The F Company consists of automobile engine, marine engine and aerospace engine businesses. It has built its global reputation for engine design and quality on its engineering capability. Though the marine engine business has not been performing well for some time, the F Company has dominated the supply of engines for the luxury end of the automobile market for years. Unfortunately for the F Company, however, the market in luxury automobiles is changing. Exchange rate movements and increased production costs have made the F Company less competitive and its rivals are rapidly catching up in terms of engine quality and design. As a result, the latest annual report shows turnover down, margins reduced and the company barely breaking even.

You have just attended a strategy meeting at the F Company in which:

• Manager A argued that the automobile engine business strategy was wrong
• Manager B claimed that the major problem had been the failure to properly implement functional strategies
• Manager C said the more attention should be paid to the threats and opportunities of the external environment so that the F Company could position itself more realistically.
• Manager D claimed that the company should really be seeking to develop further its core engineering competence if it were going to regain its competitiveness in the market place.

After the meeting, a junior manager who had been in attendance asks you to explain what his senior colleagues had been talking about.

Required:

(a) Explain the differences between corporate level strategy, business level strategy and functional level strategy in the F Company

(b) Identify the theoretical perspective on strategy formation adopted by Manager C and

Manager D

(c) Explain the concept of core competences and their relevance to the F Company