Issues to be taken under cosideration
5.OPTIONS – INCREASING EFFECTIVENESS
All successful businesses owe their existence to the recognition and existence of a market opportunity. It is essential therefore for organizations to continue identifying possible market opportunities in order to develop, expand and compete in the fierce business environment of our era. This entails constant information of the organization’s position and the market environment in which it operates. Kotler (though Baker 1996) argues that a structured analysis should be undertaken based on the following questions:
·Diagnosis : where is the company now and why?
·Prognosis : where is the company headed?
·Objectives: where should the company be headed?
·Strategy : what is the best way to get there?
·Tactics : what specific actions should be undertaken, by whom and when
·Control : what measures should be watched to indicate whether the company is
Succeeding? (Baker, 1996, Marketing, p.52)
All companies need strategies to meet changing markets. Marketing plays an important role in strategic planning. It provides information and other inputs to help prepare the strategic plan. Strategic planning, according to Kotler, Armstrong, Sauders and Wong (1996) is also the first stage of marketing planning and defines marketing’s role in the organization. “The strategic plan guides marketing, which must work with other departments in the organization to achieve strategic objectives”. (Principles of Marketing, p.70). The above analysts focus on three steps/stages of strategic market planning :a) the strategic plan and its implications for marketing; b) the marketing process; and c) ways of putting the plan into action.
Strategic planning, or finding out the strategic position of a company is essential towards the marketing plan. This will guide the formation of measurable corporate objectives. An audit then gathers information on the company, its competitors, its market and the general environment in which the firms operate. A SWOT analysis gives a summary of the strengths, and weaknesses of the company together with the opportunities and threats if faces. Next, decisions are made on what services/products are best for the company and how much support to give each one, and suggestions about the possibility of market segmentation and targets facing the organization are done. This paper attempts to apply the above for “Global Training” in Athens in order to identify possible problems and aim to find certain solutions.
Intercollege Global Training Athens is a company offering educational services and specifically training in the field of ACCA (Association of Chartered Certified Accountants, U.K.) The training program for students coming from a variety of industries leads them to take the world-wide examination for every course in Greece in coordination with the British Council and the British Chamber of Commerce.
The company was officially established in the year 2000, however was operating through cooperation with Universities and companies in Greece since 1996. The central offices are located in Cyprus and branches, apart form Greece, exist in Bulgaria, Leetonia, Poland, Oman and Dubai.
In 1996 the company began cooperation from Cyprus with leading Audit Firms such as Price Waterhouse Coopers, Deloitte and Touche, KPMG, and Ernst and Young, for in-house training focusing on individuals who wanted to receive the professional degree of ACCA. In 1998, Eurobank and ALPHA Bank joined the scheme and in 1999 an office was opened to offer the program to individuals who could join the groups at the locations of these companies and in order to form separate groups for the public needs. In a few words, recruitment was done based on a market plan and groups were formed for “walk-ins” which were trained at various Universities, with lecturers who were specialized from the central office in Cyprus.
The growth of numbers/enrolment forced the central office to form a branch in Athens and all training is done at the new company’s premises for all courses leading to examinations of the ACCA scheme. At this point, over 120 students are enrolled for ACCA examination at Global Training Athens and the company’s position calls for strategic market planning for its services. How could additional students enroll? Does the company’s position imply expansion based on the growth of numbers? How was the marketing done? What other marketing methods can be used? What kinds of opportunities are there? Are there any problems that need solutions in order to increase effectiveness? These and other market related questions for the company will be attempted to be examined in the next sections of this paper.
If the forces at work in the environment and likely future changes in that environment are identified, then these are bases for considering the opportunities and threats that might exist for the organization (Johnson and Scholes, 1988). The aim is to identify the extent to which the current strategy of an organization and its more specific strengths and weaknesses are relevant to, and capable of dealing with the changes taking place in the business environment. One note that should be mentioned at this point is the need for one not to be “absolute” in one’s analysis. The following concerning Global Training Athens are noted as significant points/issues for examination in these sections.
Issues for consideration concerning the company
ACCA is a European degree (E.U.), thus recognized by all E.U. states (including Greece; directive exists)
a.The ACCA syllabus is based on the International Accounting Standards (IAS) which are required towards the internationalization of the Accounting Parameters
b.The E.U. is preparing for the “European Stock Market”, a fact which implies individuals being aware of the methods used for listed and to be listed companies in the future Euro stockmarket. The ACCA also does this as a program.
c.Greek Presidential Degree 165/2000 recognizes professional qualifications such as the ACCA after 3 years of work experience.
d.The number of companies sending students to Global Training Athens has doubled in the past year, as have the number of students enrolled.
e.The ACCA offers, in cooperation with Oxford Brooks University a Bachelor of Science in Applied Accounting with one’s successful completion of 9 (out of 14) ACCA courses.
f.ACCA’s who complete the program become highly paid individuals. In the U.K. for example, Partners of Banks and Audit Firms are ACCA degree holders.
g.Competition for Global Training Athens is limited to non-existent, and it is extremely difficult for a company to complete due to the nature of training.
h.ACCA is now developing an MBA program in cooperation with Oxford Brooks University.
i.Global Training’s passing rates have been one of the highest worldwide (90% apx.)
j.Global Training’s lecturing team are all chartered Accountants and / or Academic specialized to teach only such courses. Most are specialists in their respective fields.
k.Internal Audit laws/regulations exist for Greek companies.
l.Having the above in mind (company profile and issues/points) the following SWOT analysis is presented.
m.Experience in ACCA trainingn.Directives (EU) Laws/Regulations (GR)o.Specialized Lecturing Teamp.International Accounting Standardsq.Bachelor prospect for ACCA/s TMBAr.Recruitment doublings.Passing reatest.Limited competitionu.ACCA’s have high salariesv.Weekend seminars only, due to foreign lecturersw.Cost of training lecturers (air fare- expenses-accommodation)◘ Facilities limited◘ No Greek Lecturers◘ Limited marketing, despite success◘ Limited services in Athens
◘Expansion (premises)◘Expansion (geographical)◘New services /new professional degree◘ACCA consulting/headhunting◘Classes during the week◘Conferences on IAS◘Advertise◘Use of IT◘Competition (limited however)◘Government changes may affect recognition(?)- Greece only.◘SOE (Greek chartered Account. Parameter concerning audit experience)
The above SWOT analysis concerns the organization as a whole, and lists all the features that could be considered critical success factors. The strengths and weaknesses are relative, not absolute. In sum, the strengths and opportunities demonstrate potential for the company in terms of expansion and in a logical growth of numbers of students. However, the cost of lecturers from abroad and the instability of government regulations do pose danger which will be disused in the later stages of this assignment. In APPENDIX 1 the framework that was used as a guideline for identifying the company’s strengths and weaknesses is indicated.
From the above SWOT analysis, two issues are noteworthy that need attention in order to be solved. These are presented in the weaknesses section. Namely, these are the: (1) the problem of “supply” of ACCA lecturers and (2) the need for additional services at Global. However as Mr. Kiritsis, the CEO of Global Training implies, the two problems are closely related to each other. As he characteristically argues, “… they are a single problem inside my mind”.
The first problem is analyzed: Global Training employs lecturers from abroad due to their experience and certification, usually from Cyprus and the UK. These countries have been using the ACCA as a recognized professional degree for decades and therefore are more familiar with the system. Greece has only recently recognized it through the EU directives and a limited number of trainers exist. The lecturers from Cyprus and the UK are mostly ACCA degree holders and specialists in their field of teaching. However, in order to use these lecturers, the costs are high due to the following reasons:
Having a specialist costs almost five times as much as the normal cost of the fee. If one considers the 14 courses the ACCA requires and the number of hours required for tuition, it is extremely necessary for the company to find local specialized lecturers and train them.
The second problem has to do with the amount of services offered. Global Training in Athens only offers one service, the ACCA. Therefore, the service portfolio is limited. Given the various threats and the prospect of competition, it is essential to market new programmes in order to compliment the ACCA and use an additional service to increase the figure of profit and be on the safe side.
These two problrems are united in one. Insreasing the services (i.e seminars) means more lecturers, which is the first problem. On the other hand more service will bring substancial profits an potential to make a better human resource planning, in terms of the lecturers.
The options have been identified above:
·Addressing Local Lecturers: It is urgently required to find local lecturers and cut the costs for the programme significantly. This may have a down side in terms of quality, however this could be done gradually. Finding and training local staff may increase costs from a financial standpoint in the beginning, however in the long run will have positive effects since the costs of running the programme will drop (five times less). This could be done in two phases. First, finding existing ACCA students at Global Training that are completing the programme and offer them the possibility, after adequate training to work as part – time consultants and trainers. Second, by advertising in the local newspapers to find managers and partners in local audit firms or banks to work on a part time basis in the beginning and also find ACCA degree holders in Greece, even if this is a rare possibility.
·Establishing new services: Global Training Athens should develop and market a new services such as seminars / in house training to companies and individuals in order to limit the possibility of the ACCA programme dropping in figures. Even though Global Training can be considered a “nicher” as a specialist in ACCA training in Greece, it is necessary to grow. Seminars or conferences in subjects like International Accounting Standards and / or Risk Management will compliment the ACCA degree scheme and will be cost effective as they are short in their nature (weekends) and profit margins are on the positive side. Hence with the profits from the new services we can plan in such a way to have foreign lecturers in the most critical services and local lecturers where they can be simirarly efficient.
Based on the examination and the issues raised, potential options will be presented along with various conclusions and discussion points. These conclusions will be based on the company in general, however emphasis will be given from a marketing standpoint in the effort to formulate potential strategies for the organization to move from its present position into a more effective one.
The company has successfully penetrated the market of training in a specific field and has thus gained considerable market share. The latest statistics indicate that in Greece, close to 200 students took the June 2000 examinations, and this means that Global Training has gained more than 70 per cent of the market. (However, students who did not take the June examinations are not counted and cannot easily be tracked.) This implies that the programme is relatively new, a market does exist and the demand for it is growing due to the issues raised prior to the SWOT analysis. The strengths of the company and the programme are noteworthy and the competitive advantage is demonstrated through the lack of actual competition, the market share, governmental regulations, its “EU” nature and the benefits such a programme can offer. The passing rates reinforce the quality of the services offered and potential opportunities may be identified.
Marketing conducted the past two years can be considered successful due to the doubling of enrollment and the issues to be raised at this point are two:
1.Is the company ready to accept a greater demand in numbers? Is the supply cost – effective and existent?
2. Can the company find alternative services to offer (advance service portfolio) to complement the ACCA programme?
The strategy of the company from a critical view point is similar to that of a market nicher. As argued by most theorists, an alternative to being a follower in a large market is to be a leader in a small market, or niche. The key idea in nichemanship is specialization. Based on Kotler (1998), Global Training can be characterized as a “service specialist” or a “product – line specialist” in the sense that the firm offers one service not available from other firms. It may be that from a strategic point of view Global Training may be better off not marketing its service (ACCA) vastly, but concentrating on its specialty. Adding more services or products may have a boomerang effect on the company. It may loose its specialization. However, what happens if and when other firms start competing in the same area? Even though it is quite difficult in the near future, substitutes may gain parts of the market. For this reason, and for the fact that having one service is always risky since business environment changes may create problems for the company, additional services are considered a must. One more service offered does not necessarily mean that Global Training may lose its characteristic as a nicher. Therefore:
-Additional service(s) should be added to the service portfolio;
-Recruitment of additional staff to meet the current and prospective demand for the service;
In the case of Global Training the company needs to first differentiate and position itself. In the words of the Managing Director, “Global Training is the Mercedes of Training”. Therefore, the aim is to produce superior service at a premium cost, well advertised. This is a logical position for a company that is considered a leader in ACCA training in Greece. The next step is to differentiate, for example to include a new tested service.
Something that should be taken into consideration is the service life cycle and modified at the different stages: introduction, growth, maturity and decline and the global opportunities and challenges.
The previous sections attempted to conduct a SWOT analysis of Global Training Athens which would, along with the company’s profile, provide useful information towards the identification of possible problems. Such problems were identified and options towards their effective solution were proposed. The issue for the company will be to examine which of these options can be implemented within the current environmental conditions.
At this point we should stretch the fact that this report gave equal importance to the identification of the problem as well as to its possible solution. That was a result of our belief that solutions to problems are given by their full and extended identification. If you deeply analyse the roots of the problem you can also find what should have been done before it had arised.
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