Strategic Initiative of G8 Education: SWOT Analysis and Recommendations

This article discusses the SWOT analysis of G8 Education and provides recommendations for its strategic initiative. The strengths, weaknesses, opportunities, and threats of the company are analyzed, and it is suggested that the company should expand its business in new markets by offering lower-priced and higher-quality products. The article also discusses the business level and corporate level strategies that the company can employ to gain a competitive advantage.

Running head: STRATEGIC INITIATIVE OF G8 EDUCATION
Strategic Initiative of G8 Education
The Name of the Student:
The Name of the University:
Author Note:

1STRATEGIC INITIATIVE OF G8 EDUCATION
Strategic Initiative:
The dynamics of today’s world is changing rapidly. Therefore, the organisations need
to analyse the internal as well as the external forces that effect the development of the
organisations, and plan strategies accordingly. On this context, SWOT analysis is the most
useful analytical tool to understand the internal and external forces that effect an organisation
(Kajanus et al., 2012) and help to make strategic plans according to the changes (Hill, Jones
& Schilling, 2014).
SWOT Analysis:
Strengths Weaknesses
 Steady financial power
 Balance sheet
 Effective Multi-brand strategy
 Strong market position
 The strategies are easy to be copied
 Unable to mitigate the challenges of
new entrants
Opportunities Threats
 Expansion in similar business field
 Expansion in product category
 Expansion in small cities
 The expansion of Non-for-Profit
organisations
 Changing consumer behaviour
Strengths: G8 Education has a strong free cash flow, which indicates the company is
financially powerful. This free cash flow enables the company to plan new projects and
increase its assets. The balance sheet of G8 Education continues to be conservatively geared,
and would help the company to increase the acquisition. The company holds a strong position
in the market, which enables it to build reliable relation with the suppliers. The company’s
multi-brand strategy that includes Kindy Patch, Early Learning Services, Bourne Learning,
Community Kids, and World of Learning, helps the company to gain the combined profit of
multiple centres.
Weaknesses: The greatest weakness of G8 Education is that the other companies in his
industry could easily copy the company’s strategies. In this way, the strategic value and the
competitive advantage of the company would be reduced. Another major concern that the
company is facing is the challenges of new entrants in the market, as so far, the company has

2STRATEGIC INITIATIVE OF G8 EDUCATION
been unable to manage those challenges.
Opportunities: G8 Education has diverse scope of expansion. As the company currently is in
early child education business, it is easier for it to expand into similar fields of child
development and educational business. Based on the changing demands of the customers, the
company has the opportunity of bringing change to its current products and creating new
productline. The demand for childcare institutes is significant, which creates the opportunity
for the company to expand the business in new market segment, such as in small cities where
the population has lower income.
Threats: A significant external threat of the company is the expansion of the Not-for-Profit
organisations, as these are giving G8 Education a tough competition with their low pricing.
The existing supply chain model of the company is driven by physical infrastructure of the
business. Therefore, the change in the buying behaviour of the consumers, that is preferring
online channels, is a substantial threat to the company.
Recommendations:
Analysing the internal strengths and weaknesses of G8 Education and the external
opportunities and threats of the market, recommendations can be made for the growth of the
company. Considering the steady financial growth, strong market position, and the effective
brand strategy of the company, it can be said that it has the advantage to initiate new
ventures. Therefore, the recommendation would be expansion, which has two crucial
elements in it.
 The company has the scope of expanding to smaller cities among the lower income
families to gain competitive advantage.
 In order to gain a competitive advantage, G8 Education should provide quality
education with lower prices.
Justification for the Recommendations:
The most suitable strategies for G8 Education would be the Business Level Strategy
(BLS) and Corporate Level Strategy (CLS). The fundamental conception of the BLS is to
enhance the existing company strategy to gain competitive advantage in order to respond to
the competitive threats (Wheelen et al., 2017). Gaining competitive advantage is about
providing the customers products and services that the competitors are unable to provide, and
to do that the company has to differentiate the specific needs of the customers. In other
words, the company requires being innovative in product and service designing.

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Innovation Through Market Pull:
As opined by Urbancova (2013), innovation is the most significant way of gaining
competitive advantage. There are multiple ways to initiate innovation in an organisation, such
as technological, product designing and planning, business model, process, and market pull.
The suggestion for G8 Education is related to market pull strategy, which is to make
innovation based on the market demand. The SWOT analysis clearly indicated that there is a
demand for lower price and higher quality products among the customers. Thus, the
recommendation has been made to provide lower price and higher quality products to the
targeted customers.
Business Level Strategy:
Pricing the products in a way that attracts the customers is another way to gain
competitive advantage according to the BLS (Hinterhuber & Liozu, 2017). In order to do
that, G8 Education needs to reduce the price differences between the company products and
services and that of the competitors. This leads to the cost leadership strategy of the company.
On this context, the company employs differentiation cost leadership and integrated cost
leadership. Differentiation cost leadership can be followed in two ways. The first is by
offering the customers products that have better attributes than the rival companies, and the
second is by focusing on a particular segment of the consumers and their needs. The
integrated cost leadership strategy indicates offerings that are low in cost and high in quality.
Therefore, G8 Education needs to create a different brand with lower price than the existing
ones. Creating and managing a separate business is crucial in this situation, as customers
could categorise the lower priced products as lower quality products, as well as think that the
company is running at loss. Thereafter, it has been suggested that G8 Education should set up
business in smaller cities where the families have lower income rate to make the company’s
low price products lucrative to the customer base (Singh, 2012).
Cost Leadership Not employing this strategy of offering the lowest price
Focused Cost Leadership Not focusing on offering cheapest priced products to the
niche consumer segment
Differentiation Offering products with attributes that the rival companies
cannot offer

4STRATEGIC INITIATIVE OF G8 EDUCATION
Focused Differentiation Not focusing on fulfilling the needs of niche consumer
segment
Integrated Cost
leadership
Focusing on offering lower cost products that are high in
quality
Diagram 1: Business Level Strategy
Corporate Level Strategy:
Corporate Level Strategy (CLS) is about how and in which direction the company is
growing through products and business management (Rothaermel, 2015; Hitt, Ireland &
Hoskisson, 2012). In this context, Ansoff Matrix is a useful tool to determine CLS for a
company. According to Ansoff, the product-market strategy is a combination of products and
reasons for designing them (Proctor, 2014). As per this strategy, there are four alternative
ways of business growth – market penetration, new products and services, market
development, and conglomerate diversification. The VRIO test presents that G8 Education is
capable of gaining larger profits by attracting customers with its existing technological
advancements and sustainable practices. Thereafter, the company is recommended to follow
the market development strategy by offering lower priced and higher quality productlines to
the new customer segmentation that is customers with lower income.
Market Penetration New Products and Services
No change in market share No new products for existing markets
Market Development Conglomerate Diversification
Entering new market of lower income
consumers with their high quality products
No new products for new markets
Diagram 2: Corporate Level Strategy
DIY or Organic Method:
The most appropriate method in which the company would employ the BLS and CLS
is the organic or DIY method. The organic growth of a company is the growth rate that the
company gains by factors like output increment and internal sales enhancement
(Achtenhagen, Melin & Naldi, 2013). Different from other methods, growth by takeovers,

5STRATEGIC INITIATIVE OF G8 EDUCATION
mergers, or acquisitions do not include in the DIY method. Rather, it includes utilization of
revenues, developing new products, and enhancing the customer service (Achtenhagen,
Melin & Naldi, 2013). Therefore, as per the recommendation of expanding the business in
new markets of smaller cities for the lower income customers with products that are lower in
price and higher in quality, employing DIY method is justified. Although, this method have a
few disadvantages, such as the growth is slow in this strategy and building market share
becomes hard. However of its disadvantages, the advantages are more significant. As the
business expands in the industry in which it is already good at, there is less risk. In terms of
finance, as the company funds the expansion from its own profits, there is less possibility of
risk. Moreover, in this method, the company does not go through major changes, and
therefore, it is easier to maintain the employee efficiency and productivity.

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