Entrepreneurial Strategy - Coursework Example

Entrepreneurial Strategy Introduction: Human resource consultancy is one of the leading business prospects of the modern world. At present, almost in all the top countries the job consultancy acts as a profitable business opportunity. Not only the well-known branded companies across the globe, there are many small and medium scale companies now started to get involved in this business and earning sufficient profit out of it. The report is about an overall analysis of the human resource management industry in the UK with main focus on the SMEs of the sector. The report is about evaluating the business pan of the manpower consulting group in UK, reviewing their strategy, figuring out whether the investment in this organization is fruitful for the investors or not. The analysis is based on the business plan prepare by the organization in order to capture the growing manpower solution provider market in the UK. Analysis of the Objective: SMART analysis: In order to analyze the objective or business goal of any organization the best management tool is the SMART analysis. This is helpful to critically review the position of the organization in the market in terms of its objective, mission and vision; its short and long term goals and how they want to go about their business. As an investor, it is necessary to analyze all this aspects. The founding of all objectives should be shaped using the S.M.A.R.T. philosophy. S.M.A.R.T. is an abbreviation that is used to monitor the development of assessable goals. Each objective should be: Specific, Measurable w/Measurement; Achievable; Relevant and Time-Oriented. (Wayne State University, 2014). From the analysis of the business goal of this organization, it is very clear that the company has a specific goal of providing skilled manpower to the UK digital communication and marketing sector. Being a human resource consultancy, the organization is diversifying the work ethics or their business role to make it more of a talent asset management group which is unique in this sector. This is a specific objective of the company. This specification can help them to gain a better place in this sector In order to measure this success a well-developed process has to be in place which can continuously collect data from both the clients and users to measure the growth of the success rate of the company towards their goal. This objective is not so much quantifiable as the job satisfaction of the users or the degree of satisfaction from the client’s perspective can be measured by only the rate of salary hike or by attrition rates or by measuring how quickly the promotion is offered to the employees. (Answer of Whether it add values or not) If we analyze the core-competency and the values of the organization there is nothing new in this as all the companies of this sector used to have values like consistency and persistency; and competencies like value or result oriented, quality and accountability etc. So these 2 factors are same as others, but one can consider their goal of talent asset management as a unique one. Time frame till 2017 is also very clear in nature. The only considering factor is whether this new model can be achievable or not because the present trend in this sector is more or less same and in order to achieve this objective some out of the box thinking from the top management is required and it also needs proper coordination with the clients. SWOT Analysis: SWOT analysis related to measuring an organization’s strong point (what an organization can) and weaknesses (what an organization cannot) and co relate the same with opportunities (possible satisfactory conditions) and threats (potential unfavorable). Once the process is completed, SWOT analysis helps the top authority to find out whether the collected information will assist the firm in achieving its aims (a strength or opportunity), also indicates possible complication that must be overwhelmed or reduced to achieve desired results (weakness or threat) (Ferrell et.al; 1998).The strength of this company are: large market, ample knowledge and opportunity to have tie up with clients, large talent pool, variety of work style (temporary/permanent/shifts, etc). The weakness are as follows: industry is close to saturation, employee in the consulting firm are more than it required-so uncertainty is there; change in labor law and work ethics of the people. Analyzing the present trend, following opportunities are there for this company such as: diversification of the business; personalized service to client and users, using social media to reach more. The potential threats are use of social media which helps the job aspirants to build their own contract; use of referral system inside organization, decreasing profit margins and increasing operating cost, recession in the market. (Hughes, 2012, pp. 41-42). SWOT Analysis of the Growth Plan: There are two different growth plans for the organization in terms of their future business prospect. The plan A is entirely based on the internal funding, business tie up with the companies to develop more relation among the clients to provide more job opportunity for the clients. Plan A is the good one for the investors as it is showing a continuous growth for the next 5 years based on the performance of first 2 years. The projection of growth in number of consultant is also good and realistic based on the present market scenario and job opportunity. Target of increasing consistently steadily is another plus point of the plan A. interim management, developing new job for the consultancy itself is also another plus point for the investor. The increasing gross profit over the year and association with new consultancy is helpful for the company to have a strong hold in the market. On the other hand the plan B of the growth option is more aggressive one for the company which is on the basis of external funding. The idea of acquisition of the new small companies in the same sector is helpful to grow the business and also to increase the competition with the existing ones. Secondly, with the acquisition the company can manage to provide skillful employees across various vertical. Use of Internet, online application process all this changes are to keep pace with the changing environment and reach out to maximum number of potential candidate. The profit margin after implementing the online system also is very high as per the company projection so the ROI or return on investment for the investors will also be a good one. Approaching new business strategies like providing consultancy to the small SMEs along with providing manpower, developing long term relation all are also very good approach for a long term success for the company. So investment in this organization is a good one but how much one want to invest is also dependent on the market situation as well. There are few weaknesses of this plan as well. Such as the projected profit is based on the business trend and there are also some chances of negative performance as well. An overall analysis of both the plan gives an idea that plan B is a better one compare to plan A. The plan A is more of a restricted growth plan which is entirely based on the internal funding .The expansion of the company is also very restricted and the growth plan is comparatively slow in nature. Cost saving is being done by moving offices or by using the profit. Plan B is more flexible in nature, with high growth projection. The plan B is also focusing on recruiting more people for the company itself to better the user and client relationship. There is also a provision of merger and acquisition to grow the business and also to diversify the same by introducing online services. The plan B is more advanced with the implementation of marketing plan to strategic buyers. The only considerable thing for the investor in case of plan B is the major source of fund is coming from external environment so to continue growth, organization has to deliver each year from both client and users perspective to ensure that regular external funding is there.(Q no:1) Ansoff’s Matrix: Analysis of the value of the company It related to 4 parameters, namely market penetration, market development, diversification and product development. The main objective of this tool is to help the investor as well as the owners/directors to analyze best possible option available for growth in the present market. New markets Market development Expanding through existing products and/or services into new markets Diversification Expanding through new products into new markets Existing markets Market penetration Expanding through existing products and/or services into existing markets Product development Expanding through new products and/or services into existing markets   Existing products and/or services New products and/or services Image 1: Ansoff’s Matrix; Purpose of the use; Business survival toolkit; (2014) Market Penetration is related to selling more of the same stuffs to same kind of customers. Market Development is referred to selling more of the same things to different group of customers. Product Development related to selling new products or services to the same customer. Diversification means selling new products or services to different customers. (HJM Business Development, 2012) If we consider the business plan or the alternates given by the company in terms of growth like organic growth, providing new client services consulting, service providing, such as talent management etc.; serving the small private firms in different sectors with great result before targeting a relationship building with large PLCs, new marketing campaign all can be consider as a part of market development as well as penetration. (Business Growth Plan, nd, p.12); Creation of online value tool for long relation with client and customer, web based advertising, quality based evaluation of the client-user relation and how far the company able to meet the requirements of both, providing new strategic solution for the client bases like MNCs, focusing new services in different sectors like retail banking with new opening among large PLCs and also marketing solution providing(emerging sector) is a part of diversification of the company in terms of business strategy. (Business Growth Plan, nd, pp.11-12). From an investor’s point of view, penetration is the lowest risk option because company is selling more of what one already know in a known tried and tested market; Market development is more chancy one is focusing in to new areas but for growth and stability and to ensure long profitability it is important. The analysis of the plan is clearly show that the company is more focusing on the penetration and market development as it is just 2 years old and in future although the projection is there along with estimated values but there is no clear information about which company they are looking to tie up or what specific diversification they like to introduce in the market.(q no 3 and 4) Porter’s Five Force Model: This related to 5 different factors namely: new entrant threat, bargaining powers of client and users, threats of the substitutes and inter industry competition (Porter, 2008). For this organization, the main threat is the fight with the existing one in the system along with the changing job pattern. There are also substitute present for the clients like using online process or internal referral to recruit so while provide service they must ensure that the standard of the resource is at highest level and also can meet up to the expectation of the client. Same way for the users also they have to give good opportunity as there are number of existing consultancy in the field. So while investing people need to take care about the fact related to this five different aspects an also consider the growth pan figure out by the company. In analysis of both the growth plan, Plan B is more suitable as it is focusing on expanding the staff strength to serve the user and client better, focusing on merger & acquisition to develop more strong market base. Moreover, plan B is focusing on introducing the online service to get up to date with modern time which can also help the company to fight the online substitute that are present for the users and clients. (Q no 2) Porter’s Five force Model:,The Five Competitive Forces That Shape Strategy; (2008) Competition in the UK HR consultancy market: In Europe, PwC incomes also improved, in spite of the influence of sustained adverse economic conditions in many European countries especially in the UK. PwC firms reported income growth of 2% in Western Europe and 3% in Central and Eastern Europe. In the UK, they are going for a strategy of recruiting skillful employees for their own organization and also for their client as well. As a business plan they are focusing on filling talent gaps with “70% of respondents saying they plan to increase investment in their workforce over the next three years.” (Newcombe, 2013)Their main objective is to grow business alongside provide skillful labor for different industries such as mining, energy, engineering and construction. Before going forward they have analyzed UK market and find out that the organizations in the country “are struggling with a widening mismatch between the skills of their workforce and the skills they need to achieve strong growth.”(Newcombe, 2013). This strategy clearly resembles that how much realistic and research oriented the business and growth plan of PWC is and how much they looks ahead while analyzing the business plan. The main difference in the operation is PWC as a consultancy is looking to recruit new skillful employee for themselves as well as for client based on requirements. Secondly, the allocation of fund is equally distributed for training the employees as well as expansion to balance the growth of the company and moreover the 5 year plan is keeping in pace with the present market scenario of the UK market. PWC as a company is looking to establish their own brand by serving the clients effectively whereas the business plan of the company suggested that they are looking for merger and acquisition in 5 years’ time which may create negative impact among the investors. Another difference is that in PWC there are separate team heads to serve different sectors of the industry with specialized knowledge whereas the company is looking for 1 top level employee only to save the cost which may create some additional pressure on him. Job diversification like PWC can manage the performance better. Conclusion: It is very clear from the above analysis that recruitment agency is slowly going upwards in the UK market but still for the investors it is not a high investing zone for various reasons. In this company, the trend of first two year is good one but before investing one have to logically analyses the strength and weakness of the company, how much diversified they can be in the future to capture the market, how much operating profit they can earn in coming years to attract external funding, how good can be the relation with the PLCs and also how will they able to retain the present relations. Generally employment consultancy sector is mainly rely on how good quality people they able to provide to the clients. The forecast in terms of GDP, inflation unemployment all is a very slowly moving as the growth rate in the UK temporary and permanent staff market will be between 25-27 bn pound in next 3 years which is slow growth rate (Hughes, 2012, p.44), So investing in this sector is not a very bad one but along with that one must consider the concerning factors associated with this regarding the market situation, current trends, future prospects, company’s own strategy and overall objective. References 1. Ferrell O, et.al. (1998); Marketing Strategy. Orlando, FL: Dryden Press 2. Hughes, K. (2012); Market Report: Recruitment Agencies: Temporary & Contract; Key Note Ltd. 3. Newcombe T.; (2013); Skills gap hindering growth for UK employers, PwC report finds ; HR Magazine; retrieved on 4.3.2014 from http://www.hrmagazine.co.uk/hro/news/1077053/skills-gap-hindering-growth-uk-employers-pwc-report 4. Porter E.M. (2008),The Five Competitive Forces That Shape Strategy, Harvard Business Review, cited on hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 - accessed on 25.2.2014 5. Use Ansoff’s Matrix to Identify Your Growth Strategy; (2012); HJM Business Development: Practical Business Advice cited on http://www.hjmbd.ie/use-ansoffs-matrix-to-identify-your-growth-strategy/ - accessed on 25.2.2014 6. Wayne State University; (2014); S.M.A.R.T. Objectives; cited onhttp://hr.wayne.edu/leads/phase1/smart-objectives.php - accessed on 25.2.2014 Read More