Brief summary of key macro issues relevant to country
Student Flight Centre is an organization that primary operates in Australia. The organization operates in order to provide international flight deals and discounts to students. Presently the organization is operating in countries such as UK, South Africa and New Zealand. The company, which originally started operating in the year 1995, has been re-launched in the year 2006. During this course of time, the organization has opened up multiple shops and has revamped its marketing strategies. In 2009, the organization has undergone significant changes and has come up with more efficient and effective organizational mission and vision. At present the organization aims at expanding the business to Bangladesh. The report hence analyzes the different issues and factors relevant to the process. In addition to this, effective strategies have also been analyzed in order to expand in the new market.
For the expansion of Student Flight Center, a thorough analysis of the environmental, political and other socio-cultural factor are needed to be considered. Bangladesh is a developing country with a significant GDP growth. It is the third largest Muslim populated country in the world. Moreover, the country has significant demographical diversity, which makes it an attractive tourist destination. However, from the macro environmental analysis of the country it can be understood that Bangladesh is facing several issues in its political, legal, political, economic and cultural aspects. It has been monitored that these factors and several issues related to them can play influential role in the expansion process.
From the analysis of the political scenario of the country, it can be understood that Bangladesh is presently not fit for economic expansion. In addition to this, the country is prone to political turmoil to a great extent. It has been analyzed that the democracy of the country also tends to be fragile at times. This political instability has resulted into lack of skilled resources within the country. Hence, Student Flight Center can face should focus on scrutinizing the process of recruitment strictly to maintain the organizational functioning. Moreover, the country comes up with heavy and strict taxation policies. It has been noticed that the government has come up with almost 15% taxation on customer products and commodities (Barkauskas, Barkauskien? & Jasinskas, 2015, pp. – 167-172). A thorough knowledge of these policies is required in order to maintain the smooth operation of Student Flight Center.
As the country is considered as the developing one, it falls under a mix economic background. The country is considered as the third largest one in the South East Asia, in terms of the economy. Hence, it can be proved as a potential market for the expansion. However, the country faces multiple issues in due to the poor governance, lack of infrastructure and growing corruption. For any foreign organization, this can be regarded as significant threats if not tackled strategically.
By analyzing the various cultural aspects, it can be understood that the country has a very rich and diverse culture. The rich cultural diversity and heritage can play influential roles in attracting tourists (Chen, Wang, Nevo, Jin, Wang & Chow 2014, pp. – 326-342). However, it can be said that the social turmoil is affecting the country largely. While expanding to the Bangladeshi market, the organization needs to take up strategies to highlight the cultural heritage and diversity as one of their key marketing strategies.
Political analysis
From the analysis of the legal aspects of the country, it has been noticed that previously the country and the industrial policies were not favorable for foreign investments. However, in the year 2016, the country has altered the Industrial Policy Act 2010 and has come up with a more favorable act (Daly & Garrity, 2013, pp. – 32). It is expected that the new industrial policies will help in attracting new investments from the foreign organizations. In the context of Student Flight Center, it can be said that the organization will be benefitted due to this renewed industrial policies. Moreover, it has been noticed that the country is willing to provide financial and infrastructural support to the priority industries such as healthcare, social assistance and transportation.
In order to enter in a new international market, organizations take up various strategies. The most effective way of international expansion is deciding a perfect entry mode for the international expansion. With regard to the political and socio-cultural analysis of Bangladesh, it can be said that the organization may face multiple issues while expanding in the country. In this regard, it can be said that understanding the various factors that may influence the process of expansion is important (Feld, Heckemeyer & Overesch, 2013, pp. – 2850-2866). At present, the country is facing problems regarding insufficient infrastructure, lack of efficient workforce and corruption. These factors can pose as hindrance in the process of smooth expansion of Student Flight Centre. Hence, the most effective way of expansion is partnering and strategic alliance. By taking up this entry mode, the organization can easily pair up with a local and renowned organization that will be helpful in the process of organizational expansion. Having a local partner can be beneficial in many ways. The primary benefit of strategic alliance is the familiarity with the local market. The partner organization being local one will have the necessary knowledge about the market. This will prove beneficial for Student Flight Centre (Harmon, Green & Goodnight, 2015, pp. – 75-95). In addition to this, strategic alliance will help both of the organizations in reducing the investment costs. In addition to this, collaborating also helps organizations in reducing the risks of entering into a market. As the organization will aim at collaborating with a local and renowned organization, it will automatically have access to the knowledge that its partner has regarding the market. This will reduce the risks significantly. Moreover, strategic alliance help in the process sharing the market risks.
Expanding a business is highly crucial process, which needs proper strategies and effective implementation of those. As Student Flight Centre is aiming at expanding to a new and international market, it is important to implement proper strategies as well. The international strategy for Student Flight Centre is developing is moving to a new geography. In order to expand to Bangladesh, the organization needs to analyze the necessary cost layout. Moreover, proper analysis of the services are to be done, while keeping in mind the market demand. In this regard, it can be said that the organization needs to study the demographic market (Hoffman, Munemo & Watson, 2016, pp. – 11-114). By researching and studying the market condition, the organization will be able to implement effective strategies to capture the new market. As the target market for Student Flight Centre is fixed within the students, it will be easier for the organization to study the trends and natures of travelling amongst the younger generation. Moreover, by taking up proper research, the organization will be able to understand the market demand as well. However, it should be kept in mind that the entire process of expanding and deciding the effective way of management may take ample time and effort. As a business strategy, moving to a new location can prove to be a risky decision. However, with proper strategies and effective implementation of them Student Flight Centre can achieve significant success.
Economic analysis
As Student Flight Centre is aiming at international expansion, it can be understood that the organization needs to follow a multinational structure in order to decide the organizational operations. It is been noticed that while expanding to an international market, multinational companies, especially the smaller organizations face multiple organizational challenges (Huang & Zhu, 2015, pp. – 312-326). The organizations dealing in the global market needs to maintain the functional units as well as maintaining the functions in different ways. Student Flight Centre is an organization that is operating in multiple countries and now is aiming at its expansion in the Asian market. In this regard, the effective organizational strategy will be ‘Matrix’.
By adopting the organizational structure that is more functional in nature, an organization holds the power designing and maintaining the organizational function in a more centralized way. For the expansion into an international market, adopting the functional approach can be difficult. Student Flight Centre is presently operating in Australia and few of the European market. The nature of these markets differs vastly from the Asian markets. Hence, it is important to allow the international division to operate independently in the new market (Mithas, Tafti & Mitchell, 2013, pp. – 45). However, the political turmoil and the high instances of corruption in the country can affect the organizational functioning to a great extent. Hence, the amalgamation of both these strategies will be most effective for this expansion. Hence, adopting the matrix organizational structure will be highly effective for Student Flight Centre. Matrix organizational structure combines the best features of both functional and international division. The amalgamation of efficient functioning and the flexibility of domestic operation will be highly beneficial for the organization. In this organizational structure, the home organization retains the power of deciding the disciplinary matters, organizational functioning and promotions. However, the local employees carry out their works as per the requirement of the local market.
As the company is aiming at global expansion, it is highly important that the organization take up effective strategies to motivate a cross-cultural work force. As the socio-cultural difference of the organization is high, the managers and leaders need to accumulate skills to manage a healthy organizational environment. In this regard, the effective strategies are to be discussed.
The primary aspect of building a harmonious organizational culture is to have effective communication. Free and effective organizational communication is helpful in building a sense of inclusion amongst the employees (Smith, 2016, pp. 47-64). This is an effective way of creating a harmonious relation amongst the employees and the leaders.
In order to deal in a different culture an organization needs to take up a flexible approach. Student Flight Centre needs to take a flexible approach in order to access the working culture and the demands and expectations of the local employees (Aguinis, Gottfredson, & Culpepper, 2013, pp. – 1490-1528). Moreover, adopting a flexible approach will also help the local employees to understand the organizational mission and vision in a more effective way.
Another important aspect of creating a balanced organizational culture is to create a sense of inclusion amongst the employees belonging to multiple religious and cultural backgrounds. Listening to the views and ideas of the employees generates a sense of mutual respect amongst the workforce. The leaders as well as the employees of the organization are able to respect the ideas and the values of each employee (Eriksson, Johanson, Majkgård & Sharma, 2015, pp. 41-63). For an organization that have cross-cultural workforce, creating a sense of belonging is highly important. Moreover, the organization is aiming at capturing a completely new business market. As tis market is completely different from the previous ones, a thorough understanding of the social and cultural aspects is required in order to succeed. Taking up inclusive approach will be beneficial in the process of thus understanding.
Cultural analysis
Expanding to a new market is considered as a crucial process. Taking up a completely new business market can be difficult especially in context of cross-cultural expansion. For Student Flight Center, the process of expansion can be more difficult as it is expanding to a market that is culturally vastly different from its native location. Hence, the role of Human Resource is to be considered of having great significance. It can easily be understood that the organization needs to employ workforce from Bangladesh while expanding to the market. In this regard, the human resource department of the organization should be aware of the employment rules and regulations of the country (Trautwein, 2013, pp. – 14-26). Moreover, from the macro analysis of the business expansion it was known that the country is going through various social and political turmoil. It has also been noticed that the problems regarding corruption tend to affect the organizational operation to a great extent. Hence, the human resource needs to be highly cautious in selecting and employing skilled and honest employees. In addition to this, it can be said that the organization should focus on scrutinizing and selecting skilled workforce. The country being a hugely populated one, availability of workforce should not be an issue. However, selecting skilled labors is important (Choudhary, Akhtar& Zaheer, 2013, pp. – 433-440). It is also important to focus on maintaining the cultural diversity within the organization. The human resource needs to focus on revising the HR policies in order to cope up with the cultural diversity of the country.
In order to expand to a new market employing proper marketing strategies are highly important. As Student Flight Center is going to expand to Bangladesh, it is important that proper marketing strategies be employed. From the market analysis, it can be understood that providing affordable flight deals are new concepts to the country (Stoian, Rialp & Dimitratos, 2017, pp – 128-148). Hence, implementation of effective strategies are required in order to introduce the new services to the students. Moreover, in order to avoid the risks of failure several factors are needed to be considered before diving to the new market. along with the risks of entering into a new market and the costs of expansion factors such as complying to the rules and regulations of the market as well as product development are also important.
The primary step towards developing an effective marketing strategy is to perform a thorough market research. In order to understand the demands in the new market, the strategy proves to be highly effective.
In order to expand the business in a new market it is important that the organization develops and alters the services according to the needs and demands of the market (Grant, 2016, pp. – 35). In addition to this, the services offered by the organization needs to be localized so that it can meet the expectations of the customers.
One of the most vital component of expanding to a new demographic location is complying with the rules and regulations of that country. A thorough knowledge of the governmental and legislative rules and regulations will help Student Flight Center to work more effectively.
Legal analysis
Entering into a new business market is a challenge for any organization. Hence, importance should be given to various marketing and advertising strategies (Burns, A. C., Bush, R. F., & Sinha, 2014 pp.- 39). In this regard, deciding a healthy budget for the marketing and promotional activities are highly important. Moreover, the organization needs to acquire the marketing strategy in order to reach the target market and potential customers.
Pricing is another important factor in global expansion. To decide the effective and proper pricing of their services organizations mostly take up the methods of tallying the pricing of the competitors. However, for Student Flight Center, the chances of comparing the prices are not very high (Phillips & Pittman, 2014, pp., – 27). The company will introduce a newer concept to the country, hence, at the initial stages the organization needs to come up with more discounts and offers to grab the attention of the organization.
Taxation policies differ according to the changing demographic location. Moreover, taxation policies of Bangladesh will be vastly different from that of the European countries. Hence, the organization should have a detailed knowledge regarding the taxation policies of the country.
Conclusion
To conclude it can be said that Student Flight Center needs to adopt effective marketing and organizational strategies in order to expand to the new business market. As the nature of the market in Bangladesh is vastly different from the western countries, the organization needs to be more cautious while expanding. As it is widely known that the country is highly populated, the scopes of future betterment is very high for the organization. In addition to this, the country has a significant population that are studying; hence, the organization can obtain significant success in the country. However, for the initial stages, employing strategic alliance is important in order to reduce the market risk and achieve better understanding of the target market. From the analysis of the macro environment of the country, it can be understood that multiple factors such as political and economic affect the business to certain extent. However, by employing proper strategies can help reducing the ill impacts. As a vastly populated and demographically diverse country, Bangladesh has high chances of attracting tourists. Hence, the market can be proved as a profitable one for Student Flight Center
References
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