Strategic Management and Strategic Competitiveness
By: Monica Wilson
January 14, 2014
While completing my research on Alcoa Inc. it has been an interesting history tree at a glance from when business opened to now. You’ll never know how Aluminum has been incorporated into the public eyes over the years. With this extent research, I’ll be introducing the company’s changes over the years, and how it has an impacted in today’s society. Furthermore, seeing the products
effort to meet its goal of improved safety performance? Explain.
For Alcoa, the key challenges in improving their safety performance are the establishment of behavioral mindsets that embrace safety throughout their organizational layers, and a preventive culture to facilitate the continual deep-seeding of behaviors.
Overcoming decades of legacy behavior around the lack of emphasis and ownership to safety is a critical step for Alcoa in establishing the desired H&S culture throughout the organization
1993 Operating Cost of Aluminum plants worldwide
(contains no depreciation or other charge for capital) ($/ton except where noted)
Smelter Country Company Capacity (tpy) Electricity usage (kWh/t) Electricity price ($/kWh) Electricity cost ($/ton): Alumina usage (t/t Al) Alumina price ($/t Alumina) Alumina cost ($/ton): Other raw materials ($/ton) Plant power and fuel ($/ton) Consumables ($/ton) Maintenance ($/ton) Labor ($/ton) Freight ($/ton) General and administrative ($/ton)
Marginal cost Total
can be the threat of backward integration. But metal producers are
unlikely to put the threats of forward integration => High
l Bargaining power of suppliers
There are three largest aluminum suppliers; Alcoa, Alcan and Reynolds Metal.
Aluminum is classic oligopoly dominated by Alcan and Alcoa. Reynolds may
benefit from R&D synergies. Also there is a threat of forward integration. =>High
l Threat of new entrants
It seems that barriers to entry are low. Product differentiation and switching cost
among existing firms (high), 5-6 big competitors. Reynolds Metals—>supplier route. New production tech—>Reynolds. New product design—> Ball Corp
-Bargaining power of buyers (high). Top 5 soft drink companies
-Bargaining power of suppliers (high)—>Alcoa, Alcan, Reynolds
-Threat of Substitutes (high): plastic and glass,
-Threat of New Entrants (low)—>the industry is already in long run MC. Smaller firms have been eliminated.
-Price, rising COGS due to rise of price of alum by 15%, 65% COGS
Summary: The Aluminum Company of America (Alcoa) had a very strong value based- culture. Every decision and every action an employee made must be aligned with the company’s values. Fred Fetterolf the president of the company in 1985, decided the company needed to document the values that all employees must live by: Integrity; Environment, Health and Safety; Customer; Accountability; Excellence; People; and Profitability. Alcoa had implemented a global ethics and compliance program, and the focus
INTRODUCTION TO Alcan:
Alcan Inc. Is a world-class leader providing innovative aluminium and packaging solutions. Alcan was founded in 1902.
|In 1902, the Canadian subsidiary of Pittsburgh Reduction Company (later Alcoa) was first chartered as Northern Aluminium Company, |
|In 1925, the company was renamed Aluminium Company
Alcoa’s Core Values in Practice
The Aluminum Company of America (Alcoa) was founded in 1888 as the Pittsburgh Reduction Company. In 1907, they changed their name to Alcoa and had strong values based culture. “In 1985, Fred Fetterolf, then president, decided the company needed to document the values that all employees must live by: Integrity; Environment, Health, and Safety; Customer; Accountability; Excellence; People; and Profitability” (Lawrence & Weber, 2011, pg 137). CEO, Paul O’Neil, built
shows a positive relationship between the market and Alcoa stock price.
Table [ 1 ]: Regression Output AA and S&P
Similar to other market indicators, it’s crucial to recognize that the economic downturn of 2008, as well as the recent recovery, resulted in Alcoa’s stock price and the broad-based index in general returning numbers that were disproportionately high. In several instances, variations over 5% occurred. Especially when Alcoa rebounded as the market remained flat. A three year
1. 2. 3. 4.
General Motors has been called a "template for 21st century capitalism." True False A business is any organization that is engaged in making a product or providing a service for a profit. True False Businesses and society are independent of one another. True False The stakeholder theory of the firm argues that a firm's sole purpose is to create value for its shareholders. True False The instrumental