Strategic Mangement – Market Forces And Internal Structure In-depth Analysis

INTRODUCTION

The formation of any business entity requires strategy and planning. These two spectra of intellectual analysis require dense and sometimes even mathematical analytical techniques in order to produce an accurate blend of realism and optimum efficiency. The process of forming an efficient, fully operational, satisfying and mostly profitable organization is an intense skill that strategic managers should strive to not only know but master and perfect (Tate, 1992). As such, by the requirements of this paper, I set out on the process of synthesizing an organization within the boundaries of the paper.

This paper contains in-depth analysis of the market forces affecting, as well as the Internal Structure of the organization in question. The paper makes use of the skills strategic managers learn through academia: systems that were put in place by scholars in the management field that should enable strategic managers to carry out their required duties with proficiency and efficiency (Godet, 1989). Among others, the academic and analytical skilled presented through the contents of this paper include; a PESTEL analysis describing the landscape of the would be organization, a Porter’s five force analysis of the likely competitors of the organization, a detailed elaboration of the basic level resources and capabilities required in forming the organization, organizations with the resource capabilities the organization can engage with in conducting its activities and a rationale surrounding the same and an employee outline of the organization among other avenues and subjects of research. Below is a simple background information on the organization in question (Issa, Chang and Issa, 2010).

Background Information

The organization’s name is ‘Stratsynth’. It is a non-profit organization that seeks to primarily assist in the development of developing countries through research, education, disaster management among others. The organization’s funding is expected to come from giving a pledge. One particular example of its objective is to effectively enable and stabilize Project Loon: a project of filling the stratosphere with balloons containing internet servers. The project aims at creating available internet to people who lack the same (Wang, Shi, and Zhang, 2017). Apart from project soon, the organization should seek to enhance and promote the Pouncer Drone, Spider Light Smoke Vehicles, and Rokon Two-wheel drive motorcycle. It should be noted that the organization’s primary target is to create an environment within these developing countries that allow easy and smooth acquisition, delivery and operation of essential life support items.

The organization’s first objective should be to address the drought crisis in East Africa. The primary focus of the organization regarding this crisis should be establishing long-term recovery and rehabilitation to the drought-stricken nations. Below is a breakdown of the strategic analytical procedures that should be employed in the formation of such an organization.

Stratsynth’s PESTEL Analysis

Since Stratsynth will be a non-profit organization operating in developing countries, it is highly prudent that the macro business aspects affecting the organization be studied and predicted along the assumption that most of the organization’s activities will be carried out in these developing countries. Since the organization’s first major objective is the drought crisis in East Africa, it is only appropriate if the same is studied with respect to the East African environment.

  1. Politics

The East African region contains a relatively volatile political environment. Countries such as Sudan and Somalia are particularly facing drought and famine as a result of the uncertain political landscape facing them. As a result, very many non-profit organizations exist within this area, as it is, perhaps, the poorest region in the world, despite its ironical rich resources. In an effort to encourage and attract foreign aid, most East African countries have a relatively attractive tax policy with respect to such organizations. With an exception of Kenya, the East African countries’ labor laws are not clearly defined or even implemented. There are little or no trade restrictions in such countries, except Kenya. As such, with respect to the political environment of Stratsynth, with respect to its activities, it would be highly recommended that Nairobi, Kenya be its inaugural headquarters. After completion of its primary objective, Stratsynth, if the hierarchy so wishes can relocate the headquarters. The main challenge of basing its activities in Kenya would be the rampant corruption in the country, this, however, would not greatly affect the organization as its activities are not business related.

2- Economy

The organization’s primary operational landscape would be a region of slow economic growth, perhaps the slowest in the world. This translates to poor infrastructure, unemployment and other undesirable consequences of slow economic growth. These countries have high inflation rates that substantially increase the lending and borrowing interest rates in the region’s financial institutions. It would be highly efficient for the organization to employ financial policies that have minimal interactions with the hosting economy, with exception of those interactions that actually serve to improve the economy. The fastest economy, however, in this region is Kenya. Therefore, according to the economic landscape, Kenya should and would be the appropriate destination for the organization.

3- Society

Since Stratsynth is a foreign organization, it would not be greatly affected by tribe or religion, which are the major social divisive factors within these regions. With respect to demographics, these areas have low health consciousness prevalence within the populations, the majority of the population is the young and unemployed, most career attitudes are in approval and acceptance of the stereotypical ‘white collar jobs’. Therefore, with respect to creating new employment opportunities, these areas would have a welcome environment for organizations such as Stratsynth because of the perceived additional employment opportunities brought by such organizations.

4- Technology

Countries within the East African region have a very low technological advancement prevalence. The typical East African country puts very little focus and emphasis on technological advancement. Everything from research and development, engineering, education and other factors affecting technology have not been fully defined, let alone improved. The region has, perhaps the lowest internet connectivity prevalence in the world. In this regard, there exists an extensive niche’ and market need that could be filled by Stratsynth. After its involvement in the drought crisis, Stratsynth should strive to focus more on technological advancement in this technologically primitive environment.

5- Law

The legal policies regarding countries in the East African region, although clearly defined within specific country’s constitutions, are not, to a great extent, effectively implemented. The only country with a somewhat effective judicial system would be Kenya.

6- Environment

The overall climate and weather patterns of the East African region is tropical since it lies along the equator. Weather and climatic patterns remain fairly constant. Industrial developments in such countries are not as pronounced as other parts of the world and as such, climate change is not a major issue affecting this region.

As elaborated in the PESTEL analysis above, the most appropriate headquarters and area of operation of the organization would be Nairobi, Kenya, for its initial and subsequent activities (Kampanje, n.d).

A Porter’s Five Force Analysis of likely Competitors of Stratsynth

Aside from the macroeconomic factors affecting Stratsynth, the other factors affecting the organization that should be effectively and clearly defined are the microeconomic factors. These factors are clearly iterated in the organization’s five force analysis (Amanollahi and Muhammad, 2016).

  • The threat of new entrants: Stratsynth would always face an intense threat of new entrance since there is a clear need for such organization in the geographical area of interest. There are very few barriers to entry into this kind of market, government policy encourages entry to such a market, the capital requirements are made affordable by governments to encourage entry. Entrants are encouraged to enter the market on the basis of government encouragement (Ward, 1974).
  • The threat of substitution: Since the organization is non-profit, it does not necessarily have a product or service that can be described as having the potential to be substituted. As such, this force is non-affecting the organization. The projects carried out by Stratsynth would serve to better the society and community of the developing countries. Since the need of such organizations clearly outweighs the ‘supply’ of the same, there is little or no imminent threat of substitution (Ward, 1974).
  • Bargaining power of customers: Stratsynth is a non-profit organization, therefore, it does not have ‘customers’ per se, it only has ‘beneficiaries’. The host population is the beneficiary of the projects of the organization. They do not have any bargaining power since the services and projects of the organization are not paid for (Ward, 1974).
  • Bargaining power of suppliers: Government and international policy protect such organizations from any form of exploitation from suppliers (Ward, 1974).
  • Industry rivalry: Since Stratsynth is entering in a non-profit endeavor, it does not have industry rivals since there are no profits to compete over. Each organization in the relevant field is acting on its own volition (Ward, 1974).

Business Level Resources and Capabilities required

Stratsynth would require the following business resources:

  • Capital: This would come in the form of grants from the parent government or donations from members of the public.
  • Headquarters: This is the center of operations of the organizations. As recommended by the PESTEL analysis above, the appropriate headquarters should be Nairobi, Kenya, for its initial objective.
  • Staff: Since Stratsynth is a research-based organization, highly trained employees and volunteers in the field of engineering, agriculture, management, Information Technology and education should be present.
  • Brand Ambassadors: For the sake of the publicity requirements of Stratsynth, a celebrity brand ambassador should be sought as a marketing tool of the organization.
  • Legal requirements

Organizations with the resources and capabilities which can aid Stratsynth

  • The United Nations (UN)- This organization possesses the appropriate diplomatic authority and influence that would be easily be accepted and welcomed by the host nation. It can also provide additional financial aid.
  • The World Bank- The chief sponsor of the majority of the global non-profit organizations. As a partner, it would go a long way in ensuring Stratsynth is continuously funded.
  • The government of Kenya- The most politically stable government of East Africa. The government would ensure the headquarters and activities are appropriately effected by the organization on Kenyan soil through leases and licenses.
  • Safaricom Limited- The leading telecommunications and ICT firm in Kenya. This organization would go a long way in realizing and formulating the research requirements and ICT requirements in the organization’s projects.
  • Kenya Farmers Association- The umbrella body encompassing all farmers in the country. This organization is the gateway to the region’s agricultural sector. Through it, projects such as irrigation and other drought combating mechanisms can be effectively implemented, in compliance with the organization’s initial objective.

All of these organisations should employ a non-equity strategic alliance with Stratsynth in order to maintain independence and the non-profitability nature of Stratsynth.

Organizational Structure

For a new organization, such as Stratsynth, the most appropriate organization structure would be a functional structure. As per the requirements of this paper, the six-person functional organizational structure would include the following persons: (Pingboard, 2013).

  • The CEO: Runs the organization, every other employee is the CEO. Has the final say on all executive matters affecting the organization after clear consultation.
  • Human resource manager: Handles matters relating to the human resource of the organization. Employee and volunteer recruitment, employee disputes, the organization’s employee requirements etc.
  • Accounting Manager: Handles all the financial matters of the organization in terms of record keeping, auditing, financial planning and all other financial related activities.
  • ICT, Agriculture and Engineering executive: By virtue of the organization’s heavy interest in ICT, there should be an ICT executive to handle all the ICT needs of the organization.
  • Legal Executive: The organization should have a chief legal representative and adviser to handle all the diplomatic needs of the company.
  • Marketing Manager: Due to the publicity interest of the organization, there should be a marketing manager to select appropriate marketing tools such as a brand ambassador or other marketing options of the organization.

Mission and Vision Statement

Mission Statement: To enable and create modern methods of acquisition, delivery, and operation of essential life support items within developing countries in the Horn of Africa.

Vision:  To play a part in eradicating drought, hunger, famine, illiteracy, conflicts and play a role in creating the ideal utopic environment for the third world population in terms of the socio-economic environment.

Conclusion

Upon creation of the organization, founders and managers should strive to first improve the already shattered and depleted socioeconomic environment before moving on to the more ambitious projects like the Pouncer Drone, the Spider Light Strike Vehicle, and the Rokon two-wheel drive motorcycle

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