Quality Metal Service Centre lies in the metal distribution industry which is highly competitive and mature. There are fewer companies in this field than those in the retail business or service industry. Quality Metal Service Centre is in the middle of the value chain. They have two major responsibility areas, both internal and external.
One issue identified with QSMC is that they have few suppliers to choose from as there only a certain number of metal mills available. With their corporate strategy to focus sales efforts on targeted markets of specialty metal users, they plan to introduce higher technology metals such as titanium however titanium is not readily available on the distributor market. This will not only further limit their selection of suppliers, it will also lose their previously stable base of customers if end user customers when it diminish its participation in the broader commodity product line. Both the bargaining power of suppliers and threat of substitute products to high-technology metals may make the specialised metal industry less profitable.
Another weakness with redeploying into higher technology metals is that the rapid development of technology will expense too much cost and further reduce the profits of the company. Research and development cost, patents costs and the changing market in the business environment may be a threat to Quality Metal Service Centre.
The organisation structure of QMSC is quite complex. It is decentralised very much on location, the regional areas where the company operates. The disadvantages of the decentralised QSMC organisation structure is that the possibility that the business segments are duplicating each others’ efforts and segment managers may make decisions incongruent with the goals of the organisation. QMSC’s organisation structure is not in a form of a flat structure organisation where there is