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BUSM3200 Strategic Management

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BUSM3200 Strategic Management

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Course Code: BUSM3200
University: Royal Melbourne Institute Of Technology

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Country: Australia


Relevant background information (should link it back to rest of analysis) – competitors, market shares, locations, share price, awards and employee ratios ( relevant to P5 and PESTEL) only from relevant sources.key factors PESTEL and describe which is more important and most (opportunities or threats?) describe if anyone of PESTEL linking to each other
conclusion- overall impact, favorable or not to overall industry.5P describe and show the interconnectedness of 1 force to another. (eg: if there are many competitive rivalry, it leads to decrease of threats if new potential intrants.) conclusion- overall impact- whether the industry is attractive or not. Profitable or not (5 forces) conclusion-  a lot of opportunities for company? Or so many threats I give additional 1 lecture and useful articles which you can take references from.


In all over the world, awareness regarding early childhood education is growing. Therefore, the important trends to support this industry is also growing worldwide in which Australia has become one of the major countries. The market in this sector has become highly competitive and getting almost saturated. Competitors in this industry of Australia is fairly high and has reached the saturation point. This is due to the fact that the government helps many NGOs to provide Early Childhood Education and Care program in the government-dependent private setting.
G8 Education Limited has been working in the Australian market for more than 12 years and built a ream of dedicated professionals for delivering a high quality developmental as well as educational services for child care throughout the country (G8education.edu.au 2018).  It is the leading provider of high quality service though its four pillars of growth and sustainability. Moreover, it has experiences in serving other developed country like Singapore also. Therefore, the success of this particular company is quite sure in near future also.
Macro environment analysis:
            For understanding the actual situation of the early childhood education centers operating in Australia, the analysis of macro environment is needed. In this respect the PESTLE analysis of Australia is important to be conducted.
2.1 PESTLE analysis for early education of children industry Australia
Political factors
The political situation of Australia is quite stable for investment in the education sector. The government has issued various programs and policies to support the education sector of this country. As the government is proper hierarchy, the companies operating in different regions can get different opportunities to flourish themselves. The current government has decided to eminently invest in the education and health sector so that the citizen of this country can get the fulfil their basic needs.
Economic factors
The global demand for export commodities has widened the current deficit of the country. Except this Australia has all the economic qualities as those of the developed nations. The current GDP has grown to 1.349 trillion USD according to the World Bank (Data.worldbank.org 2018). The annual population in the country is more than 24 million hence the investment in the education sector is fairly high. Moreover, the annual GD growth is expected to be increased 3 by 2019 which is ensuring the companies to gain profit more than expected (see appendix 1).
Social factors
The standard of living of this country is like western world as the administration directly follows the UK Government (Harmon 2015). Most of the population have European descendancy hence both the customer belt as well as the employee chain follow the organizational culture of the United Kingdom. As employee they strive for personal development through properly utilizing tools and as customer prefer quality over quantity.
Technological factors
The government spends much to grow the business sector as this is the primary aspect to grow the economy. By providing all types of technological assistance like the proficient use of automation, rate of technological usage and R&D activities have been incorporated in the legislation system to prevent cybercrime that mostly affect the business and introduced automation in the health and education sector so that the special cases of old age care and children education can be facilitated.
Legal factors
In order to protect the interest of the business, the legislation is highly commendable. The laws and policies support anticorruption in the government level so that no company face derivation in getting assistance from the country’s government. In addition to this, the government has set the standard of early childhood education and care (ECEC) under which the education sectors are to be performed (see appendix 3).
2.2 Conclusion from PESTLE analysis:
The PESTLE analysis demonstrates that all the macro environmental factors are favorable for the growth of education industry in Australia. The population growth and economic support from the government are the main factors for the flourishment of these early child education centers in every part of the country.
3. Porter’s 5 Force model:
 Threat of new entreats
the percentage of the school enrollment of students under 6 years is 101% in Australia annually which cannot be seen as a fair percentage in relation to the enrollments in the previous years (Data.worldbank.org 2018). Therefore, the companies who wanted to enter the market do not feel interested in entering this competition (see appendix 1). The companies working for more than 10 years have reputation and good reviews regarding their services (Aifs.gov.au 2018). Hence more crowd can be seen in their centers.
In addition to this, the switching cost is also high for the parents hence every few of the centers get a huge number of students at a time and others are compelled to shut their business after few years. In this scenario, the threat of new entrants is quite low for G8 Early Child Learning Centre as it has been working for more than 12 years in this country or in this sector.
Threat of substitution
There is a high threat of substitution. The education policies of the Australian government have a perfect framework under which the children education companies follow and grow their business in the country. The educational value of childcare is measured by the quality of the education provided by the centers (Gambaro, Stewart and Waldfogel 2015). First of all, the learning environment is judged by the parents before they enroll their children in this type of education center at their early age.
Creating this environment is not so easy for every center therefore, this company can gain advantage through its high-quality service. Another factor that prevent the other centers to survive in this sector is its management style. Most of the centers do not possess proper management skills and they are not very attentive to solve this problem (Weldon 2015). On the contrary G8 Early Child Learning Centre has proper structure of management to run their business.
Bargaining power of customers
The Education Minister of Australia, Senator Simon Birmingham said increased competition is good news and the annual population growth in the country has become more than 24 million that shows prospect in the education industry of Australia. However, the less the bargaining power is in the hands of the customers, the more will industry suffer. in addition to this, the high saturation or competition in the education also enhance the bargaining power of the customers (O’Connell etal. 2015). However, fortunately, this over supply in this sector has not decrease the fees of enrollment in the children education centers. This high fee system has led the parents to find an affordable place for their children. The availability is high but the affordability is not in favor of the customers hence the company will not be under threat as their charge of service is less than its competitors.
Bargaining power of suppliers
            The bargaining power of the suppliers in this context is not much concerning. The suppliers of the education industry in Australian market consists of the teachers, administrative employees and technology. In this aspect the availability of teachers and technology is very much available which has reduced the bargaining power. The constructors for building the construction can be high. One the contrary the experienced teachers and administrative employees can be expensive for the organizations to be incorporated (Weldon 2015). This company has a team of skilled teachers who have been working for long with this organization hence gained huge experience. These people can be threat for the organization as they can easily leave the company or ask for more salary.
Competitive rivalry
The education industry of Australia is very concentrated in compared to the other developed countries. As the child care centers are also providing the education starting from 0 to 6 years, therefore, the competition is high in the market. Despite the fact that the population of Australia is also increasing but the number of centers with new offers and facilities are also increasing in the scenario. In this aspect the entry of the new companies is quite default as there are more than 1100 new centers are waiting in the pipeline for serving the children in the region (Abc.net.au 2018). Therefore, the government legislation has limited to access to inputs. The current situation of the education industry focusing on early education of the children is showing the vacancies in the child education centers.
3.1 Conclusion from Porter’s Five Force analysis:
            The analysis of all these five factors, it can be said that the highly proficient and experience company like G8 Early Child Learning Centre will have no problem in serving this market. However, the company needs more resources so that the disable students also get scope to enter such center.  
4. Conclusion:
            Therefore, it can be concluded that the education industry of the country is highly concentrated but this not reduce the expenses of education or child care in the country. It has been saturated in last 5 to 7 years with new centers emerging and operating successfully. However, the PESTLE factors are in favor of G8 Early Child Learning Centre as this has experienced in operating in this highly concentrated market of Australia for more than 12 years. It has a brand recognition hence gets no effect in the competition with new entrants. However. The company needs some changes especially in their price to match the expectations of the customers and limit rising expenses for supporting the parents of these children.
5. References:
Abc.net.au (2018). ‘No common sense at all’: Anger over excess of childcare centres. [online] ABC News. 
Aifs.gov.au 2018. Child care and early childhood education in Australia.
Data.worldbank.org 2018. Australia | Data. 
G8education.edu.au 2018. Company Overview – G8 Education.
Gambaro, L., Stewart, K. and Waldfogel, J. eds., 2015. An equal start?: Providing quality early education and care for disadvantaged children. Policy Press.
Harmon, G., 2015. Australia as an higher education exporter. International Higher Education, (42).
O’Connell, B., Carnegie, G., Carter, A., de Lange, P., Hancock, P., Helliar, C. and Watty, K., 2015. Shaping the future of accounting in business education in Australia.
Weldon, P.R., 2015. The teacher workforce in Australia: Supply, demand and data issues.

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