Investment in Management Training Industry - Dissertation Example

Investment in Management Training Industry 1.0 Introduction This report is prepared on the request of the managing director of Balmas Institute (BI) and it highlights the type of market research that will have to be undertaken when considering entry into new overseas markets. This report is structured in the following sections: 1. Research Objectives These provide the basic direction to the research and guide how the research is to be conducted and data collected and analysed. 2. Research Approach and Methodology This section of the report elaborates on the intended approach and rationale for the research and how it is useful for the achievement of the above objectives. 3. Research Design This is an essential part of the proposed research as it highlights the practical aspects of the sample selection, data collection and data analysis. This section provides the overview of the research approach, methods and design and the suitability if the selection to serve the purpose of the intended research. 4. Benefits to be derived from the Research This section of the report details the benefits that the proposed research entails for Balmas Institute (BI) and will also discuss the scope of the proposed research to guide the planning for the intended expansion of Balmas Institute into the overseas market. 2.0 Research Objectives The proposed research will be undertaken with the following objectives in mind: 2.1 To Develop Customers Profile and Segmentation It is expected that product offering of BI – the management training programs – are to be consumed by other organizations that are looking for training and development programs for their employees. The proposed research should be aimed at developing a profile of the prospective customers for BI in the overseas market. The profile of the customers can be generated using the existing market research and survey reports, news, websites of different people intensive organizations and government publications. This research objective is therefore expected to reveal who the prospective clients are and in also assessing if customer segmentation is needed on the basis of the paying capacity or the need of the customers. Segmentation is a strategy that is found useful for foreign entry as it allows the entring organization to concentrate on the most profitable or easily attainable section of the customers and hence to gain a steady ground in the new market (McDonald and Malcolm McDonald (Author) › Visit Amazon's Malcolm McDonald Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central Dunbar, 2004) 2.2 To Understand the Market Dynamics and Competitive Forces In order to assess the scope of the aspired project of expanding into the overseas management training market, it is essential that an assessment of the market be made. The overseas market is currently growing at a fast pace as the effects of globalization and liberalization policies of various countries in Asia, Middle East and Africa have led to mass employment opportunities in these countries and hence for the corresponding needs for training and development of employees. As international companies set up their offices in overseas regions, they rely on the local labour and employees for the conduction of their local business, and as such, there is a vast market available for training and development organizations. The overseasmarket is however already moving into a saturated phase as a large number of foreign companies have established their management training institutes with or without collaboration from local vendors. As such, the proposed market research should aim at understanding the scope of future growth of the market, as well as the availability of competitors and their strengths and weaknesses in the industry. 2.4 To Conduct a Competitive Analysis of Management Training Programs of BI The Balmas Institute has developed its own Management training program and service package. It offers both ready made and customised services to its current customers. However, when it plans to venture into a new market, it is essential to have the information about the new markets and customer’s needs and aspirations. The market research should therefore also aim at understanding the competitive advantages that are likelly to work in the overseas market. Competitive advantage is a term used for explaning an advantage (cost effectiveness or differentiation) that one firm holds over others in a given market (Porter, 2004). The competetive advantage is largely determined by the resources that the firm already has, in terms of technology, people, creativity or any other factor that helps it to cut costs below competition or to differentiate its products from the competitors’ products (Smith and Jaynie L. Smith (Author) › Visit Amazon's Jaynie L. Smith Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central Flanagan, 2006).However, it is the needs of the customers that are to be met, the value that are cherished by the customers, that determine if the competitive advantage is actually useful for the organization. As such, understanding what other successful competitors in the overseas market are doing and exploring the needs of the customers is essential so that Balmas Institute is better able to prepare itself before launching into the new business regions. This objective will also require that BI conduct an internal strengths and weaknesses analysis to assess itself and to point out the areas that need strengthening before venturing into the new market. 3.0 Research Approach and Methodology The research is proposed to be descriptive in nature as it intends to assess the market and the scope for Balmas Institute to start operations overseas. The descriptive research as opposed to the exploratory research is aimed at studying the current situation and the inter-play of the variables that are already known (Cresswell, 2007). In the case of the current research, the variables pertain to the size and growth rate of the market, the presence of competitors and the understanding of competitive advantages. In the case of exploratory research, the variables themselve are undecided and the research aims at developing a probable hypothesis rather than descibing the status quo (Aronowitz and Ausch, 2000). The research should also employ a phenomenological approach, where the research data is collected from the respondents in their contextual background. This means, that the research aims to assess what are the competitive factors that play a role for the success of management traininng organizations. This will therefore involve the research to collect primary data from the organizations that are potential customers for management training. As the research’s objective is to understand what competitive advantages are needed for success, a qualitative research design is found to be more suitable. This is because, qualitative research provides more in depth and detailed information and can help in gauging the non-verbal cues of the resopondents as well (Cho and Trent, 2006) 4.0 Research Design The above research objectives provide the main guidance for what data is to be collected, what apropriate and credible source of data are to be used and how the data collection is to be implemented. This section therefore elaborates upon the research methods and teh research design that is proposed for this research. It also contains an explanation of the appropriateness and suitability of the design and methods. 4.1 Desk Research Method The research involves collecting data from a diverse number of secondary sources using the desk research method. The desk research method involves data colletion from already published sources like books, journals, or gathering data from electronic sources like the TV, radio or the Internet. The desk research is aimed at providing a basic background on the subject at hand and it is also guided by the research objectives. For example, the first research objective is of market analysis and assessement of the growth potential and the presence of competitor threat. The data for this is to be collected using a secondary research method where industry reports, books, journal articles, news etc, are critically analysed and reviewed to formulate comprehensive knowledge about the market. Additionally, government publications from the Ministry of Commerce and on the Industrial and manufacturing sectors of the country are to be assessed. This data is to be then used for conducting a market analysis using the framework of Porter’s Five Forces Model (Porter, 2008). This model is suitable for understanding the market dynamics as it provides information about the intensity of the competitive rivalry in the market; discusses the barriers to the new market entrants; elaborates on the scope of introduction of substitutes; and assesses the power of the customers and the suppliers. See figure 1 below: Fig 1: Porter’s 5 Forces Model (Source: Porter, 2008) The five forces model therefore is found appropriate for achievement of research objective related to an assessment of the overseas market. In addition, a PESTLE Analysis is also proposed to be conducted to assess the political, economic, social-cultural, technological, legal and environmenta analysis of the overseas market. The PESTLE analysis provides the overal analysis of the macro environment and hence is more exhaustive in detailing the threats and opportunities that a given market can offer (Cadle, Paul and Turner). The next research objective, to understand the competitive advantage factors needed in the overseas market. For this again, a literature review is needed to critically analyse the entry factors for overseas markets, the existence of competitive advantages and plausible strategies that forign companies can use while making foray in overseas markets. In order to understand the specific competitive factors and advantages in the selected overseas market for BI it is found necessary to conduct a primary research as elaborated below. 4.2 Primary Research The primary research is needed to collect the first hand data on what the customer’s needs and wants are and how they perceive the competitors’s products and services. The customers needs provide the basis for tailoring the product offering and the assessment of the competitor’s offerings provide an understanding of what advantages the competitors already hold in the market. An insight about the customer’s needs and competitor’s products are essential to help Balmas Institute formulate its own competitive strategy for market entry and penetration based. As such, the following research design is recommended for the proposed research: Sample: Sample Unit: Training and Development Heads in Organizations with 100 or more employees in the Country X Sample Size: 100 Data Collection Data Collection Instrument: Structured questionnaire with Close-ended questions. The research instrument is to be formulated in a manner that it gauges what the respondents need and desire from a management training service provider, and also to assess how they rate the existing players in the market. The questionnaire is therefore to be based on the available literature on what the possible competitive advantages are needed in the management training market in general and the criteria that make organizations successful or otherwise in this field. The research instrument consists of close-ended multiple choice questions and the respondents are required to chose the most suitable options from the choices. This enables the researcher to collect the responses on a large variety of questions and also to collect the overall data from a large number of respondents. Method of Data Collection: Customer Survey The research is proposed to use a survey as a data collection method. This is expected to provide a chance to gather insights from the people who are potentially the direct customers of Balamas Institute, and hence to get accurate and relevant inputs on what they need. A survey method will enable the researcher to collect a large amount of information from a considerably large sample size. The survey method is time efficient as the respondents have to provide their responses only in terms of the options that are provided in the research instrument. The survey method is also cost effective as no special arrangements have to be made in order to conduct the survey, as are desired in the case of face to face qualitative interviews. However, the survey method suffers from the drawback that it cannot provide detailed insights about the respondents. As opposed to a survey method, a direct interview gives a chance to cross-question and clear doubts from the respondents, as the qualitative interview provides the scope for digression into relevant areas (Cho and Trent, 2006). Also, the qualitative data that is gathered through the personal interview is expected to be detailed and in depth and hence having the potential to allow the study of the customer’s needs in a reflective and insightful manner. But, the interview method requires a large investment in terms of time and costs and hence that is not found suitable in the case of the current research (Cho and Trent, 2006). Data Analysis The data from the survey is proposed to be reviewed in the light of the available literature on the topic of competitive advantage and customer’s needs are to be studied exhaustively. The data is collected in the form of responses on the multiple choice questions, and these responses are coded in order to conduct a mathmatical and statistical analysis on them. The results of the analysis are presented to show the number or percentages of respondents who desire different things from BI. The analysis will also highlight the service and product quality perception that the respondents have of BI’s competitors. The analysis and understanding of the customers’ needs is expected to provide a detailed insight about what gaps are unmet by the existing management training organizations in the overseas markets. The information on the competitor’s approach and methods in servicing the customer’s needs will reveal what values the competitors are able to deliver and in assessing the source of their competiitive advantages. The overall analysis will therefore reveal what are needs that BI can serve and what are the capabilities and resources that it will need in the overseas market to become competitive and viable. This would help in formulating detailed Strengths and Weakness analysis of BI in the light of the data gathered from the primary research. 5.0 Research Benefits The proposed research is expected to provide several benefits to BI. The research will provide the basic guidance and framework for understanding the overseas market dynamics and in assessing the competitive forces that may be encountered. It will help BI in looking inward to assess its own strengths and drawbacks so that a practical entry strategy can be formulated. More specifically, the following benefits are expected from the research: Understanding the Market and the Customers The research will lead to the generation of exhaustive data and information on the current overseas market statistics, growth rates, market share of the existing customers and the overal industry dynamics. Using the 5-forces model, the research will elaborate on the comparative bargaining power of the customers, suppliers, existing competitors and threats to new entrants or substitutes in the market. This will provide an overall environmental assessment for the new market that BI intends to foray. Also, in addition to the review of the existing market reports and publications, the in depth interviews of the customers are expected to provide a clear understanding of the customers needs and requirements. Capitalizing on the Opportunities The research will highlight the existing need gaps that exist in the management training industry. It will provide BI with insights to the customer’s needs and what value additions may be needed to serve the customers better than the existing customers. This knowldge will give a direct advantage to BI as it is expected to help the institute to assess and formulate its own product and service offering that could be differentiated in the eyes of the prospective customers. Recognizing the Threats The 5-forces model analysis and the PESTEL analysis that is proposed in the research is expected to bring out the threats that BI may face in the overseas market. This will help the institute in developing a targeted strategy to use when making an entry in the market. Assessing Internal Strengths and Weaknesses The analysis of the external threats and opportunities will provide an adequate basis for BI to initiate an internal assessmnt of its own resources and capabilities and to judge them on their potential to meet the challenges posed in the overseas market. This will involve assessing the product offerings or the training programs of BI, the delivery methods and service package etc. Developing a Market Entry Strategy The market research will therefore provide a direct view of the existing threats and opportunities in the market; and an assessment of the internal strengths and weakness of BI. The detailed insights from the market research can then be used to formulate a targeted marketing strategy for BI for its entry plans in the overseas market. The marketing strategy need to be based on the competitive advantages that BI can use, and should detail out how to capitalize on opportunities and overcome the threats. 6. Conclusion This report elaborated on the need and rationale for the conduction of a market research prior to foraying into the overseas management training market by BI. The resport discussed the research objectives that are to be used for directing the proposed research, and elaborates upon the type of research that is to be conducted and why. It also details the research design or the practical conduction of the research so that valid and accurate data is gathered and analysed. The research also provides an overview of the benefits that are to be derived from the proposed research. These benefits include an illustration of the marker dynamics and the threats and opportunities, an assessment of the internal strengths and weaknesses of BI, an understanding of what competitive advantages are needed and a guidance for the development of the marketing strategy. References Aronowitz, S. and R. Ausch (2000). A Critique of Methodological Reason The Sociological Quarterly . 41 (4), 699-719 Cadle, J., James Cadle (Author) › Visit Amazon's James Cadle Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central Debra Paul, D. and Turner, P. (2010). Business Analysis Techniques: 72 Essential Tools for Success. UK: British Informatics Society Ltd Cho J. and A. Trent. (2006). Qualitative Research 1(3) 319–340 Creswell J.W., (2nd ed) (2007). Qualitative & Research Design. Choosing Among five approaches. Sage Publications, Inc: California McDonald, M. and Malcolm McDonald (Author) › Visit Amazon's Malcolm McDonald Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central Dunbar, I. (2004). Market Segmentation: How to do it, how to profit from it. UK:Butterworth-Heinemann Porter, M. E. (2008). The Five Competitive Forces that Shape Strategy, Harvard Business Review, January, 2008, p.86-10 Porter. M.E. Competitive Advantage: Creating and Sustaining Superior Performance , (Revised edition), The Free Press, 2004. Smith, J. L. and Jaynie L. Smith (Author) › Visit Amazon's Jaynie L. Smith Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central Flanagan, W. G. (2006).Creating Competitive Advantage: Give Customers a Reason to Choose You Over Your Competitors. NY: Crown Business . Read More