Strategic Management of DL Limited - Assignment Example

?Strategic Management Table of Contents Table of Contents 2 Introduction 3 Discussion 4 Environmental Scanning 6 SWOT Analysis 6 Porter’s Five ForcesModel 8 PESTEL Analysis 11 Implementation 15 Conclusion 18 References 19 Introduction The term ‘strategy’ is defined as the plan or the action of the organisations designed to achieve the vission of an organisation. It is performed with the help of all available organisational resources at efficient and effective manner so as to attain the objectives of the organisation. Strategies are developed or planned in order to enhance the strength of an organisation thereby reducing the potencies of the competiting firms (Johnson & et. al., 2008). Thus, strategies might be of varied types such as corporate, businessunit and operational approaches among others. Strategy facilitates in augmentation of the sustianability and corporate image of an organisation in the long run among other competitors. Therefore, proper examination, selection and execution of a strategy are basic constitents of strategic management. Strategic management is odten referred as a term that deals with projected and evolving initiatives taken to augment the performance of ?rms in the markets. It involves identification of the organisation's mission, vision and goals, policies and plans, intended to accomplish the future objectives thereby utilising the avalilable resources in an efficient manner. Strategic management is a continuous procedure of developement of strategies and policies that facilitates to compete with the existing rivals in the market thereby ensuring the market share and the brand distinctiveness among others in the market (Oxford University Press, 2011). Moreover, strategic management also implies proper analysis and examination of the external environment so as to make the implementation rather succesful to cope up with the challenging situational factors. Besides, strategic management also helps in determing the factors responsible for entering new markets, the pricing strategies, rival competitors, existing products or services and the underlying consequences. Therefore, it can be affirmed that an appropriate strategy or plan can be implemented only through apt strategic decisons certified with the help of reputed strategy consulting firms (Hunger & Wheelen, n.d.). This is a report highlighting the preparation of a strategic plan for ‘DL Limited’, thereby utilising varied ideas and knoweledges of strategic management so as to make the plan more proficient and effective. Discussion Strategic management refers a collection of decisions and operations which is accepted so as to improve the performance of an organisation.. The strategies are formulated after taking a descriptive knowledge and understanding about the environmental conditions of the market. This can be attained after conducting a SWOT analysis so as to acquire a detailed idea about the strengths and weaknesses thereby maximising the opportunities and minimising the threaths. Thus, strategic management includes planning for both present and future prospects of an organisation. Strategic management includes strategic analysis, planning and implementation so as to enhance the profitability and the marketshare among others. This can be possible only through proper decision making process and proper analysis of the market along with the rival competitors’ approaches and product lines so as to ensure positive future prospects for the organisation (Wells, n.d.). In this era of globalisation and industrialisation, it is essential to implement strategic planning process in order to enhance the business and its market identity among other competiting brands. Strategic planning is referred to as an organisation's procedure of defining its policies, or trends necessary for decision making so as to utilise its resources to attain the future strategies. In order to determine the future courses of an organisation, it is essential to realise the existing position and financial condition which would facilitate the decision making for the upcoming prospects (Wells, n.d.). Strategic planning is a crucial business activity essential for sustainability of firms. Strategic planning process mainly involves scanning of the external environmental factors, competitors, technologies, market trends and challenges among others. This can be possible only through appropriate analysis of the existing available resources which would facilitate in achieving the future strategic goals and long-term objectives (John Wiley & Sons, Inc, n.d.). Therefore, it can be affirmed that strategic planning process is a set of initiatives which is scheduled so as to achieve the desired objectives of DL Limited. The prime aim of the study would be to investigate two markets of Greece and Bulgaria as potential markets to introduce distance learning degree programs with the help of web portal so as to enhance the growth as well as the corporate image of DL Limited among others. Apart from this, entry into the markets of Greece and Bulgaria would also augment the profitability and distinctiveness of DL Limited among other rival firms. As both the above stated markets i.e. nations of Greece and Bulgaria includes large number of Turkish students, so expansion of DL Limited’s service would be feasible in these areas due to high reputation and fame of the brand name of ‘Sterling Consulting’. Therefore, in order to enter into the markets of Greece and Bulgaria, it is essential to perform environmental scanning of these markets. Environmental scanning includes both internal and external analysis so as to determine the most viable opportunities for DL Limited. Environmental Scanning SWOT Analysis Internal examination involves the SWOT analysis of DL Limited so as to verify the available prospects which would facilitate in attaining the strategic objectives. The prime vigor is that DL Limited is a part of the parent organisation Sterling Consulting, which is quite reputed and branded in the market of the United Kingdom (UK). This acts as one of the significant factors for DL Limited. Moreover, along with huge market share, customer loyalty also eases the path of entrance of DL Limited in markets of Greece and Bulgaria. Apart from this, high cost indulgence i.e. ?300,000 as well as provision of providing double degree certificates also acts as an optimistic factor for attracting students among others in the market. This would help DL Limited to enhance the joint market share of both, the parent organisation (Sterling Consulting) and its own. Moreover, it would also augment the revenue of the organisation. Although, along with strengths there are certain weaknesses as well in DL Limited. The expansion of DL Limited only in the Turkish spoken territories acts as one of the significant limitations. Apart from this, the lead time specified for the expansion process is quite low, i.e. 6 months, which might be unfeasible for the total process. Hence, it would be avowed that at least 1 year is required for extension of DL Limited. Apart from strengths and limitations, the opportunities which would be beneficial for DL Limited is the high craze of engineering and IT graduates in the markets of Bulgaria and Greece. This is because the manufacturing engineering industries offer the maximum amount of Gross Domestic Product (GDP) of the economy of both nations (IRMA, n.d.). Therefore, the governments of Bulgaria and Greece are also offering special attention towards educations, which would facilitate the growth of DL Limited. Moreover, as the opportunities of educational courses are quite high, DL Limited can also offer various other innovative programs so as to attract new students. This would enhance the market share and the corporate image among others in the markets (IRMA, n.d.). Although, DL Limited is an inherent part of a branded company named Sterling Consulting, still it has to face certain challenges in the new markets. Large number of competitors such as University of Thessaly (innovative product development course), University of Patra (mechanical and aircraft engineering course), Sofia University (IT education courses) and Hellenic Open University among others (Gourova & et. al., 2008 ). Hence, it is essential for DL Limited to introduce certain other innovative courses so as to sustain in these competitive markets. It would facilitate to enhance the brand image of DL Limited as well as its distinctiveness in the market, apart from the parent company. Along with internal analysis, external macro-environment investigation is also crucial before entering the new markets. The varied tools utilised by strategic planners for the analysis of external environment are Porter’s Five Force Model and PESTEL analysis among others. Porter’s Five Forces Model Porter's Five Forces Model Analysis is one of the efficient techniques utilised for industry analysis and industry strategy formulations. It uses five different forces of the market so as to examine the competitive potentialities and intensities of a market. Porter’s five forces model helps to investigate the opportunities and the threats present in the new markets so as to determine the profitability of an organisation in the long run. The five competitive forces are: the threat of new entrants, the threat of substitutes, the bargaining power of buyers, the bargaining power of suppliers and the degree of rivalry between the existing firms (Stahl & Grigsby, 1997). The Threat of New Eentrants In this era of globalisation, there is always an underlying threat of the entry of new competitors. New entrants increase the level of competitiveness thereby reducing the attractiveness of a market. Moreover, as the Bulgarian and the Greek markets mainly depend on the engineering industries, so the universities offering engineering and innovative IT courses are essential to maintain the business operations. Moreover, low capital requirement also enhances the threat of new entrants in these markets. Thus, in order to sustain for the long run, it is essential for DL Limited to introduce innovative degree courses such as aircraft technology at a lower cost among others. This would improve its market share and profitability (IRMA, n.d.). Threat of Substitutes As the economies of Bulgaria and Greece are mainly dependent on the manufacturing engineering industries, so the craze of the universities offering degree courses is very high. There exists many degree course providing universities so as to meet the demand of the growing population of these economies. Therefore, there exists a competition among the substitute organisations with regard to the course and fees structure in order to attract more students in the market. Moreover, due to large number of substitutes, the probability of switch over towards other competitors’ services is also rather high. This reduces, the loyalty of the students as a result the market share diminishes along with the revenue. Apart from this, it lowers the attractiveness and the prosperity of an organization in the industry, which reduces the competitiveness as well. Hence, in order to maintain the position and the potency in the market, it is essential for DL Limited to innovate new and atrrcative educational services at a reasonable price (IRMA, n.d.). Bargaining Power of the Suppliers Bargaining power of the suppliers helps to determine the competitiveness of an organization in the market. Suppliers are the prime components of an organisation that plays a vital part to enhance the profitability of an organisation. In case of educational service providers, the staffs of organisations are the most vital ingredients which are responsible for the growth and development of an organisation. Moreover, if there are small numbers of organisations then the suppliers or the staffs might take extra charges which may be detrimental in the long run. Thus, it is essential for DL Limited to offer the services at a reasonable price so as to maintain the loyalty of the students. This might help in the sustainability in the long run among other competitors (IRMA, n.d.). Bargaining Power of the Buyers The bargaining power of the buyers also influences the competencies of an organization in the market. Moreover, it is the buyers who are solely responsible for enhancing the demand in the market. The bargaining power of the buyers increases in case of few sellers or service providers in the market. However, as the numbers of educational degree providing universities are rather less in the markets of Bulgaria and Greece as compared to the number of students, so the bargaining powers of the students is quite low (IRMA, n.d.). Hence, there are high opportunities of development of educational degree courses in these markets. Intensity of Rivalry Intensity of rivalry is theother significant factor responsible for determining the growth and expansion of organisations in a specific market. Moreover, the number of competitors determines the degree of rivalry among one another in the market. The degree of competition increases due to presence of large number of organisations or service providers in the same sector which reduces the attractiveness of the market. Additionally, as the number of educational service providers in the markets of Bulgaria and Greece are quite less so the intensity of rivalry among the competing service providers are also rather low. Hence, there are high opportunities for DL Limited to enter into the markets of above stated countries so as to expand its business as well as market image among others. It would also enhance profitability and potency of DL Limited. Hence, from the above analysis, it can be clearly depicted that there are high opportunities for DL Limited in the markets of Bulgaria and Greece, which might be beneficial for the enhancement of market share and corporate image among other competitors. It would also augment the number of students thereby improving the uniqueness in the market. PESTEL Analysis Apart from the Porter’s Five Force Model, another significant method utilised for the investigation is PESTEL analysis. PESTEL analysis mainly investigates "political, economic, social, technological, environmental and legal analysis" so as to determine the macro-environmental scenario responsible for ther process of evaluation (IRMA, n.d.). It mainly detects the future prospects and the underlying risks of the markets. Moreover, PESTEL analysis is one of the significant tools utilised for the growth and the expansion of an organisation in a new market. Political Environment As the manufacturing sector mainly offers the maximum extent of revenue for the economy so the governments of Bulgaria and Greece provide special attention towards the development of these sectors. Governments are offering specific interventions towards the business management, IT and engineering courses so as to enhance the turnover of the industries, which would improve the GDP of these countries (IRMA, n.d.). Moreover, it would also improve the opportunities of educations and future prospects of the students. As a result, the prospects of the new entrants dealing with educational sectors would also increase. Therefore, it can be apprently observed that the markets of Bulgaria and Greece have high opportunities for expansion of DL Limited. Economic Environment As the quantity of the organisations dealing in educational sectors increases, it also augments the scope of employment in the areas related to IT, engineering and business management. Moreover, due to improvement in the extent of employment, GDP gets enhanced resulting in the development of economic standard of the country. Therefore, it can be affirmed that engineering, IT and business graduates might help to reduce the unemployment and provide competent workforce in the countries of Bulgaria and Greece. Hence, the opportunities of DL Limited are rather high in this sector. Social Environment If the number of companies dealing with the educational degree courses increases then the opportunities of employment would enhance. This leads to higher distribution of income thereby enhancing the standards of lifestyle of the people of those areas. Hence, governments of Bulgaria and Greece offer specific attention in the sector of education so as to improve the economic situation of the countries (IRMA, n.d.). Technological Environment In this era of globalisation, innovation and advancement are the utmost needs of industries so as to sustain in the long run among the competitors in the market. Therefore, in order to sustain in this competitive scenario, the educational service providers utilise innovative techniques and equipments such as projectors, web portals and online internet sources so as to attract more customers to increase the profitability and market share of the companies. Environmental Factors Along with the above described aspects, environmental factor is also an essential consideration, which should be kept in mind. Maintainance of the environmental factors is also very crucial for the educational service providing companies. As the rate of pollution is increasing at an alarming rate, so the educational service providers should try to reduce the carbon-footprints generated through their service which would diminish the harmful effects of the green-house gases. Hence, it would facilitate in the promotion of the green environment, thereby sinking the rate of pollution from the economies of Bulgaria and Greece. Legal Environment In order to augment the segment dealing with manufacture of engineering products, special laws and rules have been passed by the governments of both Bulgaria and Greece. Along with this, special educational laws and acts such as ‘the Public Education Act–PEA (1991)’ and ‘the Vocational Education and Training Act–VETA (1999)’ among others are also passed by the both governments so as to improve the prospects of education among the citizens of Bulgaria and Greece (IRMA, n.d.). This shows that there are high probabilities of entrance of new service providers such as DL Limited in these areas which would facilitate both the economy as well as the company (Cedefop, 2009). Hence, it can be evidently depicted that the markets of both Bulgaria and Greece have high prospects regarding the growth of eductaional service sector. Therefore, expansion of DL Limited in the markets of Bulgaria and Greece would be among the most feasible options at available. Implementation Strategy implementation refers to the execution of the policies so as to improve the image and profitability of an organisation. Strategy implementation comprises of appropriate designing of the organisational structures, allocation of resources, developing the process of decision making and proper management of the applied plans. This section deals with the implementaion strategies that would be utilised after the discussion of the external and the internal environmental factors of the markets of both Bulgaria and Greece. From the above market analysis, it can be clearly depicted that the opportunities of educational service providers such as DL Limited is quite high. Moreover, so as to improve the scenario of manufacturing engineering industries, the governements are also offering special attentions which would augment the economic growth of these economies. Therefore, the selection of the markets of both Bulgaria and Greece is quite apposite for the expansion of DL Limited. Apart from this, in order to enter the markets of Bulgaria and Greece, it is essential for DL Limited to maintain a specific market penetration strategy so as to attract the students. At the initial phase, DL Limited can offer qualitative course guides and course materials at a competitive price as compared to others through videos, CD-ROMs, audiotapes and web based resources. Moreover, DL Limited should also utilize social networking sites such as Facebook, Twiter and Orkut so as to resolve the queries of the students about varied course structures and other available facilities. The social networking websites would also contain varied information about the courses offered and the fees’ structure. Apart from this, the students would be able to clarify any types of doubts through mails, chats and web portal links. Along with this, special installment schemes within the fee structure can be also offered for the students who are not capable of paying the entire fees in a single installment (Soutsas & et. al., n.d.). This might facilitate in attracting new students which would enhance the brand identity and market share among others. Apart from this, DL Limited should also introduce certain other innovative courses dealing with production engineering, industrial design, and aircraft engineering among others so as to attract new students. Moreover, DL Limited should try to keep the fees structure quite affordable as compared to other competiting companies so as to attract more students in order to enhnace brand loyalty in the markerts of Bulgaria and Greece. In addition, DL Limited should also offer extensive promotions through online source so as to create awareness among the students. Moreover, in the advertising promotion, DL Limited should highlight that it would offer double degree cource certificates to the passing students. This is one of the important factors which might attact the attention of the students in the markets of both, Bulgaria and Greece (Zondiro, 2008). Hence, it can be depicted that as the governments of Bulgaria and Greece have been offering special attention to augment the manufacturing engineering industry, so there are high opportunities of progress for DL Limited in these regions. If DL Limited can enhance the brand identity in these markets then it would be feasible for the company to expand in the nearby regions as well thereby improving the sustainability of the company. Besides DL Limited might also face higher challenges regarding entry of new competitors due to soaring growth prospects, so continuous innovative courses should be introduced to sustain in the long run. Moreover, after the successful implementation of the strategic plans, evvaluation is also essential. Strategy evaluation is the final step, which helps to analyse the intensity of the strategic decisions implemented for the future growth of an orgaisation. This helps to examine the shortfalls of the underlying startegies which might be improved in the near future. Therefore, it can be affirmed that the decision of expansion of DL Limited in the markets of Bulgaria and Greece is pertinent in terms of both enhancement profitaility and marketshare. Conclusion Conclusively, it can be avowed that strategic management and strategic decision making would play important roles in the formulation of planning policies for DL Limited. Thus, it can be suggested that as DL Limited which would be a new player in the markets of Bulgaria and Greece, so it should offer widespread online promotions so as to enhance the awareness of available services among the students. The online advertisements should commence at least one month prior to the launch. Along with this, the course fee structures of the degree courses should be kept a little lower as compared to the other competitors in the market. It is essential as it would enhance the awareness and the responsiveness of the students towards DL Limited. Moreover, in order to make a position in the competitive markets of Bulgaria and Greece, it is necessary for DL Limited to provide special attention on the quality aspects of the services rather than the price. This would improve the distinctiveness of the brand among others in the market. Therefore, it can be revealed from the above discussion that appropriate strategic planning process is essential for the expansion in any new markets. Moreover, along with proper strategy implementaion, evaluation of these policies is also essential. Hence, DL Limited should follow the above mentioned strategies so as to enhance the corporate image and distictiveness among others. References Cedefop, 2009. Modernising Vocational Education And Training. Introduction: Modernising Vocational Education And Training – A Fourth Cedefop Report On VET Research. [Online] Available at: http://www.cedefop.europa.eu/etv/Upload/Information_resources/Bookshop/544/3050_II_en.pdf [Accessed February 11, 2012]. Gourova, E. & et. al., 2008. Challenges for IT Education at Sofia University. Faculty of Mathematics and Informatics Sofia University. [Online] Available at: http://www.wseas.us/e-library/conferences/2008/venice/edu/edu08.pdf [Accessed February 11, 2012]. Hunger, D. & Wheelen, L. T., No Date. Essentials of Strategic Management. Basics Concepts Of Strategic Management. [Online] Available at: http://www.hrfolks.com/Articles/Strategic%20HRM/Essentials%20of%20Strategic%20Management.pdf [Accessed February 11, 2012]. IRMA, No Date. 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