Castparts . (2012). Retrieved from AEROWEB website: http://www. bga-aeroweb. com/firms/News/News-PCP. html Vinas, T. , & Jusko, J. (2004, September 4). 5 Threats That Could Sink Your Company. Retrieved from Industry Week website: http://www. employeescreen. com/pdf/industry_week_aug04. pdf