Final answer:
Armor Motors Inc.'s decision to produce its own car engines may provide greater control and cost savings but involves challenges such as achieving economies of scale, supply chain adjustments, and ensuring quality. This strategy must align with market dynamics and industry standards for innovation and efficiency, which have been raised by global competitors.
Step-by-step explanation:
Impact of Armor Motors Inc. Decision on In-house Engine Manufacturing
Armor Motors Inc.'s decision to develop and manufacture its own car engines is a significant strategic move with broad implications. Shifting the production of a core component such as the engine in-house can lead to a greater control over the manufacturing process, potential cost savings on production, and improved ability to innovate. However, it also involves taking on the complex processes and high initial costs associated with the production of internal combustion engines.
Historically, companies that specialized in engine production had an advantage due to economies of scale, which Armor Motors will need to address. Additionally, by moving away from external suppliers, there may be disruption in the supply chain, and it will require effective strategy to minimize impact. Armor Motors would be taking on new responsibilities, including research and development, production, and quality control, which can be quite challenging.
The automotive industry has seen a shift in recent years, with competition no longer being among a few domestic producers but a globally dispersed set. To stay competitive, companies like Armor Motors need to invest in innovation, as the presence of foreign competitors like Toyota and Volkswagen has raised standards in the industry, leading to more reliable and efficient vehicles. This move by Armor Motors to manufacture engines may reflect a broader strategy to enhance competitive positioning by controlling more elements of the production process.
By developing its own engines, Armor Motors could potentially offer unique features to consumers, fostering brand loyalty and distinctiveness in the market. But such a move requires careful consideration of the market dynamics, costs, and industry trends. This decision could make or break Armor Motors' market position in the long run depending on the outcomes of these factors.