Bostonair Limited v World Trade Center Hull & Humber - Essay Example

Organisational Insights Analytical Essay Bostonair Limited v World Trade Center Hull & Humber SWOT Analysis of Bostonair Limited In its home website, Bostonair describes itself as the specialist-provider of technical personnel to the aerospace industries. Bostonair in particular provides recruitment service for technical maintenance personnel for the leading airline companies in Europe, such as KLM and Lufthansa Technik. Strengths Among the company’s strengths is its task-oriented approach to solving problems. This is complimented with a flat organization comprised of three main teams, namely, back office, accounts, and human resources. These two strengths work hand-in-hand in the motivation of highly technical personnel who thrive in an atmosphere of empowerment and self-discretion. The task-oriented approach enriches their jobs, and since the attention is job-centered, the routinary element is minimized and emphasis is placed on results. Flat organizations lack the tall hierarchical structure of centralized organizations, and is better suited for workers who, because of their technical expertise, work best in a spirit of collaboration rather than control. Bostonair also has the advantage of a custom-designed recruitment software that more effectively and efficiently matches employer-customers’ needs with job applicants’ qualifications. Because of the exceptional quality of its service, it has accumulated an exceptional track record in the 65 years it has been in service, ranking 7th in the UK among privately owned firms. Its quality of performance has merited a high level of repeat business from prominent firms in the airline industry such as KLM and Lufthansa Technik. Furthermore, much of its organization’s revenue is generated in the German market; the profits earned from German firms exceeds profits may from the UK firms by a factor of 4:1. This is partially an advantage for Bostonair, in that the German economy is the largest and most progressive in Europe. In the case of an economic recession, the German economy is most likely going to prove the most resilient among the European countries, which means demand for Bostonair’s services may be expected to remain steady. Weaknesses On the other hand, the fact that Germany is its biggest market may present a slight disadvantage in that Germany’s tax rates are higher than those of other European countries, including the UK. Also, it is still possible, despite the strength of the German economy, that the airline industry in general may succumb to the global recession. This is not farfetched, since travel for business and for tourism are both sensitive to market downturns. Since it is these two markets that bolster demand for air travel, conceivably fewer planes could be flying, requiring less maintenance personnel. The weakness of Bostonair in this regard is that its business targets at a narrow area of specialization, recruitment of airline personnel. Should the market turn against it, then Bostonair lacks the necessary diversification that would have enabled it to count on other revenue-generating alternatives. Another, slight, disadvantage is that new recruits in the airline industry usually have far lower salaries and poorer working conditions (such as job scheduling and choice of tasks) than senior personnel. While this is traditionally expected in this industry, and thus in 65 years Bostonair should already have adjusted to it, in light of the extraordinary nature of the present financial crisis, tightness of economic conditions may discourage the better qualified applicants from applying for this occupation. Opportunities There are some external developments that have created windows of opportunity for Bostonair. For one, the UK currency exchange rate has fallen dramatically since June of last year, against both the euro and the US dollar. This could prove a boon to Bostonair, which is a UK company that incurs most of its expenses in pounds while earning from foreign clients in terms of American dollars or euros. This means that even as its costs are pegged against the pound, the drop in the value of the pound has made purchase of its goods and services more attractive to foreign customers, being priced lower in terms of the euro and the dollar. This could encourage greater patronage from these clientele as against other competitors. Another opportunity that the global financial crisis has created is the greater cost-effectiveness of business process outsourcing, of BPO. It is likely that several airline companies which still do their own recruitment would find the need to downsize and streamline. Recruitment, since it is an activity not central to the operation of the business, could more efficiently be outsourced, at lower cost, from a recruitment agency with the proper facilities and databases than the company could carry out for itself. With the proper market strategy, Bostonair could take advantage of this to create more demand. After all, recruitment agencies usually excel among the top 100 companies because the companies would prefer to consolidate their resource in the main business and leave the recruitment to professional recruitment firms. Threats There is the threat in the over-all economy of the contracting economy and rising inflation. GDP contract during the last quarter of 2008, and CPI annual inflation rose to a high of 5.2 per cent in September 2008. The natural result of these poor economic indicators is that unemployment would be on the rise, reducing consumption even further. While rising unemployment is generally a threat in that fewer employers would be hiring, it may become an opportunity if Bostonair’s services are perceived to be less costly and many qualified applicants laid off from other jobs would seek the recruiter’s help in finding new jobs. More companies transferring from competitors or outsourcing its recruitment needs for the first time may actually mean greater volume of business for Bostonair. SWOT Analysis of World Trade Center, Hull & Humber The World Trade Centre Hull & Humber opened in 2008, as the first facility in UK’s northern and central regions to offer business facilities and services. Its concept is that of a one-stop shop for UK based business firms that seek more effective operations at the international arena, and for foreign business organizations who wish to gain a foothold in the business arena of the UK. Strengths The World Trade Centre (WTC) Hull & Humber presents a platform for businesses around the world. As such, the company is equipped with new structures and facilities necessary to do business with, such as meeting rooms with the latest amenities such as video conferencing, plasma screens, business lounges with wi-fi capability, and international business library, as well as the more traditional support services such as secretarial services, telephone, fax, and printing facilities. Also among its strengths is the support extended to WTC Hull’s by its partners: UK Trade and Investment, University of Hull Knowledge Exchange, Language is Everything, and the Hull & Humber Chamber of Commerce, all of whom provide free and impartial advice concerning how to run one’s business. Another unique feature is the presence of translation and interpreting services provided by Language is Everything (annual turnover of £ 1.6 million annual turnover. Aside from these support partners in the locality, WTC Hull has at its behest the resources of more than 300 WTCs in more than 90 countries worldwide. WTC Hull’s pitch is that local and foreign businesses will find everything it needs is well within arm’s length within its facilities. Its aim is to make the city a major hub in international trade and business. Weaknesses WTC Hull has barely been open a year for its weaknesses to fully surface. However, this very fact is itself a weakness, in that the firm had come into operations at just about the same time as the start of the financial crisis. It is still in the process of attracting sufficient number of companies to avail of its services, signifying that it has not yet gained the critical number of clientele for it to realize economies of scale. Given that, it may be difficult at the time of economic recession when most businesses will feel reticent about making bold changes. The global financial crisis may also discourage globalization efforts of businesses and countries. Uncertainties in the movement of the financial markets and the play of currencies against each other may cause many firms to adopt a wait-and-see attitude until economic indicators give out clearer signals. Opportunities Some of the effects of the economic recession may, however, improve WTC Hull’s chances of success. The drop in the UK currency may benefit like it may Bostonair, since their pound-denominated costs translate to lower prices in terms of the euro and the US dollar. This may prove attractive to potential clients. Also, the strong support provided by WTC Hulls’ partners may create a perception of value-for-money among companies who do decide to go global or enter the UK market. Threats The contraction in the GDP in the latter half of the preceding year, with the preceding half registering flat growth, is not a good sign. Even before the commencement of the financial downturn, UK’s growth has already began to suffer with production taking its toll. Businesses, at least those that were at a weaker footing than others, had already began to succumb, thus indicating a drop in productivity. This given, the potential clients who would have availed of WTC Hull’s services for global reach, would have dwindled significantly; WTC Hull would have a greater chance of attracting foreign firms than it would trying to contract UK corporate clients. Bostonair Limited vis-à-vis WTC Hull & Humber Bostonair and WTC Hull are two distinct companies in very different industries. Bostonair is involved with manpower sourcing in a specialized field in aviation, while WTC Hull is a broad-range service provider dealing with clientele in different industries. Bostonair has been in business for the greater part of a century; WTC Hull has just opened for business in the past year. Different though they may be, there are commonalities between them. Firstly, they are both B2B service providers, reliant upon the health of the businesses of their corporate clientele for their own financial viability. Secondly, there is a strong overseas component in the composition of their prospective (Hull) or actual (Bostonair) markets, putting them in a position to benefit from a drop in the value of the local currency against foreign currencies. Finally, both companies appear exceptionally poised to weather out a crisis, having excellent technical and advisory support (in the case of WTC Hull), or long experience and a stable roster of clientele (in the case of Bostonair). In the face of challenges facing these companies, it appears clear that their B2B orientation necessitate that each company creates cost efficiencies that corporate clients will be on the look-out for. These clients are also on survival mode, and their venture into greater volume of business (Bostonair) or into new markets (WTC Hull) will be with the view that such moves would generate new revenues at the least cost possible. It is thus necessary that both companies seek out ways of working value into their services, of following through on the service to ensure profitability of the client corporation. Bostonair and WTC Hull would have to go about this in different ways. Bostonair has the benefit of long experience and stable client relations. On the other hand, WTC Hull is only starting out. WTC Hull will have to make a greater marketing effort while keeping costs down, which may not be easy. These are usually in the nature of upfront costs which may or may not yield profitable outcomes. Concerning product diversity, WTC Hull has the advantage of targeting a broad range of services which several companies would find use for; the company thus has the advantage of diversity. However, Bostonair is highly specialized, catering to a particular line of business for which there are only a number of sizeable companies. Bostonair will thus have to explore cost efficiencies in its regular operations, in the tasks of sourcing and processing of applicants and dealing with clients. Its use of a software for matching client needs and applicant qualifications is an important tool in this effort. Bostonair should concentrate on the efficient delivery of the basic service, and try to exhaust the market by attracting other companies to outsource their recruitment needs. Going further than that, Bostonair might try extending its recruitment service from just the maintenance personnel to other aviation personnel such as ground or in-flight crews. This would have the effect of trying to expand possible business with the existing clientele, and using the existing capacity and competencies of the firm. 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