Parker Hannifin Strategic Management Plan Research Proposal

Excerpt from Research Proposal :

This requires the offering of a variety of products that are unique in the industry, and this is precisely how Parker Hannifin got its start and has remained viable (Porter 2007). There is a slight element of cost leadership at work in Parker Hannifin, largely as the result of the sheer size and market share of the company (which allows it to produce, distribute, and market its products at a much lower per-unit cost than smaller firms), but primarily the company's growth has been driven by internal innovation leading to the development of new products, and the acquisition of companies holding niche positions in key industries.


Parker Hannifin could alternatively explore a strategy of cost leadership even more explicitly and avidly, as it could certainly out perform its competitors in such a strategy. Given its already extensive market share and the relative lack of competitors it has for many of its products and operations, however, the benefits from such a strategy would be minimal if not non-existent (Porter 2007). The grand strategy could also focus more on sustaining current operations rather than shedding unprofitable operations while attempting growth through acquisition at the same time, but this would not tae full advantage of the current market opportunities, nor would it effectively address the internal weaknesses of the Parker Hannifin Corporation, and thus is not an advisable strategy for the company.

SWOT Outcomes

Overall the company is very well positioned for growth in the industries in which it is engaged, through a series of internal strengths and proper plans to address the weaknesses of the corporation (both brought on by different aspects of the company's size and scope of endeavors) and its overall external position in the market. The SWOT analysis conducted of Parker Hannifin points to a clear strategy for the near and long-term health and growth of the company that remains in keeping with the firm's long standing values and goals as well as its practices, while at the same time still allowing for adjustment based on current conditions. This keeps the company's future strategy in line with its current framework.

Plans and Goals for Implementation

Organization Structure

A great advantage of the SWOT analysis of Parker Hannifin is that the strategy that has been recommended for the company is largely an outgrowth of its existing strategy, meaning that the company is already effectively organized to support this strategy (Chico 2009). The various departments into which Parker Hannifin is divided reflect the different technologies and industries in which it is involved, which will support the company's ability to efficiently streamline operations with departmental discretion and minimal central oversight. The strong central guidance, meanwhile, has long been a hallmark of the company.

Organization Leadership

This central guidance has been provided by consistent values and a commitment to a singular vision and mission since the company's inception. Current CEO Donald Washkewicz has remained committed to the same quality of products and practices that the company was founded on and has ling been a prime innovator of, and this will allow for the implementation of the acquisition and streamlining goals in a manner that upholds the environmental and social values of the company (Washkewicz 2009). The clarity of Parker Hannifin's leadership's vision serves to make the implementation of any strategy easier, and the clearly defined goals of the company will help to serve this same purpose as the changes in the company's operations and formations as outlined in the strategic plan take place.

Organization Culture

Parker Hannifin is traditionally somewhat media shy, and the culture within the company reflects an industrious reticence to become embroiled in the politics of business (St. James Press 2000). This has served the company well in the past, especially as it has expanded its operations by acquiring many international competitors, an act which often leads to well-publicized consternations on the part of local communities and nations wherein these acquisitions take place. This organizational culture of a quiet earnestness and sense of responsibility will continue to serve the company both in its shedding of unwanted operations and in its acquisition of new firms and its increasing market share; both of these processes can only be made easier by the company's reputation for ethical and responsible practices.

Strategy and Implementation

This strategy must start from the top, of course, and be coordinated by company leadership in a closely monitored way that still provides a far amount of altitude to the various departments to conduct their own research and streamlining operations. All acquisition plans should be carefully reviewed by company leadership and discussed with the affected departments before any movement is made. The strong central leadership and diverse capabilities of the various departments in Parker Hannifin will allow for the successful implementation of the suggested growth strategy in a manner that will be as efficient as possible, allowing for raid movement in a time that the global economy is still somewhat in flux.

Critical Success Factors

The measurable goals that will demonstrate the critical success of the suggested strategy will be a definite increase in profit margins from production and distribution activities, which should be observable within the first year of the strategy's implementation. Increased market share as measured by a comparison of sales figures in both dollar amounts and units should be observable by the second year of acquisitions and innovations, as these begin to take hold in the various industries in which Parker Hannifin is engaged. This should increase profit margins even more than in the first year; any operation where an increased market share leads to a decrease in profit margin should be examined for efficiency issues. Investor confidence in the company over the three-year period will also be a measure of success.

Controls and Evaluations

Detailed monitoring and reporting of changes to operations and resultant changes to costs and profits will be the major avenue of evaluation and control during the implementation of the advised strategy. The independence of many of Parker Hannifin's departments will allow for more immediate evaluations of operations to take place, while the central leadership of the corporation can still monitor and control activities in a manner that will keep them aligned with overall mission goals and values. Careful analysis prior to any major shifts in the organization's operations and/or strategy will allow for projections to be made about strategic effects, and diversions from these projections can be used as evaluative and control measures for the changes to the company.


The Parker Hannifin Corporation has seen tough economic times before, but has maintained a strategy of growth and aggressive retention of its market share, and this has enabled it to remain the largest company of its kind operating in the world. The strategy recommended here after SWOT analysis and other considerations is largely an outgrowth and continuation of the company's long-held strategy. Through the responsible and ethical production of quality products, the company has allowed itself to move freely outward into a broad array of operations, contributing to its success.


AIT. (2008). SWOT Analysis for sales and marketing. Accessed 19 January 2010.

Chico. (209). "Matching organization structure to strategy." Accessed 19 January 2010.

Knight, D. (2004). "Grand Strategy: building your foundation for performance breakthroughs." Accessed 19 January 2010.

Porter, M. (2007). "Strategic management: Generic strategies." Accessed 19 January 2010.

PR Web. (2010). "Exotic Automation & Supply Acquires Parker Hannifin's Troy, MI Motion and Control Distributorship." Accessed 19 January 2010.

St. James Press. (2000). International directory of company histories. New York.

Washkewicz, D. (2009). "Investor relations." Accessed 19 January 2010.

Yahoo Finance. (2010). "Parker Hannifin Corporation." Accessed 19 January 2010.

Online Sources Used in Document:


AIT. (2008). SWOT Analysis for sales and marketing. Accessed 19 January 2010.

Chico. (209). "Matching organization structure to strategy." Accessed 19 January 2010.

Knight, D. (2004). "Grand Strategy: building your foundation for performance breakthroughs." Accessed 19 January 2010.

Porter, M. (2007). "Strategic management: Generic strategies." Accessed 19 January 2010.

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