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SCHOOL OF BUSINESS AND LAW, LONDON
STRATEGIC MANAGEMENT-
ASSIGNMENT
DISTANCE LEARNING
BINOD KUMAR CHONGBANG
6/20/2011
STUDENT ID: B0447RHRH1110
STRATEGIC MANAGEMENT-ASSIGNMENT
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Table of Contents
1.0 Abstract……………………………………………………………………………………3
2.0 Introduction……………………………………………………………………………..3-4
2.1 Overview of Strategies……………………………….…………………………………...5
2.1.2 Strategic Models of Johnsons and Scholes…………………………………………..6-7
2.1.3 Whittington’s Generic Perspective of Strategy……………………………………...7-8
2.1.4 Complexity Theory……………………………………………………………………..8
3.0 Distance Learning and DL Limited……………………………………………………….8
4.0 Potential New market to DL Limited……………………………………………………..8
4.1 SWOT Analysis of DL Limited to New Market Entry……………………………………9
4.2 Nepal Entry Analysis for DL Limited………………………………………………….9-10
4.3 Hong Kong Entry Analysis for DL Limited……………………………………………...10
4.4 Social Networking and DL Limited for Distance Learning……………………………...11
4.5 PEST Analysis of Nepal and Hong Kong…………………………………………….11-12
5.0 Potential New Product Development and Pricing Strategies…………………………12-13
6.0 Resources Required to DL Limited and Pitfalls………………………………………….13
6.1.1 IT Infrastructure…………………………………………………………………….13-14
6.1.2 Human Capital………………………………………………………………………….14
6.1.3 Customer Service………………………………………………………………………14
7.0 Relevant Issues of DL Limited…………………………………………………………..14
8.0 Conclusion………………………………………………………………………………..15
References………………………………………………………………………………...16-17
STRATEGIC MANAGEMENT-ASSIGNMENT
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1.0 Abstract
This paper is designed to provide best strategic planning for Sterling Company, an
educational consulting firm from UK, which is planning to develop the international market
through DL Limited. This research outcome has been supported by several concepts, models
and scholastic theories.
The schools of strategies and the various scholars’ opinion and their suggestions in the
direction of making an effective strategy to the company are explained in this report. An
emerging company called DL Limited which is taking birth through the Sterling Company
and its further plans and strategy in to the new potential markets i.e. Nepal and Hong Kong,
also covered by this report with relevant research and analytical facts and figures. There will
be discussion of realizing the targeted objectives of DL Limited in to those new markets with
its probable infrastructures. How DL Limited can go globally with its effective strategy and
its implementation along with control measure will be mentioned as suggestion and
conclusion.
2.0 Introduction
The world is being more multifaceted and competitive day by day due to increase in ground
breaking ideas and technological breakthrough. In this sophisticated environment a business
organisation or company should have an elongated goal. To continue to exist in the long run,
company needs solid long term strategy which can exploit the competitive advantages and
keep pushing company toward the success and achieve the targeted objectives. Due to the
increase in competition in the business world, strategic decision making is becoming more
intricate as many organisations are strained to muddle through with the challenges. Strategic
management is a process through which companies can make an effective strategy to achieve
the organisational objectives in the long run.
The objective and the aim of the strategist are to discover a position in the industry where the
company can shield in best way to itself against the forces which exists in the industry or to
use them in its good turn (Porter, 1980)[1]. A strategy of an organisation is the combination
between its external affairs and internal competencies. Strategies always describe how it is
going to respond to the customers, suppliers and competitors along with the social &
economic environment within it is being manoeuvre. When we consider that the strategy
should be strong and effective, meantime it also encompasses with its environment. It means
an organisation supposed to have strategically fit with its business environment. According to
Fred R. David (2009), strategic management is conceived as a strategic planning. A strategic
plan is, in essence, a company’s game plan. Just like a football team needs a solid game plan
to have an opportunity to beat the opponent and achieve the victory, an organisation must
have a good strategic plan [2]. For the effective strategic management, strategists should base
on the thoughts of open- mindedness. Success of a company is defined by the strategic
positioning of the human resource within the company. Each and every strategist should have
STRATEGIC MANAGEMENT-ASSIGNMENT
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enthusiasm and keenness to new perspective, information, ideas and new potentialities. There
should be proper communication of sharing and spirit of inquiry and learning. Strategic
management is the procedure of advance learning and action, not merely a formal system for
control (R. T. Lenz, 1987) [3].According to Richard Lynch (2008), Strategic management is
the prototype of key goals, aim and crucial policies or plans for achieving those goals, stated
in such a way as to define what business the company is in or is to be in and the kind of
company it is or is to be [4].
As we stated already that strategic management is always keen to look forward and future of
the company with the objective of success. It is the way of making plan and implementation
of strategy or we can say thinking future. Hence, to the very beginning of any start up of the
business; strategies are always very crucial to achieve the targeted goal. There are some key
elements which help to generate perfect strategy through the strategic management, which is
called Facets of strategic management.
Facets of Strategic Management
Source: www.lachsr.org[5]
Taking future into the account, every company has to make strategy to survive in the present
complex business context along with to exploit the competitive advantages. Making crucial
decision to control the future of an organisation always depends upon the effectiveness of the
strategic management.
Goal Setting
Strategy monitoring Analysis
Strategic Management
Strategy Implementation Strategy Formation
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2.1 Overview of Strategies
Strategy is planning, a direction or guidelines for a course of action in to the future to achieve
the organisational objectives. A strategy is a plan or prototypes that amalgamate a company’s
most important objectives, policies and action’s chain into a cohesive whole (Quinn, 1980)
[6]. It is undeniable that the world is more complex, there is tough competition as well. If a
company puts hard effort to prepare strategy then it is going to survive and gain its target
with maximising profit or wealth. Thompson and Strickland (2003) described that if an
organisation wants to achieve its goal, competing with competitors along with satisfying
clients and customers through holding strong enough market share accomplishing operation
in other hand, there should be a strategy as a future plan [7].
There are several definitions of strategy by many scholars; some of them vary from one to
another. De Wit and Meyer (2004) stated that the strategy as dimensions of strategy process,
content and context which can really recognize the every real-life problem situation within
the industry [8]. Strategy is the way and possibility of a company in the long span of time;
which attains the benefit for the firm through its composition of wherewithal within the
today’s exigent environment with fulfilling the needs of markets and executing the
stakeholder’s expectations (Johnson and Scholes, 2002) [9].
2.1.1 Mintzberg Schools of Strategies
Strategies are both plans for the future and patterns from the past (Henry Mintzberg, 1987)
[10]. Mintzberg classified the strategies into 10 Schools of Thoughts along with three
categories i.e. prescriptive, descriptive and synthesis strategies on the Strategy Safari [11].
Prescriptive strategies include three schools of thoughts; Design school, Planning school and
Positioning school. Prescriptive strategies are much more concerned with formulation
process of strategies, analytical and conception process rather than how do they form. Among
them the positioning school has been introduced lately than the Design and Planning school
which tries to give emphasis on economic marketplace. Descriptive strategies take into the
group for Cognitive school, Cultural School, Entrepreneurial school, Learning School,
Political School and Environmental School. Descriptive strategies are seemed to be focusing
on the process of emergent, development and mental. According to descriptive school,
strategies should be formulated according to its environment and its challenges through
negotiation and collective process. It also assumes that the reactive process also important to
make an effective strategic decision to the company. Synthesis strategy is with the last
schools of thoughts i.e. Configuration school. This strategy is all about transformation
process. Synthesis strategy looks into the various cluster of strategic decision making process,
content of the strategies and organisational structure where the strategy fits in. It also
examines the context of the organisation and the business world. In one word, Configuration
strategy more focuses to be integrative.
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2.1.2 Strategic Models of Johnson and Scholes
Johnson and Scholes mentioned that the strategy as a direction and scope of the organisation
over the long term period, which accomplishes the stakeholder’s expectation throughout the
configuring resources competing with environment. In Exploring Corporate Strategy [12],
Johnson and Scholes identified three key elements to measure the strategy. On the basis of
Suitability, Acceptability and Feasibility models; it is easy to make an effective strategy
and its implementation within the organisation. According to Johnson and Scholes, these
three models are applied at the end of the strategic process under strategic selection and
evaluation. A complete picture of Johnson and Scholes’ model is categorised under 3 phases,
they are: Strategic position, Strategic choice and strategic selection and evaluation. To
illustrate this model we have to look into the following diagram:
Strategic Choice
Cost/ Differentiation/Focused
Ansoff’s matrix
Vertical/ Horizontal Integration
Conglomerate
Strategic Selection and Evaluation
Suitability
Feasibility
Acceptability
Financial Risk/ Return Stakeholders mandelow matrix
Fig: Johnson and Scholes’ strategy Model
Source: http://www2.accaglobal.com [13]
This model explains how and where in what aspect a company has to look into thoroughly
during decision making. For e.g. PESTEL Analysis, SWOT, Ansoff’s Matrix to understand
Strategic Position
External
PESTEL
Five Forces
Diamond
OT
Internal
SW
6M
Money
Machinery
Manpower
Market
Materials
Make Up
Relevant
Points
Only
STRATEGIC MANAGEMENT-ASSIGNMENT
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the environment and the existing business scenario along with strategic selection and
evaluation on the basis of its suitability, feasibility and acceptability.
2.1.3 Whittington’s Generic Perspectives on Strategy
According to Richard Whittington, strategy schools are categorised into four different
aspects. They are Classical approach, Evolutionary approach, Systematic approach and
Processual approach. According to Whittington’s “What is Strategy- and does it matter”,
the Classical school believe that the strategy relies on the rational planning method. It
focuses that a good strategy is connected with a well consideration of inside and outside of
action. Evolutionist believes that the environment is the most crucial element which actually
plays vital role to make well decision to achieve the organisational objectives. It also states
that the environment is more complex and changeable. This approach also gives concern on
the organisational structure and the transformation analysis. They think that the successful
strategy comes from only the business process. Processual approach is focused on the
internal and external conciliation and amendment. It states that the rational planning and the
environment are not so important. According to this approach, to make decision the
information should be through the process development and if there is any problem that
should be opt and solve with the help of appropriate solution. Systematic School describes
about the social system and connection of strategy with the cultures and powers of the local
social system which is unavoidable. So that, during making plan there should be well analysis
of social system which is spinning in [14].
Outcomes
Profit maximising
Classical Evolutionary
Process Emergent
Deliberate
Systematic Processual
Plural
Generic Perspective on Strategy
According to this figure, it is clear that the classical and evolutionary schools of strategy are
more focused to the profit maximisation as the natural outcome of strategy making. And the
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Processual and Systematic approaches are more visual imaginary and pluralistic other
probable upshots as well as just profit.
2.1.4 Complexity Theory
According to Anderson et al (1999) [15], the organisational science has had complications
dealing with nonlinear phenomenon and has treated them assuming that they were linear.
Complexity theory is applied by most of the management area in these days to compute the
time and space for the business. Complexity theory is all about the analysis of complex and
chaotic situation of the organisation within the environment to understand the circumstance
along with strength and weaknesses.
3.0 Distance Learning and DL Limited
There are several people who really want to hold the baccalaureate degree from reputed
academic institution or universities from foreign countries. And that might not be possible to
everyone due to its affordability and geographic barriers. It is possible through the distance
learning programmes. Distance learning is a design of courses on credit base leading to
certification or degrees. After the evolution of internet, distance learning programmes are
offered by several universities around the globe and it is very popular scheme to those
students who are keen to hold their degree of foreign universities from local areas [16].
Sterling company is a British education consultant working with different institution and
universities of Britain. DL Limited is a child company, who is emerged through the Sterling
Company along with an idea to provide distance learning programmes to international
market. Dl Limited came up with an objective of market expansion as well as profit
maximisation to survive in today’s complex environment with competitive advantage.
So that, DL limited has to analyse the potential market in international context before
making any decision for the start-up. Analysis can be made through different methods like
Porter’s Five Forces model, PESTEL analysis. Furthermore, SWOT analysis is crucial part
for strategy formulation knowing the internal and external circumstance of organisation to
achieve its objective.
4.0 Potential New Markets to DL Limited
There are many countries where the distance learning is growing rapidly in different
discipline. According a projection report of National Centre for Education Statistics (2007)
there will be around 110 million of students who are going to enrol in different disciplines of
degrees through distance learning programmes around the world [17]. DL limited has to
understand and recognise the potentiality of expanding new market to international context.
Keeping in all these perspectives, DL limited is thinking to expand the market in two new
international markets i.e. Nepal and Hong Kong. For this, company has to find out the
internal and external strength, weaknesses, opportunity and threats regarding to these new
markets and company’s strategies.
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4.1 SWOT Analysis of DL Limited to New Market Entry
SWOT analysis is a technique to analysing business, environment and its resources. This
approach is used by each and every business organisation as part of strategic planning to
compete and survive in the market. It is a basic tool created to be used in the beginning stages
of decision making and as a predecessor to strategic planning in different type of applications
(Johnson et al, 1989) [18]. This technique generally looks in to:
 Internal strengths
 Internal weaknesses
 Threats in the outer environment
 Opportunities in the internal environment
Researching DL limited’s environment definitely going to benefit the company and its
management team by placing company in a point to build up a strategy for both long and
short term. There is no point to carry out analysis of SWOT technique unless it is not
auctioned. So that, DL limited has to perform this technique through the following model:
Source: www.tutor2u.net [19]
SWOT key words
4.2 Nepal Entry Analysis for DL Limited
Nepal is a landlocked country as developing countries in the south Asia region. In
comparison to past years the literacy rate is increasing and the traditional education system is
changing to modern system. From DL limited point of view, although Nepal is least
developed country, the market for distance learning is demanding. The reason behind this is
only the trend for foreign degree has been increasing day by day. Most of the students are
willing to pursue their further study in abroad. But the opportunities for DL limited will be
those students who are left behind from abroad study due to the cost. In perspective of Nepal,
the history of distance learning is not so long and DL limited will exploit the market
providing better quality education through different certification degrees and gains the profit
With
Match
Strengths
Opportunities
Into
Convert
Weaknesses
Strengths
STRATEGIC MANAGEMENT-ASSIGNMENT
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and goodwill. Threats for DL limited will be the lack of development infrastructure into the
new market. For example, distance learning education system heavily relies on the
technology and power through web based teaching method and online portals. In Nepal,
there is not enough sufficient power and internet technology, only major cities have them. So
that, it could be threat for the company but DL limited can provide distance learning
programmes focusing into those major cities. The targeted market for DL limited will be
favourable due to the numerous students. Furthermore, Nepal has only 5 universities where
DL limited can attract more students providing new baccalaureate dual degrees from Turkish
University and UK University.
DL limited is emerged through the sterling company, which is working with several British
universities from long time. Company has skilled workforce and experienced manpower as
its Strengths. Sterling company has already owned good reputation in several countries
including Turkey, Azerbaijan, Albania, Georgia and other countries. Parent company holds
the good financial position to support DL limited as well. Weaknesses for DL limited to new
market as Nepal will be the poor transportation and no updated technological devices. DL
limited does not hold any own premises in new market that will be another weakness.
4.3 Hong- Kong Entry Analysis for DL Limited
Hong Kong is most developed country in the Asian region with holding one of the highest per
capita incomes. Hong Kong is the huge market for every foreign educational institution to
offer distance learning programmes. Hong Kong carries long history in distance learning. The
first distance learning programme was initiated by Open Learning Institute of Hong Kong in
1989 [20]. DL Limited has to face competition because several Universities and Educational
institutions are offering the distance learning programme along with local universities like
OUHK. The positive part in Hong Kong for DL limited is the government is supportive for
the distance learning and education development. As an opportunity to the company we can
take the associated university of UK. Even though there are several distance courses are
offered, as DL limited is based on UK is itself from reputed country for higher education
especially in Business Management. The external opportunity for the company will be the
development and use of internet in Hong Kong. In Hong Kong education has always been
considered as exam oriented and students were taught only to memorise not to think (Fok,
2002) [21]. For DL limited the perception of people towards education could be as threats.
But recent year people are jumping one status quo to another. Hong Kong people are already
transformed into dynamic environment. Another problem will be the language proficiency of
students from Hong Kong. For new market of DL limited, the strength would be the dual
degree programmes, unique educational model and the goodwill of the company. DL limited
is entering into new market with only one faculties i.e. Business Management. So that, the
limitation on courses offered will be the company’s weakness.
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4.4 Social Networking and DL Limited for Distance Learning
Distance learning is always based on online portals and different online databases which are
provided by universities or main institutions. Nowadays every people who actually are
interested in distance learning, are aware of internet and its use. Internet gave birth to social
networking as a solid communication medium to the people around the world. Over the years,
social networking is massively in use for business purpose. Many giant companies are also
using social networking like Facebook, twitter, myspace etc.
DL limited will use the social networking as a promotional tool and as well as to understand
the market. Company is only targeting to enrol 500 students from these new markets for the
first year. So, we will use Facebook to promote our products and courses targeting to Nepal
and Hong Kong via posting an ad to the Facebook. The ads will be two, one for Nepal and
another for Hong Kong. We will examine that how many will be the prospective students
through the liking hits of people on Facebook. DL Limited will design a questionnaire to the
Hong Kong which is prepared to understand the students’ view and willingness to the courses
offered by DL limited as foreign degree. It will be a kind of survey and it will be passes
through the e-mail services like hotmail, yahoo mail and Gmail to the different universities
and high schools of the Hong Kong.
Social Networking tool as Oovoo, Skype and Google talk are the free video conferencing
service to communicate. DL limited can use these social networks as medium of teaching to
provide short lectures from the main campuses. DL limited also can use the YouTube,
uploading video lectures and providing links to the students. It will be definitely going to help
students for better learning.
4.5 PEST Analysis of Nepal and Hong Kong
The acronym of PEST stands for political, Economical, Social and Technological analysis of
environment. It is wider analysis of macro- economic framework and factors which
influences the business. PEST analysis is concerned about the key external environmental
influences to the business [22]. DL limited is mainly focused into the analysis of
Technological analysis because the whole programme is depending upon the technology. DL
limited has to face more cost in Nepal in terms of technology because Nepal does not have
updated and efficient technological devices. The dual degree programme is mainly based on
web based portals. For that, efficient and effective internet service will be required but in
Nepal it is quite hard to maintain. Online education is very expensive [23]. We have to know
that how much government is ready to research in the field technology and energy use &
cost. So, DL limited has to create some IT infrastructure for the company and the students.
Having said that it doesn’t mean that the technological aspect can’t be improvised and solve
the problem. There is always way for the wish. Hong Kong has everything for the
technological advancements and it is much easier to utilise the all web based medium for the
distance learning programme. DL limited can use UGC source for learning for the students
and for tutors as well. Furthermore, in Nepal the distance learning programme will be at
infant stage because of low volume of use of communication technologies.
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Political factors are also crucial to DL limited as it is going to start up the business. Nepal
has political instability that will be the problem for the company to start up new business.
There are not such strong employment law, consumer protection and competition regulations
that will be riskier to DL limited. At the same time, that will be the advantageous as well
cause higher the risk higher the return. So company has to aware of these consequences.
Hong Kong has better political position but might be strong and strict regulation regarding
taxation, environment and protection. Economic condition of Nepal is also poor with higher
inflation and lower economic growth rate. DL limited has to consider these factors. In the
context of Hong Kong, the economic growth rate is higher than many Asian countries.
Higher per capita income of the people, higher rate of government spending along with
monetary policy. Nepal and Hong Kong both have almost same level of social concepts but
Nepal has lower income distribution, life style, Education and living conditions than the
Hong Kong. Nepal is more flexible than the Hong Kong in terms of Health & Safety rules. So
that, DL limited has to consider all of these scenarios to expand the market with profit.
5.0 Potential New Product Development and pricing Strategies
DL limited is going to make an entry to new markets and it is only offering on the business
management courses for undergraduate level. British education is highly renowned in the
field of Business Management and Information Technology. DL limited is also UK based
academic institution providing undergraduate degree for more than 2 million distance
learners. The company is planning to provide dual degree programme to students on different
stream like BA, BBM, BBA, BSC in Finance, and BSC in Banking etc. Nepal has currently
growing market in the field of Information Technology and computer sciences. So the
potential new product for the Nepal would be BIT, BCA, and BSC in Computer Science,
BIM and Other Certified Networking Degrees like CCNA and CCNP. Nepal has also
demand of Hospitality Management and Medical Sciences. DL limited can make entry with
any of those products to achieve its target. Even in Hong Kong, DL limited can develop same
product with Nepal. Because Hong Kong is a business port for the world and there is always
high demand of computer and information technology. Hence, DL limited will provide IT
dual degrees and Computer Science courses leading to UK Universities along with business
management degrees.
Pricing strategy is the key element for any company to the new market to achieve
competitive advantage. DL limited can follow any of the pricing models based on the
Accountant’s approach, Economic Approach and Marketing Approach. Economic pricing
approach looks at the ideas of value and utility in relation to price. If DL limited is going to
follow the Economic pricing strategy, it is important to cover the aspect of a product or
service which makes possible of satisfying a need or want. Where value is an idiom used to
quantify utility and the price as the monetary unit that represents value. According to Geoff
Lancaster [24], accounting approach of pricing strategy contends that costs, demand and
competition are the major factors which is relating to pricing decisions. However, price
should always make a recovery over company’s fixed costs i.e. rents, heating, rents etc and
variable costs like labour and expenses along with a margin of profit. DL limited has to focus
STRATEGIC MANAGEMENT-ASSIGNMENT
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on this pricing strategy approach to address all of the overheads to the new market. The main
pricing strategy for DL limited will be under Marketing Approach, which is designed to
understand and attract the customers of the new market. Under this approach DL limited will
come up with a product bundle pricing strategy to lure the customers. Under this strategy
company is going to offer combined product in same package which will create a thought in
the customer’s mind as valuable offer. For distance learner of Nepal and Hong Kong, dual
degree programme itself comes under this strategy which will be beneficial to both sides.
Another pricing strategy under marketing approach will be the Skimming strategy to the
Nepal. Because DL limited has to spend more finance to provide distance degrees. But at the
same time, company will follow the penetration pricing strategy to the Hong Kong market
due to high competition. In the context of Nepal, students will be available enough for the
skimming pricing and in Hong Kong penetration will definitely take the foothold.
Pricing Strategic Matrix [25]
Source: www.marketingteacher.com
After analysing all, DL limited has to consider that whatever the pricing strategy and the
product that should be fit with the company structure and the objectives. Furthermore, the
new market as Nepal and Hong Kong has many issues that should be adhered by DL limited
to gain the competitive advantages.
6.0 Resource Required to DL Limited and Pitfalls
6.1.1 Information Technology Infrastructure
All the time the international businesses are speeded up through the flow of information.
Through the speed of information, success and failure of company is decided. So that DL
limited has to create such kind of mechanism to make possible that the IT systems in new
market are available. DL limited is providing distance courses which are taught via web
portals and online databases. Hence, company requires well IT infrastructure in new market
i.e. Nepal and Hong Kong.
Economy
Skimming
Penetration
Premium
Low
Price
High
Low Quality High
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Pitfalls for the Nepal would be less power and lower rate of IT developments. Lower speed of
Internet would be another danger for DL limited in Nepal.
6.1.2 Human Capital
Staffing is the key factor that actually makes differences for the company. Performance of
skilled man power is always effective and that will lead to attain the competitive advantages
of company. The environment is more challenging than ever before, increase in different
ideas and innovation is creating tough competition. In this context, DL limited has to focus to
increase the knowledge level of company and that is only possible through efficient and
effective human capital.
In context of Nepal, there will not be sufficient skilled human power for DL limited to
operate the business. Company has to hire those few manpower providing better
opportunities or transferring qualified staff from the parent company of UK. Hong Kong has
larger amount of qualified candidate but the problem would be the language proficiency.
Hence, DL limited has to address all requisite factors regarding human resources.
6.1.3 Customer service
Understanding customers’ demands and fulfilling them is motto of every company with
margin of profit. Good relationship of company with customers is essential to survive in
business world. DL limited also need to consider that only enrolling the student will not make
any sense. Company has to maintain good relation to students providing different facilities
and quality education. This will increase the good will of company and will be easy for
company to sustain the market.
7.0 Relevant Issues of DL Limited
This report covered many aspects that DL limited has to look into before setting up the
business in Nepal and Hong Kong. Even though there are some aspects which company has
to consider. Dl limited should increase the budget for new market entry because company has
to establish different infrastructures for the business. Financial position will be the key part
for DL limited. Many researches already showed that there is questionable degree and
courses are offered by distance learning education providers. Hence, Dl limited should be
able to provide clear and genuine degrees to the students. Cultural differences would be
another issue to be addressed. In Nepal, there is huge market for distance learners but due to
age gap parents of targeted students may not understand what distance learning is. Another
issue is time zone between main campus of DL limited and the new market. So that company
should aware of all these issues with an idea to manage them smoothly.
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8.0 Conclusion
Massive use of internet made the way of doing things different. Internet technology created
the world as a single forum which is dynamic. People do not need to go library and
universities to learn something because it is accessible through the online portals and
databases along with user generated contact like Wikipedia. Tapping the cellular phones and
hitting the button of the computer keyboard is becoming the way of learning method. Online
learning system is setting up one distinct approach overcoming the geographical barriers.
Online learning or Electronic learning is creating maximum amount of flexibility to the
students around the globe. The turnover of distance learner is increasing day by day. So that
Sterling Company has to make strategic investment to the international market via DL limited
to attain the competitive advantages.
The parent company of DL limited is already providing distance learning more than 2 million
students across the world. Making greater strategic investment in Nepal and Hong Kong for
distance learning would be another portfolio investment for the company as a whole.
Nevertheless, Dl limited has to give more concern regarding required resources to starting up
business in two different markets which is completely new and several pitfalls that may arise.
Even though the market has great potential customers for distance learning company has to
understand the possible hurdles and try to minimize utilising knowledge and expertise.
The most important part for DL limited is to provide web based learning system to the two
new markets from UK. For this, company has to build up a network for web portals with high
online security. Company has to hire and make a committee to look after this accordingly.
That will provide efficiency to the learners from the Nepal and Hong Kong. At last, a
successful distance learning system should have the good resources of online courses and
efficient method to deliver to the students.
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International perspective, 3rd Edition, Thompson, p3-p19
9. Johnson, G., and Scholes, K., (2002), Exploring Corporate Strategy, 6th Edition,
Prentice Hall
10. Mintzberg, H., (1987), Crafting Strategy, Harvard Business Review, July- August
11. Mintzberg, H., Ahlstrand, B., and Lampel, J., (1998), Strategy Safari: A Guided Tour
Through the Wilds of Strategic Management, The Free Press, New York, p2-p7
12. Johnson, G., Scholes, K., and Whittington, R., (2008), Exploring Corporate Strategy,
8th Edition, Prentice Hall, FT, An imprint of Pearson Education
13.http://www2.accaglobal.com/pubs/hongkong/students/newsupdate/archive/2010/25/learn
ing_strategic_choice.pdf (Accessed on 18/06/2011)
14. Whittington, R., (2001), what is Strategy- And does it matter? 2nd Edition, Thompson
Learning, p1-p40
15. Anderson, F., Meyer, A., Eisenhardt, K., and Pettigrew, A., (1999), Introduction to
the Special Issue: Application of Complexity Theory to Organisation Science,
Organisation Science, Vol 10, No 3, Special Issue: Application of Complexity theory
to Organisation Science (May- Jun., 1999),p233- p236
16. http://www.broward.k12.fl.us/sbbcpolicies/docs/P6744.pdf (Retrieved on 16 June 2011)
17. http://nces.ed.gov/programs/projections/projections2017/tables/table_B04.asp?referrer=r
eport (Accessed on 16 June 2011)
STRATEGIC MANAGEMENT-ASSIGNMENT
17
18. Johnson, G., Scholes, K., and Sexty, R. W., (1989), Exploring Strategic
Management, Scarborough, Ontario: Prentice Hall
19. http://tutor2u.net/business/strategy/SWOT_analysis.htm (Accessed on 17 June 2011)
20. https://docs.google.com/viewer?a=v&q=cache:MBTmv7tgRT0J:citeseerx.ist.psu.edu/viewdo
c/download%3Fdoi%3D10.1.1.112.5927%26rep%3Drep1%26type%3Dpdf+distance+learning
+history+of+hongkong+pdf&hl=en&gl=uk&pid=bl&srcid=ADGEESjO8alMYmOJpV0wJBnvyoR
vewpt2l_KlGqdyOZsJBULKtkh8dZkKOydFMJ8jNi88QQM0qphNWUVqtdRZ6-
w5Lrz9fjtSG_VhynSeOk0Oep_rWsqH7FmEFhfFg2NQyDXMZs81c3C&sig=AHIEtbRBG9zsszv4w
gWgrCTHA_VNEYQpaA (Retrieved on 18 June 2011)
21. Fok, S. C., (2002), Teaching critical thinking in a Hong Kong secondary school, Asia
pacific review, p83-p91
22. http://www.ngfl-
cymru.org.uk/vtc/bus_studs/members/downloads/PDF%20Output/PEST.pdf (Retrieved on
17 June 2011)
23. http://gauge.u-gakugei.ac.jp/apeid/apeid04/country_papers/nepal.pdf (Accessed on 17
June 2011)
24. Lancaster, G., and Massingham, L., (2002), Essentials of Marketing, 4th Edition,
McGraw Hill
25. http://www.marketingteacher.com/lesson-store/lesson-pricing.html (Accessed on 17 June
2011)

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Assignment- SM

  • 1. SCHOOL OF BUSINESS AND LAW, LONDON STRATEGIC MANAGEMENT- ASSIGNMENT DISTANCE LEARNING BINOD KUMAR CHONGBANG 6/20/2011 STUDENT ID: B0447RHRH1110
  • 2. STRATEGIC MANAGEMENT-ASSIGNMENT 2 Table of Contents 1.0 Abstract……………………………………………………………………………………3 2.0 Introduction……………………………………………………………………………..3-4 2.1 Overview of Strategies……………………………….…………………………………...5 2.1.2 Strategic Models of Johnsons and Scholes…………………………………………..6-7 2.1.3 Whittington’s Generic Perspective of Strategy……………………………………...7-8 2.1.4 Complexity Theory……………………………………………………………………..8 3.0 Distance Learning and DL Limited……………………………………………………….8 4.0 Potential New market to DL Limited……………………………………………………..8 4.1 SWOT Analysis of DL Limited to New Market Entry……………………………………9 4.2 Nepal Entry Analysis for DL Limited………………………………………………….9-10 4.3 Hong Kong Entry Analysis for DL Limited……………………………………………...10 4.4 Social Networking and DL Limited for Distance Learning……………………………...11 4.5 PEST Analysis of Nepal and Hong Kong…………………………………………….11-12 5.0 Potential New Product Development and Pricing Strategies…………………………12-13 6.0 Resources Required to DL Limited and Pitfalls………………………………………….13 6.1.1 IT Infrastructure…………………………………………………………………….13-14 6.1.2 Human Capital………………………………………………………………………….14 6.1.3 Customer Service………………………………………………………………………14 7.0 Relevant Issues of DL Limited…………………………………………………………..14 8.0 Conclusion………………………………………………………………………………..15 References………………………………………………………………………………...16-17
  • 3. STRATEGIC MANAGEMENT-ASSIGNMENT 3 1.0 Abstract This paper is designed to provide best strategic planning for Sterling Company, an educational consulting firm from UK, which is planning to develop the international market through DL Limited. This research outcome has been supported by several concepts, models and scholastic theories. The schools of strategies and the various scholars’ opinion and their suggestions in the direction of making an effective strategy to the company are explained in this report. An emerging company called DL Limited which is taking birth through the Sterling Company and its further plans and strategy in to the new potential markets i.e. Nepal and Hong Kong, also covered by this report with relevant research and analytical facts and figures. There will be discussion of realizing the targeted objectives of DL Limited in to those new markets with its probable infrastructures. How DL Limited can go globally with its effective strategy and its implementation along with control measure will be mentioned as suggestion and conclusion. 2.0 Introduction The world is being more multifaceted and competitive day by day due to increase in ground breaking ideas and technological breakthrough. In this sophisticated environment a business organisation or company should have an elongated goal. To continue to exist in the long run, company needs solid long term strategy which can exploit the competitive advantages and keep pushing company toward the success and achieve the targeted objectives. Due to the increase in competition in the business world, strategic decision making is becoming more intricate as many organisations are strained to muddle through with the challenges. Strategic management is a process through which companies can make an effective strategy to achieve the organisational objectives in the long run. The objective and the aim of the strategist are to discover a position in the industry where the company can shield in best way to itself against the forces which exists in the industry or to use them in its good turn (Porter, 1980)[1]. A strategy of an organisation is the combination between its external affairs and internal competencies. Strategies always describe how it is going to respond to the customers, suppliers and competitors along with the social & economic environment within it is being manoeuvre. When we consider that the strategy should be strong and effective, meantime it also encompasses with its environment. It means an organisation supposed to have strategically fit with its business environment. According to Fred R. David (2009), strategic management is conceived as a strategic planning. A strategic plan is, in essence, a company’s game plan. Just like a football team needs a solid game plan to have an opportunity to beat the opponent and achieve the victory, an organisation must have a good strategic plan [2]. For the effective strategic management, strategists should base on the thoughts of open- mindedness. Success of a company is defined by the strategic positioning of the human resource within the company. Each and every strategist should have
  • 4. STRATEGIC MANAGEMENT-ASSIGNMENT 4 enthusiasm and keenness to new perspective, information, ideas and new potentialities. There should be proper communication of sharing and spirit of inquiry and learning. Strategic management is the procedure of advance learning and action, not merely a formal system for control (R. T. Lenz, 1987) [3].According to Richard Lynch (2008), Strategic management is the prototype of key goals, aim and crucial policies or plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be [4]. As we stated already that strategic management is always keen to look forward and future of the company with the objective of success. It is the way of making plan and implementation of strategy or we can say thinking future. Hence, to the very beginning of any start up of the business; strategies are always very crucial to achieve the targeted goal. There are some key elements which help to generate perfect strategy through the strategic management, which is called Facets of strategic management. Facets of Strategic Management Source: www.lachsr.org[5] Taking future into the account, every company has to make strategy to survive in the present complex business context along with to exploit the competitive advantages. Making crucial decision to control the future of an organisation always depends upon the effectiveness of the strategic management. Goal Setting Strategy monitoring Analysis Strategic Management Strategy Implementation Strategy Formation
  • 5. STRATEGIC MANAGEMENT-ASSIGNMENT 5 2.1 Overview of Strategies Strategy is planning, a direction or guidelines for a course of action in to the future to achieve the organisational objectives. A strategy is a plan or prototypes that amalgamate a company’s most important objectives, policies and action’s chain into a cohesive whole (Quinn, 1980) [6]. It is undeniable that the world is more complex, there is tough competition as well. If a company puts hard effort to prepare strategy then it is going to survive and gain its target with maximising profit or wealth. Thompson and Strickland (2003) described that if an organisation wants to achieve its goal, competing with competitors along with satisfying clients and customers through holding strong enough market share accomplishing operation in other hand, there should be a strategy as a future plan [7]. There are several definitions of strategy by many scholars; some of them vary from one to another. De Wit and Meyer (2004) stated that the strategy as dimensions of strategy process, content and context which can really recognize the every real-life problem situation within the industry [8]. Strategy is the way and possibility of a company in the long span of time; which attains the benefit for the firm through its composition of wherewithal within the today’s exigent environment with fulfilling the needs of markets and executing the stakeholder’s expectations (Johnson and Scholes, 2002) [9]. 2.1.1 Mintzberg Schools of Strategies Strategies are both plans for the future and patterns from the past (Henry Mintzberg, 1987) [10]. Mintzberg classified the strategies into 10 Schools of Thoughts along with three categories i.e. prescriptive, descriptive and synthesis strategies on the Strategy Safari [11]. Prescriptive strategies include three schools of thoughts; Design school, Planning school and Positioning school. Prescriptive strategies are much more concerned with formulation process of strategies, analytical and conception process rather than how do they form. Among them the positioning school has been introduced lately than the Design and Planning school which tries to give emphasis on economic marketplace. Descriptive strategies take into the group for Cognitive school, Cultural School, Entrepreneurial school, Learning School, Political School and Environmental School. Descriptive strategies are seemed to be focusing on the process of emergent, development and mental. According to descriptive school, strategies should be formulated according to its environment and its challenges through negotiation and collective process. It also assumes that the reactive process also important to make an effective strategic decision to the company. Synthesis strategy is with the last schools of thoughts i.e. Configuration school. This strategy is all about transformation process. Synthesis strategy looks into the various cluster of strategic decision making process, content of the strategies and organisational structure where the strategy fits in. It also examines the context of the organisation and the business world. In one word, Configuration strategy more focuses to be integrative.
  • 6. STRATEGIC MANAGEMENT-ASSIGNMENT 6 2.1.2 Strategic Models of Johnson and Scholes Johnson and Scholes mentioned that the strategy as a direction and scope of the organisation over the long term period, which accomplishes the stakeholder’s expectation throughout the configuring resources competing with environment. In Exploring Corporate Strategy [12], Johnson and Scholes identified three key elements to measure the strategy. On the basis of Suitability, Acceptability and Feasibility models; it is easy to make an effective strategy and its implementation within the organisation. According to Johnson and Scholes, these three models are applied at the end of the strategic process under strategic selection and evaluation. A complete picture of Johnson and Scholes’ model is categorised under 3 phases, they are: Strategic position, Strategic choice and strategic selection and evaluation. To illustrate this model we have to look into the following diagram: Strategic Choice Cost/ Differentiation/Focused Ansoff’s matrix Vertical/ Horizontal Integration Conglomerate Strategic Selection and Evaluation Suitability Feasibility Acceptability Financial Risk/ Return Stakeholders mandelow matrix Fig: Johnson and Scholes’ strategy Model Source: http://www2.accaglobal.com [13] This model explains how and where in what aspect a company has to look into thoroughly during decision making. For e.g. PESTEL Analysis, SWOT, Ansoff’s Matrix to understand Strategic Position External PESTEL Five Forces Diamond OT Internal SW 6M Money Machinery Manpower Market Materials Make Up Relevant Points Only
  • 7. STRATEGIC MANAGEMENT-ASSIGNMENT 7 the environment and the existing business scenario along with strategic selection and evaluation on the basis of its suitability, feasibility and acceptability. 2.1.3 Whittington’s Generic Perspectives on Strategy According to Richard Whittington, strategy schools are categorised into four different aspects. They are Classical approach, Evolutionary approach, Systematic approach and Processual approach. According to Whittington’s “What is Strategy- and does it matter”, the Classical school believe that the strategy relies on the rational planning method. It focuses that a good strategy is connected with a well consideration of inside and outside of action. Evolutionist believes that the environment is the most crucial element which actually plays vital role to make well decision to achieve the organisational objectives. It also states that the environment is more complex and changeable. This approach also gives concern on the organisational structure and the transformation analysis. They think that the successful strategy comes from only the business process. Processual approach is focused on the internal and external conciliation and amendment. It states that the rational planning and the environment are not so important. According to this approach, to make decision the information should be through the process development and if there is any problem that should be opt and solve with the help of appropriate solution. Systematic School describes about the social system and connection of strategy with the cultures and powers of the local social system which is unavoidable. So that, during making plan there should be well analysis of social system which is spinning in [14]. Outcomes Profit maximising Classical Evolutionary Process Emergent Deliberate Systematic Processual Plural Generic Perspective on Strategy According to this figure, it is clear that the classical and evolutionary schools of strategy are more focused to the profit maximisation as the natural outcome of strategy making. And the
  • 8. STRATEGIC MANAGEMENT-ASSIGNMENT 8 Processual and Systematic approaches are more visual imaginary and pluralistic other probable upshots as well as just profit. 2.1.4 Complexity Theory According to Anderson et al (1999) [15], the organisational science has had complications dealing with nonlinear phenomenon and has treated them assuming that they were linear. Complexity theory is applied by most of the management area in these days to compute the time and space for the business. Complexity theory is all about the analysis of complex and chaotic situation of the organisation within the environment to understand the circumstance along with strength and weaknesses. 3.0 Distance Learning and DL Limited There are several people who really want to hold the baccalaureate degree from reputed academic institution or universities from foreign countries. And that might not be possible to everyone due to its affordability and geographic barriers. It is possible through the distance learning programmes. Distance learning is a design of courses on credit base leading to certification or degrees. After the evolution of internet, distance learning programmes are offered by several universities around the globe and it is very popular scheme to those students who are keen to hold their degree of foreign universities from local areas [16]. Sterling company is a British education consultant working with different institution and universities of Britain. DL Limited is a child company, who is emerged through the Sterling Company along with an idea to provide distance learning programmes to international market. Dl Limited came up with an objective of market expansion as well as profit maximisation to survive in today’s complex environment with competitive advantage. So that, DL limited has to analyse the potential market in international context before making any decision for the start-up. Analysis can be made through different methods like Porter’s Five Forces model, PESTEL analysis. Furthermore, SWOT analysis is crucial part for strategy formulation knowing the internal and external circumstance of organisation to achieve its objective. 4.0 Potential New Markets to DL Limited There are many countries where the distance learning is growing rapidly in different discipline. According a projection report of National Centre for Education Statistics (2007) there will be around 110 million of students who are going to enrol in different disciplines of degrees through distance learning programmes around the world [17]. DL limited has to understand and recognise the potentiality of expanding new market to international context. Keeping in all these perspectives, DL limited is thinking to expand the market in two new international markets i.e. Nepal and Hong Kong. For this, company has to find out the internal and external strength, weaknesses, opportunity and threats regarding to these new markets and company’s strategies.
  • 9. STRATEGIC MANAGEMENT-ASSIGNMENT 9 4.1 SWOT Analysis of DL Limited to New Market Entry SWOT analysis is a technique to analysing business, environment and its resources. This approach is used by each and every business organisation as part of strategic planning to compete and survive in the market. It is a basic tool created to be used in the beginning stages of decision making and as a predecessor to strategic planning in different type of applications (Johnson et al, 1989) [18]. This technique generally looks in to:  Internal strengths  Internal weaknesses  Threats in the outer environment  Opportunities in the internal environment Researching DL limited’s environment definitely going to benefit the company and its management team by placing company in a point to build up a strategy for both long and short term. There is no point to carry out analysis of SWOT technique unless it is not auctioned. So that, DL limited has to perform this technique through the following model: Source: www.tutor2u.net [19] SWOT key words 4.2 Nepal Entry Analysis for DL Limited Nepal is a landlocked country as developing countries in the south Asia region. In comparison to past years the literacy rate is increasing and the traditional education system is changing to modern system. From DL limited point of view, although Nepal is least developed country, the market for distance learning is demanding. The reason behind this is only the trend for foreign degree has been increasing day by day. Most of the students are willing to pursue their further study in abroad. But the opportunities for DL limited will be those students who are left behind from abroad study due to the cost. In perspective of Nepal, the history of distance learning is not so long and DL limited will exploit the market providing better quality education through different certification degrees and gains the profit With Match Strengths Opportunities Into Convert Weaknesses Strengths
  • 10. STRATEGIC MANAGEMENT-ASSIGNMENT 10 and goodwill. Threats for DL limited will be the lack of development infrastructure into the new market. For example, distance learning education system heavily relies on the technology and power through web based teaching method and online portals. In Nepal, there is not enough sufficient power and internet technology, only major cities have them. So that, it could be threat for the company but DL limited can provide distance learning programmes focusing into those major cities. The targeted market for DL limited will be favourable due to the numerous students. Furthermore, Nepal has only 5 universities where DL limited can attract more students providing new baccalaureate dual degrees from Turkish University and UK University. DL limited is emerged through the sterling company, which is working with several British universities from long time. Company has skilled workforce and experienced manpower as its Strengths. Sterling company has already owned good reputation in several countries including Turkey, Azerbaijan, Albania, Georgia and other countries. Parent company holds the good financial position to support DL limited as well. Weaknesses for DL limited to new market as Nepal will be the poor transportation and no updated technological devices. DL limited does not hold any own premises in new market that will be another weakness. 4.3 Hong- Kong Entry Analysis for DL Limited Hong Kong is most developed country in the Asian region with holding one of the highest per capita incomes. Hong Kong is the huge market for every foreign educational institution to offer distance learning programmes. Hong Kong carries long history in distance learning. The first distance learning programme was initiated by Open Learning Institute of Hong Kong in 1989 [20]. DL Limited has to face competition because several Universities and Educational institutions are offering the distance learning programme along with local universities like OUHK. The positive part in Hong Kong for DL limited is the government is supportive for the distance learning and education development. As an opportunity to the company we can take the associated university of UK. Even though there are several distance courses are offered, as DL limited is based on UK is itself from reputed country for higher education especially in Business Management. The external opportunity for the company will be the development and use of internet in Hong Kong. In Hong Kong education has always been considered as exam oriented and students were taught only to memorise not to think (Fok, 2002) [21]. For DL limited the perception of people towards education could be as threats. But recent year people are jumping one status quo to another. Hong Kong people are already transformed into dynamic environment. Another problem will be the language proficiency of students from Hong Kong. For new market of DL limited, the strength would be the dual degree programmes, unique educational model and the goodwill of the company. DL limited is entering into new market with only one faculties i.e. Business Management. So that, the limitation on courses offered will be the company’s weakness.
  • 11. STRATEGIC MANAGEMENT-ASSIGNMENT 11 4.4 Social Networking and DL Limited for Distance Learning Distance learning is always based on online portals and different online databases which are provided by universities or main institutions. Nowadays every people who actually are interested in distance learning, are aware of internet and its use. Internet gave birth to social networking as a solid communication medium to the people around the world. Over the years, social networking is massively in use for business purpose. Many giant companies are also using social networking like Facebook, twitter, myspace etc. DL limited will use the social networking as a promotional tool and as well as to understand the market. Company is only targeting to enrol 500 students from these new markets for the first year. So, we will use Facebook to promote our products and courses targeting to Nepal and Hong Kong via posting an ad to the Facebook. The ads will be two, one for Nepal and another for Hong Kong. We will examine that how many will be the prospective students through the liking hits of people on Facebook. DL Limited will design a questionnaire to the Hong Kong which is prepared to understand the students’ view and willingness to the courses offered by DL limited as foreign degree. It will be a kind of survey and it will be passes through the e-mail services like hotmail, yahoo mail and Gmail to the different universities and high schools of the Hong Kong. Social Networking tool as Oovoo, Skype and Google talk are the free video conferencing service to communicate. DL limited can use these social networks as medium of teaching to provide short lectures from the main campuses. DL limited also can use the YouTube, uploading video lectures and providing links to the students. It will be definitely going to help students for better learning. 4.5 PEST Analysis of Nepal and Hong Kong The acronym of PEST stands for political, Economical, Social and Technological analysis of environment. It is wider analysis of macro- economic framework and factors which influences the business. PEST analysis is concerned about the key external environmental influences to the business [22]. DL limited is mainly focused into the analysis of Technological analysis because the whole programme is depending upon the technology. DL limited has to face more cost in Nepal in terms of technology because Nepal does not have updated and efficient technological devices. The dual degree programme is mainly based on web based portals. For that, efficient and effective internet service will be required but in Nepal it is quite hard to maintain. Online education is very expensive [23]. We have to know that how much government is ready to research in the field technology and energy use & cost. So, DL limited has to create some IT infrastructure for the company and the students. Having said that it doesn’t mean that the technological aspect can’t be improvised and solve the problem. There is always way for the wish. Hong Kong has everything for the technological advancements and it is much easier to utilise the all web based medium for the distance learning programme. DL limited can use UGC source for learning for the students and for tutors as well. Furthermore, in Nepal the distance learning programme will be at infant stage because of low volume of use of communication technologies.
  • 12. STRATEGIC MANAGEMENT-ASSIGNMENT 12 Political factors are also crucial to DL limited as it is going to start up the business. Nepal has political instability that will be the problem for the company to start up new business. There are not such strong employment law, consumer protection and competition regulations that will be riskier to DL limited. At the same time, that will be the advantageous as well cause higher the risk higher the return. So company has to aware of these consequences. Hong Kong has better political position but might be strong and strict regulation regarding taxation, environment and protection. Economic condition of Nepal is also poor with higher inflation and lower economic growth rate. DL limited has to consider these factors. In the context of Hong Kong, the economic growth rate is higher than many Asian countries. Higher per capita income of the people, higher rate of government spending along with monetary policy. Nepal and Hong Kong both have almost same level of social concepts but Nepal has lower income distribution, life style, Education and living conditions than the Hong Kong. Nepal is more flexible than the Hong Kong in terms of Health & Safety rules. So that, DL limited has to consider all of these scenarios to expand the market with profit. 5.0 Potential New Product Development and pricing Strategies DL limited is going to make an entry to new markets and it is only offering on the business management courses for undergraduate level. British education is highly renowned in the field of Business Management and Information Technology. DL limited is also UK based academic institution providing undergraduate degree for more than 2 million distance learners. The company is planning to provide dual degree programme to students on different stream like BA, BBM, BBA, BSC in Finance, and BSC in Banking etc. Nepal has currently growing market in the field of Information Technology and computer sciences. So the potential new product for the Nepal would be BIT, BCA, and BSC in Computer Science, BIM and Other Certified Networking Degrees like CCNA and CCNP. Nepal has also demand of Hospitality Management and Medical Sciences. DL limited can make entry with any of those products to achieve its target. Even in Hong Kong, DL limited can develop same product with Nepal. Because Hong Kong is a business port for the world and there is always high demand of computer and information technology. Hence, DL limited will provide IT dual degrees and Computer Science courses leading to UK Universities along with business management degrees. Pricing strategy is the key element for any company to the new market to achieve competitive advantage. DL limited can follow any of the pricing models based on the Accountant’s approach, Economic Approach and Marketing Approach. Economic pricing approach looks at the ideas of value and utility in relation to price. If DL limited is going to follow the Economic pricing strategy, it is important to cover the aspect of a product or service which makes possible of satisfying a need or want. Where value is an idiom used to quantify utility and the price as the monetary unit that represents value. According to Geoff Lancaster [24], accounting approach of pricing strategy contends that costs, demand and competition are the major factors which is relating to pricing decisions. However, price should always make a recovery over company’s fixed costs i.e. rents, heating, rents etc and variable costs like labour and expenses along with a margin of profit. DL limited has to focus
  • 13. STRATEGIC MANAGEMENT-ASSIGNMENT 13 on this pricing strategy approach to address all of the overheads to the new market. The main pricing strategy for DL limited will be under Marketing Approach, which is designed to understand and attract the customers of the new market. Under this approach DL limited will come up with a product bundle pricing strategy to lure the customers. Under this strategy company is going to offer combined product in same package which will create a thought in the customer’s mind as valuable offer. For distance learner of Nepal and Hong Kong, dual degree programme itself comes under this strategy which will be beneficial to both sides. Another pricing strategy under marketing approach will be the Skimming strategy to the Nepal. Because DL limited has to spend more finance to provide distance degrees. But at the same time, company will follow the penetration pricing strategy to the Hong Kong market due to high competition. In the context of Nepal, students will be available enough for the skimming pricing and in Hong Kong penetration will definitely take the foothold. Pricing Strategic Matrix [25] Source: www.marketingteacher.com After analysing all, DL limited has to consider that whatever the pricing strategy and the product that should be fit with the company structure and the objectives. Furthermore, the new market as Nepal and Hong Kong has many issues that should be adhered by DL limited to gain the competitive advantages. 6.0 Resource Required to DL Limited and Pitfalls 6.1.1 Information Technology Infrastructure All the time the international businesses are speeded up through the flow of information. Through the speed of information, success and failure of company is decided. So that DL limited has to create such kind of mechanism to make possible that the IT systems in new market are available. DL limited is providing distance courses which are taught via web portals and online databases. Hence, company requires well IT infrastructure in new market i.e. Nepal and Hong Kong. Economy Skimming Penetration Premium Low Price High Low Quality High
  • 14. STRATEGIC MANAGEMENT-ASSIGNMENT 14 Pitfalls for the Nepal would be less power and lower rate of IT developments. Lower speed of Internet would be another danger for DL limited in Nepal. 6.1.2 Human Capital Staffing is the key factor that actually makes differences for the company. Performance of skilled man power is always effective and that will lead to attain the competitive advantages of company. The environment is more challenging than ever before, increase in different ideas and innovation is creating tough competition. In this context, DL limited has to focus to increase the knowledge level of company and that is only possible through efficient and effective human capital. In context of Nepal, there will not be sufficient skilled human power for DL limited to operate the business. Company has to hire those few manpower providing better opportunities or transferring qualified staff from the parent company of UK. Hong Kong has larger amount of qualified candidate but the problem would be the language proficiency. Hence, DL limited has to address all requisite factors regarding human resources. 6.1.3 Customer service Understanding customers’ demands and fulfilling them is motto of every company with margin of profit. Good relationship of company with customers is essential to survive in business world. DL limited also need to consider that only enrolling the student will not make any sense. Company has to maintain good relation to students providing different facilities and quality education. This will increase the good will of company and will be easy for company to sustain the market. 7.0 Relevant Issues of DL Limited This report covered many aspects that DL limited has to look into before setting up the business in Nepal and Hong Kong. Even though there are some aspects which company has to consider. Dl limited should increase the budget for new market entry because company has to establish different infrastructures for the business. Financial position will be the key part for DL limited. Many researches already showed that there is questionable degree and courses are offered by distance learning education providers. Hence, Dl limited should be able to provide clear and genuine degrees to the students. Cultural differences would be another issue to be addressed. In Nepal, there is huge market for distance learners but due to age gap parents of targeted students may not understand what distance learning is. Another issue is time zone between main campus of DL limited and the new market. So that company should aware of all these issues with an idea to manage them smoothly.
  • 15. STRATEGIC MANAGEMENT-ASSIGNMENT 15 8.0 Conclusion Massive use of internet made the way of doing things different. Internet technology created the world as a single forum which is dynamic. People do not need to go library and universities to learn something because it is accessible through the online portals and databases along with user generated contact like Wikipedia. Tapping the cellular phones and hitting the button of the computer keyboard is becoming the way of learning method. Online learning system is setting up one distinct approach overcoming the geographical barriers. Online learning or Electronic learning is creating maximum amount of flexibility to the students around the globe. The turnover of distance learner is increasing day by day. So that Sterling Company has to make strategic investment to the international market via DL limited to attain the competitive advantages. The parent company of DL limited is already providing distance learning more than 2 million students across the world. Making greater strategic investment in Nepal and Hong Kong for distance learning would be another portfolio investment for the company as a whole. Nevertheless, Dl limited has to give more concern regarding required resources to starting up business in two different markets which is completely new and several pitfalls that may arise. Even though the market has great potential customers for distance learning company has to understand the possible hurdles and try to minimize utilising knowledge and expertise. The most important part for DL limited is to provide web based learning system to the two new markets from UK. For this, company has to build up a network for web portals with high online security. Company has to hire and make a committee to look after this accordingly. That will provide efficiency to the learners from the Nepal and Hong Kong. At last, a successful distance learning system should have the good resources of online courses and efficient method to deliver to the students.
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