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MASTER OF BUSINESS ADMINISTRATION

INTAKE II (MBA-2)

STRATEGIC MANAGEMENT &


BUSINESS POLICY
FINAL CASE STUDY:
STRATEGIC AUDIT FOR BAYAN GROUP
Submitted To:
Dr. Sherif Lotfy

Submitted by:
Muhammad Fadel

Program: Master of Business Administration


Subject: Strategic Management

Table of Contents
I.
II.

BG Background..............................................................................................................................................................................................3
Current Situation ..........................................................................................................................................................................................4
A. Past/Current Performance .................................................................................................................................................................4
B. Strategic Posture .....................................................................................................................................................................................4
1. BG Mission ............................................................................................................................................................................................4
2. BG Objectives ......................................................................................................................................................................................4
3. BG Strategies .......................................................................................................................................................................................4
4. BG Policies ............................................................................................................................................................................................4
III.
Corporate Governance .........................................................................................................................................................................5
A. Board of Directors ..................................................................................................................................................................................5
B. Top Management ....................................................................................................................................................................................5
IV.
External Environment (EFAS) Opportunities & Threats (SWOT) ....................................................................................5
A. Societal Environment (PEST Analysis) .........................................................................................................................................5
1. Political-Legal .....................................................................................................................................................................................5
2. Economic ...............................................................................................................................................................................................6
3. Socio-cultural ......................................................................................................................................................................................6
4. Technological ......................................................................................................................................................................................6
B. TASK Environment Industry Analysis ...........................................................................................................................................6
V. Internal Environment (IFAS) Strengths & Weaknesses (SWOT) ............................................................................................7
A. Corporate Structure...............................................................................................................................................................................7
B. Corporate Culture ...................................................................................................................................................................................7
C. Corporate Resources .............................................................................................................................................................................7
1. Marketing..............................................................................................................................................................................................7
2. Finance ...................................................................................................................................................................................................7
3. Research & Development ..............................................................................................................................................................8
4. Operations ............................................................................................................................................................................................8
5. Human Resources .............................................................................................................................................................................8
6. Information Systems ........................................................................................................................................................................8
VI.
Analysis of Strategic Factors (SFAS) ..............................................................................................................................................9
A. Key Internal and External Strategic Factors (SWOT) .............................................................................................................9
1. Strengths ...............................................................................................................................................................................................9
2. Weaknesses .........................................................................................................................................................................................9
3. Opportunities ......................................................................................................................................................................................9
4. Threats ...................................................................................................................................................................................................9
B. Review of Current Mission and Objectives .............................................................................................................................. 10
VII.
Strategic Alternatives and Recommendations ....................................................................................................................... 10
A. Strategic Alternatives ........................................................................................................................................................................ 10
B. Recommended Strategy .................................................................................................................................................................... 10
VIII.
Strategy Implementation ................................................................................................................................................................. 11
IX.
Strategy Evaluation & Control ....................................................................................................................................................... 11

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 2 of 11

Program: Master of Business Administration


Subject: Strategic Management

I.

BG Background

Started as Bayan Translation Services in late 2002, Bayan Group Cultural Investments (BG) is an SME
that has been built to last, as the Owners usually say. BG has been committed to delivering integrated
sets of various language and content services including full range of multilingual written translation,
simultaneous interpretation and conferencing, copy editing, subtitling, technical writing, software
interface localization and website globalization. Capitalizing on the success achieved in this service
function, BG has started slightly to expand to language and translation training activity. BG has also
certain other strategic areas of functionality under current study and consideration including econtent development/publishing, hard-copy publishing, accredited language training and multilingual
content production.
BGs past performance has passed through different stages of successes and failures as well, which
held the company back from achieving a worthy success due to, among other reasons, the following:
-

Lack of cash resources;

The Owners loss of focus at certain critical times;

Inefficient financial resources management;

Deviation from the Companys Mission & Vision

Starting mid-2011, BG has been awarded a considerably good project that helped the organization gain
more stability; settle all past liabilities and commitments. The Companys Current Situation Analysis
shows good growth potential in case a perfect match could be developed between opportunities
available in external environment and the internal BG strengths created along the past 10 years.

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 3 of 11

Program: Master of Business Administration


Subject: Strategic Management

II.

Current Situation
A. Past/Current Performance
Improved financials, 100% liability-free for the first time since late 2007, price/earnings
ratio positive
o

All Company debts settled;

Financial reserve available, though relatively small amount;

Improved running overheads reduction strategy; and

Excellent opportunity for sustainable growth.

B. Strategic Posture
1. BG Mission

To be a leading provider of translation and language services that may achieve


customers business targets and yield profits for shareholders, as developed in
2002 for Bayan Translation Services.

To become a leading regional provider of language, culture and human


development services that may contribute to regional development and achieve
high profits for the shareholders, updated in 2007 for Bayan Translation Services.

2. BG Objectives

To grow the local Egyptian language and content service business and become one
of the top 5 largest providers nation-wide;

To achieve profitability leadership in the language and content services industry


for every service and/or product line. Focus on profitability rather than on market
share.

To achieve leadership in total customer satisfaction as measured on quarterly, biannual or annual basis through acknowledged customer satisfaction measurement
methods.

To increase profitable market share growth on sales, assets and equity.

3. BG Strategies

Regional/global growth through strategic alliance with global MLVs (Multilingual


Vendors), software & web developers and PR and event organizers;

Differentiate BG brand name as quality content & language service provider

Create synergy between content services and products

4. BG Policies

High quality content/language service/product is primary to cost reduction


Cost-effective yet efficient promotion & marketing
Slow R&D activities as BG focus on profitability more than market share

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 4 of 11

Program: Master of Business Administration


Subject: Strategic Management

III. Corporate Governance


A. Board of Directors
o

One managing director supported by financial, legal, business and marketing


consultants;

Highly experienced caliber with a nation-wide acknowledgement as a leading industry


promoter;

B. Top Management
Currently, BG outsources 90% of multilingual translation and content processing activities
which gives BG a better room to focus on the business operation. Outsourcing is awarded
to one main subcontractor with few other subs.
o

The majority of BG top management team have been trained and promoted from
within the Company, while only few of them came in from different backgrounds;

Enjoy considerable expertise in BGs business industry;

Being few in number, they need further training on business perspective issues; and

Need new blood to compete on the regional/global level(s).

IV. External Environment (EFAS) Opportunities & Threats (SWOT)


A. Societal Environment (PEST Analysis)
1. Political-Legal
1. Political changes are always positive for BG. The global, regional and local political
atmosphere is always positive for BGs areas of functionalities. Unlike other
business industries, the multilingual content and language services usually receive
even stronger demand under crises of whatever type; (O)

2. Current, mid-term favorable internal political atmosphere. The current local


and regional political transformation creates stronger global demand; (O)
3. Political globalization trends create increased demand on language,
translation and content services/products; (O)
4. Post-revolution politics had negative impact on the countrys overall
performance; (T)
5. Industry union to be established. There are serious procedures taken to
establish Egypts first national body for language and content professionals,
i.e. the Egyptian Translators & Linguists Syndicate (ETLS). Bayan MD is the
key power behind the cause; (O)
Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 5 of 11

Program: Master of Business Administration


Subject: Strategic Management

2. Economic
a. National economic indicators are raising higher after an almost 2 years of
retreat and continued losses; (O)
b. Global and regional forecasts predict that Egypt is about to witness an
upheaval in investments in order to contribute to peace throughout the
region; (O)
c. Multinational tycoons are back to invest in long term projects
(multinationals and global organizations constitute 60-70% of BGs targeted
customers for 4th quarter of 2012 and 2013); (O)
3. Socio-cultural
a. Local culture pays humble attention to the role of translation as a key
profession and standard business; (T)
b. Egyptian middle-aged nationals have sustainable attraction to learn foreign
languages; (O)
4. Technological
a. Technology reduces operation costs. Technology helps BG create virtual
workspace where each team member works from home and connect with
colleagues through the web; (O)
b. Technology connects to global vendors and clients, through online
translation portals (e.g. proz.com & translationcafe.com) ; (O)
c. Field-specific technologies and software enhances
effectiveness (Trados & SDLX are just examples); (O)

efficiency

and

d. Automatic translation tools and Free translation service is expected to affect


the non-official global demand on translation. (T)

B. TASK Environment Industry Analysis


1. Globally the market is growing and demand is getting high; (O)
2. The market is getting more competitive, with the advent of numerous newcomers;
(T)
3. Industry going global as global business is expanding internationally; (O)
4. Entry barriers to industry are very low; (T)
5. Buyers Power medium; (T)
6. Vendors power medium which affects the service life-cycle; (T)
7. Threat of Substitute is High; (T)
8. Fragmented industry and immature market (T)
Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 6 of 11

Program: Master of Business Administration


Subject: Strategic Management

V.

Internal Environment (IFAS) Strengths & Weaknesses (SWOT)


A. Corporate Structure
a. Functional Structure. CEO subordinated by Department Managers for translation,

content creation, interpretation & conferencing, finance and personnel, marketing and
sales ... etc; (S)

b. Considerable room for delegation where only major decisions goes for CEO; (S)

B. Corporate Culture
a. Customer satisfaction is a top priority: all BG team is collectively responsible for total
customer satisfaction; (S)
b. Quality inseparable: both executives and smaller subordinates are committed to quality
performance that keep the BG brand differentiated; (S)
c. The major part of BG corporate culture is built on the founders personal philosophy and
vision including concern for quality delivery, staff satisfaction, innovative approaches
and top-notch performance; (S)
d. Friendly environment: working on content creation and/or processing requires a quite
business environment, friendly interaction attitudes and peaceful atmosphere and BG
pays a large attention to this. (S)

C. Corporate Resources
1. Marketing
a. Bayan Group brand advertising is consistently showing only on YellowPages;

recently repeated advertising has been carried in a newly launched, industryspecific magazine; (W)

b. Major volume of work orders come through WoM (word of mouth); (S)
c. Focus on marketing as a whole is very weak; no sales team; no considerable
marketing activities; no specific marketing budget or plan; (W)
d. Language and translation training promotions recently showed on
FaceBook (S)
2. Finance
a. Low financial reserves with limited budgeting; (W)
b. BG becomes debt free for the first time since 2008; (S)
c. Last 2011 quarter ad through 2012, BG revenues are up, stable and secured; (S)

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 7 of 11

Program: Master of Business Administration


Subject: Strategic Management

d. Operating income is significantly rising while running overheads are significantly


down; (S)
e. 2012 net income is outstanding compared to the past five years; (S)
3. Research & Development
a. Internal service/production process is meant to meet the Companys quality
differentiation factor; (W)
b. BG is a technology follower and take long time to get product innovations to
market (far away lagging behind competitors); (W)
4. Operations
a. Outsourcing large portion of the translation business, while still controlling
the output quality mitigated other company burdens and will give room to
expand on total performance areas; (S)
b. Continued process improvement is a core BG competence that keep it in
business with almost no marketing for 10 years; (S)
5. Human Resources
a. BG maintains good relations with labor unions and insurance bodies; (S)
b. Staff relations run very smooth and well organized; (S)
c. Business coaching needs more attention; (W)
6. Information Systems
a. BG information systems are old and need significant upgrade; (W)
b. Process Management System is being designed and developed for BG; (S)

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 8 of 11

Program: Master of Business Administration


Subject: Strategic Management

VI. Analysis of Strategic Factors (SFAS)


A. Key Internal and External Strategic Factors (SWOT)
1. Strengths
a. History & Expertise;
b. Positive total internal corporate culture;
c. Strong word of mouth appeal;
d. No debts or any other financial liabilities;
e. Quality and continued process improvement.

f. New Process Management software designed


2. Weaknesses
a. Poor marketing and zero sales team;
b. Lack of financial resources;
c. Lack of focused research and development activities (R&D);
d. Lack of attention to market share;

e. Human resources training and development needed


f.

Current information systems need significant upgrade

3. Opportunities
a. Global market is growing an higher demand levels are being developed;
b. National economy is starting to regain strength;
c. Predictions of in-country flowing foreign investment;
d. Technology positive impact on operation costs and connectivity;

4. Threats
a. Slow short-term economic performance;
b. Competition is getting stronger;
c. Entry barriers are too low;
d. Threat of substitute.

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 9 of 11

Program: Master of Business Administration


Subject: Strategic Management

B. Review of Current Mission and Objectives


1. Current mission needs to be updated to match with current Environmental Scanning
results. Possible updates could be stated as follows:
To become a leading regional content service provider and producer that may contribute to
regional development and achieve high profits for the shareholders.
2. Current Objectives sound good but still need to be converted into SMART targets to
specify, measure, achieve, realize and time-phase.

VII. Strategic Alternatives and Recommendations


A. Strategic Alternatives
1. External Growth through strategic alliance or long-term contracts both globally and
domestically
a. [Pros]: increased volume of work; better pricing and standard payment; exposure
to global market; higher profit margins; better branding
b. [Cons]BG have too little financial resources and reserves to carry out such a step.
2. Growth through concentric diversification into the publishing industry
a. [Pros]: starting a content production facility, increased volume of work; exposure
to global and regional market; higher profit margins; better branding
b. [Cons]BG have too little financial resources and reserves to carry out such a step.
3. Stability through pause/proceed-with-caution strategy
a. [Pros]: provides a time-out till the Company is able to improve its structure,
consolidate resources and enhance operations then starts its growth strategy;
b. [Cons]time is too critical to wait with little financial resources.

B. Recommended Strategy
1. Pause/proceed with caution strategy for a duration of 6-12 months, so that BG can
consolidate financial resources needed for a growth strategy;
2. Quality and process improvement should be maintained and therefore, certain capital
investment should be directed to R&D;

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 10 of 11

Program: Master of Business Administration


Subject: Strategic Management

VIII. Strategy Implementation


1. Enhance competitive edge through the acquisition of global standard quality certifixation;
2. Marketing and R&D need significant improvement with the target of getting new
service/product lines on track in a short timeframe;
3. Integration/consolidation of various service lines to convert into product lines need careful
study;
4. Expanded translation training through strategic alliance with private language high
education institutions;
5. Get accreditation from a global renowned player in Language training and coaching; and
6. Capitalize on past content prepared for common use purposes in order to re-produce it in a
new fashion as a new product

IX. Strategy Evaluation & Control


1. PMS & MIS should be in place and order to follow up, monitor and report on the progress of
strategy implementation;
2. Keep a careful eye on any occurrence of deviation from the adopted strategy, and each case
should go through corrective and preventive procedures matrix;
3. Regular & effective communication between the Board of Directors and Top Management
teams is a must.

Final Case Study: Strategic Audit For Bayan Group

Student: Muhammad Fadel (MBA-II)


Page 11 of 11

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