Describe the Strategic Management process. In strategically planning his next move, what decision choices between alternative courses of action does Ethan Williams, the new Director of TATI, need to consider in establishing Tasman Arts Training Institute’s competitive advantage?
Tasman Arts Training Institute (TATI) is a private training establishment in Nelson, New Zealand. It is one of the best-known community schools and there are many professional and successful artists that teaching courses in TATI, which makes a progressive quality reputation.
However, TATI is currently faced to financial difficulties due to low numbers of students. Therefore, trust recently employed a new director, ...view middle of the document...
As shown in figure 1, the strengths of TATI are that they have a progressive quality reputation in New Zealand and they have quality work output. Which makes TATI have opportunities to sell their artworks via retail showroom or Internet. There is also a potential for TATI to enter international and tourist market. On the other hand, Ethan needs to solve the weakness. For example, staffing issues since current staffs do not make their fullest contributions and TATI also need to attract the some new talent. There are also threats for TATI to enter a new market, such as cultural barriers. Moreover, TATI needs to compete with other training institutes. Figure 1 shows a brief of SWOT analysis of TATI.
- Progressive quality reputation
- Quality work output
- Having professional artists Weaknesses
- Staffing issues
- Financial issues
- Suppliers issues
- International and tourist market
- Retail showroom
- Internet market Threats
- Cultural barriers
- Competition with other training institutes
- Lack of product diversification
Figure 1 (SWOT analysis of TATI)
Apart from SWOT analysis, Ethan can also use Porter's five forces (Figure 2) to analyze the industry and environment. Porter's five forces is a framework for competitive industry analysis directs attention towards understanding industry competitors, new entrants, suppliers, customers and substitutes. First, it is not easy for new entrants to enter the industry because experience and reputation is needed. It can be barriers for new entrants to entry so the treat will be low in this point. For the suppliers, the treat is low because there are a number of suppliers, so TATI has the ability to substitute. The threat of customers is high because they are price sensitivity and they have the ability to substitute. For substitutes, it is a high treat because customers can substitute it by other industry’s products or services. Industry competitors will be the biggest threat because they can offer similar products and services.
Figure 2 (Porter's five forces)
After analyzing the external and internal environment, Ethan needs to select new strategies for TATI. There are three levels of strategy in strategic management process, which are corporate strategy, business strategy and functional strategy. Corporate strategy means setting long-term direction for whole enterprise. After the SWOT analysis, it indicated that there are opportunities in International and tourist market and retail showroom. TATI should move towards on this direction to generate revenue outside of student fees and government funding. Business strategy is another level of strategy. It identifies how a division or strategic business unit will compete in its products or service domain. TATI might needs product diversification to compete in this business. For example, their art course should not just for teaching fine art, pottery and textile design, but also develop in new area, such as 3D designs. The last...