Find an illustration of strategic direction in an administration in your state or part. from your ain experience or from your reading. The illustration can associate to either a large or little concern. or even to a public sector administration.
Which facets of the illustration do you see to be good or bad illustrations of some facets of strategic direction. utilizing the rules covered in this topic as your usher? For illustration. you might discourse the good and bad illustrations in one or more of these countries: managing stakeholder outlooks ; pass oning organizational intents ;
external environment ( PESTEL model. five forces. chances and menaces ) ; strategic capableness ( value concatenation and value web. strengths and failings ) ;
SWOT analysis ;
explicating a business’ scheme ( bases of competitory advantage ) ; implementing a business’ scheme ( structural types. pull offing people ) ; and/or corporate scheme ( the two chief portfolio attacks and extent of corporate diverseness ) .
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Singh’s Auto Rentals Company Limited ( Singh’s ) was established in 1972 with a little fleet of merely five ( 5 ) vehicles for rental. Singh’s intercrossed corporate scheme embraces cost and distinction in a market that is extremely competitory. holding expanded its client base to integrate the corporate society. the international sector and the community sector. The company has grown and is now one of the preferable clients of the Ministry of National Security of Trinidad and Tobago. offering a broad scope of high-end vehicles and SUV’s for rental. coachs for Tourss and retreats. executive autos with drivers for marrying parties and seven ( 7 ) seater vehicles for the household oriented client.
Business degree challenges have over the old ages forced Singh’s to refocus their aims on their MOST. with intense market development and incursion orientation. in an aggressive effort to win market portion. addition volume additions and construct place rapidly. In this assignment the external environment embracing Porter’s 5 Forces and PESTEL are examined along with its’ impact and influence on Singh’s SWOT and stakeholders outlook. Examples of the good and bad of the external environment will besides be highlighted to depict how the company can increase their competitory advantage and profitableness.
Table of Contentss
“The supreme art of war is to repress the enemy without contending. ” ? Sun Tzu. The Art of War
In discoursing the positive and negative facets of the external environment. the PESTEL. the SWOT and Porter’s 5 forces will be used to analyze where Singh’s Auto Rentals is at in the industry and where the company can trust to be in the following five ( 5 ) old ages.
The auto rental industry is a competitory industry and Singh’s competences and capablenesss will decidedly maintain them in the market and do them into leaders one time they follow their aims and tactics.
“All work forces can see these tactics whereby I conquer. but what none can see is the scheme out of which triumph is evolved” . ? Sun Tzu. The Art of War
2. Company overview: Singh’s
2. 1 Vision
We aspire to go the taking visible radiation in the Auto Rentals industry through uninterrupted service invention and the enlargement of our distribution webs.
2. 2 Mission
Using our group’s strengths we aim to go a major force in the Car Leases industry by offering advanced merchandises. effectual procedures. extended webs. and the enlisting of the brightest endowment. we strive to accomplish impressive profitableness.
2. 3 Aims
From the vision/mission statements given. it would look that the aim of Singh’s Auto Rentals is to go leaders in the industry. It can besides be derived that this company seeks to accomplish the undermentioned aims ;
To increase market portion
Remain close to its rivals
Increase the fleet of vehicles
To set up leading in the market
2. 4 Schemes
Singh’s scheme for accomplishing these aims might be a concern scheme. Business scheme is concerned with make up one’s minding which markets and activities the concern should be involved in ; where it wants to be ; and how it is traveling to acquire at that place. Singh’s schemes may include ; Satisfying clients ( run intoing client demands )
Runing the concern ( organizing resources in the most efficient and effectual manner ) Beating the competition ( schemes and tactics to derive competitory advantage ) Achieving corporate aims
2. 5 Tacticss
Methods this company uses to accomplish schemes. as written in the mission. are the debut of support and complimentary services they provide viz. ;
24 hr FREE Roadside aid
Guarantee competitory rates and seasonal price reductions
A broad scope of vehicles to take from including the economic system and SUV scope.
Free care on all vehicles
Air conditioned comfort
3. PESTEL analysis of Singh’s
Awareness of the external environment and how they impact on the company can be summarised utilizing the PESTEL model. The PESTEL can specify the cardinal drivers of alteration. These cardinal drivers of alteration have differential impacts on industries. markets and administrations.
3. 1 Political
Singh’s is a in private owned company but because the company buys and rents vehicles they would be involved with few governmental organisations for assorted intents.
Ministry of Transport
for licensing of new vehicles
For vehicle transportations
Ministry of Finance
To O.K. any duties
Duties or charges for purchases
Taxs ( including staff wages )
Customss and Excise
Importing. responsibilities and clearance of all vehicles
Ministry of Legal Affairs
To register the company lawfully
To guarantee all licences to run as a limited liability company 3. 2 Economic
As a private owned company. Singh’s has to watch for what impact his company financially from the external environment. Cardinal factors can be ; Fuel rates – have rates gone increased or decreased. this would find how to monetary value the leases. Exchange rates for foreign currency.
Salary dialogues in the country- would the employees demand high rewards as a consequence of salary dialogues for authorities workers. Available and recognized methods of payment – check. hard currency. VISA. MasterCard. Unemployment rates in the state.
3. 3 Social
These influences the length of clip a vehicle would be rented for. Singh’s offers long term leases ( 6 months to 3 old ages ) and short term leases ( 1 twenty-four hours to 6 months ) . Social factors include ; Changing cultures – extremum periods for local leases ( marrying and carnival ) and peak periods for foreign leases ( tourers are drawn to the Caribbean during winter and summer ) . Demographics – age groups of drivers.
Community involvements – anteroom groups. charitable administrations etc…
3. 4 Technological
In a concern such as Singh’s one would promote engineering to play a function in the information aggregation. storage and distribution of the company’s fleet of vehicles. Technological factors include’ Computerised scanning of vehicles under care.
Computerised database systems used for certification. informations aggregation. charge. accounting and telling. Communication methods have to be of the highest quality in order to make out to clients ( the concern to client attack ) . Updated web sites. facebook pages or other societal hunt engines used to publicize the company.
3. 5 Environmental
Influences from the direct environment that may impact Singh’s might be Waste disposal – for waste disposal from the garage ( oil. parts etc… ) Energy ingestion –the sum of energy or power used in a procedure or system. Weather conditions- may merely impact the infrastructural facet of Singh’s in footings of enduring on vehicles which are non kept covered over a long period.
3. 6 Legal
The legal facets of the company and how it influences the schemes and aims. Governmental Torahs – a jurisprudence might province that no 1 under the age of 18 is allowed to drive. Policies – policies put in topographic point by the board of managers and the cardinal stockholders to find how the concern is traveling to run. Rental contracts have to be done up and signed by each party for every dealing. Insurance companies competing to see the fleet of vehicles.
Stakeholders can be both internally and externally. In an industry such as the vehicle rental industry the stakeholders are really of import. The outlooks of the stakeholders are every bit of import to the development of Singh’s ( see appendix III )
4. 1 Internal:
Board Of Directors or Management
Service suppliers – care crews. specializer garage crew
4. 2 External:
Business to concern Clients
Government and regulative industries
5. SWOT ( Internal / External Analysis of Singh’s )
In an attempt to determine its competitory environment a SWOT analysis of Singh’s can help to invent a sound strategic program. The purpose is to work and maximise the strengths and chances ; avert threatening fortunes through tactical responses and supply institutional ascent to decrease failings ; all these towards a place of profitableness and value creative activity.
As defined by ( Alzoubi 2004 ) SWOT Analysis ( strengths. failings. chances and menaces ) is a general model for directing and helping strategic contrivers to place the appropriate organisational schemes to accomplish their ends. Directors look at SWOT analysis as a technique to assist directors to place and be after the concern ends. and pull the schemes to accomplish them ( Alzoubi 2013 p. 126 ) .
Focused direction and staff
Efficient client service
Skilled auto attention specializer and technicians.
Lack of Human Resource best patterns
No clear strategic way
Lack of uninterrupted preparation and development for staff
Poor selling accomplishments
To derive big net incomes
To be a house clasp name in the auto lease concern
To function a big client group
Potential for new services or merchandises to be offered
Companies offering similar services coming on watercourse
Employee turnover due to other companies offering better bundles
Loss of clients due hapless service experience
new and existing ordinances
new and existing rivals
unstable political and legal systems in foreign markets
External chances and menaces can work both ways for the administration for illustration new engineerings can do one facet of the company disused but enhance another facet of the company all at the same clip.
6. Singh’s Strategic Based Units ( SBU’s )
SBU’s let big corporations such as Singh’s and SSS to change their schemes harmonizing to the different demands of the assorted external markets they serve. For example-
Corporate Leasing – renting to companies on a particular contract Short term and long term rental – to both corporate clients and immediate clients Executive driver services – airdrome to hotel and return. nuptialss. seminars Pre-owned vehicle sales- new to the company but really effectual and brings in more net incomes Bus and driver Tourss for tourers
7. The consequence of Porter’s 5 Forces on Singh’s
Porter’s 5 forces analysis can be applied to Singh’s as a tool to analyze the competitory advantages of the company. Harmonizing to Porter ( 1980 ) . competition ( competition ) on the market is consequence of the five variables or chief forces: competition degree. dickering power of clients and that of providers. the menace from new entrants and replacement merchandises. The followers was deduced from the analysis of the five forces:
7. 1. Menace of New Entry
Due to miss of policies to forestall new entry. the market is unfastened for new entrants. Singh’s will now hold to develop and keep a cost advantage and distinction of its services. to derive sustainable competitory advantage. Economies of graduated table – it would be expensive to for new entrants to fit Singh’s because of the degree the company has reached in the industry. it would be hard for new entrants to fit them. Experience – new entrants would be inexperienced in most of the ‘know how’ of this industry and that deficiency of experience can give Singh’s the advantage over a new entrant ( See Appendix II ) .
7. 2. Menace of Substitution
Substitutes can come non merely from within the industry but besides from outside. Directors frequently focus on their ain industry and neglect the menace posed by replacements for the merchandise or service. The price/performance ratio is critical. Even if the replacement is more expensive the replacement is still effectual ( see appendix II ) .
7. 3. Buyer Power
Singh’s needs to pay attending to the clients and the monetary value they pay for the service. If the monetary value is excessively high clients may seek to make concern elsewhere which will coerce the company to drop monetary values. therefore losing gross ( see appendix II ) .
7. 4 Suppliers Power-
It was recognised that the concern can be adversely affected if providers drive up their monetary values. so the construct of low cost to derive competitory advantage will be affected ( see appendix I1 )
7. 5 Competitive Rivalry-
From the analysis it was apparent that the company had challengers executing a similar service. To forestall clients from traveling from Singh’s to the rivals. the company will necessitate to supply alone services to its clients ( see appendix II ) .
Singh’s entered the market as an enterpriser in 1972. rivals from so to now would be companies established about or before that clip perforating the same market with similar aims. One such illustration would be Southern Gross saless and Service Company Limited ( SSS ) . Both companies entered the corporate market to seek to derive market portion. SSS has a larger vehicle fleet than Singh’s but SSS does non supply some of the circuit usher services or 25 place coach retreat services that Singh’s caters for. Even though they are in similar industries. they each cater to a different sector within the market. Mention to Appendix III for a ocular on how competitory advantage works in an industry as Singh’s.
9. Competitive advantage Singh’s has over SSS:
Caters for company leases and corporate leases
Provides auto and driver services
Provides care for some vehicles and outsources the remainder Cost- largely high priced unit lease
Energy ingestion is high
Caters for circuit groups and tourer transit
Provides auto and driver services
Provides transit services from airdrome to hotel and return
Provides rental bundles for nuptialss with a driver
Monetary values are comparatively low and are negotiable
Assorted subdivisions throughout the state so clients can make concern from any subdivision
Customer service is ranked really high
A strong networking capableness ( Strength ) has lead to an enlargement in the concern activities of Singh’s ( chance ) and this has resulted in increased net incomes due to long term leasing by assorted ministries ( strength ) . The strength of networking was cultivated over a period of clip and one time established. it can prolong Singh’s for the following five ( 5 ) old ages. Singh’s external environment has room for new entrants and a batch of possible menaces and chances that can originate. nevertheless. with proper strategic direction and good trained staff this company can go on to force frontward in this market and even do a discovery in a new one.
Continue to measure Singh’s on a regular basis.
Always know where the company is in relation to its rivals.
Capitalise on new engineerings and trade in old techniques.
Monitor staff and their endowments. make regular preparation to update them on the current techniques being used by rivals so that they can be brought up to rush or even one measure in front.
Increase profitableness by looking into selling and advertisement to the larger companies such as energy companies ( BPTT and Atlantic LNG ) to seek to derive greater market portion. this is an chance within their SWOT analysis.
See upgrading the fleet and possibly adding some luxury type vehicles. expression at the menace of purchasers and see what the clients are inquiring for. Customers may be willing to pass their money on luxury autos from a rental company they trust.
Johnson. G. Whittington. R and Scholes. K 2011. Researching Corporate Strategy. 9th edn. Pearson Education. London.
Alzoubi. majed R. 2004. Strategic planning and edifice advanced organisations. Unpublished. PhD thesis. Amman Arab University for Graduate Studies. Jordan.
Alzoubi. majed R. 2013. The Impact of Intellectual Capital or SWOT Analysis among Jordanian Banking Industry “Empirical Study” : International Journal of Business and Social Science. Vol. 4 No. 2 pp. 123-137.
Singh’s car rental company limited. viewed 7 July 2014. hypertext transfer protocol: //www. singhs. com/about. hypertext markup language
Southern Gross saless and Service Company Limited. about us. viewed on 7 July 2014. hypertext transfer protocol: //www. southernsalestt. com/corp_history. php
Tutor2U. viewed on 9july 2014.
hypertext transfer protocol: //www. tutor2u. net/business/strategy/corporate_objectives_strategy. hypertext markup language
Slideshare. com. hypertext transfer protocol: //www. slideshare. net/milesweaver/analysing-the-external-environment-of-business-ie-general-competitive. viewed on 12 July 2014