Strategy of Business Management - Navitas vs Kaplan - Assignment Example

Navitas vs Kaplan Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 31 May, 2012. Strategic Planning for Navitas Introduction: Navitas 3 Navitas Organizational Vision, Mission and Values 3 Organizational Vision 3 Organizational Mission 3 Organizational Value 4 SWOT analysis 4 Threats: 5 PESTLE Analysis 7 Political factors 7 Economic factors 8 Social factors 8 Technological factors 9 Environmental factors 9 Critical Success Factors 10 Branding and Reputation 10 IT integration 10 Relationship Management 11 Core Competencies 11 What types of strategies are available to the organisation? 11 Which strategy is most appropriate for the organisation? 12 Corporate level strategies 13 Business Level Strategy 13 Functional Strategy 13 Conclusion 14 Introduction: Navitas Navitas is among the largest educational service companies in Australia. It focuses on providing English proficiency courses to their clients. They also provide pathway programs to international students wishing to study in Australia in partnership with Top Australian universities. Recently, Navitas has taken its educational services to the international market. Strategic Goal: To expand the market share of the Group. The main objectives they should seek to achieve in their strategic goal include: Higher presence in more countries. More enrolments in their institutions. Introduction: Kaplan Strategic Goal: To get a larger share of the Australian Higher Education Market. Kaplan Australia is a fully owned subsidiary of Kaplan.inc owned by Washington post. Kaplan offers pre-university pathway programs for students hoping to join Australian University. Since its entry in Australia in 2006 Kaplan has grown to become Navitas biggest challenger in pathway and English proficiency course. Navitas Organizational Vision, Mission and Values Organizational Vision Navitas vision is to attain recognition as the most trusted global learning organization in the world. Kaplan’s vision Organizational Mission The organization mission states that: Navitas is passionate about creating opportunities through lifelong learning and global leader in delivering better learning solutions. Kaplan’s mission is to assist students to realize their educational and career ambitions by building “futures one success story at a time. Organizational Value Navitas organizational values is are follows They have a passion for their purpose Demonstration of the passion through achievement Are rigorous improving their professional reputation and credibility? Acting ethically in their operations Respect and care for the environment and people. Kaplan’s “Kaplan helps individuals achieve their educational and career goals. We build futures one success story at a time” (Kaplan Australia) Values include: Integrity: Kaplan strives to uphold ethical standards in their day to day operations Knowledge: Kaplan instructors are highly experienced and knowledgeable Support: “we offer you the tools you need to succeed” Opportunity: Kaplan avails pathways for access to education. Results: Kaplan dedicates themselves in making sure their students achieve their goals. SWOT analysis Navitas Strengths: The strengths of Navitas outlined below add value to the company, and gives it the edge in most areas of its business over competitors (Yip 2004, pp.23). Strategic alliances with top universities in the regions it operates in. Effective marketing strategies has enabled the corporation maintain a profitable trend over the last five years raise. Experienced and highly skilled employees Reputation of delivering high quality results Capabilities Navitas is a publically listed company and has been making profits consistently meaning they have a strong financial position as it has market capitalization of over $169 million. Navitas has a highly experienced and talented executive team that can enable them implement any new strategy they choose to implement. Weaknesses: Navitas lack of patents/proprietary technology is one of the factors that may mean the company may be overtaken by competitors that may successfully copy their business model. Opportunities: Navitas good financial position can enable them invest in New opportunities in Australia and other regions. The lack of quality education in various regions means Navitas can expand their geographical reach to other regions like ASIA and Africa (Szymanski and Bharadway 1993, pp.16). Navitas has excelled in taking over and merging with other businesses. Navitas should use these two strategies to enter new markets and capture the customer bases of these existing businesses (Kotler, Brown, Adam and Armstrong 2007, pp. 175). Acquisition of existing educational institutions Threats: Navitas must be aware of possible threats to the growth of their business when formulating contingency plans and strategies (Brassington and Pettitt, 2006, pp.124). Navitas expansion to international markets will be influenced by the regulations in those countries Increased competition from new international entrants is a threat to Navitas growth plans. The entry of Kaplan into the Australian market led Navitas to consider the expansion into the international market. Kaplan Strengths: Kaplan’s is a well known international company with a good reputation. Kaplan is a strong brand, and is easily recognizable and respected. Kaplan provides high quality services to its clients. Kaplan’s has a wider customer base as it operates in over 34 countries. Kaplan has a good internet presence. Capabilities Kaplan’s owner the Washington post has the financial muscle to support the organization strategic goal of becoming the dominant player in the Australian market. Kaplan also has a highly competent top management team. Weaknesses: Like Navitas Kaplan to lacks patents over its business models Kaplan is behind its competitors with a low share of the market, which in turn leads to lower turnover. Opportunities: Kaplan can take advantage of the Australian government policy of allowing international students to access the Kaplan can exploit educational opportunities in other countries where it does not have any presence. Kaplan can of existing Australian High education organization through takeover and mergers. In Kaplan’s business strategic alliances and joint ventures are very important. Kaplan’s should expand existing strategic alliances and create new one with Australian educational businesses. Threats: Kaplan must comply with Australian government policy which might in future lean towards reduction of international students in Australia. Navitas and other competitors might come up with new products that make its products less attractive. Changes in consumer behavior may affect Kaplan’s business negatively. The entrance of another international player into the Australian market could threaten Kaplan’s business in Australia Competitors action could also threaten Kaplan’s market share in the Australian market for example if Navitas recruits more skilled staff. PESTLE Analysis This aspect deal with the factors that affect the business from the outside, the term PESTLE stands for the social, political, economic, legal, environmental as well as the technological factors that may affect Global and Australian business(Veliyath and Fitzgerald 2000, pp.56-82). PESTLE analysis is carried out so as to assess the external environment of the business. Political factors This includes factors such as laws, legislation and government decision that may have an influence on a business (Drejer 2000, pp.225). It may also at times include the amount of government intervention in businesses been operated in the country. One of the major factors affecting the institution is government a greater level of government intervention in these countries which it operates in such as in Canada, Australia, and UK. Since Navitas and Kaplan operates in a more than one country the institution is faced by a number of regulation from different government authorities which at times a hinder their performance as well as provisions of educational services in this countries. Economic factors Navitas is also affected by some economic factors, one of such factors include the slower growth rate in terms of global knowledge the economy, thus the requirement for knowledgeable workers is low. Another economic factor is the emergence of multi disciplinary knowledge base which requires workers to be trained in more than one area (Fine 2008, pp.20). For example there is a need for workers with information technology knowledge to be intertwined with other disciplines. Social factors Aspects which are considered under this category include factors such as population growth, career attitudes as well as the emphasis on safety (David 2003, pp. 119). Changes in social trends affect the demand of the services offered by a company. One the most critical social factor that is affecting the organizations is the increase in number of older people in the population and in the target countries, with the increase the numbers of younger people are decreasing. Also by the increase of the number of old aged individuals in the society there is an increase in labor force. Another social challenge that is facing them is the increased diversity as well as mobility of the society within which they operate. With such mobility and diversity, Navitas and Kaplan will have to offer programs that are suitable to the global market. Technological factors These includes aspect related to technology, some of those aspects that are considered under this category includes aspects such as automation, R& D activities, changes in technology as well as technology incentives (Johnson and Scholes 2003, pp.37). This aspect at time places barriers to entry to certain market and may also affect the production levels. In relation to Navitas and Kaplan, the technological factors affecting the educational market include aspects such as the development of web based communications and the development of social networks which play a major role in determining the current as well as the future students of the institutions associated with Navitas. Another technological aspect is the e-connectivity and the advancement in the use of the internet for personal and educational purposes. Through the use of this technology current and prospective students are able to have a greater access to information services about the institution on a 24 hour basis daily (Rugman and Richard 2011, pp. 340). Also by the use of the internet there have emerged certain opportunities to outsource as well as establish shared services thus enhancing the offering of the courses been offered by the institution. Environmental factors This includes aspects related to weather, climate as well as climate change which may have an influence on the enterprise (Williamson, Cooke, Jenkins and Moreton 2003, pp. 142). One of the major environmental issue that have occurred due to Navitas and Kaplan is a greater concentration of students in certain residential areas near their schools or institutions Since most of the students come from different geographic locations and cannot be able to commute daily they end up staying in residential houses near their institutions. Another environmental issue that has been brought about by the development of institutions such as Navitas is that in some countries they are affected by weather conditions to such an extent that they do not operate during certain weather conditions Critical Success Factors Branding and Reputation Navitas and Kaplan are strong brands and have a reputation of offering high quality educational services. Any future strategy both competitors must build on their strong brands to move ahead of competitors (Rix 2004, pp 213). Navitas carries out various brand building activities including featuring the testimony of students it has helped achieve a good education. The student testimonies are delivered in high polished language showing the quality of their core educational programs. Kaplan’s Brand building activities IT integration For any organization to realize competitive advantage over business rivals it must be ready to leverage technology to help it get and stay ahead of rivals (Okumus 2003, pp 876). Navitas uses IT for their marketing advantage but their IT integration is still low as they do not offer quality online course comparable with other courses offered in physical universities. Kaplan IT integration is more extensive than Navitas with Navitas using the internet more widely for its marketing activities. Relationship Management Navitas and Kaplan business is based on the relationships with numerous educational institutions (Joost 2005, pp 20). Both firms must delicately manage these relationships as any fallout may see the decline of the companies and precipitate other educational institutions to review their alliances with them (Guruz 2008, pp.22). Core Competencies A core competency is an area of an organization business where the organization excels in. Core competencies are hard to copy for other organization and they are the factors that mostly influence whether a company will realize sustainable competitive advantage in their industry of operation (Kotler and Kellee 2006, pp 189). Navitas excels in providing tailor made English proficiency courses for international students and the future strategy should enhance this core competency is enhanced for Navitas to continue having a sustainable edge over competitors. What types of strategies are available to the organisation? Generic strategies are basically classified by a business owner response to the industry structure. For educational business such as Navitas and Kaplan to be able to have a competitive advantage they must choose one of the three generic models that were proposed and developed by porter. The foremost strategy is that of cost leadership. If Navitas and Kaplan ought to use a cost leadership strategy by offering quality affordable educations services and also expanding their services to wider market at the same cost (Ollhoff 2007, pp. 93). This strategy will solely be based on the firms’ ability to control the institution operating cost in a way that their services will be attractive to the students and thus they will be able to generate high profit margins. If the firms’ opt for a differentiation strategy, then it will have to provide service that is unique to the customers and of high value to customers (Grant, Butler, Humphrey and Stuart 2011, pp 139). Through this they will be able to develop loyalty among their students who will recommend others to the institution. The last strategy that can be adopted will mainly focus on either differentiation or cost leadership strategy which will be targeting a narrow as well as a focused market (Ferrell and Hartline 2010, pp. 51). If the decides to use the cost leadership strategy it should focus in creating internal efficiencies to assist the institution in withstanding external pressures. Based on the fact that, both the differentiation strategy and the cost leadership strategy are aimed at the broader market, the firms can also confine the services offered to certain market areas or at the same time they may opt to offer a smaller line of services to a broader market, thus in this sense they will be pursuing a strategy of niche or focus (porter, 1980). The worst thing that most companies, business or institution do is trying to take all the three generic strategies at one and at times they end up been stuck in the middle (Grant 2005, pp. 49). It might be inappropriate for Navitas and Kaplan to take into consideration all the three strategies since they have a clear business strategy and they also have a clearly defined market segment within which they operate. Which strategy is most appropriate for the organisation? For Navitas and Kaplan to succeed in realizing sustainable competitive advantage they have to employ strategy responses based on the evaluation of their current business strategy (Acur and Bititci, pp.390). Based on the generic strategies discussed above Navitas can use a market Development strategy: Joint Development and Strategic alliances. While Kaplan can use a niche marketing strategy to gain a larger market share in the Australian market. Corporate level strategies The Top management of Navitas should actively seek opportunities in foreign countries focusing on Asia and Africa. High quality education is in high demand in these regions as they account for the highest numbers of international students. This approach should use acquisition and takeovers of viable businesses in educational hubs with high potential for growth (Thomsen 2004, pp). Kaplan’s Top management should order a market assessment to know how to best target the international student market in Australia. Business Level Strategy Navitas must deliver high quality services tailored to the clients in the new market. Navitas must not use a one size fits all approach as the educational needs in one market are different than that of other markets (Warnaby and Woodruffe 1995, pp 254). It must also enhance its core competency of focusing on providing quality English competency courses (De Toni and Tonchia, pp.970). Kaplan’s focus should be international students and it must change its institutions to be more comfortable and international student friendly than any other institutions in Australia. Functional Strategy Navitas must seek to leverage information technology to achieve its business goals. Providing online course would make sure Navitas can teach students away from educational institutions. Employment in the new institutions use local instructors as much is possible without compromising the quality of services. Kaplan should use IT especially the internet to offer online courses for international students in their own country. The marketing department should adopt their market policy to reflect Kaplan’s new marketing punch line “Kaplan your home away from home” Conclusion Navitas can maintain competitive advantage over Kaplan and other rivals in the educational business by analyzing their business as shown above and coming up with an appropriate strategic response. Thus, a market development strategy would be the most appropriate strategy for Navitas to realize sustainable edge over their rivals. Kaplan’s Niche marketing strategy will enable them gain a larger market share in the Australian educational market. 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