Strategic Analysis Report: Western Sydney University China Expansion

This report presents a strategic analysis of Western Sydney University's potential expansion into the Chinese education market. The analysis begins with an executive summary outlining the report's objectives, which include evaluating the viability of expansion and determining a suitable market entry mode. The report utilizes the VRIO framework to assess the university's resources, identifying valuable, rare, inimitable, and organized resources. It then applies Porter's Five Forces and PESTEL analysis to evaluate the external environment, including the threats of new entrants, substitutes, and competitive rivalry, as well as political, economic, social, technological, environmental, and legal factors. The analysis identifies opportunities and threats, leading to a recommendation for market entry mode. The report concludes with a summary of findings and recommendations, providing a comprehensive overview of the strategic considerations for WSU's expansion into China, including a look at market entry mode recommendations.

Running head: STRATEGIC ANALYSIS
STRATEGIC ANALYSIS
Name of the student
Name of the University
Author note

1TITLE
Executive Summary
The significant objective of the report is to analyze the scope of an expansion of the
operations of the Western Sydney University to the country of China. In order to measure and
evaluate the viability of such an expansion, the resources that may be available to the
company in the country have been analyzed using the VRIO framework. Furthermore, the
external environment of the Western Sydney University in China has been evaluated using
the frameworks of Porter’s Five Forces and PESTEL analysis. The results of these tools have
thus provided an evaluation of the opportunities and threats for such an expansion and
thereby determined the suitable market entry mode to be through partnerships.

2TITLE
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
VRIO Analysis.......................................................................................................................4
Porter’s Five Forces Analysis................................................................................................6
PESTEL Analysis...................................................................................................................7
Analysis of Opportunities and Threats...................................................................................9
Market Entry Mode..............................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

3TITLE
Introduction
The business environments of organizations throughout the world are subject to
change depending on various external and internal factors. In order to operate in the industry
successfully it is essential for the business organizations to identify these forces in the
external environment and evaluate the opportunities that may be available to the company
and the threats that they might be faced with (Ho, 2014). In this regard, it may be noted that
the scope of a strategic analysis of a business organization involves such an evaluation of the
external environment in which the organization operates. The evaluation of this external
environment helps the organization to conduct its decision making and strategy development
processes in an efficient manner (Clarkson, 2019). In order to remain competitive
environment, the business organizations may choose to adopt growth strategies, such as
expansion of the scope of their business in other countries (Wu & Chen, 2014). The
significant aim of the essay is to perform a resource based, industry based and institution
based strategic analysis for the Western Sydney University so that they may be able to
expand the scope of their operations in the education industry of China. In order to
successfully conduct this strategic analysis and identify the opportunities and threats for such
business expansion, the competitive forces present in the external environment of the
institution will be analyzed using the models of Porter’s Five Forces and the PESTEL
framework. Furthermore, the various resources available to the institution will be analyzed
using the VRIO framework. In doing so, the most suitable market entry mode for the
institution will be indentified, which can be used for the successful expansion of its business
in China.
The Western Sydney University is a widely recognized multi-campus university in
Australia, which was founded in the year 1989 (Westernsydney.edu.au, 2020). The

4TITLE
University is one among the top 300 universities in the world and is well known for the wide
variety of courses that is provides to its students. The Chinese education market has been
subjected to rapid growth in the recent ages, owing to the rapid advancements through
research and development in the technology used for teaching purposes (Deloitte.com, 2020).
Hence, if the University expands the scope of its operations in China it may be greatly
benefited.
Discussion
VRIO Analysis
The VRIO framework provides for a tool of strategic analysis for business
organizations, which is used for the purpose of identification of the resources available to
them and also determine the extent to which these resources may provide the organization
with opportunities in the short term as well as in the long term (Knott, 2015). The prupose of
conducting a VRIO analysis also includes the evaluation of the resources available to a
business organization that may be able to provide it with a certain level of competitive
advantage in the market in which it operates. In this regard, the evaluation of these resources
is conducted on the basis of their value, rarity, imitability and organization (Albrecht,
Holland & Peters, 2016). In the given case, the development of resources in an educational
institution for the purpose of propelling the growth of its business may be identified to
include the scopes of management, administration, marketing, networking, innovation
capacity and fund raising for research and development. The primary sources that are
required for the Western Sydney University to conduct its operations in China are human
resources in the form of administrative, teaching and support staff, material resources like
technological infrastructure, buildings and the like, and fiscal or financial resources. The
framework of the VRIO analysis as applied to the Western Sydney University for the
expansion of the scope of its business in China shows the following results:

5TITLE
 Valuable – The valuable resources of a business organization can be identified to be
those that can be utilized by the business organization in order to capitalize on the
opportunities available to them (Agasisti & Longobardi, 2014). In the case of the
Western Sydney University, the valuable resources include the management of its
human resources, which will enable the institution to retain highly skilled and
knowledgeable teaching staff to meet the requirements of the students. Furthermore,
another valuable resource available to the organization is its positive brand image and
identity that may help in attracting large number of students to study in the institution
after its expansion in China.
 Rare – The rare resources of a business organization include the ones which may not
be available to its competitors and is exclusively available to the organization alone.
In this regard, it may be noted that the highly skilled and professional teaching staff of
the university may be regarded as a rare resource available for the success of business
operations in China (Indartono & Wibowo, 2017). The expertise of these individuals
may include prior experience in the field of cross-cultural classroom environments.
 Imitability – The imitability of the resources available to a business organization
refers to the extent to which they may be able to be duplicated by the competitors. In
this regard, it may be noted that the skills and experience of the human resources
available to the Western Sydney University is both costly and difficult to imitate.
Furthermore, the research and development for innovations in teaching curriculum
also cannot be duplicated or imitated by the competitors of the institution
(Shanmugam & Shanmugamoorthy, 2016).
 Organized – The organization of the resources available to a business organization
refers to the manner in which they are utilized by the organization so as to capitalize o
the available resources to their optimum potential. In this regard, it may be noted that

6TITLE
the human resources available to the institution for the departments of administration
and teaching is organized in a manner so as to ensure the provision of optimum
quality of services to the students, thereby obtaining maximum customer satisfaction.
Furthermore, the financial resources available to the institution are also organized to
suit the requirements of the various departments of operations.
Porter’s Five Forces Analysis
The framework of the five forces was developed by Michael E. Porter in order to
analyze the competitive environment of business organizations. The various forces analyzed
through the framework of Porter’s five forces include the threats of new entrants, substitutes,
bargaining power of the suppliers, bargaining power of the consumers and competitive
rivalry (Dobbs, 2014). In this regard, the analysis of the competitive forces on the Western
Sydney University with respect to its expansion strategy in China may be identified to be the
following:
 Threat of new entrants – The Western Sydney University faces low threat from new
entrants because of the high amount of costs and investment required for the
establishment of business operations in this sector (Hu et al., 2018). Furthermore, the
education industry in China already has high competition from big institutions, which
may be unfavorable for the entry of new small-scale institutions.
 Threat of substitutes – The Western Sydney faces low threat from the presence of
substitutes. It is so because the Western Sydney University offers the students with a
wide range of courses to choose from, thereby decreasing their possibility to switch to
other universities to study the courses of their choice (Westernsydney.edu.au 2020).
In this regard, it may also be mentioned that the university may further choose to
include certain courses within its curriculum that cater to the interests of the local
students of China.

7TITLE
 Bargaining power of the suppliers – The University faces a low threat from the
bargaining power of the suppliers due to the presence of a large number of suppliers
in the education industry (Xiao & Wilkins, 2015). These suppliers pertain to the
providers of material resources.
 Bargaining power of the customers – The Western Sydney University faces low
threat from the bargaining power of the customers, because in the education industry
the customers are generally willing to pay high process in order to receive high
quality of education. The brand identity and image of the institution will attract the
students to study in the institution irrespective of the prices charged for the education
services provided to them.
 Competitive rivalry – The University faces a high threat from the competitive rivalry
in the education industry of China. China, being a highly populated country, has a
number of distinguished educational institutions developed to meet the requirements
of the students (Verger, Lubienski & Steiner-Khamsi, 2016). In this regard, it may be
mentioned that the competitive rivalry in the education industry of China may be a
major threat faced by the Western Sydney University in case of its expansion.
PESTEL Analysis
The framework of PESTEL analysis provides for a strategic tool that is used for the
evaluation of the external environment in which a business organization operates. This
evaluation is done with the help of an analysis of the political, economic, social,
technological, environmental and legal factors that may determine the scope and extent of the
business operations and functions of the organization (Shtal et al., 2018). In this regard, a
PESTEL analysis of the education industry in China may be conducted in order to identify
the opportunities that may be utilized by the Western Sydney University in case of an
expansion of its business activities in the country, as well as the threats that may be posed to

8TITLE
it as a result of such an expansion. The PESTEL framework as applied to the education
industry of China shows the following results:
 Political factors – The political factors that may affect the operations of the Western
Sydney University in China include the Education Laws of the people’s republic of
China. The operations of the university must abide by these legislations in order to
ensure their successful operations. Other political factors influencing the operations of
the university in China may include the communist political culture and political
stability of the country.
 Economic factors – The economic factors affecting the operations of the Western
Sydney University in China include the rate of inflation, employment levels,
availability of skilled teaching staff and disposable income of the customers.
Furthermore, the growing GDP of the country may also be an opportunity of growth
of the university in China (Rahman, 2017).
 Social factors – The social factors affecting the operations of the university in china
include the demography of the country in terms of number of individuals who may
fall in the target market of the institution, which is primarily between the age group of
15 to 20. Other social factors include the tastes and preferences of the students
towards the courses offered by the institution as well as the vast cultural and linguistic
differences that exist between the two countries China and Australia.
 Technological factors – The technological factors affecting the operations of the
Western Sydney University in China include the scope of research and development
to innovate new methods of teaching, such as the provisions of smart classrooms.
Furthermore, the accessibility of the students to internet services and bandwidth
available in the areas where the institution will operate is also essential, as these

9TITLE
internet services will be required for admission procedures as well as to conduct
online classes and lectures.
 Environmental factors – The environmental factors that affect the operations of the
University in China include the regulations in the country pertaining to sustainability
of business activities and corporate social responsibility activities that may be
undertaken to build a positive brand identity in the country (Zhiyong, 2017).
 Legal factors – The legal factors influencing the operations of the University in
China include the regulations pertaining to the standards of educational services and
safety and protection of the students. Furthermore, regulations pertaining to the wages
and benefits provided to the teaching staff also form important elements of the legal
factors that may regulate the operations of the University in the country.
Analysis of Opportunities and Threats
As discussed earlier, the evaluation of the external environment of a business
organization helps in the evaluation of the opportunities that may be available to it for
efficient utilization as well as the threats that it may be faced with (Baldwin, 2016). The
evaluation of such opportunities and threats in turn help the business organization to
efficiently formulate the strategies that may be adopted by it during the expansion of the
scope of its business as well as the ensure efficiency in the decision making processes. In this
regard, the opportunities and threats available to the Western Sydney University in case of
the expansion of the scope of its business in China can be identified to be the following:
 Opportunities - The opportunities available to the Western Sydney University for the
expansion of its operations in China include the low threats of bargaining power of
the suppliers and customers (Bai, 2015). Furthermore, the positive brand identity and
image of the university in the education industry is also an opportunity that may help
in building the trust of the students. Other opportunities include the technological

10TITLE
infrastructure available in China, the potential economic growth in the country and
availability of skilled teaching personnel.
 Threats – The threats that may be faced by the Western Sydney University for the
expansion of its operations in China include the high level of competition in the
education industry. Furthermore, the high amount of investment required to establish
successful business operations in the country may also be considered as a threat to
expansion. One of the most alarming threats is the vast cultural and linguistic
difference between the countries of Australia and China that may cause discrepancies
in the operations of the institution in the country.
Market Entry Mode
There are various foreign market entry modes that are available to business
organizations for the purpose of expanding the scope of their business in different countries.
These different types of foreign market entry modes include joint venture, licensing,
partnerships, acquisitions, mergers and franchising (Ang, Benischke & Doh, 2015).
The foreign market entry mod that can be applied by the Western Sydney University
for the expansion of the scope of its business in China can be identified to be the formation of
partnerships with local suppliers and secondary schools. Such partnerships may help the
University to efficiently market itself to the students. Partnerships with secondary and higher
secondary schools will enable the institution to get in touch and communicate with the
potential students directly and explain to them the various courses that may be offered to
them by the University. Partnerships with the local suppliers would help the university to
conduct an efficient analysis and evaluation of the existing market in the education industry
of China. The market entry mod of partnership can therefore be regarded as an efficient
means of foreign market entry because the joint venture thus formed helps the business

11TITLE
organizations to get accustomed to the trends of the new market with the help of prior
experience of the local partners (Andersen, Ahmad & Chan, 2014).
Conclusion
Form the above discussion regarding the expansion of the scope of business of the
Western Sydney University in the education industry of China, it can be mentioned that to
ensure successful business entry in a foreign market, the organization is required to conduct a
detailed research on the external environment of the new market. The scope of strategic
analysis therefore, aids the organizations to evaluate the external environment and determine
the competitive forces that may influence the business operations and functions of the
organization in the industry. In this regard, the strategic analysis of the University and its
expansion in China shows that the there are numerous opportunities available to the
organization for its expansion in the country. The mode of entry found to most suitable for
the institution is that of partnership with local supplies and the secondary and higher
secondary schools in the country.

12TITLE
References
Agasisti, T., & Longobardi, S. (2014). Educational institutions, resources, and students'
resiliency: an empirical study about OECD countries.
Albrecht, C., Holland, D., & Peters, M. (2016). Strategic revenue analysis. Strategic
Direction.
Andersen, P., Ahmad, S. Z., & Chan, W. M. (2014). Revisiting the theories of
internationalization and foreign market entry mode: a critical review. International
Journal of Business and Commerce, 4(1), 37-86.
Ang, S. H., Benischke, M. H., & Doh, J. P. (2015). The interactions of institutions on foreign
market entry mode. Strategic Management Journal, 36(10), 1536-1553.
Bai, C. E. (2015). China’s structural adjustment from the income distribution
perspective. China Finance and Economic Review, 3(1), 6.
Baldwin, M. (2016). Critical reflection: Opportunities and threats to professional learning and
service development in social work organizations. In Social work, critical reflection
and the learning organization (pp. 51-66). Routledge.
Clarkson, A. (2019). Toward Effective Strategic Analysis: New Applications of Information
Technology. Routledge.
Deloitte.com. (2020). Trends in the Chinese Education Industry | Deloitte China | Global
Chinese Services Group. Retrieved 29 March 2020, from
https://www2.deloitte.com/cn/en/pages/international-business-support/articles/trends-
in-the-chinese-education-industry.html

13TITLE
Dobbs, M. E. (2014). Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review.
Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic
analysis. European academic research, 2(5), 6478-6492.
Hu, J., Liu, H., Chen, Y., & Qin, J. (2018). Strategic planning and the stratification of
Chinese higher education institutions. International Journal of Educational
Development, 63, 36-43.
Indartono, S., & Wibowo, F. W. (2017). VRIO and THES based development of university
competitive advantage model in formulating university strategic plan. International
Information Institute (Tokyo). Information, 20(10A), 7275-7283.
Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?. Management
Decision.
Rahman, M. (2017). PESTEL analysis of China.
Shanmugam, A. P., & Shanmugamoorthy, P. (2016). Role of ICT on Information Seeking By
Users in Higher Educational Institutions. Journal of Advances in Library and
Information Science, 5(2), 139-143.
Shtal, T. V., Buriak, M. M., Amirbekuly, Y., Ukubassova, G. S., Kaskin, T. T., &
Toiboldinova, Z. G. (2018). Methods of analysis of the external environment of
business activities. Revista ESPACIOS, 39(12).
Verger, A., Lubienski, C., & Steiner-Khamsi, G. (2016). The emergence and structuring of
the global education industry: Towards an analytical framework. In World Yearbook
of Education 2016 (pp. 23-44). Routledge.

14TITLE
Westernsydney.edu.au. (2020). Home | Western Sydney University. Retrieved 28 March
2020, from https://www.westernsydney.edu.au/
Wu, J., & Chen, X. (2014). Home country institutional environments and foreign expansion
of emerging market firms. International Business Review, 23(5), 862-872.
Xiao, J., & Wilkins, S. (2015). The effects of lecturer commitment on student perceptions of
teaching quality and student satisfaction in Chinese higher education. Journal of
Higher Education Policy and Management, 37(1), 98-110.
Zhiyong, X. (2017, August). PESTEL model analysis and legal guarantee of tourism
environmental protection in China. In IOP Conference Series: Earth and
Environmental Science (Vol. 81, No. 1, p. 012092). IOP Publishing.