Economics in Business - Assignment Example

Economics in business Introduction: The purpose of this paper is to analyze the business objectives as best applicable to the Southampton Solent University. Herein, it is essential for the author to analyze the competitive landscape that the university finds itself and try and identify the forces which are governing the business decisions of the university. Further, the author aims to complete understand the simplex of competitive market forces and subsequently make recommendations for better future functionality of the university. PESTLE Analysis The author feels that it is applicable to use a PESTLE analysis due to the fact that the Political, Economic, Social, Technological, Legal and Environmental aspects of this model are exceptionally relevant in analyzing Southampton Solent University’s business environment. The PESTLE analysis does have some limitations as it is often seen just as a starting point – “emphasizing the need to test the conclusions and findings against the reality” (The PEST or PESTLE Analysis, 2009). Furthermore, PESTLE analyses are time consuming and assume a static business environment which is not in line with the business reality. Still, it provides a useful snapshot image of a firm’s position. Pestle Analysis of the major driving forces for UK business schools Political The UK represents a better example of a great first world country so most of the people in the world economy feel that UK provides a stepping stone to something better than what they are experiencing in their normal existence. Economic Expansion and capitalism has made survival of the fittest the only real truth of man’s existence; the purest implications of economics on our lifestyle. Therefore, the constant struggle to be the very best in all spectra is the main goal of every individual in the world Social Increasing commercialization in all aspects of the society and changing perceptions of lifestyles and standards of living at this point in time in history. Technological The best means of education provided by the UK business institutions vis-à-vis the passion and conviction of the people in the global community to achieve the best academic experience that is available to them Source: (Rogers, 1999) (Havergal et al, 1999) Porters Five Forces Next the author will conduct a Five Forces analysis of the competitive environment that Southampton Solent University operates in. The Porters Five Forces model does have some limitations. For example, it assumes a static business environment, which is not wholly accurate with regards to the highly dynamic and fast moving airline market. Furthermore, “it is not able to take into account new business models and the dynamism of the industries, such as technological innovations and dynamic market entrants from start-ups that will completely change business models within short times” (Porters Five Forces Analysis). For example, Porter’s Model would not have foreseen the impact of the introduction of the low cost universities which completely changed the business environment in a very short timeframe. However, when used in conjunction with other models such as PESTLE it still is very useful for analyzing the market as a snapshot in time. The Major Competitive forces inside the UK business institution’s model Buyer Power The personal inclinations and the subsequent consistent struggle to fulfill these inclinations of the people who aim to enroll themselves in these prestigious institutions Threat of Substitutes The standing and repute and most importantly the performance of other business institutions in the UK Supplier Power The availability of resources that are pre-requisite for the setting up of a business institution; the most important factor being the availability and the quality of the instructors that are present to teach at these institutions. Degree of Rivalry The number of quality business institutions that are present in the market and consistently competing for the attention of the people who plan to study in UK business institutions Barriers to Entry The obstacles to access into this market for institutions who want to set themselves in this market which could be vis-à-vis cost advantages or goodwill of institutions, proprietary learning curve etc. Source: (QuickMBA, 2007) The most critical factor amongst many for the business institutions is the great emphasis on quality. Most organizations are dwindled in their quest for excellence in the face of increasing consumer base which leads to greater revenues; therefore, to be focused on the emphasis on quality is certainly a great factor contributing to the success of these institutions as they have been able to successfully prevent applying trade-offs that are detrimental to the level of quality of the institution, which has in turn helped them maintain a level of quality; favorable effects of which have been experienced throughout the institution. Other success factors are favorable external conditions such helpful government policies, peaceful communal conditions etc; all of which conspire together to provide a supportive base for these institutions. (RAPIDBI, 2008) These success factors are likely to remain in the future as the emphasis on quality is an ingredient of success which is not contingent upon time; it remains a critical success factor at any point in time. In addition, the conditions in the UK can be expected to remain stable in the future so we can expect no new occurrence of negative externalities to arise in the future. The Southampton Solent University certainly holds a significant position in the industry of UK business institutions and that is largely due to rich educational experience that is promulgated by the institutions and the wide range of degrees that offered that in this business institution. Educational streams including Arts, Design and Media Courses, Business and Law Courses, Maritime and Environment Science Courses, Social Science Courses, Sport and Tourism Courses as well as Technology Courses, one can see that The Southampton Solent University is certainly a big player in its specific market and, hence, it must be given due credit as being a major player with regards to the current market place. In addition, the future outlook of the organization looks fine as the university is multi-disciplinary and also has a school for post-graduate studies working in tandem with the school for undergraduate studies as well as professional studies, hence, showing the adaptability and openness to expansion yet keeping in full view the initial objectives of the organization which augurs well for the institutions future. (University of East Anglia, 1999) A Value Curve is basically segmented into two parts; with one part comprising of the elements indicative of the performance of the institution i.e. the products and services provided by the institution. The other side comprises of the maximum utility that the dearest customer of the firm derives from the elements of performance which have been demarcated. In this regard, the elements of performance of Southampton Solent University would comprise the educational experience that they offer to their student body, all of which comprises the dearest consumers of their products. (Chan et al, 2005) Recommendations for improvement: The elements that have to be raise above the level of the industry must surely be the competence of the teachers. The quality of teaching is paramount in ascertaining the worth of the university; therefore, increasing the level of education standards will surely attract more students to the university. This will in turn help the university is having a larger pool of students to pick from which will subsequently increase the quality of the student body. So, just by increasing the quality of the teachers will bring about a chain reaction that would see the level of quality increasing holistically in the university. (Kim et al, 1999) The elements that have to be created for the Southampton Solent University in order to make it a fruitful proposition to the students must be those that increase value to the educational experience of the students. Therefore, the Southampton Solent University could try set up summer fellowship programs, educational exchange programs etc in collaboration with other universities and the corporate world in order to ascertain an experience for the students which is as productive as any, as well as create a mechanism for the easy transition for these students when they come into the Southampton Solent University and when they leave the university after the duration of their academic stay. Even though, these opportunities may be present at other institutions, Southampton Solent University has to create the opportunities in such a way that they only fit the Southampton Solent University program and the complete Southampton Solent University experience, which would make Southampton Solent University even more significant in the eyes of the students in the global community. (Kim et al, 1999) The government also has a critical role to play for the establishment and further enhancement of educational institutions such as the Southampton Solent University. The author feels that the creation of a quasi-market is the need of this hour for this particular competitive landscape: Now, a quasi-market is basically defined as an institutional structure which is established in the public sector whose aim is to provide a middle ground to the free markets and the public administered markets. A model derived from a sort of the best from both the worlds; a quasi-market structure reaps the benefits from increased efficiency that can be ascertained from free markets without having to lose the equity benefits that are determinable from the traditional systems of public administration and financing markets. (Bartlett et al, 1993) Bibliography: 1. Rogers, J (1999) “Facilitating Groups” London: Management Futures Ltd. (1999) 2. Havergal, M & Edmonstone, J (1999) “The Facilitator’s Toolkit” UK: Gower Publishing Ltd. (1999) 3. Kim, W. Chan and Mauborgne, Renée “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant” Harvard Business Press, (2005) 4. QuickMBA, Porter’s Five Forces, Strategic Management (2007) November 7, 2008 5. University of East Anglia, Norwich Business School (2007) November 7, 2008 6. RAPIDBI, Critical Success Factors (2008) November 7, (2008) 7. Kim, W, Chan and Mauborgne, Renee “Creating New Market Space” Harvard Business Review Jan- Feb 1999 8. The PEST or PESTLE Analysis., (2009), The Environment Scan – Environmental Organizational Scanning 9. Porters Five Forces Analysis, University Essays., 10. Bartlett, W. and J. Le Grand, (1993), Quasi-markets and Social Policy. Palgrave Macmillan. ISBN 0-333-56519-3 Read More