Name

SM0377 Understanding
Strategy
BA (Hons) Leadership and Management
January 2012

Word Count (Part 1): 3045

Word Count (Part 2): 1006
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Contents

Contents
Part 1 ....................................................................................................................................2
1.0 Introduction .................................................................................................................................. 2
1.1 Defining Strategy .................................................................................................................... 2
2.0 External Environment .................................................................................................................. 2
2.1 Macro and Micro Environment ............................................................................................... 2
2.2 PESTEL Analysis ................................................................................................................... 2
2.3 Five Forces Analysis .............................................................................................................. 2
2.4 Summary of the External Analysis ......................................................................................... 2
3.0 Internal Analysis .......................................................................................................................... 2
3.1 SWOT Analysis ...................................................................................................................... 2
3.2 Ansoffs Matrix ........................................................................................................................ 2
3.3 Summary of the Internal Analysis .......................................................................................... 2
4.0 The Authors Role in Contributing to Strategy ............................................................................. 2
4.1 Role and Mission .................................................................................................................... 2
4.2 Strategic Decision Making ...................................................................................................... 2
4.3 Contribution to Strategy ......................................................................................................... 2

Part 2 ....................................................................................................................................2
Reflective Statement & Learning Log ................................................................................................ 2
Reference List ........................................................................................................................................ 2
Bibliography ............................................................................................................................................ 2
Appendices ............................................................................................................................................. 2

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Appendix 1.1 - Organisation Background .................................................................................... 3

Appendix 2.1 - PESTEL Analysis ................................................................................................. 3
Appendix 2.2 - Five Force Analysis .............................................................................................. 3
Appendix 3.1 - SWOT Analysis .................................................................................................... 3
Appendix 3.2 - Competitor Comparison Chart ............................................................................. 3
Appendix 4.1 - Organisational Structure ...................................................................................... 3

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Part 1
1.0 Introduction
The context of this report is to provide the reader with a strategic analysis and appraisal of the
authors organisation. XXX is a private-sector training provider whose core business is to deliver
work-placed learning to adults in the North West of England (see appendix 1.1 for organisation
background). Relevant strategic frameworks will be applied to both the organisations external
and internal environment in order for a critical strategic evaluation to be sought.

1.1 Defining Strategy

Within the corporate environment there are many theoretical views and approaches to defining
strategy. The author has reviewed literature which defines strategy and which can be applied to
private-sector organisations, such as XXX.
Johnson, Scholes & Whittington (2008, p.3) provides focus on strategy being about the long
term direction of an organisation and place an emphasis on the importance of satisfying
stakeholder expectations:
The direction and scope of an organisation over the long term, which achieves
advantage in a changing environment though its configuration of resources and
competencies with the aim of fulfilling stakeholder expectations.
In a more recent study, Thompson & Martin (2010) argue that strategy can be used to fulfil both
short term and long term goals of an organisation. Thompson & Martin (2010) also argue that,
instead of the primary focus being on fulfilling stakeholder expectations, that strategy should be
used as an approach to achieve organisational goals or objectives. This supports earlier
research (Lynch, 2006. p.5) whereby strategy is defined as being the identification of the
organisations purpose and the plans and actions to achieve that purpose.

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However, in providing a more competitive approach to strategy, Porter (1996, p.64) argues that
corporate strategy is about being different and intentionally choosing a different set of activities
to that of competitors:
The essence of strategy is in the activities choosing to perform activities
differently or to perform different activities than rivals.
It is argued that if strategy is not applied in such a way it is merely nothing more than a
marketing slogan that will not withstand competition (Porter, 1996).
Although strategists may fail to adopt a universal approach to defining strategy, strategy is
arguably an essential tool required by organisations in the private-sector. In a recent study on
private-sector organisations, Quinn, Patton & Patrizi (2010) describe how strategy is an
important focus of management and organisational development, as it gives the organisation
the opportunity to analyse, adapt and implement change in order to achieve its goals. Strategy
is also described as being essential to organisations nowadays due to the increasingly global,
postindustrial, information based and competitive environment, compared with that of only a few
decades ago (Fleisher, & Benoussan, 2003).

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2.0 External Environment

2.1 Macro and Micro Environment
This section of the report will focus on the external environmental factors that surround the
authors organisation. Through the application of strategic framework tools an analysis will be
carried out.
Indeed, the external environment can be defined as:
Anything that influences or impacts on the organisation, its markets, its resources
or its stakeholders (Campbell, Edgar, & Stonehouse, 2011, p.127).
Campbell, Edgar, & Stonehouse (2011) define how the external environment is commonly split
into two types:

External general environment (the macro-environment).

Industry or competitive environment (the micro-environment).

Research (Capon, 2008) has shown that a careful and accurate analysis of both external
environments can benefit an organisation and enable them to implement an effective strategy.
Capon (2008) has outlined the key benefits attributed to the analysis of the external
environment:

Managers within an organisation are able to achieve a greater understanding and

appreciation of the external environment leading to improvement in long-term and
strategic planning.

The principle external environmental influences which generate change are highlighted.

Anticipation of threats and opportunities occurs within a time scale of long duration to
allow responses to be considered.

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2.2 PESTEL Analysis

A common tool used to analyse the broad macro-environment of an organisation is the PESTEL
framework. PESTEL is a simple acronym which stands for Political, Economical, Social,
Technological, Environmental and Legal. According to Johnson, Scholes & Whittington (2008),
applying this framework provides a wide environmental overview by identifying a
comprehensive list of influences on the possible success or failure of particular strategies. In a
study based on the international business environment, Brooks, Weatherston, & Wilkinson
(2011) found that, by applying the PESTEL framework, analysts can assemble a logical and
comprehensive picture of any organisational environment.
However, Faulkner & Campbell (2003) argue that the PESTEL analysis can often produce vast
amounts of information which can make it impossible for an organisation to use effectively by
those making the strategic decisions. Houlden (1980), as cited by Faulkner & Campbell (2003),
states that this problem is a form of bounded rationality and describes how the sheer scale of
information available nowadays means that models, such as PESTEL, which are designed to
simplify the complex environment, can mean that useful information can be lost.
Nevertheless, in support of Johnson, Scholes & Whittington (2008) and Brooks, Weatherston, &
Wilkinson (2011), Pettinger (2004) argues that even though the analysis may outline such a
wide analysis, it will highlight to the organisation any external concerns or issues which need
urgent attention and those which the organisation has no control.
For the purpose of this report, the author has carried out a PESTEL analysis of their own
organisation (appendix 2.1). Although the analysis has produced a wide range of information,
based on the research by Pettinger (2004), the author has identified key factors which have
highlighted any external concerns or issues which need urgent attention and those which the
organisation has no control. Table 2.1 outlines these key factors.

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Table 2.1 PESTEL Analysis - Key Factors

Key Factor

Influence on Strategy

The Government

95% of XXXs income is provided through the Skills Funding Agency (SFA), who
is an agency for the UK government. Ultimately, this reliance on government
resources means political factors are significant to the organisations strategy.
XXX have no control over the changes the Government implement but are likely
to be heavily affected by them. These could have both a positive or negative
affect of the organisation but will almost certainly need to be incorporated into its
strategy. For example:

The governments plans to increase funding for 75,000 additional

Apprenticeships is a significant factor considering 90% of XXXs delivery is
through Apprenticeships. XXX could be able to engage with more learners
and attract more funding.

However, a potential threat to the organisation is that the overall budget for
the Department for Business Innovation & Skills is to be cut by 3 billion by
2014/15. This could see other training providers in the region focus their
business strategy on the delivery of apprenticeships, which ultimately would
increase competition for funding.

Finally, the Governments plans to reform the upper limit on tuition fees could
see a possible decline in students entering into full time higher education.
Therefore, there could be a possible increase in demand for work based
learning in the region.

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Key Factor
Unemployment
Rates

Influence on Strategy
As XXXs primary service is to deliver workplace learning, economic factors in
the region surrounding unemployment will have a significant impact on the
organisations strategy. Less people in employment will mean less learners to
engage in workplace learning.
Given the current economic climate, the unemployed market could potentially be
a large market for XXX to enter. There is the opportunity to up-skill these
individuals and, through training delivered by the organisation, support them into
employment.
For learners who the organisation support into the labour market, they then have
the opportunity to deliver Apprenticeship training.
As a result of a Government initiative to target unemployment, the SFA have
recently provided flexibilities to their funding. This will allow XXX to access
funding to provide training to the unemployed. XXX are currently implementing
strategic changes to be able to deliver such training. However, this will need
urgent attention as the organisation will be reviewed by the SFA in 3 months time
at the end of their next funding quarter. Unsuccessful implementation of these
changes would likely see these flexibilities withdrawn from the organisation.

Ofsted

Ofsted play a significant role in shaping XXXs strategy through a legal factor, as
they inspect and regulate those who provide education and skills for learners of
all ages.
The core business of XXX is to provide a good and consistently high quality
learning experience for all of its learners. Ofsted will monitor the level of service
quality that XXX provide against their standards. XXX therefore need to
implement strategies which will allow them to deliver their training to promote
quality and satisfy Ofsted standards.
A outstanding Ofsted grade will not only make the provider more attractive to its
customers, but it will also make them more attractive to funders, such as the
SFA, and allow them to gain a competitive advantage in the industry.

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2.3 Five Forces Analysis

Along with an analysis of the macro-environment, it is important for organisations to analyse
competition within their industry or sector, namely; their micro-environment (Johnson, Scholes,
& Whittington, 2008).
The Five Forces analysis, originally identified by Michael Porter, is one of the most powerful
conceptual models used to identify the forces that affect an industry (Haberberg, & Rieple,
2008). The analysis is performed from the perspective of industry incumbents and suggests that
the stronger the organisations position concerning competitive pressure, the greater the
organisations profit potential (Grimm, Lee & Smith, 2006). According to Grimm, Lee & Smith
(2006), this framework helps an organisation achieve a competitive advantage by recognising
industry structure, positioning themselves in relation to that structure as well as shaping
industry structure in a beneficial manner.
Contradicting this research, Pearce & Robinson (2009) have found that managers are
frequently frustrated in their attempts to anticipate the external environments changing
influences using frameworks such as the Five Force analysis. The environment is full of
uncertainties and can often leave less powerful or smaller firms unable to maximise their longterm planning. However, in the same study Pearce & Robinson (2009) did agree that even by
just assessing the potential impact of the micro-environment, managers can put themselves in
an advantageous position by allowing them to narrow the range of options available and
eliminate those which are inconsistent with the forecast opportunities.
For the purpose of this report, the author has applied this framework to their own organisation
(appendix 2.2). Using this analysis of their own organisation, the author has identified key
factors, within the micro-environment, which can affect the private training industrys
profitability. Table 2.2 outlines these factors.

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Table 2.2 Five Forces Analysis - Key Factors

Key Factor
Government
(bargaining power
of suppliers)

Influence on Strategy
Porter (2008) describes how the Government are best understood as a sixth
force as their involvement is neither inherently good nor bad for industry
profitability. However, in this analysis, the Government can arguably be
described as a direct force as they are the main supplier of funding in the
private sector training industry. They directly control the industry through
funders and regulators, such as the SFA and Ofsted.
This leaves training providers with very little bargaining power over its
suppliers in terms of any changes they wish to make. However, the best way
for a training provider to increase its bargaining power and attract funding is to
satisfy its funders and regulators. For example:

By satisfying the funding requirements and meeting contract value profiles

set by the SFA will mean the organisation is in a greater position to retain
funding, secure further funding and gain a competitive advantage in the
industry.

By satisfying the standards of Ofsted, an independent regulator who

reports directly to the Government, the organisation will be more attractive
to its customers. A provider who is attractive to its target audience is also
more likely to meet its SFA profiles and in return gain and secure funding.
Quality of service

Due to the industry being so heavily regulated, services delivered by providers

(bargaining power
of buyers and

often become standardised and undifferentiated. This means that customers

can play providers off against each other, thus creating strong competition

competitive rivalry)

between rivals in the industry.

Although providers may try to differentiate themselves by offering flexibilities;
with shorter lengths of stay, additional learning programmes and advances in
technology, the demand for providers to deliver quality services should be
focal in its business.
Besides providing flexibilities to the customers, delivering a quality service will
allow the provider to be compliant and consistent. This will satisfy customers,
funders, regulators and inspectorate. Indeed, by being able to provide the
highest quality provision will give a provider the opportunity to be successful in
the industry.

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2.4 Summary of the External Analysis

Through applying both the PESTEL and the Five Forces frameworks, the key external strategic
factors affecting private-sector training providers have been identified.
The Government are clearly a major factor in shaping the organisations strategy as they are
the main funders in the industry. Although providers have no bargaining power with the
changes the Government wish to make, they can increase their bargaining power to win larger
contracts by satisfying Government agencies, such as the SFA, through achieving contract
value profiles and delivering a quality service.
The services XXX offer are deemed to be of quality if the meet the requirements set out by the
industry inspectorate, Ofsted. By meeting these requirements the organisation are more likely
to attract more customers and therefore achieve its SFA contract value profiles.
Along with these factors the current economic climate, with its high levels of unemployment, is a
critical factor due to the nature of the learning which is delivered. However, the government are
providing genuine opportunities for providers to tap into this market and provide learning to the
unemployed.

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3.0 Internal Analysis

3.1 SWOT Analysis
Besides an external analysis, an organisation should also undertake an internal analysis to
provide an effective platform to develop strategic options (Jeffs, 2008).
A commonly used tool for internal analysis is SWOT. SWOT analyses an organisations
strengths, weaknesses, opportunities and threats, and summarises the key issues from the
external environment and the strategic capability of an organisation that are most likely to
impact on its strategic development (Johnson, Scholes & Whittington, 2008). Johnson, Scholes
& Whittington (2008) describe how this can be a useful tool to generate strategic options as well
as assessing future courses of action.
However, in an earlier study, Barney (1995), as cited by Mazzucato (2002), describes how
many organisations focus too heavily on their opportunities and threats. To obtain a sustainable
competitive advantage, Barney (1995) argues that organisations must give enough attention to
their strengths and weaknesses, including their internal resources and capabilities.
In accordance with this research (Barney, 1995), the author has carefully analysed all internal
factors using SWOT analysis (appendix 3.1). Comparing this with the external strategic factors
identified the previous section, the author has identified the key factors which the organisation
are currently addressing when developing their strategy to meet their strategic objectives,
outlined in appendix 1.1. Table 3.1 outlines these key factors.

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Table 3.1 SWOT Analysis - Key Factors

Key Factor

Influence on Strategy

Achieving

Each financial year providers, who have been awarded a contract by the SFA,

contract value
profile

are given contract value profile which they must achieve. Providers who fail to
achieve their contract value profile will not only lose out on funding available to
them, but risk having future contract values reduced as a penalty.
In the financial period of August 2010 - July 2011, XXX were unable to achieve
their contracts value profile. Not only is this a weakness to the organisation, but
it is arguably a threat due to the potential of the loss of future funding. The
organisation claim that the key factors affecting this were the high levels of
unemployment in the region, change in Government, and the changes in
regulations to Apprenticeship frameworks.
The organisation have also just released figures which show that the
organisation were unable to achieve their value profile for the first quarter of the
2011/12 financial funding period. However, the organisation have been
presented with the following key opportunity to overcome this weakness and
achieve their financial targets:

SFA funding flexibilities - following the closure of the first financial quarter,
XXX have now been awarded flexibilities to their funding contract. The
organisation are now in a position to deliver training to unemployed
individuals who seek to gain employment. This not only means that the
organisation have the opportunity to tap into a new market and grow the
organisation, but they have a greater opportunity to achieve their value
profile.
Through addressing these economical and political factors, the organisation now
has the opportunity to achieve their financial target for the contract year. If
strategic changes are effectively implemented and managed correctly the
organisation have an excellent chance of achieving two of their strategic
objectives of growing the organisation and improving profitability.

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Key Factor

Influence on Strategy

Ofsted

One of the organisations strategic aims is to be graded as outstanding by

Ofsted. As mentioned in the previous section, an outstanding Ofsted grade will
not only make the provider more attractive to its customers, but it will also make
them more attractive to funders and allow them to gain a competitive advantage
in the industry. It will also allow the organisation to compete with large colleges in
the region.
Unfortunately, a current weakness is that XXX were only graded as being good
by Ofsted in an inspection in August 2010. Reasoning from Ofsted, and
identifying further weaknesses, were poor learner achievement rates, lack of
support for training advisors and weak management of KPIs in some
departments.
As a result of this inspection, XXX created a Quality Improvement Strategy
which was specifically designed to take steps to address the issues raised by
Ofsted. This was implemented with an immediate effect. In October 2011, XXX
were then subject to an Ofsted Focused Monitoring Visit, which reviewed the
improvements made following the inspection. Feedback from this visit identified
that Ofsted were highly impressed by the strategic improvements.
If XXX continue to successfully promote quality throughout their organisation, in
a way they done over the past year, they have a genuine opportunity to achieve
an outstanding grade. Therefore, achieving one of their strategic goals.

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3.2 Ansoffs Matrix

One of XXXs strategic objectives is to grow their organisation in terms of profit and their ability
to compete with large public colleges in its region. Jeffs (2008) describes how growth is
desirable for many organisations and Ansoffs Matrix is a commonly used tool to develop
strategies. Johnson, Scholes & Whittington (2008) states that the matrix provides an
organisation with an alternative set of directions, namely:

Increased penetration of existing markets.

Market development, including building new markets possible in new customer

segments.

Product development, referring to product improvement and innovation.

Diversification, involving a significant broadening of scope for both markets and

products.

However, from a cautious viewpoint, Mazzucato (2002) argues that there can often be a limit to
the growth of an organisation. Mazzucato (2002) states that strategic plans for growth will
depend on the experience of the management leading the process and many actions,
especially diversification, are done at a high risk to the organisation. Joyce & Woods (2001)
support this cautious approach and provide further argument that any rapid growth can often
mean organisations fail to effectively manage its new capacity, meaning the quality of products
are affected.
Using its growth objective, and considering the analysis of its external environment, XXX have
put in place various strategies to help them to achieve this. However, the organisation must be
not allow quality to suffer (Joyce & Woods, 2008) as a result of any growth. The author has
used Ansoffs Matrix in order to identify these key strategies (table 3.2).

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Table 3.2 Ansoffs Matrix

Growth Type
Market
Penetration

Growth Strategies Identified

XXX are currently implementing a number of strategies in order to help them
increase their share of the current market. These include:

Refer a Friend Scheme - this scheme asks current customers and employees
to refer a friend to enroll onto a XXX learning programme. Those who refer
new customers will be awarded a bonus between 50-100 for each new
customer. It is hoped this recruitment drive will increase the organisations
customer base, as well as helping the organisation achieve its contract value
profile and become more profitable.

Through the use of MIS, the organisation have developed reporting tools
which will allow them to identify further opportunities amongst its current
customers. For example, this report can be used to identify those who have
recently completed an Apprenticeship and would be eligible to enroll onto an
Advanced Apprenticeship. Not only will this aid the organisation in its growth
but retaining customers is cheaper than attracting new ones.

Princes Trust Millionaire Makers - throughout 2011 XXX has been engaging
with the Princes Trust to raise money for the charity. Not only will this
address corporate social responsibility but it will allow XXX to promote their
services to young potential learners through the charity through various
networking events and advertising.

XXX has set up a working party that will look at the creation/development of
Facebook and Twitter sites. It is hoped this will allow the organisation to
growth through the interaction of younger potential customers.

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Growth Type

Growth Strategies Identified

Market
Development

Although one of XXXs objectives is to gain an outstanding grade with Ofsted

and compete with large local colleges, at present they offer a much smaller
range of training products compared to these public bodies. However, a strategic
advantage the organisation has is that they are more flexible in its delivery and
have a good reputation for accommodating nonstandard shift patterns of its
customers and working environment.
Whilst the organisation does have this strategic advantage over public
competitors, its ability to equally compete with large public bodies remains a
longer term strategic growth objective. Therefore, XXXs short-term strategy
focuses heavily on its private competitors. XXX currently ensure they offer a
larger and more up-to-date range of courses than its competitors (appendix 3.2).
In July 2011, XXX began to deliver Apprenticeships in IT Professional
Communication. Not only is this delivered to customers in workplace
environments, but the organisation also opened an internal academy to deliver
this qualification. At present, only one of XXXs private competitors deliver this
specialist qualification (appendix 3.2).

Product
Development

As well as ensuring its range of products competes with that of its competitors,
the organisation also ensures quality and innovation are at the forefront of its
delivery.
As identified in the Five Forces analysis, the industry regulations often make it
hard for providers to differentiate their products, indeed creating strong rivalry
between competitors. Therefore, XXX adopt strategies which will allow them to
deliver quality and innovative services.
At the end of 2009, the organisation introduced e-portfolio software called
Learning Help. This is an innovative system which helps to enhance the learners
experience by providing them with a personalised learning journey. This also
means that learning materials can be accessed via the internet.
This use of technology has allowed XXX to reach more learners in rural areas,
thus helping to grow in these geographical areas, and aids the learners in
completing their programmes in a timely manner.
Learners who progress well through their programme are more likely to achieve.
In the past it has been poor achievement rates, as identified in the SWOT
analysis, which have prevented XXX from gaining outstanding by Ofsted
inspectorate.
XXX have heavily incorporated technological advances to allow them to improve
the quality of their service. The organisation continues to watch the market for
the latest technological advances to remain ahead of the competition.

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Growth Type

Growth Strategies Identified

Diversification

This is an area where the organisation have recently withdrawn from. The
organisation offered a free recruitment service to organisations and learners, to
place individuals into employment and then deliver Apprenticeship training.
In July 2010, the organisation announced that it would no longer be operating
this service as it was not financially feasible. It was also a distraction from their
core business.
XXX, at present, have no strategic plans for any further type of diversification.

3.3 Summary of the Internal Analysis

The authors internal audit of their organisation has shown that their organisation has its
strengths, weaknesses, opportunities and strength along with its potential to grow in the current
market.
In the last financial year and the first quarter of the current financial year, the organisation has
under performed in terms of its profitability. However the SWOT analysis has identified
opportunities; through flexabilities in funding, training delivered to the unemployed market and
improving quality, which provide the potential to improve profitability. Through discussing
SWOT analysis the author has identified that the organisation has strategies in place to over
come its weaknesses and threats, and to build on its strengths and opportunities. All of these
will help the organisation achieve its strategic objectives.
The growth analysis identified that the organisation has genuine strategies in place to aid its
growth in the training industry. At present XXX is ahead of its private competitors in terms of it
range of products and its size. They also continue to use the latest technology and innovation
for their training products to grow within the industry.
However, a goal of the organisation is to grow and complete with large public bodies, such as
local colleges. In addition to its growth strategies the organisation must achieve outstanding in
their next Ofsted inspection for the organisation to stand any chance of achieving this. As
outlined in the SWOT analysis, the organisation have implemented a Quality Improvement
Strategy which has been reviewed by Ofsted, whom were highly impressed.

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Indeed, it can be argued that XXX have comprehensively assessed their external environment
and effectively identified strategic areas which need addressed to allow them to meet their
objectives. It is hoped over the remaining financial year the organisation can meet their financial
targets through the implementation of these strategies, and compete with larger organisations
in its long term future.

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4.0 The Authors Role in Contributing to Strategy

4.1 Role and Mission
As the author of this report, my role within XXX is a Team Leader within the Finance
Department. The Finance Department falls under the Quality Division (see appendix 4.1) and
can be defined as a support function (Slack, Chambers, & Johnston, 2010) as its purpose is to
support the core functions, such as training delivery staff, to operate effectively.
In accordance with Slack, Chambers, & Johnston (2010) my department carries out a range of
administrative tasks which support the training delivery staff in the field. Along with this my
department also carries out a range of quality checks to ensure training is conducted and
documented in a way which satisfies SFA financial guidance. Indeed my department, although
not directly responsible for delivery of training, plays an important role in ensuring quality and
consistency in order to help the organisation achieve its mission.
XXX mission is:
XXX

4.2 Strategic Decision Making

Regarding strategic decision making, Campbell, Stonehouse, & Houston (2002) define how
strategy exists within a number of levels of the organisation. Both Campbell, Stonehouse, &
Houston (2002) and Johnson, Scholes & Whittington (2008) have defined three levels of
strategy (table 4.1).
Table 4.1 Levels of Strategy
Level

Description

Corporate Level
Strategy

Strategy at this level is concerned with the overall scope and direction of
an organisation, including how value will be added to the different parts
of an organisation. These can include decisions relating to ownership,
objectives, products, marketing, finance, etc.

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Level

Description

Business Level
Strategy

Strategy at this level is concerned with how the various businesses

included in the corporate strategy should compete in their particular
markets. These can include decisions relating to core competences in
marketing, finance, sourcing and distribution.

Functional Level
Strategy

Strategy at this level is concerned with how the component parts of an

organisation effectively deliver both corporate and business level strategy
in terms of resources, processes and people.

Within my organisation both corporate and business level strategies are made by the board of
directors, as shown in appendix 4.1. Within this board, there are no non-executive members
and more than half of the board is made up of family members. According to recent research
(Solomon, 2010), it could be argued that this board does allow for enough corporate
transparency and not enough disclosure to stakeholders, as well as arguably making selfserving decisions. Beasley (1996), as cited by Solomon, 2010, also found that organisations
without non-executives on their board increased the incidence of fraudulent financial activity.
Besides these criticisms, it could also be argued that by failing to include middle management
in decision making is detrimental to the organisations overall strategic management. Although
the conventional view is that strategy is the business of top management, research (Johnson,
Scholes & Whittington, 2008) has shown middle managers are often overlooked yet they can
provide benefits to strategy making. This is because middle managers generally have more
involvement in procedures. They are better at interpreting strategic intentions into action, have
a strong commitment to strategic goals and are in a position to communicate the strategy more
effectively (Johnson, Scholes & Whittington, 2008).
In support of this research (Johnson, Scholes & Whittington, 2008), I agree that strategic
decisions are not always communicated effectively to my department by the board. An example
of this surrounds the recent funding flexibilities that have been made available to my
organisation by the SFA. My department was informed of this information secondhand by a
member of the Sales Department. It took over two weeks for this information to be
communicated to the organisation through the Business Update from the board. Formisano
(2004) states that all levels of the organisations should be engaged in decision making and
poor vertical communication is one of the main reasons why strategies fail.

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4.3 Contribution to Strategy

On a more positive note, my department is set Key Performance Indicators (KPIs) by the board
of directors which supports the achievement of corporate and business strategies. These have
been effectively communicated to my department. KPIs are used as a tool to evaluate and
ensure performance that is linked to strategic objectives (Sanchez, & Benoit, 2010). In a study
of private sector organisations, Lathan (2007) describes how KPIs must fit the company
strategy and goals in order for them to provide a consistent approach to operations.
I would agree with this research (Lathan, 2007) and argue that the objectives set by the board
are relevant to the companies strategy and provide my department with a clear direction of
purpose.
My role, as a team leader, is to ensure that my department consistently achieves its KPIs. One
of our main KPIs is to ensure the training delivery staff provide consistent and compliant
documentation which underpins the training they deliver. As mentioned throughout this report
quality is a key driver for XXXs success. Using the definition by Schroeder (2003) and ensuring
documentation is compliant with SFA funding guidance will ensure my organisation is adopting
a quality approach that satisfies its funders.
I ensure my department is able to do this by implementing training and providing on going
support and guidance to individuals. I have set up a Training Matrix which identifies an
individuals competence in each area relating to KPIs to ensure every member of the team can
do their job effectively. I also ensure that all individuals fully understand the guidance set out by
the SFA so that quality can be achieved.
In line with research (Jay, 2003 and Sinickas, 2006) I also hold daily team briefings and regular
team meetings within the department. This is an effective way to communicate, build motivation
and gives me the opportunity to plan daily task to ensure that workloads are prioritised so that
other KPIs can be achieved.
Indeed, as a department my team work effectively and consistently achieves its KPIs. However,
I feel communication from the board, regarding other important strategic decisions, should be
improved. I also feel it may be beneficial for middle management to have some involvement in
decision making, in support of the research by Johnson, Scholes & Whittington (2008).

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Part 2
Reflective Statement & Learning Log
Research in the field of leadership and management has placed an emphasis on the
importance of reflective learning. For the best results, it is argued that individuals should reflect
on their learning and newly developed skills, as well as identifying how this can be applied to
their daily roles in their organisations and how this can develop their future career path (Watson
& Reissner, 2010). It is within this context that I aim to reflect on the knowledge gained and
developed throughout module SM0377: Understanding Strategy.

Knowledge developed as a result of this module

I began this module be attending weekly lectures and undertaking recommended further
reading, of which I needed to keep a Learning Log. I feel this Learning Log was a particularly
useful tool in helping me develop throughout module.
At the beginning of the module I started to keep a log of the lectures that I had attended. This
encouraged me to revisit and conceptualise what I had learned. This further embedded my
strategic knowledge and also initiated me to think strategically whilst understanding how the
learning could be applied to actual activities and issues in my workplace.
In addition, the Learning Log encouraged me to undertake the recommended further reading
and e-learning activities, as outlined in the Teaching and Learning Plan. Admittedly, this is
something I would otherwise not have undertaken so rigorously. The further reading and
activities reinforced the learning that I had acquired in the lectures. This again helped me to
understand how strategy could be applied within my organisation and in my assignment, as the
weeks progressed.
Through the learning acquired in the lectures, further reading and the activities I began to enjoy
my learning and applying this to my organisation. As a result, I signed up to Business Updates
from the Skills Funding Agency (SFA); a key stakeholder to my organisation. This allowed me
gain to knowledge of strategic factors which could affect my organisation, and indeed my
current role.

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As I progressed through the weeks, I also began to analyse my organisations macro and micro
environments. Through this I was able to understand how stakeholders such as the SFA, the
Government and Ofsted strongly shape and effect my organisations strategy. This also further
highlighted my organisations need for quality and the need to be reflective to changes in their
macro-environment; particularly political, legal and economical factors.

How learning has contributed my performance within my organisation

In addition to gaining a better understanding of my organisations position in the private sector
training market, I also began to gain an understanding of how my job role links to my
organisations strategy. Namely, through helping to promote quality and achieving Key
Performance Indicators (KPIs).
Although Corporate and Business Level Strategy within my organisation are made by the board
of directors, I have realised that the role I play in Functional Level Strategy. I have been able to
identify how my department contributes to the achievement of the organisations strategic
objectives. This will indeed have a beneficial affect on my organisation. Through better
understanding of this, I felt more motivated in my job role and adopted a more positive
approach, possibly as I felt my job role had more importance than I had originally thought. I
began to focus on the quality within the department, as well as looking at improvements and
efficiencies that could be made to ensure KPIs are consistently achieved (previously I had not
realised that KPIs were directly linked to the strategic goals of the organisation).
I found myself taking more of an interest in activities such as reading weekly business updates
and identifying how any changes would affect the strategic goals of my organisation, as well as
my department. Following on from this, I was able to pass my knowledge and understanding
onto my colleagues. I have been able to explain and help to address any queries they had
through a more positive approach.

Reflection on my learning
As previously mentioned, I believe the Learning Log had a positive effect on my learning. By
completing this I was encouraged to participate in further activities outside of lectures, as well
as reflecting on learning I had gained in lectures. Indeed, I was also encouraged to apply my
learning to the workplace and understand how this could be applied in my assignment.

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In a previous module I completed a Learning Style questionnaire, based on Honey & Mumfords
Learning Cycles, which identified that I had a strong preference to the learning style of a
pragmatist. Table 1.0 provides a description of this learning style and the preferred learning
activities.
Table 1.0 Learning Style of a Pragmatist
Pragmatist

Activities

Description

Positively search out new ideas or techniques which might apply in

their situation.

Take the first opportunity to experiment with applications.

Respond to problems and opportunities as a challenge.
Are keen to use ideas from management courses.
Like to get on with things with a clear purpose.
Preferred Learning
Activities

Where there is a link between the subject matter and a problem or

opportunity on the job.

Shown techniques for doing things with obvious advantages.

Where there is a chance to try out and practice techniques with
coaching/feedback from a credible expert.

Exposure to a model that can be emulated.

Techniques given are applicable to the current job role.
Immediate opportunities are available to implement what has been
learned.

There is a high face validity in the learning activity.

Practical issues can be concentrated on.

(Information adapted from: Mumford, 1997 and Honey & Mumford, 1986)
The preferred learning activities suggest that a pragmatist is all about things working in practice
and being relative. I believe the Learning Log encouraged me to learn in a way which suited my
learning style, as it made the learning relative and practical to my organisation and current
position. Without this I feel that I may have struggled to understand some of the more complex
theories of Strategy.

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Areas for further development

In producing this assignment there were certain areas of Strategy which I focused on more than
others, these include; PESTEL, Five Forces Framework, SWOT and Ansoffs Matrix.
There are other frameworks which I would have liked to have applied to my organisation, such
as the Value Chain analysis and Porters Generic Strategies. I feel that Porters Generic
Strategies would be a particularly useful tool to apply to my organisation, as one if its strategic
objectives is to grow the organisation. This would follow on from the growth analysis outlined in
this report, and would help to shape strategy in terms of increased competition through growth.
I would also like to further develop my knowledge in Corporate Social Responsibility. This year
my organisation has taken part in the Millionaire Makers Challenge which raised money for the
Princes Trust. At the AGM the organisation announced that they would be choosing two new
charities to raise funds for next year. It would be interesting to assess and understand their
reasoning behind this, as this is something the organisation has previously not been involved in.
Indeed, in leaving this module, I feel as though I am now in a position to apply the skills and
competences that I have gained at both my current organisation and indeed, to my future
managerial career.

Page 27

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Butterworth-Heinemann.
Capon, C. (2008) Understanding Strategic Management. Essex: Pearson Education Limited.
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Education Inc.
Grimm, C.M., Lee, H. & Smith, K.G. (2006) Strategy as Action. Oxford: Oxford University Press.
Jay (2003) How to Build a Great Team. Gosport: Pearson Education Limited.

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Jeffs, C. (2008) Strategic Management. London: Sage Publications.

Johnson, G., Scholes, K. & Whittington, R. (2008) Exploring Corporate Strategy. 8th edn.
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2011).
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Wiley & Sons Ltd.
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2011).
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Van Deusen, C., Williamson, S. & Babson, H.C. (2007) Business Policy and Strategy. 7th edn.
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Appendices
Appendix 1.1 - Organisation Background
XXX

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Appendix 2.1 - PESTEL Analysis

Factor
Political

Influence

Publication of the National Skills Strategy, whereby the Government have set
out measures to improve skills, training and apprenticeship. These include
providing funding for an additional 75,000 Adult Apprenticeships and investing
in skill sectors on which future growth and jobs depend.

Department for Business Innovation & Skills - a department set up by the

government to support sustained growth and higher skills across the
economy. The department's budget for 2011/12 is 17.6 billion reducing to
14.6 billion by 2014/15 under the governments 2010 spending review.

Government reforms to higher education were the upper limit on tuition fees
will be raised to 9,000 in 2012.
Economical

The rate of employment is lower than the national average.

The North West has the highest proportion of workless households of any UK
region.

The dominant sectors of the North West economy are manufacturing,

business services and the public sector.

The North West has a much lower number of businesses per 10,000
population than the national average.

There is a smaller proportion of highly qualified people in the North West than
nationally, but there are also fewer skills shortages.

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Factor

Influence

Social

Broadly, the population is ageing, and there is a relatively low proportion of

people from black and minority ethnic groups.

However, the ethnic diversity of the North West has changed significantly
since the 2001 Census. In particular, the regions non-white population has
grown dramatically; there have been increases in the Black African, Black
Caribbean, Chinese and Mixed heritage.

With employment and ethnicity, there are notable trends. In particular, white
and mixed raced people are the most likely to be employed, whilst
Pakistani/Bangladeshi people have the lowest employment rates in the
region.

Women in the North West earn less than their male counterparts, are
underrepresented at professional and managerial levels, and are more likely
to be concentrated at the lower skilled end of the market.

Disabled people have lower overall levels of qualifications than non disabled
counterparts.
Technological

The Information Authoritys plans to strategically reform its electronic data

collection methods.

The Information Authoritys change to the Learning Aims Database (LAD)

which is replaced by the Learning Aim Reference Application (LARA). This
imposes changes such as a new look, new location, new platform and new
technology.

SASE Implementation - changes made by the National Apprenticeship

Service (NAS) where Blueprint compliant apprenticeship framework are
being replaced with the new SASE (Specification for Apprenticeship
Standards in England) compliant apprenticeship frameworks.
Environmental

Sustainability Agenda.
Pressure to reduce Carbon Footprint.
The need for recycling.

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Factor
Legal

Influence

Ofsted Inspections
Apprenticeships, Skills, Children and Learning Act (2009) - this act outlines
the changes to be implemented regarding the new SASE compliant
frameworks.

Government review of the Skills Funding Agency (SFA) and its structure - the
SFA are a partner organisation of the Department for Business Innovation &
Skills and fund and regulate adult further education and skills training in
England.

Sources of information: Conservatives (2011), Department for Business Innovation & Skills
(2011), UK National Statistics (2011).

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Appendix 2.2 - Five Force Analysis

Force

Threat

Threat of entry

Existing providers may have built up an established reputation, meaning new

entrants may need to differentiate. Learners maybe unwilling to engage with a
newcomer without this established reputation.

Switching costs from one provider to another is nil, however if the other
provider has claimed SFA funding this would not be able to be claimed again.

The capital investment requirement to enter the market is relatively low,

however a new entrant would have to secure SFA funding, acquire staff with
the correct skills and experience and register with the relevant awarding body.

An existing provider may have a quality advantage over new entrants - such a
Ofsted grading, which a new entrant would not have.

Government and Ofsted regulations may make it difficult for a new entrant.
Bargaining

Funded learning in England stems from Government. This leaves providers

power of
suppliers

with little bargaining power over suppliers, as there is no real alternative.

As the government are serving many industries, they are likely to choose to
fund the industry which needs protecting.

There are low switching cost if the Government chose to withdraw funding
from one provider and award to another.

Commercially funded learning (that funding provided by a learners employer)

is available. However, this customer group has a negotiating leverage as they
are a relatively low number of buyers and are often harder to source.
Bargaining
power of buyers

Customer are often faced with standardised and undifferentiated products,

which can lead to learners playing one provider off against the other.

Customers demand quality and flexibility.

Customers face minimal to nil switching costs in changing providers.
Large volumes of customers have a greater negotiating leverage.
Threat of
substitutes

Local colleges can deliver the same training in a non-work-based

environment.

Learners may choose not to opt for work-based training and in stead opt for
Higher Education.

Learners may choose not to opt for any sort of training at all.

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Force
Competitive
rivalry

Threat

Strong rivalry between competitors to secure Government funding.

Rivalry between competitors to attract learners is also strong as products are
often identical.

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Appendix 3.1 - SWOT Analysis

SWOT
Strengths

Factors Identified

15 years of successfully winning and delivering Government contracts.

A well established reputation in the region.
Successful management of contracts and staff performance through an
effective Management Information System (MIS).

Innovative learning methods - such as trainers ability to differentiate and

personalise training programmes to adapt to their own learners.

Winners of several awards as well as being shortlisted for a number of other

regional awards.

An experienced workforce who are developed through training to support

their growth.

Good use of ICT for communications and delivery of training following the
implementation of Learning Help (E-Portfolio software) in November 2009.
Weaknesses

Ofsted grade is good, rather than the desired outstanding grade.

Unable to meet all profiles set out by the SFA in 2010/12 contract year.
Learner achievement rates in some delivery ares are less than 85%.
Training advisors require more support from Programme Managers and
Internal Verifiers out in the field.

Weak management of KPIs in some departments.

Insufficient Customer Service contact with learners and employers.

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SWOT
Opportunities

Factors Identified

The growing unemployed market - this is a good opportunity to deliver

training to unemployed and Not in Education, Employed of Training (NEET)
individuals.

Recent flexibilities applied to SFA funding to allow XXX to deliver funded

training to assist individuals into employment.

Use feedback from Ofsted to implement plans for change to enable the
organisation to be awarded an outstanding grade.

Government reforms to higher education were the upper limit on tuition fees
will be raised in 2012 - this could see an increase in demand for work-based
learning.

Employment of a successful Bid Writer to identify other bid opportunities to

enhance and support the organisations core business (including
Commercial, Government, Local Authority and ESF bids).

Threats

Change in Government has caused delay on some new contracts and have
been put on hold until after the spending review.

Change in Government has seen capping on Train 2 Gain contracts.

Winning Government contract has become more competitive.
XXX may lose contract bids where funders choose to award contracts to
providers with outstanding Ofsted grades.

XXX may lose out on funding due to failing to achieve profiles set out by the
SFA.

Rate of unemployment in the North West is above the national average - this
means less people are able to engage in work-based learning.

Use of new E-Portfolio software could make both staff and learners feel
threatened by technology.

Source of information: Strategic Business Plan (2010) & Marketing Strategy (2011).

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Appendix 4.1 - Organisational Structure

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