Discuss about the Strategic Analysis of University of Wollongong.
The University of Wollongong or UOW is an Australian university which performs public research and is located in the city of Wollongong, in New South Wales, Australia. The university has enrolled 32,000 students within the year 2017. The number of students of the university include international candidates as well. The alumni base of the university is greater than 1,30,000 more than 2000 staff members are present in the university. The university was established in the year 1961 and the official opening of the college took place in the year 1962. The University has been able to offer greater than 100,000 degrees since its establishment. A multi-campus institution is developed by the university both in the domestic and the global field as well (Uow.edu.au. 2018).
Vision – The main vision of the organization is based on the belief that the by linking the clinical and the academic research related to medical issues and health are quite common among the Illawarra community in the area where the university operates. The findings of the research can be translated rapidly into the successful delivery of the healthcare related services.
Mission – The mission of the organization is to build the centre of innovation and excellence in medical research and health which target the improvements in health with the help of preventive health care and intervention (Alvesson and Sveningsson 2015).
Goals – The main focus of the university is to offer outstanding environments of learning and personalised experience. The organization aims at developing graduates who will be highly sought after and those who have the experience of university which is research intensive in nature and the curriculum of study is intellectual. The organization is committed towards generating outstanding research capabilities and world class level results as well. The objective of the university is to earn a place in top 1% of the universities in the world which create opportunities to refresh and renew (Barrick et al. 2015).
Strengths – The universities and the environment that is provided to the students has become important for the future of the various candidates internationally. The world is facing many environmental, economic and social challenges which have led to the universities in Australia play a major role in making the country competitive on an economic basis and cohesive on a social basis. The higher education sector and the university of Wollongong has to play a major role in this case. The university has been providing outstanding environment for learning to the students and this has been the major factor behind its success (Bartlett and Beamish 2018).
Weaknesses – The facilities that are provided by the university have started to age and have lost their quality due to the lack of proper maintenance. The funding that is provided to the university by the government of Australia has not proved to be enough to maintain the research related needs and infrastructure of the organization. This has caused high levels of discontentment among the students. The future of the students who are currently a part of the university’s ongoing courses are facing major issue due to the lack of proper research equipments. The organization is further unable to respond quickly to the changes that are occurring in the external environment (Brewster 2017).
Opportunities – The opportunities are related to building a research environment a research environment that is outstanding in nature. The university aims at providing clear incentives to drive the research related focus of the students. The university can further transform its curriculum according to the needs of the students. The other major opportunity is to invest in the staff so that they can collaborate to create and achieve greater targets. The campuses of the university can be enhanced so that facilities provided in the campus are aligned with the centres of the population (Brouthers, Nakos and Dimitratos 2015).
Threats – The reductions in the funding that are provided by the state has caused pressure on the university for the generation of new streams of revenue. This has can thereby affect the level of fees that is charged by the university from the students. The changes in the policies of the Australian and the various changes that occur in the economy can also affect operations of the university (Clegg, Kornberger and Pitsis 2015).
The education industry in Australia has been going through a lot of changes and the knowledge levels of the students are also becoming more and more advanced with each passing day. The advent of information technology in education is constantly offering forms of education that are new to the students and the professors of the various universities as well. The stakeholders of the industry related to education therefore need to consider the various factors of the external environment which are able to affect the industry of higher education (Elmes and Barry 2017). This analysis can be conducted with the help of the PESTLE framework which helps, the staff, the management and the governors to manage the ways by which the external environment can affect the future of these universities. This can further help the universities to plan for the various management and finance related decisions that are to be taken by the university. The PESTLE analysis of the education sector of Australia needs to be conducted to decide the future operations of the University of Wollongong (Frow et al. 2015).
Political factors – The privatization related activities that are taking in the universities of Australia are affecting the profitability of the various public universities. The initiatives that are taken by the government can create risks for the universities that are operating in the environment. The policies formulated by the government are also related to the operations of the university in Australia. The regulations imposed by the government on various universities can affect the research that are being conducted by the students. The government intervention in the various processes of the university can hinder their operations. This can cause a loss of time for the students (Galliers and Leidner 2014). The polices of the government may also compel the professors in the university to bring changes in their skills and gain knowledge in the other fields. The changes in the curriculum of the universities may also be caused due to the various regulations of the government. The government influence of Australia can therefore cause many changes in the operations of the university.
Economic factors – The funding that is provided to the various universities by the Australian government is also an important factor that can affect the operations. This further have a major effect on the infrastructure of the university and the ways by which it can operate in the changing economy. The changes that occur in the local education related industry can affect the operations of all the different universities operating in the country (Grant 2016). The ability of the parents of the students to provide funds that are related to the successful completion of their course is another major economic factor that affects the universities. The ability of the universities to manage the surplus and the invest their yearly savings on the infrastructure decides the ways by which these organizations function. The organizations also need to maintain costs that are related to the different resources, like staff, solutions, technology. The increase in these fixed costs have huge effect on the operation related costs of the various universities (Helfat and Martin 2015). The shortages of educational resources that occur in the national and the international market can further affect the universities which are located in Australia. The locations of universities in areas where there are problems of over-population also affect the universities in an adverse manner. The turnover of employees has been a major issue in the Australian market. This problem is faced by the universities in the country as well. The economic condition of the country therefore affects the functioning of the universities as well (Hill, Jones and Schilling 2014).
Social factors – The social factors of a country have major effect on the operations the universities. The social trends in the country are changing on a continuous basis. The three major social classes in Australia are, the middle class, the working class and the upper class. The earnings of the various classes have huge differences and this a major social issue in Australia. The lifestyle of the upper class people is also quite different as compared to that of the lower class and the working class. The students on the other hand tend to dress up according to the style that is set by their role models and sometimes they dress up to show the symbol of their wealth to the others in the society (Jackson, Schuler and Jiang 2014). The higher education institute in Australia are known to offer the best opportunities related to jobs to a large amount of the entire population. The universities also tend to attract a huge number of students from the overseas. The government has been providing funds to the various universities which has been a major positive point in their ongoing operations.
Technological factors – The new products and processes are created with the help of new technologies. This helps in the reduction of costs and improvement of quality which ultimately leads to high levels of innovation. These developments help in benefiting the various students who study in the various universities. The major issue related to the technological environment of Australia is the tension that has been developed between the national research organizations and the researchers of the universities. The tension was mainly related to the allocation of resources and the effective communication levels between the university researchers and the government. This can be a major issue related to the operations of the various universities in Australia (Jarzabkowski and Kaplan 2015).
Legal factors – The legal factors are mainly related to the legal environment in which the different organizations in Australia operate. The compliance with regulations and rules that are formulated by the government is important for the successful operations of the universities in Australia. The Australian universities always need to make sure that they follow the regulations and the laws that are set by the government.
Environmental factors – Environmental factors are related to the climatic changes and changes that take place in the weather. The awareness related to environmental protection is on the rise and the universities have a major responsibility to educate the students and the others in the country about the environment related issues. The universities and the all the other organizations operating in the country need to follow and implement the various environmental laws (Luthans and Doh 2018).
Power of the Suppliers – The suppliers in case of the universities are the teachers or the professors and the infrastructure of the universities. The professors of the universities and the basic infrastructure affect the choices of the students. If the universities aim to increase the emphasis on a certain course, they need to prepare for the increase in costs related to salary. The costs related to infrastructure of the Wollongong University is a part of the suppliers of the organization. The power of these suppliers related to the university are quite high and will affect the revenues that are generated (O’Neill, Beauvais and Scholl 2016).
Power of the Buyers – The global student pool of the university can be considered to be a major part of the buyer power. The global students and the high amounts of fees that are provided by them to the university have been able to increase the bottom line. However, the increase in the number of universities in the various countries and high level facilities offered to the students can affect the revenues of the Wollongong University in an adverse manner. The buyer related pressure is international in nature and is quite high in case of the Wollongong University (Rugman, A. and Verbeke 2017).
Rivalry – The pressure of rivalry has also increased in a constant manner and the various universities in Australia are facing the competition. The different universities are competing for a less number of students and this caused pressure on the revenues of the Wollongong University as well.
Threat related to substitution – The domestic and the international students are offered huge number of options. The frame of mind of the students have become similar to consumers. The needs of the various students have also increased. The substitution related threat is also quite high for the university.
Threat related to new entry – Many new universities are opening up and this has further increased the threat of new entrants in the market. This has been able to cause huge pressure on the universities to provide better options to the students (Tantalo and Priem 2016).
The university can use the strengths by trying to attract the various students from the other countries. The research capabilities of the organization can be enhanced to solve this purpose.
The threats that are related to the opening up of the new universities can be overcome by Wollongong University by creating new options for the students and providing them with more opportunities (Rugman, A. and Verbeke 2017).
The major weakness of the organization is related to the weak infrastructure which prevents the university from providing huge opportunities to the students. This can be solved by the increasing the investment on the infrastructure and research.
The strengths of the university related to research can be used by the students and the they can create huge opportunities for their own careers.
The weaknesses of the university related lack of international students and proper infrastructure can be overcome by investing more time on research and collecting funds from the government (Wright, Coff and Moliterno 2014).
Enhancing the campuses and providing high level opportunities to attract the students from the international areas. The growth of the global multi-campus of the university is planned and the university plans to use its reputation in the industry to grow successfully.
The corporate level strategy of the University of Wollongong is related to the partnership that is built by the university to build a network that will comprise of its alumni. This will help the university to enhance its reputation in the market and attract students from abroad. This will also be helpful in the collection of funds from the government (Tantalo and Priem 2016).
Organizational structure – The organizational structure of the university is hierarchical in nature and consists of various levels. The top management mainly consists of the Vice Chancellor and the Principal. The middle level management consists of various senior executives including, the chief administrative officer, the chief finance officer, deputy vice-chancellor (academic), deputy vice-chancellor (global strategy), deputy vice chancellor (innovation and research) and deputy vice chancellor (health and communities). The next level consists of the various divisions of the university which are related to accommodation, business improvement, pro vice-chancellor (students), pro vice-chancellor (Middle East and North Africa), Executive Director. The faculty of the university report directly to the Principal and the Vice-Chancellor (Hill, Jones and Schilling 2014).
Control systems – The control systems of the organization are mainly based on the various levels of the organizational structure that has already been discussed. The entire control of the activities in the university is in the hands of the Vice-chancellor and the Principal. The duties are further divided among the various other departments and their heads. The departments are divided in such a manner so that extra pressure is not given on the other departments. The hierarchical style of the organization depicts that the decisions are made by the top management, which are then followed by the others in the organization (Helfat and Martin 2015).
Organizational culture – The collaborative working culture is followed in the university and the various faculties work along with the partners of the organization to achieve the desired goals. The university works under the alliances that have been formed with the various organizations or international corporations. This helps the university in creating their global reputation and increasing the student base. The university has agreements with many international universities regarding the exchange of resources and students. The collaborative nature of working has been useful for a global organization like the University of Wollongong. This has further the university in creating an international presence (Uow.edu.au. 2018).
Financial Analysis
The financial analysis of the University of Wollongong will be based on the ratio analysis of its financial statements of the year 2016. Ratio analysis serves as a useful tool when assessing the different financial statements of the organization. It provides a quick overview of the performance of the firm in monetary terms.
The ratios discussed are as follows:
Return on Invested Capital
This ratio is a profitability ratio which helps in the measurement if the return which an investment is capable of generating (Zietlow et al. 2018). This is in return for the capital invested. The provider of the capital is generally the stockholder or the bond holder. The primary motive of the given ratio is to analyse the capability of the company in turning capital to profits.
Formula
ROIC= (Net Income-Dividends)/ (Debt+ Equity)
For University:
=(57700-4262)/(378310+1083123)
=(53438/1461433)
=0.0365
=4%
Any firm`s ROIC reflects the size and strength of the moat. If any company has the ability to have a ROC of 15-20% then it has a great method. This ratio is useful for the big companies.
As it can be seen, the University of Wollongong has a ROIC of 4% , which is very low and it is advised that the company improves in the given aspect (Uow.edu.au. 2018).
Return on Assets
The return on assets is another ratio which measures the annual net income to the average assets in a financial year (Lasher 2013). The Return on Assets is a useful ratio used to measure the efficiency of the business in using its assets as a source of generating income. This ratio is also a profitability ratio.
The formula is given as follows:
Formula
|
ROA = |
Annual Net Income |
|
Average Total Assets |
The net income which is taken into consideration is the net income after considering the taxes of the firm. It is calculated by dividing the sum of the total assets in the beginning and at the end of the year and taking its average.
The ROA of the University is as follows:
ROA= 57700/(1646336+1383571/2)
=57700/1514953
=3.8%
This given ratio indicates the amount of cents earned on each dollar. A higher value on the given ratio shows that the company is more profitable. Companies in a similar industry should be compared using the given ratio. A good ratio indicates that the company is making profits successfully.
The University of Wollongong has been doing comparatively well in the given aspect.
Current Ratio
The current ratio can be classified under the liquidity ratio and is used to measure a firm`s ability to pay the dues it owes to others in form of short term liabilities. This shall be paid using the current assets of the firm (Bekaert and Hodrick 2017). This ratio is specifically important as it is a critical measure of liquidity.
The current assets which comprise of the cash, marketable securities and others can be converted to cash easily. This reflects that the companies who have enough current assets, will be able to easily pay out their liabilities when the need arises.
Current Ratio= Current Assets/ Current Liabilities
The current ratio is normally calculated by dividing the current assets of a firm by its current liabilities.
For the University:
Current Ratio= 463422/ 184903
=2.5 times
The University of Wollongong has a current ratio of 2.5 (Uow.edu.au. 2018) which can be said to be a good ratio as the ideal ratio maintained by the companies should be 2:1.
|
Ratios |
University |
|
ROCI |
4% |
|
ROA |
3.8% |
|
Current Ratio |
2.5:1 |
Conclusion
The report is based on the internal and external analysis of the University of Wollongong. The internal environment is analysed based on the SWOT framework and strategies are formulated for the purpose using the opportunities and addressing the weaknesses. The external environment is analysed with the help of PESTLE framework related to the environment in Australia. Further, the financial statements of the university are analysed and the position on the organization is discussed in detail based on the strategies that have been employed in its operations.
References
Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledge.
Barrick, M.R., Thurgood, G.R., Smith, T.A. and Courtright, S.H., 2015. Collective organizational engagement: Linking motivational antecedents, strategic implementation, and firm performance. Academy of Management journal, 58(1), pp.111-135.
Bartlett, C.A. and Beamish, P.W., 2018. Transnational management. Cambridge University Press.
Bekaert, G. and Hodrick, R., 2017. International financial management. Cambridge University Press.
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Elmes, M. and Barry, D., 2017. Strategy retold: Toward a narrative view of strategic discourse. In The Aesthetic Turn in Management (pp. 39-62). Routledge.
Frow, P., Nenonen, S., Payne, A. and Storbacka, K., 2015. Managing co?creation design: A strategic approach to innovation. British Journal of Management, 26(3), pp.463-483.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Helfat, C.E. and Martin, J.A., 2015. Dynamic managerial capabilities: Review and assessment of managerial impact on strategic change. Journal of Management, 41(5), pp.1281-1312.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic human resource management. The Academy of Management Annals, 8(1), pp.1-56.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools?in?use: A framework for understanding “technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Lasher, W.R., 2013. Practical financial management. Nelson Education.
Luthans, F. and Doh, J.P., 2018. International management: Culture, strategy, and behavior. McGraw-Hill.
O’Neill, J.W., Beauvais, L.L. and Scholl, R.W., 2016. The use of organizational culture and structure to guide strategic behavior: An information processing perspective. Journal of Behavioral and Applied Management, 2(2).
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Tantalo, C. and Priem, R.L., 2016. Value creation through stakeholder synergy. Strategic Management Journal, 37(2), pp.314-329.
Uow.edu.au. (2018). Global Connections. [online] Available at: https://www.uow.edu.au/about/global/index.html [Accessed 9 Apr. 2018].
Wright, P.M., Coff, R. and Moliterno, T.P., 2014. Strategic human capital: Crossing the great divide. Journal of Management, 40(2), pp.353-370.
Zietlow, J., Hankin, J.A., Seidner, A. and O’Brien, T., 2018. Financial management for nonprofit organizations: Policies and practices. John Wiley & Sons
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