Type: Business
Pages: 8 | Words: 2210
Reading Time: 10 Minutes

Capstone Turbine Corporation, the USA, is the leading global manufacturer of the microturbine power systems. It was the first company to present commercial microturbine power plants to the world. At present, Capstone designs and produces the microturbines with the power of 30 kW – 1 MW.

Microturbines are the modern equipment for the autonomous heat and power supply to the consumers, offering excellent technical and operational characteristics. Superlative consumer properties and responsible engineering of engine components, using innovative technologies, were protected by more than 100 patents. This allowed allocating microturbines to a separate class of power generating equipment. Microturbines ideally meet the needs of the modern distributed power, although at the expense of design features.

Capstone Turbine develops, manufactures, markets and services microturbine technology systems for use in stationary distributed power generation applications, including cogeneration (combined heat and power, integrated combined heat and power, and combined cooling, heat and power), resource recovery and secure power. In addition, Co.’s microturbines can be used as battery charging generators for hybrid electric vehicle applications. Microturbines allow customers to produce power on-site in parallel with the electric grid or stand alone when no utility grid is available using several technologies such as reciprocating engines, solar power, wind powered systems and fuel cells.

The analysis of the company’s positioning assumes assessment of its possibilities (a condition of assets, etc.), given dynamics of the environment. The analysis is conducted according to two directions: resources and the company’s position among the competitors. The latter is especially important. The model of Porter’s five market factors is often used for analysis. According to this model, the market position of Capstone Turbine Corporation is defined by its relationship with competitors, suppliers, and consumers, and vulnerability to new market entrants and introduction of product substitutes.

These factors depend on a number of other interdependent parameters (a number of buyers, suppliers and products-substitutes) that, in turn, depend on a market segment, product uniqueness, etc.

The general strategy of the company and its marketing strategy coincide in many respects. Marketing strategy focuses on the consumers’ needs and ways to satisfy these needs. These factors are also outlined in the company’s mission statement and goals. Many concepts of marketing such as market share, market development and its growth are just as commonly used in strategic planning of the company. It leads us to a conclusion that it is difficult to separate strategic planning from marketing. In fact, some companies sometimes call strategic planning “strategic marketing planning”.

While performing analysis of the market and threats, it is necessary to fulfill the detailed analysis of the key competitors. Step by step, it will help us better understand the strengths of the company. Studying and speculating on the competitors’ potential action plan will help identify the opportunities to pursue. It is generally recommended to conduct the PEST-analysis (political, economic, social and technology factors) before SWOT analysis.

Preliminary SWOT analysis shows great opportunities in improving customer experience, tighter partnerships with manufacturers, and product diversification. The company can easily fulfill these changes and additionally introduce new trademarks targeting different market segments.

In order to define the strategy for Capstone Corporation focusing on its major strengths and opportunities and diminishing the effect of its weaknesses and threats, it is necessary to contemplate on four key thoughts:

 Business image of Capstone Turbine Corporation

The redundancy of an industrial infrastructure and actives, limitation of financial and human resources, as well as a gradual loss of competitiveness lead to the necessity of a radical reorganization of the enterprise. It is also crucial for the company to narrow concentration to business areas with the clearest competitive advantage.

The first step in the given direction is to allocate non-profile business, including auxiliary and procuring manufactures for the enterprise. The given scenario is invalid only in case of production of auxiliary and procuring manufactures having a stronger competitive advantage over the core business production. The second step is to benchmark the core businesses against the competitors.

The competitive position of Capstone Turbine Corporation in the market is determined by a degree of correspondence of the company’s products to the key factors of decision-making (KFDM) of a buyer. Analyzing the degree of Capstone’s goods’ correspondence to customer expectations and their market competitiveness, it is possible to predict a change in Capstone’s competitive position and undertake purposeful efforts on strengthening its market position.

 The analysis of a current situation and prospects of development of the target and adjacent markets.

In order to forecast a demand for the goods it is possible to use four basic methods:  analyzing trends, surveying potential customers, studying what functionality is in demand, and exploring consumers’ investment programs and their implementations.

Capstone’s positioning in the market and the forecast of its competitive position as a whole depends on a product-market portfolio and is changed in the Capstone’s internal environment.

Capstone is positioned in relation to competitors in the industry. The industry image is shaped by the typology of companies operating in it. Companies’ market portfolios, shipping geography, revenue turnover, etc. can be singled out as the principle typology criteria. The following stage is the analysis of the Capstone’s current market position in relation to other players and identification of company’s niche in the industry, accounting for its financial and other capabilities. For example, the analysis of the USA’s technological industry shows that the majority of manufacturers do not need to count on a complex supplier. This strategy is implemented by Capstone.

The essence of Capstone’s strategic marketing is that a strategy can’t look like a detailed plan of the next several years.. Even big/average enterprises typically enter the market with a simple product without a hint of strategic planning. Only then it makes sense to strategize, following with a development of a marketing strategy.

There is a communication plan that will help Capstone become more competitive in the technologically innovative market. The communication plan is necessary for Capstone to go through the qualitative changes. Communication is the product. During the consumption of the product, there are changes of the participants of the communication.  

Capstone may use the following communication plan, which is a part of the overall project management plan. It includes the following information:

  • § the data about the transferred information, including format, content and the level of detalization;
  • § the name of the person responsible for the transfer of the information;
  • § the name of the receiver of the information;
  • § frequency of communication;
  • § defining which decisions can be solved at the lower hierarchy levels, and which decisions should move upwards;
  • § updating the communication management plan during promotion and development.

The main emphasis in the assessment of the integration transformations in Capstone Corporation is put on its financial success. Nevertheless, it often does not give complete and adequate information about the situation in the company. It does not allow distinguishing its competitive advantages, organizational and financial projections, and also vulnerability to competitors. There are unresolved questions rising in connection with selection and optimization of the forms and mechanisms of internal and external integration, introduction of the economic and organizational structure, resulting in merges and acquisitions, intra-corporate governance formation, organization of financial management and control.

Analysis of integration transformations in Capstone is made on a basis of the standard techniques in many respects, which are not adapted to domestic practice of merges and acquisitions. The problem of Capstone also exists in the lack of a systematic approach to the integration transformations. Development of complete and transparent model of Capstone’s development, making use of financial, economic, social, psychological, anti-brave, standard, legal, structural, and branch mechanisms can promote rapid development of the national economy and its transition to a qualitatively new level.

 Solid leadership skills of the company’s managers are the most crucial to make positive changes in the corporation happen. Effective leadership is one of the keys to the corporation’s future success and survival.

Effective leaders possess an accurately structured system of ideas, based on knowledge and deeply rooted value system of value, which, in turn, are greatly propagated to  the followers. Moreover, leadership trainings become a part of a corporate culture in such corporations. By passing knowledge and experience down to young managers, “the leadership engine” turns on.

Leadership is a process guiding others behavior in order to achieve common goals. Leadership is an influence on people for the purpose of achieving results through communication of high standards and demand of good quality work.

Being a form of social interaction, leadership is a complex activity including:

  1. Participants – both leaders, and followers;
  2. The process of influence;
  3. The number of possible results – not only goal achievement, but also adherence of people to these purposes, an interaction improvement in a team and a change in corporate culture.

Leadership is necessary for building a team from a group of people, which is a steady competitive advantage. Leaders know how to encourage people to work together and how to motivate them to show the best results. Leaders also know how to balance individual aspirations of team participants for the purpose of synergy – the result that significantly exceeds the sum of the individual contributions. Leaders direct the participants of a team to coordinate the aspiration to the achievement of the best individual results by common efforts of a team.

In order to improve teamwork in Capstone Turbine Corporation, it is necessary to create an improvement leadership team of a kind. A number of participants in the improvement team would depend on the complexity of current team projects. Team leaders should supervise the team projects. If a leader has the necessary knowledge of the process optimization, methods and instruments of their implementation in the organization, the other team members should possess the knowledge concerning the organization itself (its functions, formal structure, work methods, etc.). It is very important to pay sufficient attention to training and professional development of the team members (documentation and analysis of the information). The main goal of the team is to supply the company’s management with new breakthrough ideas.

Any improvement team leader at Capstone should:

1) be a innovator – be able to create a favorable psychological climate in the team;

 2) coordinate the team to successfully achieve the goals;

3) solve conflict situations in the team;

4) support team members and give them advice whenever necessary.

There are certain measures that can be taken at Capstone in order to improve the teamwork in the company:

1)   The team members should be ware that they are working as a team. To achieve this, it is necessary to unite the team with common tasks.

2)   Interests of each team member should be taken into consideration;

3)   The team members should be screened for their motivation and desire to work interdependently.

4)   The teams should consist of members with a different set of competences. The difficulties may arise if there is a duplication of functions among the team members.

Social responsibility is a voluntary contribution of business to a society’s development in social, economic and environmental spheres, connected directly to the primary activity of the company and beyond the minimum defined by the law.

Capstone Turbine Corporation is one of the most socially responsible corporations.  Following the philosophy that business can grow and develop only in a close connection with a human being and surrounding environment, Capstone Corporation has created a modern program of corporate social responsibility, which continuously improves.

Capstone Corporation grants services of the highest quality, obligated by a corporate social responsibility, which includes: responsibility to its customers, fair personnel selection, support of community and minimizing the negative impact of its activities on the environment.

 Observance of business and corporate ethics

The responsibility to personnel, maintenance of social security of employees, and the corporate projects directed toward boosting employees’ motivation:

• Training practice provides a comfortable adaptation of young experts to the professional requirements.

• Improvement of professional skills during a training program is a vital sense of satisfaction to a person in self-actualization and professional growth.

Any corporation’s main responsibility is to maximize shareholders equity and, consequently, only people can bear social responsibility. Corporations are responsible only to their shareholders, instead of to a society as a whole. Despite this fact, Capstone Turbine Corporation orients not toward the short-term gains, but toward success in the long-term.

Capstone Corporation should take active part in internal corporate social responsibility, namely:

1. Labor safety;          

2. Salary stability;

3. Maintenance of socially acceptable salaries;

4. Additional medical and social insurance of employees;

5. Professionally developing human resources through training programs;

6. Rendering assistance to employees in critical situations.

The external social responsibility of Capstone Corporation should include the following actions:

1. Sponsorship and corporate charity to groups of people in need;  

2. Assistance in environmental protection;

3. Assistance to the local community and local authorities;

4. Be ready to participate in crisis situations;

5.Bear responsibility to its customers for the offered goods and services.

Conclusion and Recommendations

Capstone Turbine Corporation can become a more powerful organization if it thinks the following through:

• goals and strategies (mission, goals, strategy, resources and restrictions);

• business processes (values);

• structure and roles (distribution of powers and responsibility);

• personnel (motivation, knowledge and skills);

• culture and norms (what rules regulate interaction inside and outside the company: management style, values and norms);

• team consistency (allows employees to cooperate effectively).

The recommendations for Capstone in order to make it more competitive in the market are:

–   to gradually move toward lowering prices for turbines;

–  to create advertising campaigns to promote itself globally;

–  to expand the delivery channels to various geographical regions through finding suitable partners in these regions.

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