Strategic Planning in Navita ltd - Case Study Example

Strategic Planning Name: Lecturer: Course name: Course code: Date: Executive summary Strategic planning is a systematic process of forecasting a future that is desired by the company. It involves breaking down this vision into goals which are extensively defined or objectives and chronological steps to be followed in order to achieve them. Strategic planning commences with the desired end and traces backwards to the current situation of the company, this is in contrast to long term planning which starts with the current situation of the company and establish procedures and steps to achieve future estimated needs. This analysis of Navita ltd will focus on the strategic planning which will evaluate the types of strategies available to companies (Kerzner, 2007). These include the growth strategy, stability strategy, retrenchment strategy, combination strategies among others. This report will analyze the available strategies and suggest the best strategies that the company can adopt to enable them achieve its vision in the near future. The report will base on the situational analysis of the company when suggesting the strategy that the company will be able to support. The report will also evaluate the most valuable strategic direction of the company basing on its situational analysis. Introduction Strategic planning is a process in which organizations define its strategy, or path and make decisions on apportioning the resources to enable the establishment of the strategy. The current position or situation of an organization and the availability of avenues through which the organization can follow a particular path are fundamental in determining the course of the organization. Strategic planning is concerned with “what the organization wants to do”, “for whom do they do it” and “how will they succeed” The components of strategic planning involve a good understanding of the company’s mission, vision, strategies and values. Vision statement of the company shows what the company wants to be, or rather how it wants its world in which it operates to be. Vision concentrates in the future of the company as it is a long term view. On the other hand, mission explains the fundamental purpose of an enterprise or organization. It shows the reason for the existence, and what the company does to attain its vision. Values are beliefs shared among the organization’s stakeholders (Marie A. Chisholm-Burns, 2009). Values drive the culture of an organization and priorities and give a structure in which decisions are based. A sound strategic plan should function as a structure for decisions or for protecting support and, or approval, it should give a basis for in-depth planning, it should enlighten the business to other people with the aim of informing, motivating and involving, it should also aid benchmarking and monitoring of performance, and its should be able to encourage change and become key element in the next plan. Current strategic approach of Navitas Ltd Navitas limited announced in January 2010 that it has expanded its business to United States America after it had expanded locally by acquiring other companies. The expansion will enable Navitas ltd to provide college services for high school students who need extra study to enter universities which Navitas ltd had signed deals (Imhoff, 2009). This move improved the company revenue which rose by 24% and profits also increased by 48% as at February 2010, and also the share prices increased significantly. According to statistics, the higher education industry has risen all over the world. The motivating factors for this increased demand include the need for knowledge and skilled manpower to drive the economy of nations and also the link between higher education and income levels hence social developments. Due to the increasing demand, Navitas had successfully won the market by being the leading provider of university pathway education in Australia. Navitas threat was competition from Kaplan Inc which entered Australia in 2008. Types of strategies available for Navitas ltd The formulation of a strategic plan involves steps that cover vision, objectives, mission, values, strategies and goals. The current vision of Navitas ltd states “Navitas is recognized all over the world as the most trusted international learning organization in the world”. From the SWOT analysis of the company, it is revealed that the company is working very hard to achieve its vision. The company has expanded both locally and internationally, they have competent staff, they have state of the art resources that facilitates learning, they have tried to suppress completion by subsidizing their rates, they have diversified touching on the horizontal lines and also the have increased their branches in various parts of the world. This increase is to provide services to increasing demand all over the world. The mission statement states “Navitas is passionate about coming up with opportunities through enduring education and being a worldwide leader in giving enhanced learning solutions”. The company is seen to be doing exactly as per their mission statement basing on the situational analysis (Marie A. Chisholm-Burns, 2009). The company is building its reputation and acceptability all over the world by engaging in provision quality services and reaching out to many through its branches and partnerships in various countries and diversification. The values of the company are: The company is rooted to their potential and reason for existence. They express drive by attaining and pressing forward together. They are adventurous by nature. They exhibit rigour in improving their reputation in professionalism and capacity. They are legitimate in the way they deliver and behave. They show esteem by celebrating, caring and valuing for people and the environment. The types of strategies Organizations use strategies such as the corporate strategy which gives the direction for the whole organization; business strategy gives direction for a particular business unit or service/product line; functional strategy which gives direction for the support of operations of the business and the corporate strategies. The most crucial grand master strategies employed by organizations include the growth strategy which sets the expansion targets of the company; retrenchment strategy which sets ways and procedures for scaling back the company operations; stability strategy which sets ways that will enable the company to stay at status quo; and combination strategy which sets out the strategies for business combinations. Growth Strategy Navitas ltd has been implementing their growth strategy through its acquisitions and going internationally through partnerships and also building their own campuses (Randel S. Carlock, 2008). This has enabled the company to increase its income considerably over the years. The company through this strategy has enabled them to gain recognition and reputation in the world. The growth strategy of the company has also been enhanced through diversification. The company diversified horizontally by acquiring CSM Knowledge and also through the acquisition of Australian Centre for Languages (Robert Georg Wittmann, 2009). This was initiated by the new entry in the market and it was a strategic idea to suppress completion from the rival Kaplan Inc. The company is also advancing its growth through venturing in market developments. The company initiated expansion relationship with universities both in Australia and overseas in the year 2009. The relationship that was initiated between Navitas and University of Portsmouth was to establish an international college that will deal in pre-university and pathway programs. This market development initiative among others was meant for growth of the company. The company is engaging in market penetration strategy through offering of their services at considerably lower prices as compared to its competitors. They are also in the fore front in the product development. They have significantly modified their services to fit to the global demands so as to accommodate a bigger population of the world. Stability Strategy If a company wants a slow or stagnated growth, the management may decide to seek for a strategy that concentrates on stability (Kraemer, 2001). The available elements found in this strategy are: Pausing – this is when the internal resources have been stretched to the maximum hence requiring the company to scale down and concentrate on controlling the quality. Proceeding cautiously – this can be implemented when there is a problem in the macro-environment which might force the company to adopt a strategy that will allow only growth is formidable. If the company is cash cow and has a strong loyal customer base, then it is advisable to pull back and concentrate on research and development. Retrenchment Strategy Retrenchment is a corporate level strategy that is meant to cut down the diversity or size of the operations of the company (Kerzner, 2007). Retrenchment also means reducing of company expenses with an aim of gaining financial stability. It is a pullback or withdrawing some of the services in the market. Among the activities that signify retrenchment include a captive company; turning around especially when the company is making loses or losing the market share, the available solutions is either to exercise contractions or do consolidations; bankruptcy can also lead to retrenchment; divestment; and liquidation. The suitable strategies for Navitas Ltd The company has concentrated in growth strategy in the previous years. This is evident in its diversification strategies, acquisitions and opening outlets in overseas and also collaborating with international universities to reach out to many students (Imhoff, 2009). This strategy has assisted the company so much in terms of profitability, branding and building reputation. The most suitable strategies that the company can engage in are: Product development which requires the company to engage in research and development attain new services or improve on the services that they were previously providing. This will enable the company to stay competitive in the market because of the new emerging trends of services and flexibility in the higher education industry. Market penetration strategy will enable the company to reach out to many students all over the world. The company will be able to subsidize its fees hence making their services affordable to many. This will see the company gaining more students from its competitors. New market developments have also enabled the company to gain recognition overseas. The company has partners and campuses in overseas which offer their services (Dubrin, 2011). The company can engage more on this strategy by putting up campuses and partnerships in more countries. This will enable the company to achieve a larger market share because they are already established and they have gained acceptance in the market. Navitas ltd can also engage in research and development strategy. Research and development will assist the company in knowing the future trends in higher education industry hence enabling them to prepare and adopt strategies that will assist the company to stay competitive in the market as well as expanding. The strategy that Navitas ltd has the capacity to support Basing on the company vision, mission and core values, the strategies that the company has the capacity to support are growth strategy and research and development strategy (Brundtland, 2006). The company can engage in expansion through market developments, diversification, development in its services and pricing strategy. These strategies are within the company's capability as it is revealed in the situational analysis of the company. These strategies will enable the company to achieve its vision which is “Navitas is recognized all over the world as the most trusted international learning organization in the world” Basing on the situational analysis, the company can engage in growth strategy which will enable it to achieve its vision. Navitas ltd wants to be recognized in all countries of the world as the most trusted international learning organization in the world (Abel Adekola, 2009). To achieve worldwide recognition, they should engage in setting up their learning institutions worldwide or signing partnership contracts with international institutions which will enable these institutions to offer education services of Navitas. By engaging in this strategy, the company will reach out to many students worldwide hence achieving its vision. Research and development will enable the company to offer quality educational services to its students worldwide because they will be offering services basing on the worldwide trend in higher education industry. Conclusion Navitas Ltd is working very hard to achieve its vision. The situational analysis of the company reveals that the company is in the right direction in trying to achieve its vision. Through its values and the mission statement, the company has incorporated its vision in the mission and core values. The strategy that the company has the capacity to support and also that is able to link to the company's success in future business is the growth strategy and they also need to integrate it with research and development. This will enable the company to achieve its vision if they adopt this strategy. Reference List Abel Adekola, B.S.S., 2009. Global Business Management: A Cross-cultural Perspective. Ashgate Publishing, Ltd. p.235. Brundtland, G., 2006. World Commission on Strategic Planing and Business Development. Oxford: Oxford University Press. pp.321-32. Dubrin, A.J., 2011. Essentials of management:STRATEGIC PLANNING AND BUSINESS STRATEGIES. p.119. Gene R. Tyndall, J.C.R.C.T., 2010. Strategic planning and management guidelines for transportation agencies, Issue 331. Transportation Research Board. pp.11-22. Imhoff, E..L.R.&.W.D., 2009. Data in Search of Business Accountability Theory: A Critical Examination of the Relationship Among Social Performance, and Economic Performance of US Firms. Academy of Management Review, pp.540-57. Kerzner, H.R., 2007. Strategic Planning for Project Management Using a Project Management Maturity Model. John Wesley & Sons. Kraemer, J., 2001. Strategic planning and management control. Journal of Small Business and Entrepreneurship, 23, p.51. Marie A. Chisholm-Burns, A.M.V.M.S., 2009. Business Management, Leadership, Marketing, and Finance Accountability. Wesley & Sons. p.271. Miniard, a.P.W., 2009. Picture-based Persuasion Process and the Moderating Role of Strategive Planing. Journal of Consumer Research, 18, pp.92-107. Randel S. Carlock, J.W., 2008. Strategic Planning for Busineses: Parallel Planning and Advancement of Corporate Strategic. Cengage Learning. Robert Georg Wittmann, M.P.R., 2009. Strategic Planning: How to Deliver Maximum Value Through Effective Business Strategy. Kogan Page Publishers. Read More