DL Limited Company - Business Strategies - Case Study Example

DL Strategic Business Plan Introduction This report seeks to illustrate a business plan for DL Limited Company. DL Limited Company is a new company, and a branch of the Sterling Consulting Company. The Sterling Consulting Company is a small education firm based in the United Kingdom, and has been working closely with senior official from several universities in the United Kingdom alongside 14 Turkish universities. This firm seeks to develop double degree programmes in Engineering, Business and Information Technology for the Turkey based students, such that students who successfully complete their three years of undergraduate studies in Turkey have a chance to complete their final year in a UK university. This service has widely been replicated by other Turkish speaking territories. In addition, several leading Turkish open universities have invited Sterling Consultancy, some of which are some of the current clients of Sterling Consultancy have invited the firm to provide distance learning degree programmes to their students. As a result, Sterling Consultancy has resorted ion to opening DL Limited Company to offer the service. The students will be based in their countries of origin, and will follow courses through a web portal in order to qualify for the double undergraduate degree from both their local university and a UK university. DL Limited will therefore offer a course in Business Management through web technology. It speculated that this service will be highly promoted through the active support of the client universities. In this report, we shall outline the ways in which strategic decisions are made, examine two markets, discussing the market entry strategies and the key decisions that are required before entering the selected markets, with special consideration on the pricing strategy and the of social networking services. The report will also look at product development and the nature resources required in implementing the strategy. The pitfalls the DL Limited is likely to encounter will as well be outlined. Ways in which strategic decisions are made Decision making is one of the most fundamental business practices. Any undertaking of the business requires making strategic decisions, as it works towards ensuring that the business goals are attained, as well as shaping of both the present and future of the business (Nag et al., 2007). Within the company, managers are required to make choices that are aimed at making the business grow and more profitable. For instance, they have to decide on which markets to exit or enter, or which employee to promote or layoff. Apparently what differentiates between a successful organization and a failing one is based on the decision making capabilities. Strategic decisions, mobilize resources, vision and the energies of the organization, to enable it attain the desired results (Nag et al., 2007). However, there are several factors that have to be considered when making strategic decisions within the organization. First, it is important to take time and plan for the decision making process. Planning for decision making limits the amount of resources that will be channeled to decision making, offers a standard of measurement and gives room for the establishment of independent goals (Noone, 1998). It is also important to collect all the required information required in order to come up with an effective decision, and assess the consequences of each option before coming to a decision. There are various ways that could be applied in making strategic business decisions. Every successful organization is built on strategic decisions, since its leaders are always looking for prospects for products or services that will position the company to be successful in a competitive business environment (Proctor, 1999). To make strategic decisions in an organization, the leaders need to identify the needs that are not met by the available products or services in the organization’s main area of specialization, and consider ways of enhancing the existing products or services (Nag et al., 2007). It is then necessary to compare the organization’s internal capabilities with the market opportunities in order to concentrate on the needs the organization can successfully satisfy. The next step is to gather a team that can offer ideas regarding the specific products that could be implemented to meet the needs of the market. The ideas can then be prioritized by examining their specific benefits and risks, pros and cons. The decision can then be made basing on this evaluation and the general research (Noone, 1998). The final stage involves tracking the result to determine whether the decision is attaining the intended results. The organization can also consider the following procedure in making strategic decision. However, the organization has to first establish whether the decision is necessary or not. Necessary decisions are those that are vital for the success of the organization. It is important to classify the problem to establish if the events are common to the organization or not. Classifying the problem will enable the organization to determine the approach that could be used to solve the identified problem. The problem has to be then defined in order to get to the root of the problem in order to formulate the right approach to solve it. After getting to the root of the problem, the next step is to decide on what is right, a stage that often entails making comprises. It is necessary to consider the opinions of all those who will be affected by the final decision (Noone, 1998). However, a decision will only become real, once it is implemented and therefore, it is important for the organization to build action into the decision that has been arrived at. After the implementation, it then important to test decision to find out if it attains the intended results. Potential markets for expanding the distance learning programmes Selecting a satisfactorily or the best approach for launching a product of a new business enterprise from an established corporate base is a hard task. Certainly, there is no single strategy which is favorable for all companies, products or markets. It is apparent that, the competitive strategy for an existing company to expand its products into new markets is shaped by various factors including the firm’s characteristics, the market among other environmental factors (Philip & Gary, 2010). In this case, a company has to consider market entry strategy and make key decisions that are vital to be addressed before entering their chosen markets. A market entry strategy is defined as a planned technique for delivering products to a new target market or when dealing with services, it means setting up and managing contracts in an international country (Lymbersky, 2008). In this part, we will analyze potential markets for expanding the distance learning programmes for DL limited. In particular, we will discuss the market entry strategy for the company in these new markets and the fundamental decisions that they necessitate to address before entering these markets. In addition, we will discuss promotional strategies such as social networking services that can be sued to promote their distance learning programmes together with the pricing strategy. Market entry strategy As stated above, companies need to consider market entry strategy before expanding their services into a new market. Through the application of primary and secondary research, DL limited can expand its distance learning programme to native English countries. In our case, Australia and the United States will be the new markets where DL limited will expand their services. It is certain that, Sterling is the only British company that has made a significant inroad into this market, with their unique education model that allows students to acquire dual degrees. Their network of contacts with many university officials and government regulators provide them with a sound platform to develop their business further in this potentially lucrative market. However, in Australia and in the United States, the company may face competition from other companies offering distance learning programmes such as Weston Distance Learning, KC Distance Learning, and Docebo company; therefore, DL should use a market entry strategy that is viable and one that will assist the company in entering the new market successfully. A suitable strategy to apply in this case is the waterfall strategy. The waterfall strategy In the waterfall strategy, DL will expand its services in the selected markets sequentially. Firstly, the company will enter one new market, let’s say Australia and establish its identity there. This entails estimating the potential market size and patterns of revenue, identifying the target market segment, creating brand awareness, and lastly, creating and implementing a sales strategy (Po Li T. Li, 2003). After establishing the product identity in the Australian market, DL limited can then use the same knowledge to enter in to the United State market. This is deemed a less risky procedure while expanding in to new markets. Benefits of expanding into new markets There are various benefits that firms yield after expanding their products in to new markets. Some of these benefits may include brand awareness, increased sales thus revenues and market share, and business stability (Philip & Gary, 2010). This is no exceptional to DL limited. Establishing a market entry strategy entails a detailed analysis of possible clients and the potential competitors. Factors to consider before entering in to a new market Before expanding its services in to new markets, DL limited need to make certain decisions concerning the following factors. Resources: DL limited should consider the amount of resources it intends to dedicate into launching its new markets. For instance, time, technical skills and finance which will enable them offer quality and efficient services. It is true that, DL limited has a good corporate base which is essential for the expansion of its distance learning programme. Competition: this is the most vital factor that should be considered by all companies that wish to expand their market. DL limited should consider the market aggressiveness, the suppliers, and how the company can position itself in order to stand out from its rivals. In Australian and US market, there is definitely high competition and as a result, the company should employ efficient strategies in order to emerge successful. Barriers to entry: the company should consider whether there are legal barriers that require to be addressed before entering into the new market. For instance, export license, trade limitations, and the essential level of training and knowledge required. Product or service: companies should consider the products or services they are intending to expand in to the new market. In our case, DL limited wants to expand a service- distance learning degree programmes, and therefore it should consider whether it is viable to the new market, its appeal and the competitive advantage. Pricing: this is the last factor that companies consider before entering into a new market. Pricing encompasses charges for the product or service. DL limited in this case will consider the amount of money it will incur in promotions, general operating overheads and the charges for the service. Promotional strategy Promotional strategies are a prerequisite for companies to succeed in the competitive market. Such promotional strategies such as the internet, magazines, Television, and news papers among others have been employed largely by firms in the contemporary time. Promotion is considered as the most fundamental strategy that can assist a firm stand out from its rivals and at the same time attain its set objectives. DL limited will utilize social networking services on the worldwide web in order to promote its distance learning programmes in the new markets thus, reach a wider target market. Some of the social networking services that can be employed encompass MySpace, twitter, facebook, and Flicker among others (Kelsey, 2010). If used efficiently, social networking services can offer an instant boost to all online businesses. Social networks are deemed to connect individuals at low costs which is very beneficial for companies seeking to expand their businesses and contacts with potential customers (Kelsey, 2010). In addition, social networks act as tools for customer relationship management for firms selling their services. By employing social networking services, DL will be able to connect with many target customers in their new markets. The company will advertise its services in the social networks in the form of banners and text ads. Such information to be advertised may include the courses being offered, time duration, and charges per module among others. DL limited can employ the following steps in advertising its services through social network: Plan and code modified profiles in all the main social networks. Establish contests, cross-promotional strategies, and viral campaigns within the chosen social networks. Perform brand management through public relations, content updates, and direct interaction with customers. Gauge and scrutinize reports to track the achievement of different campaigns. Pricing strategy Pricing is considered as the most vital element in marketing. In addition, pricing is a marketing mix element that affects other factors including the channel decision, product features, and promotion (Kent, 2003). DL limited can use various pricing strategies in order to enter into the new market successfully. Nevertheless, the most efficient strategy to use in this case is penetration pricing. This will encompasses charging low prices for its distance learning programme, and once the market share is gained, the company can increase it prices in future. As DL limited will have already built customer loyalty through its quality services, the probability of loosing such clients will be very low. In addition, DL limited can also set its prices based on the competitor’s prices. Product development Product development can be described as a process of creating products or services with different or new characteristics in order to provide additional benefits to the customers. It is basically concerned with the development of a new product or service and introducing into the market. DL Limited Company seeks to offer validated distance learning courses, at undergraduate level to students pursuing Business Management. One of the product development models DL Limited could apply is the stage-gate model. This model applies funnel tools in its decision making process regarding the new product development, and in our case, the new service. The decision points or gates are located at specific points of the product development process that are most fundamental to making decisions concerning the continuance of the product development (Hamel & Prahalad, 1994). The production areas within the gates include idea generation, development of capability, feasibility establishment, product launch, and testing and validation. The management will then make a decision as to whether the service should continue to be developed or not, at the end of each of the outlined areas of development. Considering the fact that this is the only British company that has made a significant inroad into the market, offering a unique model of education where learners can acquire dual degrees, then this indicates that the company has significant room for growth since there are no competitors. The service can as well be expanded into other markets to make the company more profitable. However, the company should not use this as a strategy to exploit its customers, but rather offer affordable costs that will attract more students. In addition, considering that this is the first company to offer this type of service, it has the ability of establishing its brand name such that as other companies resort into this venture, it will remain the most preferred due to its already established brand name (Hamel & Prahalad, 1994). DL Limited therefore has the potential of exploring into more markets, on a global scale, to establish its brand name and gain a competitive advantage over its future competitors. The resources required to implement their strategy, and the potential pitfalls that the company might face In implementing strategy that will assist in expanding the distance learning programme into Australian and US market, DL limited will require a range of resources. For instance, such resources as time, finance and technical skills are very essential in implementing a strategy (Philip & Gary, 2010). Financing: DL limited should be aware of its need to fund the strategy. Therefore financial commitment during the early stages of the planning process is vital. However, lack of enough funds to undertake the strategy as required will affect the company negatively in its aim of expanding its market. Human resource factors: DL should have a strong human resource base that is responsible of carrying out communication during the implementation process. These individuals should be thoroughly aware of the strategy they are supposed to implement. However, DL limited may experience a draw back in a case where, there are poor communication between the human resource and the company as a whole. Therefore, is vital for the company to ensure it has effective human resources who will be able to undertake their responsibility as required. Time: in order to emerge successful in the new market by implementing the strategy effectively, DL must dedicate ample time to this role. Individuals assigned this responsibility must concentrate more on implementing the strategy especially the promotional strategy. Through this, the company will be able to sell itself effectively to its target market. However, little dedication to the implementation of the strategy will yield little or no benefits to the company. Knowledge and skills: individuals assigned with the implementation of the strategy must have ample knowledge and skills required for the same. This knowledge assists them in rethinking of new ideas that are a prerequisite for the strategy implementation. It is true that, DL limited, offering a unique product will be able to succeed in its new selected markets after implementing its strategy effectively, which will also give it a competitive advantage over its future competitors. Financial management This is another significant area DL Limited should give consideration. Financial management can be defined as the management of the organizational finances with an aim of attaining the financial objectives. Dl Limited has established its financial objectives, for instance, the company seeks to generate cash, create wealth for the business and probably provide sufficient return on investment taking into consideration the resources the company has invested and the risks the business is undertaking. For instance, DL Limited has an estimate of about £ 300 000 and therefore the company has an objective of paying back these costs after an estimated period of six months. The purpose of financial management is to therefore ensure such an objective is attained. Financial management encompasses financial planning, financial control and financial decision making (Mulcaster, 2009). Financial planning entails making sure the company survives and the manner in which its funds are spent in the most efficient manner. It also entails planning for the company’s future in a more realistic model (Proctor, 1999). Financial control seeks to ensure the company is attaining its objectives. It considers if the company’s assets are being utilized efficiently, how secure the assets are and if the management is acting in accordance with the company’s rules and in the best interest of the company’s shareholders (Mulcaster, 2009). Lastly, financial decision making relates to financing, investment and dividends. For instance, the company can raise funds from borrowing from the banks, selling its shares and taking credit from some of its clients. One of the major financing decisions is if the profits the company is making should be distributed to its shareholders in the form of dividends or retained within the company. However, when the shareholders are given higher dividends the company stands at a risk of starvation since it will lack the funds to further reinvest in growing profits and revenues (Proctor, 1999). Therefore, financial management remains to be one of the key management areas that will determine the future of the company. Conclusion This report has focused on DL Limited Company, a new company, and a branch of the Sterling Consulting Company. In order to expand its distance learning programme in its new selected markets (Australia and United States) the company has to make various decisions concerning pricing, resources to be used, competition, and barriers of entry. A good market entry strategy should be utilized in order to ensure successful entry. The waterfall strategy which calls for sequential entry in new markets should be employed in this case. Pricing, as discussed above is a major factor that should be put in mind in any business undertaking. The company as discussed should use penetration pricing strategy as it is deemed a good strategy for entering into new markets. Promotion strategies including social networking services will be employed by the company in order to reach and cover a wider target market. Effective use of this strategy will enable DL Company limited to emerge successful in the market. Through product development, the company will be able to provide additional benefits to its customers which are beneficial for the company’s growth. Good implementation of the strategy will enable DL limited to attain its goals of increasing market share and revenues, and at the same time, offering quality education to students. References Philip, K & Gary, A, 2010. Principles of Marketing (13th ed). New York: Pearson Prentice Hall. Kent, B. M, 2003. The Pricing Strategy Audit. Cambridge: Cambridge Strategy Publications. Po Li T. Li, 2003. Reviving Traditions in Research on International Market Entry. London: JAI Press. Lymbersky, C. 2008. Market Entry Strategies, Hamburg: Management Laboratory Press. Kelsey, T, 2010. Social Networking Spaces: From Facebook to Twitter and Everything In Between. New York: Springer-Verlag. Mulcaster, W, 2009. 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