Order from us for quality, customized work in due time of your choice.
Introduction
The Davis Service Group Plc has been successfully expanding its operations in most parts of Europe through acquisition and organic growth. Consequently, it has turned out to take leadership in the textile services industry throughout the continent. The company has identified an opportunity in the Australian market for its tool hire services and it intends to capitalize on this. The company intends to expand its operations in order to grow organically. However, as much as the business organization might be having particular strengths, such as a stable financial base and adequate skills in their business operations area, there are still some challenges to be encountered (Davis Service Group Plc, 2007). First, such challenges include the language distinctions that may prevent from effective communication in the course of business operations. Second, the difference in the currencies may make it difficult to project the costs and returns more effectively. Last, there are differences in the legal and administrative matters. Therefore, it is essential to examine these issues to overcome the obstacles coming with them.
The people to work in this region within this company should be familiar with the language and culture to achieve the organizations goal. Since the business currently uses a pound as its currency, it might not be difficult to link it to the Australian dollar to clear off the difficulty in making financial projections. The company intends to invest 50 million pounds, and it is expecting to grow at an annual rate of 25% (Davis Service Group Plc, 2007). Moreover, the management and other employees of the organization should make themselves familiar with the legal and administrative procedures followed within this country.
Key Issues
The main issues are that the company is financially stable and has adequate skills in carrying out the business operations in the tool hire field. The weaknesses include the language distinctions, the difference in currency, and in cultural, administrative, and legal procedures. However, there is an opportunity in the new geographical area of operation that cannot be missed by this company since this is not its first move towards spreading within different countries.
Vision, Mission, and Corporate Objectives
The Davis Service Group Plc is a focused European textile maintenance company. Its core strategy is to set up market leading positions to acquire growth of revenue by making acquisitions and growing organically (Davis Service Group Plc, 2007). The operations are managed efficiently to bring sustainable growth of the profit, stable cash flow, and higher levels of return to the shareholders.
The companys vision is to become a business leader in textile maintenance, tool hire, and building systems. The mission of the company is to focus on its core business to be able to deliver higher levels of growth at better margins than those of its competitors. It is being performed through managing the companys operations efficiently and by availing resources to drive the growth strategies using the core areas of the organizations expertise (Davis Service Group Plc, 2007). This business organization intends to remain focused in order to capture the opportunities for organic growth. It also aims to keep innovating and improving customer service, shifting the focus from products supply to delivering service solutions. Moreover, it strives to concentrate on the delivery of pricing that recovers the increases in the cost base, and make it possible to invest in order to support the growth that the customers expect. One of its objectives includes aiming to grow the revenues higher than the economic growth of the markets. Another objective is to target returns on investments at a higher rate than the cost of capital to the group. Increasing the organizations earnings in line with the inflation rate and managing the organization on a sound financial footing are also of great concern. The group targets stable free generation of cash flow to finance further investments in the business (Davis Service Group Plc, 2007). The organization seeks to maintain a progressive dividend policy.
Situational Analysis
In the year 2001, the company expanded its operations through acquisition in the European Union region that was enlarged. Since the group was able to succeed in expanding its textile maintenance operations at that time, this provides the potential for the organization to be able to succeed in the current expansion. Since there is a strong potential for tool hire in the large market, the company has made a decision to increase the tool hire Strategic Business Unit (SBU) by entering the Australian market (Growing a company by international acquisition, no date). Organic growth refers to a situation where a company attempts to raise the turnover using only its available assets.
Some of the barriers that may hinder the expansion of business operations may include language dissimilarities that prevent from effective communication. Currency differences can be linked to variances in values, making business unable to forecast its costs and revenues. Moreover, cross-cultural differences and the way people behave and carry out their activities in various countries may also hinder the companys growth.
Another aspect to consider is legal and administrative differences that vary from one nation to another. The level of knowledge and skills among people may not be the same from one country to another. Thus, when aspiring to start a business in a different country, it should be done with caution in order to set it up in the area where people have needed skills and knowledge.
Macroeconomic Analysis
Since the business is to be launched in Australia, the political, economic, social, legal, and environmental conditions in this country need to be compared to those in the United Kingdom. As per the economic situation, the service sector is the dominant as far as the countrys economy is concerned. However, both the mining and agricultural sectors earn highest revenue for the country. From the 1980s, the country has undertaken important reforms meant to restructure the economy (Growing a company by international acquisition, no date). Moreover, there has happened a transformation from an inward looking and highly protected marketplace to an open, globally competitive, and export-oriented one.
The main reforms that have been carried out involve the following:
reducing unilaterally high tariffs among other barriers to free trade;
” floating the local dollar;
” liberalizing the foreign banks;
” rising flexibility within the labor market;
” bringing down duplication;
” increasing efficiency between the two branches of the government;
” reforming the tax systems among other.
Order from us for quality, customized work in due time of your choice.