my sm final assingment turn it in

8/4/2019 My SM Final Assingment Turn It In

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NAME: ADAH OCHE.

CLASS: MBA2 A, INTERNATIONALBUSINESS.

STUDENT NUMBER:

B0576MPMP0810.

COURSE: STRATEGIC

MANAGEMENT.

ANSWER.

How DL Limited Can Make Strategic Decision. For DL limited to succeed, it is important

for it to have a strategy that will enable it to make profit, and to gain competitive advantage

over its rival. DL Limited is faced with alternatives of which it will pick the one that will best

address the problem that it is facing. These problems ranges from: making of profit, gaining

advantage over its competitors, branding, staffing, resource allocation, budgeting, etc.

Generally, strategy is defined as "the long term action plan of an organization". Hampden

(1990:44) Defined as the principle of how an organization can gain competitive edge over itsrival. But in looking at the basic characteristic of strategy, Olson(2000:27),defined strategy as

how an organization organize and channel its resources, in addressing the challenges that it is

facing in order to gain advantage over its competitors so that it can achieve the desire of the

organization and its stake holders.

Strategic decision can be made by mimicking the role of visionary leaders and theories approaches of

academic scholars. These approaches is categorized in to ten schools by Alhstand and Lamspel. Some of


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the schools of thought are prescriptive and are concerned with how decisions can be made concerning

the future while other schools are descriptive and are concerned with how best a decision can be made

and how a decision can be made to respond to environmental changes. These schools of thought

according to Manas (2005) include:

Design school. It is concerning with matching an organizations internal and external capabilitiesand striking a balance.

Environmental school. This school states that a firm is influenced by the happenings in its

environment.

Configuration school. This school is mainly concerned with how an organization can be

transformed.

Planning school. This school is concerned about how an organization can make plan to gain

competitive advantage and it uses theory like SWOT.

Entrepreneurial school. This focuses on leadership strategy in transforming the organization.

Cultural school. The school is of the believe that all strategy is rooted in the social cultural

background of the firms society.

Power School. It is of the believe that strategy is shaped by the power game within and outside

the firm.

Cognitive school. These looks at how those that makes strategies make it.

Learning school. The school believe that strategy evolves out of learning.

Having looked at how strategy is made in putting the ten schools into consideration, DL limited will use

Porters model to make some key decisions.

Porters five forces model for DL limited.

Buyer Power:

The buyers of the service (students) should be considered to know what they like, what the

want to buy at what price and there loyalty.

Competitive Rivalry: DL limited ought to consider competitors in the market. If the competition

is much, then it has to strategize on how to get the loyalty of its buyers and suppliers. But if

there is no competition, then DL limited will maintain dominance in the market.

Threat of Substitution:

If DL limited student have a substitute to Dl limited. Then the companys dominance will beweakened and the company ought to strategize to maintain dominance.

Threat of New Entry:

DL limited has to be on the look out for new entry into the market and raise its standard high in

order to ward off competition.


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These models can help DL limited to make strategic decisions. These can be achieved by

crafting simple rules that will aid DL limited to gain competitive advantage. These rules should

place DL limited where there is most opportunity (Harvard Business Review on Advances in

Strategy).

Companies that rely on strategy as simple rules are often accused of lacking strategies because

a good strategy is suppose to be innovative and flexible. Strategies are better crafted from

experience. When there is no experience, the experience of existing companies in the business

can be used. It will therefore be important for DL Limited to draw from some of the experiences

of Sterling Consulting. These are the models that will guide DL limited in making strategic

decisions.Based on managements decision in exploring new markets, we shall consider Nigerian and

Malaysian market. We shall enter into these markets bearing in mind the different market entry

strategies and picking the one that will best suite DL Limited.

DLs market entrystrategy. Jashmid (I999:40) said that there are several ways that acompany can enter into a new market. These are:

Through licensing


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By exporting. It could be done directly or indirectly.

Through Licensing or franchising.

Through Joint venture or strategic alliance.

By going offshore for production

Exporting. These can be done by exporting directly into the new market or intermediaries like

agents, trading companies and distributors.

Licensing. Licensing is done by leasing your patent, logo, trademark or copy right name to

another company based on a given agreement between the licensor and the licensee

Joint Venture. This is the process where individual,two companies or more cooperate to share

resources and expertise in order to make profit..

Off Shore Production. This is the process of moving capital to a foreign land for production due

to the effectiveness or efficiency of the host country in making such a goods or services.

For DL Limited, a joint venture will be the best way to enter into the new market because its

partner school will already have a structure, have knowledge about the market and will be less

expensive for DL limited because of the start up capital of only 300,000 at its disposal .

Students graduating from the program can thus be given a certificate from the host school and

the school it will be affiliated to in UK just like it is done in sterling consulting. These will give DL

a competitive edge over its rivals.

Use of World Wide Web as a Strategy. DL limited should also encourage learning through

world wide web. These will enable it to cut its cost because one resource person (teacher) can

teach across different schools at once. It will also enable DL limited to build a comprehensive

school portal that will help it to monitor the activities of its staffs and students. These could be

used to develop a standard customer relationship management and an E-library. World wide

web will bring about efficiency and effectiveness.

Based on the following information that we have from our primary and secondary datas we

shall make an in-depth analysis on these two new markets and take a decision

Nigerian Market.

The Nigerian market has the following prospect for investment:

More than a hundred thousand students applying every year to do a degree or post

graduate course in an international university. Because of the high importance attached

to foreign certificate from a British, American or a Canadian school.

Available higher institutions of learning that have structures and facilities that will

encourage distance learning.

Cheap and available labour. Nigeria has more than 6,000 PhD holders and professors

teaching across various field of endeavor.

A democratic and a free economic state


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A point of access to African market

We shall use the PEST analysis to analyze the markets in order to address some key decisions

before entering the market.

Political. Today, Nigeria has a stable democracy which is good for business. Businesses in

Nigeria receives no interference from the government except for the laid down policies and

regulations of the government that guides businesses. Nigerian foreign policy encourages

business a lot as it is so much concerned in wooing international business in investing in

Nigeria. Political changes in growing democracy could sometimes derail business, but recent

experience has shown that Nigerias democracy is accommodating and as such can easily

encourage business. Nigeria also has a sound employment law in place that can measure up to

any western standard.

Economic. Nigeria has a free market economy. Businesses are been allowed to compete freely

with only the natural law of demand and supply influencing it. Consumers (Academic) have the

ability to pay and that is evident from the thousands of Nigerian students studying all over the

world. Nigeria has a good tax policy. Nigeria has one the cheapest tax regime in the world and

offers concession to some growing business to enable it to grow. The country also has a sound

banking policy. Businesses can easily access loan at a very cheap rate. Nigerian currency over

the past few years has become stable with a minimal increase or decrease in exchange rate

which is encouraging for international exchange.

Social. The Nigerian social system encourages learning. Every average Nigerian (learned or not),

would like to send his or her child/ward to school. Illiteracy is been seen as out of fashion.

These accounts for the thousands of graduate that Nigerias universities are churning out

yearly. Social status is been attached to foreign certificate and these will give an edge to DL

over local educational rivalries. Nigeria has the largest population in Africa with about 67%

youth population which is a good potential market for DL limited.

Technological.Nigerias government today is spending so much on research. Nigeria has very

many research centers across the country with about 50% of it been sponsored by the

government. Nigerias government has launched two new space satellites in orbit to encourage

communication and some private communication companies like glo mobile has connected

Nigeria to fiber optic which will make communication cheaper and faster. It has a lot of sunlight

round the year which can be easily explored for cheap energy.

Malaysian Market.


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The Malaysian market has the following prospects:

A point of tourist attraction with visitors from all over the world. This has made itto become host to many businesses from all over world.

A point of access to Asian market (A large population with a teaming youthpercentage)

Cheap and highly skilled labour A democratic and a free economy market

Low risk investment economy

Easy access to investment capital

Sound and developed educational sector.We shall do the PEST analysis of Malaysian market in order to address some some decision.

Political. Malaysia has a 29 years democracy. There is relative democratic stability in Malaysia with an

accommodative policy towards foreign business. There is little interference from the government.

Economic. Malaysia also has a free market economy. Businesses are been allowed to compete freely

with only the natural law of demand and supply influencing it. Consumers (Academic) have the ability to

pay and these is evident from the several numbers of foreign universities and colleges moving there. It

has a huge number of foreign students from all over Asia studying there. Malaysia has a good tax policy.

The country also has a sound banking policy. Businesses can easily access loan at a very cheap rate.

Malaysian currency over the past few years has also become stable with a minimal increase or decrease

in exchange rate which is encouraging for international exchange.

Social. Malaysia has a social system that promotes integrity. Been educated speaks a lot of ones social

status. They have an accommodating and welcoming culture which has endeared them to the heart of

many foreigners. Malaysian are also known to be hard working and committed to there job.

Technological. Malaysia has a state of the art technology that will encourage any type of E-learning.

Malaysia has space communication satellites and it is connected to the fiber optic. It has a stable and

cheap source of electricity supply.

Pricing strategy for DL Limited. Now that we have decided that it is viable to enter into Nigerian and

Malaysian market, the next major decision to be made is that of pricing. We should know how much we

should charge for ourservice? In setting a price, we shall consider DLs

Overhead cost

Running costPackaging

Promotion

The economy

Tax.

Price Analysis. If Sterling Consulting has 1000 students following their model in Turkey, representing a

fee income of more than 7.5 million to UK universities. Then it is assumed that it remits 7,500 per

student to UK universities. Nigerian universities charge an average of 1,200 for a degree course. DL


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Limited is budgeting for a very conservative annual enrolment of 500 new students and their setting up

cost is 300,000 = 300,000 / 500 Students= 600(Expenses per student). Therefore, price will be

Break even point for Nigerian market: 15,000(fees) x 500(students) = 7,500,000Therefore, 300,000 (initial investment)/ 7,500,000 =

0.04 (That is 4 weeks which is a month)

Assuming all students pay there fees on resumption,

The pay back period will be a month.

Description

Remittance to UK school

Remittance to Malaysians

school

Expenses (Cost per

student)

Add up profit(To make

return in less than 2years)

7,500

2,500

600

6,100

School fees for DL limited

program in Malaysia

16,600

Break point for Malaysian market 16,600(fees) x 500(students) =8,300,000 =

300,000 (Initial investment)/8,300,000=

0.036 = 0.04 (That is 4 weeks which is a month).

Assuming all students pay there fees on resumption,

The pay back period will be a month.

Description

Remittance to UK school

Remittance to Nigerias

school

Expenses (Cost per

student)

Add up profit(To make

return in less than 2years)

7,500

1,200

600

6,100

School fees for DL limited

program in Nigerian

15,000


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Setting a Price. DL will use Market penetrationstrategy and Geographical pricing strategyin setting its

price.Market penetration can be used to gain easy entry into the market. DLlimited can achieve this by

lowering its price through the fact that is shown in the calculation. Profit might be lowered at the initial

stage but it will pay off by attracting more students and making its profit by number advantage

(Miller:1986). Geographical pricing should also be used. This is exemplified by DL limited charging

different prices for students in Nigeria and Malaysia as shown in the calculation because both countries

do not have the same economic endowment. So from our analysis, we shall set DLs price at 15,000 in

Nigeria and 16,600 in Malaysia which is far lower than the price any UK university will charge for a 3

years degree program (UK university fee: 10,500 x 3 = 31,500) and even at that, DL Limited students

will gain double degree from a Nigerian or Malaysian university as the case may be. Geographical pricing

encourages different prices for different location because of the difference in economic endowment,

running cost or market strategic position. That is why the price of Nigerian DL limited has been set to be

below that of Malaysia.

Potential Product Development for DL Limited. New products and services are the lifeblood of all

businesses. Investing in their development is crucial to business growth and profitability.

But embarking on the development process is risky. It needs considerable planning and organization.

We shall now look at the product life cycle of DL limited products and services so that DL limited can

know when the time is right to start the development process. It will guide the company to make the

wisest decision about its planned investment and how to create the best product.

Maximize Toolbar


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Culled fromwww.mindstool.com

As expected, the pay back period for DL Limited is less than 2 years, so we shall look for a product that

can hit its maturity stage before 2years and will give DL Limited a competitive advantage.

Partnering with Professional Bodies. DL Limited can partner with professional bodies

like Association of Chartered Accountants, Chartered Institute of Marketing, Business

Management institute, etc so that students graduating from DL Limited programs can become

automatic associate members of those institutes. These can be achieved by inculcating some

modules into the program that will help students to fit into such professional bodies. These
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product can take DL Limited less than 2 years to recoup there investment because students will

pay as soon as they get registered for the program. However, it should be made voluntary and

students can as well enjoy a discount which will encourage them to enroll. DL Limited can as

well negotiate this discount with the professional bodies since a large number of students will be

expected to enroll.

Partnering with Reputable Organizations for Students Internship. DL Limited

can partner with reputable organizations so that students that pass through DL limited programs

can gain experience in there field of endeavor. Because of the economic situation, reputable

organizations can easily be wooed into this partnership by offering them skilled labour at a very

cheap rate or at no cost. Students at the other hand will be glad to participate as the experience

will help boost there chances of getting a good job after the program. However, it should be made

optional for students that want to participate only.

Introduction of Extra Curricular Activities. DL Limited can introduce extra curricular activities like music

or different sports club in there various host campuses that will make there programs more interesting

These products will give DL limited a competitive advantage over its rival and will cost it little or nothing.

More importantly, it will take DL Limited less than 2 years to recoup any of these investments on these

new products.

Resources DL limited require to implement its Strategy.

DL Limited need to successfully manage thesesix key resources to implement there strategy:

1. Capital2. Organization Structure3. Human Resources4. Technology (IT)5. Students (Customer)6. Linkage-Academic Structures (Host and

partnering school).

Capital

DL limited needs 300,000 to execute its program in each of the centers. These fund as we earlier

analyzed can be sourced from the banks of the host market and from personal investment from

the members of the board


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The organizational Structure

DL Limited needs an organizational structure that will carry out its operation and can fit

in into its strategy a functional organizational structure that can respond to changes

easily.

The human Resource Factor

DL limited needs a motivated, well trained efficient and effective human resource that will be ableto carry out its duties. If the proper human resource factor is not there, it will lead to the abysmalfailure of the implementation of DL limited strategies.

Technology (IT)

DL Limited also require the use of information technology as that will facilitate a smooth distancelearning program, building a portal for a sound customer relationship management, and setting upof an E-library and other E-resources that will facilitate the smooth running of the program. It also

requires stable and uninterrupted electricity.

Students (Customers)

DL Limited from the information supplied needs 500 students in conjunction with th 2,000,000students its expecting from Sterling Consultancy to succeed. These students can be easily gottenfrom the new markets. Without students, DL Limited can not function.

Linkage Academic Structures (Host and Partnering School)

DL Limited needs a host school (In Malaysia or Nigeria) and a partnering school (In UK) of whichit will serve as a linkage between the two.

DL Limited needs these resources to successfully implement it strategy

DL Limited Potential Pitfall.

Threat from competitors / New entrants.

Lack of finance

Inadequate technology

Lack of student

Inflation

Change in government policies Inadequate skilled labour

Other Relevant Issues to be Considered by DL Limited Management Board.

Corporate Social Responsibility.

Businesses today should not be all about making of profit without considering giving


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back to the society that you have received so much from it and acting in a responsibleway. DL Limited management should therefore take it into account to develop a good

social and corporate image by sponsoring some projects like campaign against

HIV/AIDS, helping in giving relieve to those that are in need and acting responsibly theway it is expected of its host society by not embarking on things that will be harmful or

not welcomed in its host society. For DL Limited to have the backing of its hostcommunity, a sound corporate culture is needed. Todays business is not only aboutmaking profit but by giving back to the society what the society has given to you. People

Setting of Target and Performance Appraisal.

DL Limited should set a target that will help it to have a focus as to what the company

needs to achieve. DL Limited should have a set target that it will use to match itsperformance with in order to know how well they are doing and how thy can improve on

what they are doing. Target sometimes could be a motivator as it steers management and

employees into action in order to achieve the set target.

Crisis and Change Management.

There is no business without crisis or change (Senge: 1990). DL Limited management

should envisage probable crisis and change that might occur and should put in place a

structure that will be able to manage those crises and change when it occurs.

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