Business Organization and Environment

Business Organization and Environment or Nature of Business for UWP and Kos.

Which aspects could be included in Palouk's business plan?

It should include:

• An executive summary, which is an overview of the business start-up.
• The name of the business, its address, its legal structure, its aims and objectives, which in this case would be the increase of its scale of operations and to buy the lorry to collect larger quantities of produce in remote areas.
• The business opportunity: a description of the product or range of products to be made, the quantity to be sold and the estimated price, as it is said in the case, the expansion of its business would be very profitable, as long as the UWP Mission remained in Loyka.
• The market: the size of the potential market, in this case, there wouldn’t be that much competition.
• Personnel: he could probably employ other people since he wants to increase the scale of operations.
• Buying and production: Where would he buy its materials and produce them.
• Premises and equipment: the equipment and premises needed in order to build its products.
• Financial forecasts: in this case, it is said the expansion would be very profitable.

SWOT Analysis

UWP

Strenghts This humanitarian project would remotivate the troops by providing a change of routine, by giving them a sense of achievement, and by building positive relationships with the local population. (47-49)

Weaknesses The reputation of the UWP troops gradually deteriorated. (25) Moreover, “the Olive Hats” in Loyka started to resent being there and motivation was beginning to deteriorate. (28-29) some peacekeeping troops would need extra training in construction skills and safety procedures. (92-93)

Opportunities The existing University Campus was small, old and in need of extensive repair. (76 - 77)

Threats However, opposition to the UWP presence grew as did violence against the troops. (or weakness) (27) As a result, there was a significant decrease in the number of doctors in Loyka. (68-69) Conservatives in the country, Kos warned, would be strongly opposed to Loykese women receiving care from foreign male doctors. (73-74) Kos feared that a university built by the UWP would become a symbol of foreign intervention in Loyka and would make it a target for critics of the government and of the UWP presence in the country. (79-81)

Kos

Strenghts He knew that he could increase the scale of his business operations with the UWP Mission without any additional marketing. (120-121) The income comparison showed that the expansion of his business would be very profitable – as long as the UWP Mission remained in Loyka. (or weakness or threat at some point). (143-145)

Weaknesses This would also allow for significant economies of scale, but the logistics would be more complex. (121-122) He would have to drive and collect produce using dangerous remote unpaved roads outside the protection of the UWP Mission. (122-123) He would also have to dedicate all his time to his business and would no longer be able to work in the officers’ dining hall. Although that job did not pay particularly well, it was in a safe environment and provided a regular source of income. (124-127) To collect larger quantities of produce in remote areas, Kos would need to purchase a large lorry (truck). (128-129) The bank manager indicated as a condition for the granting of a loan that the bank would require the lorry as collateral. Secondly, the poor quality of the roads meant that the lorry would lose value quickly. (129-131) He would need to manage stock levels on a just-in-case basis, when he was used to a just-in-time basis. (138) The use of just-in-case stock control would raise the possibility of waste, but Kos thought spoilage would be minimal. (140-141) Kos realized that he was entirely dependent on the UWP Mission for his income. (161)

Opportunities These remote communities might perceive Kos as collaborating with the UWP troops. (123-124) The bank manager warned Kos that many other local entrepreneurs were likely to take advantage of the business opportunities resulting from the construction and operation of the new hospital or university. (132-134) If Kos could utilize his contacts within the UWP Mission, he would have a “first-mover advantage”. (134-135)

Threats However, he knew that the aim of General Pierce was to stabilize the situation in Loyka as rapidly as possible so that the UWP Mission could withdraw their presence. (164-166)

PESTLE Analysis

UWP

Political	After the civil war, a fragile new coalition was established as government. (3) The intervention of a global organization in Loyka (4) The local governor often disagrees with the UWP actions (23)
Economic	Sectors: 45% primary, 15% secondary and 40% tertiary sector. (1) The local economy was able to recover from the events of the civil war. (19) The current global economy might affect the choice.
Social	The country Loyka has suffered a civil war and by consequence it has risen violence (2) Part of the Loyka's population, disagree with the presence of military forces from the UWP (27) The presence of “the Olive Hats” gave a sense of stability and international support. (15) When the civil war broke out, most of the Loykese doctors who could speak english left to other countries. (66) The Loyka’s population has conflicts with the decision of building a hospital or university. (103) Because of the civil war, the country desperately need engineers, school teachers, nurses and many other highly skilled professionals to help rebuild the social infrastructure. (77) Conservatives in the country, Kos warned, would be strongly opposed to Loykese women receiving care from foreign male doctors. (73-74)
Technological	The lack of a good infrastructure.
Legal Factors	No legal factors.
Environmental Factors	Botanic gardens.

Kos

It is almost the same as for the UWP Mission.

Political	After the civil war, a fragile new coalition was established as government. (3) The intervention of a global organization in Loyka (4)
Economic	Sectors: 45% primary, 15% secondary and 40% tertiary sector. (1) The local economy was able to recover from the events of the civil war. (19)
Social	The country Loyka has suffered a civil war and by consequence it has risen violence (2) Part of the Loyka's population, disagree with the presence of military forces from the UWP (27) The presence of “the Olive Hats” gave a sense of stability and international support. (15) When the civil war broke out, most of the Loykese doctors who could speak english left to other countries. (66) Because of the civil war, the country desperately need engineers, school teachers, nurses and many other highly skilled professionals to help rebuild the social infrastructure. (77) Many other local entrepreneurs will start their business with the opportunity of the building of the new hospital or university (132)
Technological	Lack of good infrastructure.
Legal Factors	No legal factors.
Environmental Factors	Botanical gardens. Be aware of the environment taking into account its production if expansion is made.

Ansoff Matrix

UWP Mission

Product Development
UWP would be Product development because they have already been for a while in Loyka therefore they are in the same “market” and with the construction of either the hospital or the university it would be the “product” (in this case a service)

Kos

Market penetration
Target same product to same market but differently. This is because Kos will only expand its current operation, so he would have the same product and the same market but it will be marketed differently since it would be his own business.

Strategic, tactic and operational objectives (apply to UWP)

Strategic and operational objectives both help to Loyka in decision-making in order to know how to achieve the aims of either the university or the hospital. It is as important for Loyka to set operational objectives as strategic objectives.

• In this case, these type of objectives would allow General Pierce to fulfill the two objectives given to her: improving the image of the “Olive Hats” (strategic) and the remotivation of their troops (operational). If a hospital were to be constructed, prenatal care might have to be taken into account for an operational objective. On the other hand, for the construction of a university, there might be the need to rebuild the social infrastructure, which could be a strategic objective.
• As seen in this case, the setting of both types of objectives are important to Loyka, since the company could see which objectives are more likely to be achieved in order to know which construction is the most suitable.

Tactics: Are short-term objectives which help achieve the strategic objectives. In this case, a tactic could be the finding of a source in which something could be used in order to improve the image of the “Olive Hats”.

Glossary

Concept	Definition	Application to the case
Ethical objectives	Ethics: ideas of what is morally correct or not. An example of an explicit ethical objective: it will deal with suppliers fairly.	The UWP Mission to Loyka had ethical objectives: its troops (nicknamed “the Olive Hats” because of their olive coloured helmets) were expected to create stability, fulfilling the UWP Mission’s aim to maintain order, peace and security. (5)
Non-for-profit organization	Organizations that are run according to business principles, but that do not aim to make a profit.	She received permission from the UWP headquarters, provided that the new hospital or university be operated as a non-profit organization. (44)
Operational objective	They are very short-term objectives which are typically small scale and cover the day-to-day of the business.	Secondly, she had the operational objective to remotivate her troops. As salaries were set by. (39)
Partnership	A business organization which is usually owned by between 2-20 persons. They have unlimited liability.	It could also attract private capital for future public-private partnerships in research and development (R&D). (116)
Retailer	A type of business which buys goods from manufacturers and wholesalers and sells them, typically in smaller quantities and in a place convenient to the buyer, to customers.	Supply produce not only to the UWP Mission and to the university or hospital, but also to retailers in Beral. (153)
Scale of operation	It implies to increase the size of the business.	Increase the scale of operation of his business. (150)
Social and environmental audits	Measures of performance of a business against social/environmental criteria, such as levels of CO2 emissions in an environmental audit.	Given her experience of previous UWP Missions, General Pierce ordered Colonel Donovan to conduct a formal social and environmental audit of the construction of both facilities. (96)
Sole trader	A business organization which has a single owner. They have unlimited liability.	Twice a week, operating as a sole trader, he drove his car to several local farms. (61)
Strategic objective	The main objectives of a business designed to achieve its aims.	Firstly, she had the strategic objective to improve the image of “the Olive Hats” in Loyka in. (36)
Strategy	It is concerned with plans and policies which allocate resources in a way will allow the business to achieve its corporate objectives. They set out the long-term objectives and the plan for how they will be achieved.	Due to these changes in the external and internal environment, the UWP headquarters in Geneva prepared a force field analysis to evaluate whether the UWP Mission to Loyka should change its strategy in 2011 (Appendix 2). (32)
Wholesaler	A type of business which buys goods from manufacturers and sells them in smaller quantities to retailers.	In Beral there is no city-wide wholesaler for the produce that Kos distributes. Becoming a wholesaler would require setting up and managing supply chains, employing staff, increasing working capital and adopting a new business structure. (154)

Topics

• Business Organization and Environment
• Human Resources
• Accounts and Finance
• Marketing
• Operations Management

References

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