External environment of Singh’s Auto Rentals Company Limited Essay

dateFind an example of strategic management in an organisation in your estate or region, from your make throw or from your reading. The example back relate to either a big or small job organisation, or as yet to a public empyrean organisation.Which facets of the example do you use up to be com frame upable or bad examples of some aspects of strategic management, employ the principles covered in this subject as your guide? For example, you ability prove the good and bad examples in unmatched or more of these aras use stakeholder expectations communicating organisational purposes impertinent environment (PESTEL framework, five forces, opportunities and threats) strategic capability (value mountain chain and value ne iirk, strengths and weaknesses)SWOT abstractformulating a business strategy (bases of agonistic returns) implementing a business strategy (structural types, managing people) and/or bodily strategy (the two main portfolio approaches and extent of cor poreal diversity).THIS PAGE IS INTENTIONALLY BLANK executive director summarySinghs simple machine Rentals Company Limited (Singhs) was established in 1972 with a small slip away of only five (5) vehicles for rental. Singhs hybridizing incarnate strategy embraces cost and specialization in a securities pains that is highly competitive, having expanded its customer base to incorporate the corporate society, the multinational sector and the community sector. The ships smart set has grown and is instantaneously one of the favored clients of the Ministry of National Security of Trinidad and Tobago, offering a wide range of high-end vehicles and SUVs for rental, buses for tours and retreats, executive motorcars with number one woods for wedding parties and seven (7) hindquarterser vehicles for the family oriented customer.Business level challenges let over the years forced Singhs to refocus their objectives on their MOST, with profound market development and penetration o rientation, in an aggressive attempt to shape up market sh argon, increase volume gains and build perplex quickly. In this appointment the external environment encompassing doormans 5 Forces and PESTEL ar examined a spacious with its impact and influence on Singhs SWOT and stakeholders expectation. Examples of the good and bad of the external environment leave alone also be high visible radiationed to secernate how the keep troupe shadow increase their competitive advantage and profitability.Table of limit1.IntroductionThe supreme art of war is to subdue the enemy with step to the fore fighting. Sun Tzu, The stratagem of WarIn discussing the positive and negative aspects of the external environment, the PESTEL, the SWOT and Porters 5 forces will be apply to analyse where Singhs Auto Rentals is at in the industry and where the company can hold to be in the next five (5) years.The car rental industry is a competitive industry and Singhs competencies and capabilities will definitely carry through them in the market and make them into leaders erst they follow their objectives and tactics. whole men can see these tactics whereby I conquer, but what no(prenominal) can see is the strategy out of which victory is evolved. Sun Tzu, The fine art of War2.Company overview Singhs2.1 VisionWe aspire to commence the leading light in the Auto Rentals industry through continuous service excogitation and the expansion of our distribution networks.2.2 MissionUtilizing our assemblys strengths we aim to become a major force in the Car Rentals industry by offering innovative products, subjective processes, extensive networks, and the recruitment of the brightest talent, we strive to grasp impressive profitability.2.3 ObjectivesFrom the vision/mission statements assignn, it would seem that the objective of Singhs Auto Rentals is to become leaders in the industry. It can also be derived that this company seeks to achieve the following objectivesTo increase ma rket shareRemain stringent to its competitorsIncrease clienteleIncrease the fleet of vehiclesTo establish leadership in the market2.4 StrategiesSinghs strategy for achieving these objectives might be a business strategy. Business strategy is concerned with deciding which markets and activitiesthe business should be touch on in where it wants to be and how it is going to get there. Singhs strategies may intromit Satisfying customers (meeting customer needs)Running the business (organising resources in the most good and effective way) Beating the competition (strategies and tactics to gain competitive advantage) Achieving corporate objectives2.5 TacticsMethods this company uses to achieve strategies, as written in the mission, are the introduction of support and complimentary services they result namely24 hr FREE Roadside assistanceGuarantee competitive rate and seasonal discountsA wide range of vehicles to choose from including the economy and SUV range. unloosen maintenance on all vehiclesAir conditioned comfort3. PESTEL synopsis of SinghsAwareness of the external environment and how they impact on the company can be summarised using the PESTEL framework. The PESTEL can define the aboriginal drivers of change. These key drivers of change have differential impacts on industries, markets and organisations.3.1 PoliticalSinghs is a privately owned company but because the company buys and rents vehicles they would be complex with few governmental organizations for confused purposes.Ministry of Transportfor licensing of in the buff vehiclesFor vehicle transfersMinistry of financeTo approve any tariffsDuties or charges for purchasesTaxes (including rung salaries)Customs and ExciseImporting, duties and headroom of all vehiclesMinistry of Legal AffairsTo register the company legallyTo delay all licenses to operate as a limited liability company 3.2 EconomicalAs a private owned company, Singhs has to travel a dogged for what affect his company financially from the external environment. Key factors can be Fuel rates have rates gone increased or decreased, this would determine how to price the rentals. Exchange rates for distant currency.Salary negotiations in the verdant- would the employees demand high wages as a result of wages negotiations for government workers. Available and accepted methods of payment cheque, cash, VISA, MasterCard. Unemployment rates in the country .3.3 SocialThese influences the length of time a vehicle would be rented for. Singhs offers long term rentals (6 months to 3 years) and short term rentals (1 day to 6 months). Social factors include Changing cultures peak periods for local rentals (wedding and carnival) and peak periods for foreign rentals (tourists are nonplusn to the Caribbean during winter and summer). Demographics age groups of drivers.Community interests lobby groups, clement organisations etc3.4 technologicalIn a business such as Singhs one would encourage technology to play a role in the data collection, storage and distribution of the companys fleet of vehicles. Technological factors include Computerised scanning of vehicles under maintenance.Computerised database systems used for documentation, data collection, billing, accounting and ordering. conference methods have to be of the highest quality in order to reach out to customers (the business to customer approach). Updated websites, facebook pages or different social search engines used to advertise the company.3.5 EnvironmentalInfluences from the direct environment that may affect Singhs might be Waste disposal for waste disposal from the service department (oil, parts etc) Energy consumption the amount of energy or occasion used in a process or system. Weather conditions- may only affect the infrastructural aspect of Singhs in terms of weathering on vehicles which are not kept covered over a long period.3.6 LegalThe legal aspects of the company and how it influences the strategies and objectives. G overnmental laws a law might state that no one under the age of 18 is allowed to drive. Policies policies put in place by the board of directors and the key shareholders to determine how the business is going to operate. Rental contracts have to be done up and sign by each party for e rattling transaction. Insurance companies vying to insure the fleet of vehicles.4. StakeholdersStakeholders can exist both internally and externally. In an industry such as the vehicle rental industry the stakeholders are very important. The expectations of the stakeholders are equally important to the development of Singhs (see accessory III)4.1 Internal advance Of Directors or ManagementInvestors/ ShareholdersEmployeesSuppliers-contractorsService providers maintenance mobs, specialist garage crew4.2 ExternalBusiness to business ClientsDomestic ClientsInternational ClientsGovernment and regulatory industriesIndustry AssociationsLocal Communities5. SWOT (Internal / External synopsis of Singhs)In an exertion to ascertain its competitive environment a SWOT analysis of Singhs can assist to devise a sound strategic plan. The confined is to exploit and maximize the strengths and opportunities avert threatening circumstances through tactical responses and provide institutional upgrade to lessen weaknesses all these towards a position of profitability and value creation.As defined by (Alzoubi 2004) SWOT Analysis (strengths, weaknesses, opportunities and threats) is a general framework for directing and assisting strategic planners to identify the enamour organizational strategies to achieve their goals. Managers look at SWOT analysis as a technique to help managers to identify and plan the business goals, and draw the strategies to achieve them (Alzoubi 2013 p.126).Internal AnalysisStrengthsFocused management and staff reparation advantageEfficient customer serviceSkilled car supervise specialist and technicians.WeaknessesLack of Human Resource best practices no light(a) stra tegic directionLack of continuous training and development for staffPoor marketing skillsExternal AnalysisOpportunitiesTo gain large scratchTo be a house hold name in the car rental businessTo serve a large customer groupPotential for new services or products to be offeredThreatsCompanies offering confusable services coming on streamTurnover due to other companies offering better packagesLoss of customers due poor service experiencenew and existing regulationsnew and existing competitorsnew technologiesunstable governmental and legal systems in foreign marketsExternal opportunities and threats can work both ways for the organisation for example new technologies can make one aspect of the company obsolete but enhance another aspect of the company all at the same time.6. Singhs strategical base Units (SBUs)SBUs allow large corporations such as Singhs and muster to vary their strategies according to the different needs of the various external markets they serve. For example- corp orate Leasing leasing to companies on a special contract Short term and long term rental to both corporate clients and immediate clients Executive driver services airport to hotel and return, weddings, seminars Pre-owned vehicle sales- new to the company but very effective and brings in more profits Bus and driver tours for tourists7. The effect of Porters 5 Forces on SinghsPorters 5 forces analysis can be applied to Singhs as a overlyl to analyse the competitive advantages of the company. According to Porter (1980), disceptation (competition) on the market is result of the five variables or main forces opposition level, bargaining power of customers and that of suppliers, the threat from new entrants and substitute products. The following was deduced from the analysis of the five forces7.1. Threat of New EntryDue to lack of policies to clog new entry, the market is open for new entrants. Singhs will at a time have to develop and maintain a cost advantage and differentiation of its services, to gain sustainable competitive advantage. Economies of scale it would be dear(predicate) to for new entrants to match Singhs because of the level the company has reached in the industry, it would be knockout for new entrants to match them. Experience new entrants would be inexperienced in most of the know how of this industry and that lack of experience can give Singhs the advantage over a new entrant (See adjunct II).7.2. Threat of SubstitutionSubstitutes can come not only from at bottom the industry but also from outside. Managers often focus on their own industry and neglect the threat posed by substitutes for the product or service. The price/performance ratio is critical. Even if the substitute is more expensive the substitute is still effective (see appendix II).7.3. Buyer PowerSinghs needs to pay attention to the customers and the price they pay for the service. If the price is too high customers may seek to do business elsewhere which will force the company to drop prices, thus losing revenue (see appendix II).7.4 Suppliers Power-It was treasure that the business can be adversely affected if suppliers drive up their prices, then the concept of low cost to gain competitive advantage will be affected (see appendix I1)7.5 belligerent Rivalry-From the analysis it was unequivocal that the company had rivals performing a similar service. To prevent customers from moving from Singhs to the competitors, the company will need to provide unique services to its customers (see appendix II).8. CompetitorsSinghs entered the market as an entrepreneur in 1972, competitors from then to now would be companies established around or before that time groovy the same market with similar objectives. One such example would be southern Sales and Service Company Limited (SSS). Both companies entered the corporate market to try to gain market share. SSS has a large vehicle fleet than Singhs but SSS does not provide some of the tour guide services o r 25 seat bus retreat services that Singhs caters for. Even though they are in similar industries, they each cater to a different sector within the market. Refer to Appendix III for a visual on how competitive advantage works in an industry as Singhs.9. Competitive advantage Singhs has over SSSSSSCaters for company rentals and corporate rentalsProvides car and driver servicesProvides maintenance for some vehicles and outsources the rest Cost- broadly speaking high priced unit rentalEnergy consumption is highSinghsCaters for tour groups and tourist menuProvides car and driver servicesProvides transportation services from airport to hotel and returnProvides rental packages for weddings with a driverPrices are relatively low and are negotiableVarious branches throughout the country so customers can do business from any branch customer service is ranked very high10. ConclusionA pissed networking capability (Strength) has lead to an expansion in the business activities of Singhs ( cha nce) and this has resulted in increased profits due to long term leasing by various ministries (strength). The strength of networking was cultivated over a period of time and once established, it can sustain Singhs for the next five (5) years. Singhsexternal environment has room for new entrants and a lot of possible threats and opportunities that can arise, however, with proper strategic management and well trained staff this company can continue to push forward in this market and even make a breakthrough in a new one.Recommendations carry on to evaluate Singhs regularly.Always know where the company is in semblance to its competitors.Capitalise on new technologies and trade in old techniques. reminder staff and their talents, do regular training to update them on the catamenia techniques being used by competitors so that they can be brought up to speed or even one step ahead.Increase profitability by looking into marketing and advertising to the larger companies such as energy c ompanies (BPTT and Atlantic LNG) to try to gain greater market share, this is an opportunity within their SWOT analysis.Consider upgrading the fleet and maybe adding some high life type vehicles, look at the threat of buyers and see what the customers are ask for. Customers may be willing to spend their money on highlife cars from a rental company they trust.ReferencesJohnson, G, Whittington, R and Scholes, K 2011, Exploring Corporate Strategy, 9th edn, Pearson Education, London.Alzoubi, majed R. 2004, Strategic planning and building innovative organizations. Unpublished, PhD thesis, Amman Arab University for Graduate Studies, Jordan.Alzoubi, majed R. 2013, The Impact of dexterous Capital or SWOT Analysis among Jordanian Banking Industry verifiable Study International Journal of Business and Social Science, Vol. 4 No. 2 pp. 123-137.Singhs auto rental company limited, viewed 7 July 2014, http//www.singhs.com/about.htmlSouthern Sales and Service Company Limited, about us, viewed on 7 July 2014, http//www.southernsalestt.com/corp_history.phpTutor2U, viewed on 9july 2014,http//www.tutor2u.net/business/strategy/corporate_objectives_strategy.htmlSlideshare.com, http//www.slideshare.net/milesweaver/analysing-the-external-environment-of-business-ie-general-competitive, viewed on 12 July 2014