Creation of a Permanent Aid Delivery Corporation - StratSynth Group - Case Study Example

Name: Class: Unit: 1 Introduction Drought and war in East Africa is a major cause of hunger and suffering in the region. This is a common phenomenon in flood and disease stricken areas, or areas that have been disadvantaged by decades of warfare or economic denial (Verschuren, Laird & Cumming, 2000). StratSynth is an aid delivery corporation founded to help in enabling acquisition, delivery and operation of essential life support items. StratSynth has been formed at the time when drought in several African countries has led to diminishing food supply, communicable diseases, assess constraints and the level of refugees has been on rise. This response provides a strategic advice for the creation of a permanent aid delivery corporation. 2 Background to the situation Bill and Melinda Gates Foundation, and the Chan Zuckerberg Initiative in helping the disadvantaged in the society have been a great inspiration. This is based on their interests on stabilising developing regions and supporting Project Loon which is aimed at enhancing knowledge access in developing nations. Their commitment is based on ensuring that they establish long term recovery and rehabilitation for stricken nations. At the moment, the aid delivery is not very effective in the affected areas. This is especially due to fact that most donors fails to consider goals of their aid and the associated economic implications (Oloruntoba & Gray, 2006). After attending the World Advancement Conference, Gates and Chan have become interested in developing a permanent aid delivery corporation. StratSynth first objective will be to address, in a very public manner, the East African Drought Crisis. 3 A PESTEL analysis StratSynth Group will be operating in the developing countries. Despite the fact that some of the developing countries have been experiencing economic growth, their business environment have more challenges that the developed countries (Yüksel, 2012). In addressing East African Drought Crisis, PESTEL analysis is vital. 3.1 Political StratSynth Group operations in the developing countries will have to face unstable political environment in some of the countries in East Africa such as Somalia and South Sudan. This is due to fact that some of the countries are involved in civil war and lacks democracy. The operations will have to address the legal requirements which in some cases may be exploitive. In the developing countries, there are high risks of unstable political environment (Jurevicius, 2013). 3.2 Economic Countries of operations are classified as developing countries. This includes countries such as Somalia which has been experiencing civil wars. There are high chances of informal economy due to the impacts of the civil wars. Thus, the operations of StratSynth Group will be mostly carried out in countries with unstable economic environment. This includes high inflation rates and high costs of living. There is high level of corruption with the most corrupt countries being based on the developing regions. This may lead to an increase in the operation costs (Gillespie, 2007). 3.3 Social Operating in the developing countries will have an impact on the community socially. Social landscape of StratSynth Group business operations is based on amalgamation of traditions and different ethnic groups. The countries have a high population growth and there are chances of ageing population. The corporation must consider the cultural expectations and norms in the country of operations (Yüksel, 2012). The level of unemployment in most areas of operations is high which can help the corporation in gaining labour force. 3.4 Technological In the developing countries, technology is sourced from different parts of the world. In addition, there is low access to the internet. This can be enhanced through the implementation of the project Loon in these countries. Despite this, there has been a rise in technology awareness among the population in the developing countries (Gillespie, 2007). 3.5 Environmental In the countries affected by the drought, there have been impacts of global warming. In other areas such as Somalia, the country is semi-arid with low percentage of arable land. There are several organisations in these countries which have been advocating for environmental awareness. There have also been global sensitisations on the communities on the ecological issues (Jurevicius, 2013). 3.6 Legal Poor legal system is a major issue in carrying out business (Jurevicius, 2013). Some of the countries have experienced violent regime change while others lack a democratic process (Darcy, Bonard & Dini, 2012). This is the case of South Sudan and Somalia. Despite this, there are several countries with a developed legal system. High taxation may affect the operations in some of the countries. 4 Five Forces analysis Porter 5 forces are vital in understanding the competitive forces and the industry structure. This helps in making strategic decision. The forces are used in shaping the industry competition (Porter, 2008). 4.1 Competitive rivalry This is a force that helps in determining the level of competition in the market (Dulčić, Gnjidić & Alfirević, 2012). It is determined by the number of the competitors in the market and their capabilities (Porter, 2008). StratSynth Group will be operating in a market landscape which has several players. These include the USAID, OXFAM, Self Help Africa, Action Aid and Water Aid among many others which operate globally. Despite the high number of aid corporations and organisations working in the region, there is low market rivalry. This is due to fact that the organisation work is not for profit and most of them works together for a common goal. 4.2 Bargaining power of the suppliers The suppliers for the corporations are volunteers and donors. This is based on the aid acquisition through Giving Pledge. The high number of organisations looking for donations from Giving Pledge and volunteers gives them considerably more power in line with theory (Dobbs, 2014). 4.3 Bargaining power of the customers This force looks at the power of the customers in bargaining which can affect the piecing. Aid corporations do not charge for goods and services (Dobbs, 2014). There are a lot of affected countries in the developing world making the need for aid high. Despite this, there are a lot of aid organisations and corporation. StratSynth Group offers their products in a differentiated way unlike most of the aid organisation. This is a corporation which offers aid in efficient and more effective manner. 4.4 Threat of new entrants This force looks at the difficulty of the competitors in joining the market place. Aid organisations and corporations operate in a market landscape which has low barriers of entry (Dobbs, 2014). It is easy for an organisation to mobilise for donations and offer them to the affected regions. Despite this, StratSynth Group has well organised and unique strategy which gives them an upper hand in the market. 4.5 Threat of substitutes Threat of substitute is based on the ability to switch from one product to another. It is determined by the switching costs and buyers’ inclination to change (Porter, 2008). Being an aid organisation, StratSynth Group should not be concerned on the threats from substitute. This is due to fact that their services and products are aimed at regions which needs them. 5 Recommended Business Level Strategy for resolving the case 5.1 Business level resources and capabilities required StratSynth Group mission is to enable the acquisition, delivery, and operation of essential life support items. This can be attained through having aid delivery technology and infrastructure (Oloruntoba & Gray, 2006). As an aid corporation, it is expected to have the capability to mobilise money and goods through Giving Pledge, purchase goods, logistics and track good destination. The organisation is expected to have the technology required to manage and track donations from Giving Pledge. On addressing the disaster, the corporation is expected to have knowledge on the location and how the aid will be delivered. Logistics management is based on the growing human needs in the area of operations. StratSynth Group is expected to have the capability to engage commercially and non-commercially with companies that can offer supplies. Procurement is an indispensable part of the humanitarian aid corporations (Oloruntoba & Gray, 2006). 5.2 Organisations with the resources and capabilities with which StratSynth may engage There are several organisations which StratSynth Group may engage using corporate level strategies with resources and capabilities that can help the group. These include the Red Cross, Action Aid and WaterAid, CARE and OXFAM (Schulz, 2009). Red Cross have a well-established logistics network across the East African region. The organisation has been able to create a network which makes it easy for them to mobilise aid and deliver it in time when needed. StratSynth Group can use corporate level strategies to enter into joint venture with Red Cross t to enhance its logistics (UNODC, 2017). Action Aid is another organisation that has established logistics and a wide reach in the region. The organisation has been working in the East African region for a long time making them well versed with the market landscape (UNODC, 2017). StratSynth Group should partner with Action Aid with an aim of enhancing their donor network. This alliance should be non-equity with a main aim of familiarising with the region and gaining a wonder donor network. WaterAid has played a major role in ensuring clean water delivery in the affected regions in East Africa. This is an organisation that has addressed water crisis during the current drought situation (UNODC, 2017). Water Aid and StratSynth Group should form a joint venture with an aim of enhancing each other capabilities in combating drought in the region. CARE has been a major player in the region in combating the drought crisis. The organisation has one of the most accurate mappings on the areas affected by the drought and the required statistics (UNODC, 2017). Forming a non-equity alliance with CARE can help StratSynth Group to have adequate information and the logistics requited. Non-equity alliance will allow both organisations to attain their agreed goals while remaining independent. OXFAM is one of the most successful humanitarian organisation in the region and globally. A non-equity alliance can help a lot in acquisition, delivery, and operation of essential life support items (UNODC, 2017). This is due to the experience and capabilities of OXFAM as a leading humanitarian organisation. 5.3 Pouncer Drone, the Spider Light Strike Vehicle and the Rokon two wheel drive motorcycle Cooperative strategic relationships are vital part of corporation strategic management. Melinda Gate’s interest in the Pouncer Drone, the Spider Light Strike Vehicle and the Rokon two wheel drive motorcycle is very vital for the effectiveness of aid delivery. Logistics forms a very important part of the corporation (Van Wassenhove, 2006). It would be advisable for these firms to be included in the cooperative strategic relationships. These are solutions that can save a lot of lives by fast and efficient aid delivery. Pouncer Drone has high endurance and can access remote regions where the infrastructure does not exist or is broken down. A joint venture with Pouncer drone can help in addressing aid delivery in the war prone and remote areas. Rokon is a 2 wheel off-road motor cycle which can access anywhere. This is required for aid delivery in the remote regions in East Africa and areas with poor infrastructure. This should be based on a non-equity joint venture to ensure that each of the organisations remains independent. The Spider Light Strike Vehicle is also a vital for access in the remote and rugged areas. This is especially war tor regions and areas with poor infrastructure (Stoddard et al., 2009). A joint venture with the Spider Light Strike Vehicle should be based on non-equity arrangement. These alliances will help StratSynth Group in meeting their future aid delivery needs. 5.4 Organisational structure for StratSynth Headquarters group 1) Chief Executive Officers-Melinda gates and Priscilla Chan are supposed to be the chief executive officers and founders. 2) Chief financial officers- The chief financial officer will oversee the financial planning and analysis of the corporation. 3) Business operations officer- Responsible for the operational functions including legal issues, grants, donations and contract management. 4) Chief human resources officer- responsible for human resource teams and aligns services and works for the corporation. 5) Chief logistics officer- The main roles are to ensure that the aid suppliers are able to reach the expected areas in time and with the best quality. 6) Field manager-The field manager will be responsible for the distribution of aid in the region. The field manager is the lead specialist to work on the region affected. 5.5 Vision and mission and a positioning statement The mission for StratSynth Group is to enable the acquisition, delivery, and operation of essential life support items. This is through collaborating with related organisations to deliver aid to the address future requirements in flood and disease stricken areas, or areas that have been disadvantaged by decades of warfare or economic denial (Haile, 2005). The group is ready to work with others in the region to establish a long term recovery and rehabilitation for stricken nations. The vision for the StratSynth Group is a peaceful secure and food reliance global environment. This is through addressing the long term recovery and rehabilitation for the affected nations. StratSynth Group is positioned as a non-profit organisation with main focus on the developing countries. This is through provision of aid to the flood, drought and war stricken areas relying on funding from Giving Pledge. 6 Conclusion Bill and Melinda Gates foundations and Chan and Zuckerberg initiative should come together and establish StratSynth Group. The non-profit organisation immediate objective to address East African Drought Crisis should consider the market landscape based on PESTEL and Porter analysis. This is a region that can be addressed better through strategic alliances with related organisations. There is also great opportunity in forming alliances with Pouncer Drone, the Spider Light Strike Vehicle and the Rokon two wheel drive motorcycle as explained. 7 References Darcy, J., Bonard, P., & Dini, S. 2012, ‘IASC Real-Time Evaluation of the Humanitarian Response to the Horn of Africa Drought Crisis: Somalia 2011–2012’, Valid International. Dobbs, E. M. 2014, ‘Guidelines for applying Porter's five forces framework: a set of industry analysis templates’, Competitiveness Review, Vol.24, no.1, pp.32-45. Dulčić, Ž., Gnjidić, V., & Alfirević, N. 2012, ‘From five competitive forces to five collaborative forces: revised view on industry structure-firm interrelationship’, Procedia-Social and Behavioral Sciences, Vol.58, pp.1077-1084. Gillespie, A. 2007, PESTEL analysis of the macro-environment, Foundations of Economics, Oxford: Oxford University Press, USA. Haile, M. 2005, ‘Weather patterns, food security and humanitarian response in sub-Saharan Africa’, Philosophical Transactions of the Royal Society B: Biological Sciences, Vol. 360, no.1463, pp.2169-2182. Jurevicius, O. 2013, ‘PEST & PESTEL Analysis’, Strategic Management Insight, Vol.13, 2013. Oloruntoba, R., & Gray, R. 2006, ‘Humanitarian aid: an agile supply chain?’, Supply Chain Management: an international journal, Vol.11, no.2, pp.115-120. Porter, M. E. 2008, ‘The five competitive forces that shape strategy’, Harvard business review, Vol.86, no.1, pp.25-40. Schulz, S. F. 2009, Disaster relief logistics: benefits of and impediments to cooperation between humanitarian organizations (Vol. 15), Haupt Verlag AG. Stoddard, A., Harmer, A. & DiDomenico, V. 2009, ‘Providing aid in insecure environments: 2009 update’, HPG Policy Brief, Vol.34, no. 10 . UNODC. 2017, List of all available NGOs, Unodc.org, Available at: https://www.unodc.org/ngo/list.jsp [Accessed 1 May 2017]. Van Wassenhove, L. N. 2006, ‘Humanitarian aid logistics: supply chain management in high gear’, Journal of the Operational research Society, Vol.57, no.5, pp.475-489. Verschuren, D., Laird, K. R., & Cumming, B. F. 2000, ‘Rainfall and drought in equatorial east Africa during the past 1,100 years’, Nature, Vol. 403, no.6768, pp.410-414. Yüksel, I. 2012, ‘Developing a multi-criteria decision making model for PESTEL analysis’, International Journal of Business and Management, Vol.7, no.24, pp. 52-66. Read More