Inzamam ul Haque. 1722090630. Mid. case 4 PDF

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MIDCASE 4Prepared byInzamam-Ul-Haque 1722090630Mgt 489Section:11; Summer 2020Submitted toBobby HajjajDepartment of ManagementNorth South University Bashundhara, Dhaka22 nd September 2020Table of Contents Vision Framework Vision Key Issues.................................................................

Description

MID CASE 4

Prepared by

Inzamam-Ul-Haque

1722090630

Mgt 489 Section:11; Summer 2020

Submitted to Bobby Hajjaj Department of Management North South University Bashundhara, Dhaka

22nd September 2020

Table of Contents Vision Framework ................................................................................................. 1 Vision .................................................................................................................... 1 Key Issues........................................................................................................... 1 Intension ............................................................................................................. 1 Ideology .............................................................................................................. 1 Goal ....................................................................................................................... 1 Diversification ....................................................................................................... 2 Portfolio Analysis .................................................................................................. 2 Analysis of Synergy ............................................................................................... 3 Resource and Capability ........................................................................................ 4 Core competence ................................................................................................... 4 Dominant logic ...................................................................................................... 6 Corporate Parenting Strategy ................................................................................. 6 Global Expansion................................................................................................... 7 Conclusion ............................................................................................................. 8

Vision Framework Vision A.M. Academy was one of the most renowned and recognized brands for TOEFL, IELTS, and Spoken English instructions. It was basically a service for the students and adults applying for foreign reside nt permission, foreign universities, work visas or even the people trying to get good positions in different large corporation in overseas. Key Issues I. After few days of starting of A.M Academy there had been a large number of students so new students cannot be appointed as it would decrease the tuition quality. Moreover, Altaf could not hire new teachers as well because more of the students were coming to A.M Academy only for him. II. While expansion though the rent of Gulshan branch was the highest still after even a year of the operation started the number of students were poor compared to other branches. III. Opening a new company by Altaf’s brother in law and taking away some of the potential teachers (resources) of A.M Academy. IV. The other big players in the industry has 80% of market share which is a threats and big problem for A.M Academy. V. Lack of proper managerial structure along with proper Management system, HRM and Marketing.

Intension Mission I. II. III. IV. V.

Beside different other operations A.M Academy wanted to expand the English tuition. A.M Academy wanted to look in the potential size and attraction of the market. A.M. Academy wanted to expand the market inside and outside Dhaka. Wanted to stay among the top echelons of the industry. In the long run further expansion in the overseas i.e. going global.

Ideology I. II.

Core value: A.M. Academy values the English knowledge and education of the students. Giving them proper knowledge of English along with TOFL and ILTS instructions. Core purpose: Altaf Mahmood had passion for teaching though while teaching in the school he doesn’t like the management system. Due to his thrill for teaching in mid of 1997 he started the journey of A.M. Academy.

Goal Try to hold the current market position by focusing on the current operations and further introduction of new services according to the market demand of both tapped and untapped market.

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Diversification Portfolio Analysis It can be seen that the coaching industry stays in the growth stage. Even the consultant was saying that there is other market outside Dhaka which was untapped. But with time we can see that in 2006 the market of Dhaka in the coaching industry became saturated but still there were opportunity to expand outside the Dhaka region. So, looking at the life cycle of this service we can say that it’s in the growth stage and there is huge possibility to growth before going to the matured stage.

If we see the product life cycle, we can find the coaching industry in the figure. On that point of industries growth, it can be said that A.M Academy had a lot of potential in the market and it can grow with the industry and establish themselves as one of the top recognized coaching center country-wide.

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Looking at the industry of TOFL, ILTS, Spoken English instructions coaching services A.M Academy belongs in the Star of BCG Matrix. As we know Market growth rate depends on the industry and when it is in the growth or matured stage of product life cycle then the market growth rate is high. On the other hand, A.M Academy is one among the top 5 big fishes and has a student base of 3000 which is third according to the number of students. A.M Academy is really successful and they still have scopes to tap the untapped market outside Dhaka and be the leader in this industry. If we specify than Dhanmondi Branch for them is cash cow. Uttara Dhaka is Star, Mirpur, Eskaton, Chittagong and Sylhet brand are in the Question Mark and the Gulshan branch is Dog for A.M Academy. By 2008, some of the Question Ma rks might transfer into Star. So, overly considering the whole corporation the coaching service provided by A.M Academy belongs to Star in BCG Matrix. Analysis of Synergy Lack of proper management system and HRM exist in A.M Academy. It is seen that now a day’s students are checking the background and for this demand the teacher have to fulfill that requirements. Moreover, the valuable services both in case of managerial and teaching methods are not followed in the same way across all the branches. All this eventually decease the synergy for A.M Academy. There were some Marketing and Financial investment problems which decreases the overall synergy as well. By solving those problems, A.M Academy can achieve synergy and can gain certain benefits. I. II. III.

IV.

With proper management, marketing and proper financing A.M Academy can achieve process optimization. By this their different processes will be more stable an efficient. With the increase in synergy by solving the above mentioned factors responsible for the decrease of Synergy can help to reduce the overall expense for A.M Academy. The additional training for tutors, investing more on them, giving the tutor more bargaining strength will make the teachers more efficient and eventually increase the synergy to a huge margin. This would attract more students and increase the overall revenue for A.M Academy. All expansions were finance from A. M. Academy cash-flows. As the company doesn’t have any long term debt this eventually add values from synergy and helps A.M Academy to a greater extend. Page | 3

V.

Changing of Managerial structure along with good integration among the management, HRM, Marketing, Finance department will create synergy for A. M. Academy. Moreover, in case of capital the value achieved form synergy can improve the working capital with time. Cutting of price by 20% overtime will grab more student’s attention. Though in the short run it might seem like loss but in the long run this will generate more revenue and this decision of management will work as synergy. If new diversification of services (Skill development service, IBA Admission service) are introduced this will increase the overall synergy of their regular ILTS, TOEFL and Spoken English services.

VI.

VII.

Resource and Capability The resources for A.M Academy areI. II. III.

Tangible: The office building of A.M Academy, the investment done in the new venture inside and outside Dhaka. Revenue (Cash) earn from the profit of the business. Intangible: The Reputation, Good will, Brand value, Culture, Intellectual properties of A.M Academy. Other Resources: The Skills and uniqueness of Altaf himself, Teachers, HRM, Management system.

The Capabilities for A.M Academy areI. II.

III. IV. V. VI. VII.

The office building helps to operates all the operations of coaching services fluently. The investment of money generated from the revenue helps to expand and open new venture. Moreover, it helps for the development of existing branches. And invest more on the tutors for their training and improvement. The brand value, reputation and good will of A.M Academy helps to grab more student’s attention resulting in increase the number of students. The culture of A.M Academy is unique and different from others which help to operate other operation in a smooth way. Additional training by HRM make the teacher more efficient and help them to deliver same level of teaching along every branches. The increase in Marketing budget through the decision of Management will help for further development and also help to grab new students as well. Another good decision by management was the cutting of price by 20% which would attract more students in future.

Core competence Core competence are basically those which can transfer to multiple SBU and that would create a competitive advantage for the corporation. A.M Academy already has some a competitive advantage from the very beginning. Moreover, fine-tuning some of their problems might help them to achieve more core competence in this industry. The most important and differentiating factors for A.M Academy was Altaf himself. We can get a clear idea from the Core Competence Analysis Template. Page | 4

Competence

Description

Importance

Defensibility

1.The first and most important core competence is Altaf himself as for his quality mentoring many students were fond of A.M Academy.

This competence helps A.M Academy to grab more students and also increase the reputation of A.M Academy. From VRIN model this competence is valuable, rear, inimitable and nonsubstitute. Now, if we talk about the VRIN model through there are many good teachers who are easily available. But most don’t have that much experience like Altaf and haven’t got training from him as well. So, this is a competence for A.R Academy. The good managerial system along with good culture and environments can be core competence for A.M Academy. As management system will give a good level of hierarchy and control, good culture cannot be copied or imitated so easily. That is valuable and rear as well. If we look at the big competitors like Urban Academy, Towhid Academy or Bhuiya institution only Urban has their branch outside Dhaka. In Sylhet no competitors have their branch so marketing

The importance of this competence in very high in near future.

The competitor cannot copy this competence as it has already been mentioned.

This competence has high importance and it can actually grab more students in future.

The competitors can Cannot be copy the training differentiated process or can get easily. good teachers. But the efficiency of Altaf while giving training cannot be copied.

The importance of this core competence will be- it helps to control in a more stable way. Good environment and culture is helpful in the work place for the tutors and the students.

A good managerial The culture has structure and high strategic management system competence. can be copied but the culture can never be copied as that unique and varies from organization to organization.

The importance of this competence is that it can create more reputation and grab more student outside Dhaka. This helps A.M Academy’s

The marketing campaign can be copied and can be a differciator only for a small period of time.

2.The tutors is another core competence for A.M Academy and it became so, as their training is given by Altaf himself which makes them more efficient and they become a factor of core competence. 3.A good managerial structure and good management culture can be another core competence

4.A good marketing budget specially for outside the Dhaka region can be a core competence as well Though it is for short run but yet can create value for A.M Academy and

Competence strength The competence has strategic capability and cannot be easily differentiated as there is no alternates of this.

It gains strategic competence for a short period of time.

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increase reputation

the campaign in that region expansion outside can be a core competence Dhaka successful. for short time. This can be copied by other competitors with time but for that limited period it would make A.R Academy reputed outside Dhaka.

All of this core competence can be transferred to different SBU’s and can be effective use as well. This would eventually help A.M Academy to be unique in this industry. Moreover, while diversification (Introduction of Skill development service, IBA Admission service) this core competence can play a vital role and work as a differentiator for A.M Academy. Dominant logic The Dominant logic for the A.M Academy depends on the philosophy of Altaf. In the case, the consultant said to have a clear vision but Altaf has a philosophy of expansion and he believe that only expansion can make his corporation successful. But dominant logic is not always a successful one. In the case it is also proven first expansion showed both revenue and losses but when A.M academy was focusing on the current operation it saw the highest level of success in 2007-2008. So, dominant logic is not always true and any industry change can destroy this dominant logic. So, for present scenario Altaf has to change the dominant logic and should try to focus on the current operations and introduce some new services like skill development service (Teaching Excel, PowerPoint, Illustrator etc, IBA Admission Service). The core competence of A.M Academy will help a lot in this diversification. Corporate Parenting Strategy The effective combination and consistent of all value creating activities, come either from direct corporate parent activities or from composition of portfolio is basically corporate parenting strategy. Among the four corporate parenting strategy for A.M Academy areStand Alone: The Dhanmondi Branch of A.M Academy have already reached the in the cash cow stage so that be stand alone. The cash cow should be kept and revenue from this can be invested in other Star and Question marked branches. Development: Considering the situation of A.R Academy in Dhaka this is in the Star of BCG matrix and outside Dhaka it’s in the Question marks. So, proper marketing expenditure on both especially in the Question Mark will help A.R Academy to a large extend. The Star service will be more established and the Question Marked will start to move in Star service. Good managerial, HRM system along with updated teaching method and practice of innovation in this industry will be a key point of development for the A.R Academy. It would help to earn more revenue and invest fluently in different other sectors of development for A.R Academy. The Page | 6

investment would be easier only if the revenue is high as Altaf doesn’t prefer any long term loan. Along with this for diversification (Introduction of Skill development service, IBA Admission service) this would play a vital role Linkage: Good management culture and good HRM policy can create a linkage between the SBU’s of A.R Academy. The linkage can be a very good parenting strategy for A.R Academy as it creates synergy for them. Moreover, the same tutors can also create linkage for different branch. As he or she can take class in multiple branches and can increase the overall efficiency and synergy with comparatively less expense. Moreover, a good managerial structure can make all the work easy to control in an efficient way and also can create a linkage between the SBU’S of A.R Academy. Control Service: Different department like Management, HR or Marketing all the non-core services are control by this parenting strategy. Though these are non-core but yet creates a lot of value. These control services have great impact on the synergies which are gained by development and linkage. So, for A.R Academy control services creates a key role.

Global Expansion The strategy or concept to go Global containsI. II. III. IV.

Modes of international expansion National proximity Insiderization Diamond of national advantage etc.

Looking at the case, it can be said that for Modes of international expansion, A.M Academy can follow Strategic Alliance as Altaf is investing along with the local partner Parmanand who wanted to fund 10% of the project by himself. Moreover, he has some venture capitalist who wanted to invest so it becomes easier for Altaf. Moreover, it would share the overall cost and decrease the risk as well. But the culture is the most important part here. So, to show similarity in culture, Nation proximity and to be successful in Nepal Market Insiderization would help a lot. In National proximity we can see that Nepal and Bangladesh shares almost same legal and political system, shared same preference, have similar business practice and same cultural proximity which can be shown by Hofstede theory of culture distance as well. Moreover, in Insiderization Altaf can gain Local Knowledge of Nepal as that is almost same as that of Bangladesh. He can be aware of the local preference of the target market there and customize his service according to the need of his target market. He can also give local commitment if his venture in Nepal takes off which will give competitive advantage of nation (Diamond of Nation advantage) in future as well. So, it looks promising to expand and open a new business venture of A.M Academy in Nepal. But the most important question arises when a Corporation is that Why do a Corporation go international? Basically, a Corporation go Global for two reasonI. II.

Access to Output Markets Access to Input Markets

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i.

ii.

Access to Output Markets: This is mainly done when the growth is compulsory and the domestic market is fully saturated. In this case, rather going for product/service diversification overseas market are choose by extending core competence. In the case, the consultant showed Altaf the size of the market outside Dhaka, a lot of which was still not efficiently tapped. So, those untapped market can be tapped and the local market of Bangladesh is not still fully saturated. There are some places in Dhaka where A.M Academy can expand. Moreover, in future according to McKinsey’s Three horizon of growth he Altaf can follow horizon 1 to focus more on the current operation and Horizon 2 to diversify by introduce some more services of teaching (Skills development- Excel, PowerPoint, Illustrator etc, IBA Admission service) along with IELTS, TOFEL, English Spoken. As, it is seen that the local market still has customers and in future will have more customers after A.M Academy diversifies. So, going global in present time is not a wise decision for A.M Academy. Access to Input Markets: When there is access to low cost labor or resources, access to leading-edge knowledge or skill, access to best technology or capital market than only a corporation would go global. This is mainly done so that the operatio...