• Describe the organisational structure that is most likely to be applicable to Tuffstuff Ltd
• Discuss the utility, as an analytical tool, of a PEST analysis.
• Prepare a business report for the CEO of Tuffstuff Ltd that analyses the key factors to be considered with regard to Tuffstuff’s proposed venture and sets out your recommendation. It is expected that a PEST analysis of Tuffstuff‟s proposed venture in Rwanda will form the basis of your report.
Most of the companies, especially the leading companies throughout the world are gradually becoming interested to expand their business in the international markets for increasing their market share and profit. However, it is difficult to set up a business within an unknown territory, especially when the market environments of such territories are different from their domestic markets (Acar, 2015). Therefore, it is essential for the companies to analyse both internal and external environment (Micro and Macro environment) of the particular business and market or economy. The markets cannot control both Micro and Macro environment factors, but such factors can influence the strategic decisions of the marketers. There are various analytical tools such as Porter’s five forces, SWOT and PEST analysis available for assessing the Micro and Macro environment factors (Frynas and Mellahi, 2015). The CEO of Tuffstuff Ltd is expecting less or no competition, but the CEO is expressing concerns regarding the expansion of the business in Africa. The current study concentrates evaluating the importance of SWOT and PEST analysis for justifying whether the CEO of Tuffstuff Ltd is making an appropriate decision by setting up manufacturing and distribution operation in sub-Saharan Africa, in particular, Rwanda.
Organizational structure has an impact upon the success of a business largely, as the structure implies how the organization is going to perform their business operations. It is essential for the organizations like Tuffstuff Ltd to select the most effective organizational structure, especially when such organizations are going to implement their business into an unknown territory (Gustafsson and Wikner, 2015). Geographical organizational structure and Matrix organizational structure are two effective organizational structures Organizational Structure is most likely to be applicable to Tuffstuff Ltd. There are various benefits of the Geographical organizational structure of Tuffstuff Ltd. The management of Tuffstuff Ltd should consider creating a separate geographical division for developing manufacturing and distribution operation in sub-Saharan Africa, in particular Rwanda. However, the division will also be responsible for reporting directly to their head office. The objectives of all the employees and staffs of that particular division will be same as the objectives the division. The managers of Tuffstuff Ltd should lead the division from the top of a chain of command. The company should also consider hiring the local people (Rasheed et al. 2015).
PEST analysis or PESTLE analysis is essential for analysing the macro-environment factors, which include Political (P), Economical (E), Socio-Cultural (S), Technological (T), Legal (L) and Environmental (E) factors. Controlling such factors is beyond the ability of the businesses, but they can make effective decisions based on those factors (Shah et al. 2015).
Political factors can influence the decisions of the government of an economy. Due to political factor, the government may become convinced to implement particular policies regarding tax policies, Fiscal policy, trade tariffs etc. Such policies may largely affect the business environment (economic environment) (Shabanova et al. 2015).
Economical factors are the determinants for influencing the performance of an economy. The economic performance of an economy has an impact upon the performance of a business from the long-term perspectives. For instance, changes in inflation may affect the decisions of the businesses regarding their method of pricing their products and services. On the other hand, economic factors may also have impacts upon the demand and supply model in terms on purchasing power of a consumer (Snieskiene, 2015). The inflation rate, interest rates, foreign exchange rates, economic growth patterns etc are the key examples of economic factors. The policies of the governments regarding FDI (foreign direct investment) are also significant parts of the economic factors.
Socio-cultural factors are one of the key macro-environment factors, especially in today’s business world of globalization. The key determinants of socio-cultural environment include demographics, cultural trends, population analytics etc. Such factors may also include cultural influences (Haron, 2015).
Technological factors imply the extent to which innovations and advancements in technology may affect the operations of the industry and the businesses. Research and Development (R&D), automation, technological awareness etc can also influence or make an impact upon the performance of a business (Schneider, 2015).
SWOT analysis is one of the effective analytical methods, widely used for evaluating the strengths, weaknesses, opportunities and threats of an organization. Strengths and weaknesses indicate mostly the internal factors while opportunities and threats imply external factors. SWOT analysis not only helps to assess the current position of the business, but it also helps to make effective strategic decisions. The companies should concentrate using their strengths to utilise their opportunities and to avoid strengths. In addition, the companies also have the ability to overcome their weaknesses by utilising their opportunities. Following is the example structure of SWOT analysis (Frynas and Mellahi, 2015).
|
INTERNAL |
STRENGTHS |
WEAKNESSES |
|
Things an organization is good at Knowledge and Experience Creative and Unique characteristics Resources Geographical territory Core Capabilities and Competencies Reputation and Quality Pricing, Distribution, Flexibility on Product or Service |
Things an organization should improvise Skills and Knowledge Gaps Financial Issues Reputation and Market Awareness Management and Leadership Issues Staff Involvement and Motivation Poor location |
|
|
EXTERNAL |
OPPORTUNITIES |
THREATS |
|
Expanding Business in New Markets Acquisitions and Strategic Alliances Business and Product or Service Diversity Utilising new analytical tools such as PESTLE New Product Development Minimising Costs Innovation and technology Development R&D |
Environment Changes (PESTLE) Losing business and existing Loyal Customers Increase in costs of Raw Material, Energy and Transportation Costs Increasing Market Competition New Product Development and Innovation by the competitors Technological Changes Seasonality |
Table 1: SWOT Analysis
(Source: SnieškienÄ—, 2015)
Most importantly, as SWOT helps to give adequate information regarding the weaknesses, the companies have the opportunity to work upon their weaknesses to avoid any possible threats.
It is seen in the major business areas that bring proposed venture considered on Tuffstuff. The researcher has signed a treaty to gain the market share of companies in entering to Africa. A major quote says, “Future lies on the common lines of business positions on Africa”. A comparative review has been laid through major decisions where people find working age and the total population in the developmental area (Briggs, 2011). The main purpose of the topic is evident to check the business solutions to enter Africa in gaining the market through PEST analysis. Working as CEO of Tuffstuff Ltd has a good base of the operations of UK and Continental Europe to manufacture cement. However, it is actively considered in setting manufacturing and distribution process in Sub-Saharan Africa in major parts of Rwanda. The company also has a distribution policy that makes the competition even in making market competition high on Parts of Africa (Miyajima, Mohanty and Chan, 2012). Thus, working as a consultant that provides major firms and business readily accepts territories on the proposed investment policies. However, the support will regard in studying PEST analysis of Tuffstuff in making market through PEST analysis of Cement Company. However, this section introduces an idea that can be entertained on the business principles of performing a SWOT analysis of the company (Mulligan, 2012).
Working as a Consultant in a firm that provides business solutions in development is approached by the CEO of Tuffstuff Ltd to operate the activities performed in Africa. Since, Tuffstuff Ltd enters major parts of Africa particularly in the areas of Rwanda to increase the market growth to form stability, but CEO has replied to the event that applying PEST analysis would not help to increase the market distribution on major scales. Thus, the main reflection on this topic suggests variable factors that are applying PEST analysis will determine good ability to cope with market share. Africa has been holding a political and legal environment, which stabilizes major events to make the country developed (Pimenta da Gama, 2011). However, there may be factors that evolve changes in the trade regulations and tariffs in business. The legal enforcement would simplify the working perspective, which will increase regulations of the market to stabilize good effects. The CEO of Tuffstuff Ltd has evaluated key factors that are:
The consultant will motivate employees through a good sequence in making the competitive market of Africa even. PEST analysis will be performed through business ideas through Political, Economic, Social and Technological environment in analysing the perspectives of major opportunities (Srivastava, 2011). Since, Tuffstuff Ltd trade cement to major parts of UK and Europe, but now it wants to join hands with Africa. The market position would be sustainable if PEST analysis will support terms on operations of Sub-Saharan Africa in Rwanda. The information evolved on the personal ideas in making the assumptions clear, and contrast develops through a business approach in Africa (Teglio, 2012).
Political factors would underline Africa’s current policies in holding good interest on market growth. The consultant would improvise changes through government and regional policies in making it effective (Briggs, 2011). There are other contenders, which empower sustainable positions right for making business policies ideal. However, they would review change perspective on a business policy that Tuffstuff Ltd develops in making a good reflection on market share. The treaty would assume major changes that make Tuffstuff Ltd to make a proper evaluation of rights and regulations in making market developed through legislation and taxation (Mulligan, 2012). The planning perspective would analyze business through an approach in launching distribution of cement through corporate policies, social responsibilities, environmental issues and customer protection rights in Rwanda.
Economic factors also stabilize on the current economy to see how Tuffstuff Ltd Company makes market gain through growth, stability and declination. The consultant would see if major changes from significant positions on the customer levels to become disposable if income is falling apart (Chang, 2011). It is also seen if unemployment rate would be easy to build a workforce. Then it would be hard to sustain a good position in the business module. However, globalization has a great effect in holding economic barriers of Africa in making production good as done in UK and Europe.
The Socio-Cultural factors have made the trend of market growth to increase population on the age of the individual relatively in major parts of Africa. Bringing newer changes on Africa has favored increasing society’s level of education, health and social mobility. The employment patterns will reflect change perspective to show trends and attitudes in building good stability in holding market success (Hoballah and Erlich, 2012). Thus, population change will increase these factors on religious beliefs and lifestyles in Rwanda to hold good market share.
Technological factors also have a great impact to see whether the change would reflect Tuffstuff Ltd to increase market distribution and growth in Rwanda. Since in the present market, technology holds a greater area. Thus, this strategy would avail major resources to access new technologies in redefining Tuffstuff product through government policies and educational institutions (Miyajima, Mohanty and Chan, 2012). However, infrastructural changes also balance technology to hold the good structure in the market in Rwanda.
The researcher has made an effect to overcome ideas by taking PEST analysis on going to perform SWOT analysis. The CEO has evaluated major changes that could be ideal to sustain good effect in the market in performing SWOT analysis through the converging ideas in making it a perfect solution. Through a proposed venture, an explanation would reflect on the policies that make the assessment criteria evolved through the market structure of Tuffstuff Ltd in entering African market (Pimenta da Gama, 2011).
Strengths would evolve good ideas that could make advantages of Tuffstuff Ltd better in Rwanda. This will lower costs for major resources that drive strategic market through Unique selling proposition (Saren, 2011). Looking among the competitors of Cement Company, Tuffstuff may provide high quality products in making the market gain effective in major areas of Rwanda in assessing the economic factors of PEST analysis.
There may be major weaknesses in determining the company’s areas that how it can be improved (Wenzel, 2012). The CEO of Tuffstuff Ltd has applied changes in making the market growth effective. However, through Socio-economic factors of PEST analysis, people may find good areas in making market gain developed. Competitors may form realistic and unpleasant here.
Opportunities also have a good impact on the interesting trends in making market effective. This would be compact on major areas of Rwanda to apply social trends, increase in population, lifestyle changes. Thus, this research focuses on the local events as revised by the CEO of Tuffstuff Ltd to make local events an interesting perspective on technological areas of PEST analysis (Teglio, 2012).
Threats would form a major obstacle among the competitors of Tuffstuff Ltd in making the market even through development procedures. There are major specifications that enhance services offered on products and services that are changing effectively (Mulligan, 2012). Hence, political factors can hold good stability on the competitive market on the major threats in Rwanda.
In this topic, the market has evolved a greater area in holding stability through profitability areas in development and succession. This would increase changes made through technological influence and good infrastructural facilities of Tuffstuff Ltd in Africa. Since, Tuffstuff Ltd has made a growing market in areas of UK and continental Europe. Therefore, to reflect new changes in the governmental procedures of cement industry in the business environment would increase market share in Africa. Thus, the researcher has taken ideas in giving necessary recommendations of Tuffstuff Ltd through sustainability, technology, infrastructure and rise of corporate social responsibility.
Technology has made a great impact on the African countries to make specifications through development in trading with these companies. Since, these companies have great technological influence. Thus, Tuffstuff can increase their market growth higher in Africa through various innovative ideas among the common people in future.
Since, Africa is an underdeveloped continent its major parts can be developed through good infrastructural techniques. Tuffstuff can do this through increasing cement on building blocks in major parts of Rwanda.
The management of Tuffstuff Ltd should consider maintaining environmental sustainability to enhance their reputation and to develop the effective relationship with the African government and the community. Such commitment will also help the company to gain long-term sustainable growth.
The Company should frequently communicate and collaborate with the local government and the community to obtain their support, which is essential for their business. The management should also consider hiring people from the local community to increase their CSR reputation. The management should also contribute financially to the well-being of the local community. Offering free education and medical treatment to the local people are the most popular contributions that the management of Tuffstuff Ltd may widely consider.
The idea performed in this research will help to assess various knowledge and skills performed in the business environment. This would change prolific ideas entertained on Tuffstuff Ltd to enter African market. In this research, the researcher has taken various concepts to perform strategic idea on organisational behaviour in making market distribution higher. The researcher has also outlined a strategy to perform SWOT and PEST analysis through objectives made in giving a specific proposition. Hence, the research concludes that through various factors as evolved by the CEO of Tuffstuff to make a good territory in Rwanda will help to stabilize market intensity higher.
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