Application of SLEPT Framework to Analyze the Threats and Opportunities of BELFOR USA in Australia

Efforts by a company in opening global subsidiaries and branches should entail the development and implementation of a positioning strategy based on a careful analysis of the external environmental factors that may impact the firm’s operations and profitability in one way or the other. While a number of tools exist to assist businesses in evaluating the external environmental factors, the SLEPT framework is widely used in the assessment of the environmental influence on business’ operations (Ortiz, 2010). SLEPT entails the analysis of the elements of social, legal, economic, political, and technological factors and hence the mnemonic. The outcomes of the SLEPT analysis are useful in the identification of the opportunities and threats that are faced by the organization. The purpose of this essay is to use the SLEPT framework to describe how BELFOR USA Company can use the identified threats and opportunities to formulate and implement a global market positioning strategy in Australia.

BELFOR USA Group Inc.

In describing the application of the SLEPT framework in analyzing how the company can convert the threats into opportunities it is essential to understand the company and the products it offers in the target market. BELFOR USA is a multinational company that offers disaster restoration services to individuals who have been affected by damage from fire, storm, and others (BELFOR USA., 2018). The restoration services are aimed at assisting the private customers and businesses to overcome the consequences brought by the damage quickly in a cost-effective and smoothly. Furthermore, the recovery services are aimed at offering efforts aimed at minimizing business and life interruptions as much as possible. The other services include smoke and soot removal, building dehumidification, water extraction and mold removal among others.

Socio-cultural Factors

Socio-cultural factors affect the consumption patterns, tastes, lifestyles, and preferences (Doole & Lowe, 2008). Similarly, the socio-cultural factors have a significant impact on the organization’s access to utilization of human resources.

Opportunities

Since English is the predominant language, the firm can easily create awareness about the products as it enters a new market. Similarly, a common language is essential in the creation of a suitable organization culture through effective communication and teamwork. The high concentration of urban and suburban dwellers provides a ready market for the recovery services. Furthermore, the high home ownership in the world makes the country an ideal market for the offering of services such as soot and smoke removal and others.

Threats

Skilled labor is essential to accomplishing the organization’s objectives. The shortage of skilled labor will undermine the firm’s effort to provide quality products to the potential consumers. While a diverse cultural background may offer an opportunity for the business to acquire diverse human resource skills, a threat may arise due to the lack of the understanding of the right marketing mix to meet the demands of the consumers. The effect of competition is worsened due to the fact that the market is unknown and hence the organization is threatened by the dynamics in an unfamiliar territory. The business may also struggle to establish reliable suppliers who may be loyal to the firm’s rivals.

Legal

The legal factors constitute the elements that are regulatory in nature (Doole & Lowe, 2008). Every business is sensitive to laws that are part of the territories of their operations. The legal aspects are usually updated to encompass aspects of consumer protection, labor laws, and environmental legislation.

Opportunities

Australia has a strong human rights discrimination laws in business that can be utilized as a strategic opportunity by providing a framework for offering services to individuals regardless of their background and social status. Such laws also allow for the recruiting the right people to assist in accomplishing the organizational goals. The environmental laws and regulations regarding hazardous materials can provide an opportunity for Belfor to offer services aimed at protecting the environment. Furthermore, the organization can also provide services to businesses and private consumers that are aimed at achieving environmental regulation compliance.

Threats

A business is threatened in a market when the legal aspects are unfavorable such as the taxation regulations that adversely affect the profitability of the business operations. The business is also faced with problems relating to the law of contract some of the agreements are oral in nature thereby reducing the availability of proof required for the execution of such agreements. Since the laws are constantly changing, it may be costly for the business to stay updated with the prevailing regulations at different times of the operations.

Economic

The right economic activities are critical to ensuring the success of a business in a global market. The economic factors are both macro and micro in nature (Doole & Lowe, 2008). The macro-economic factors include factors such as interest rates, growth rates, inflation rates, and wages.

Opportunities

Australia is one of the best performing economies in the world. Favorable market conditions are experienced due to the increased buyer purchasing power as well as allowing the organization to expand by taking risks. The growth in the construction industry presents a strategic opportunity to the firm by increasing the number of potential customers to whom the services can be offered.

Threats

The low unemployment rate of 5.36% is a significant threat to the business due to the potential inadequate skilled labor. Venturing into the Australian market may, therefore, be associated with high costs of labor leading to the related high production costs. Another threat arises from the fact that the economic performance varies by state and territories making it challenging for the business to adopt the right mechanism for approaching the market.

Political

The political factors related to the dynamics of governance and policies in a country. Political stability is one of the primary factors that determine the success of a business in a particular territory (Doole & Lowe, 2008). Civil unrests and other political tensions increase the market risks and threats related to business operations. The political also affects the legal frameworks due to the various legislations that are produced to regulate the business operations in the country.

Opportunities

The political environment in Australia is stable and hence increases the ease of doing business as well as eliminating risks such as loss of productivity due to the closure of operations due to political tensions and dynamics. Since the political framework is similar to that of the UK, the firm has an understanding of the operations and can consequently implement strategic measures based on the proven policies to ensure the growth and prosperity in the territory.

Threats

Threats arising from the political environment in Australia include the changes in legislation 2018-2019 that may lead to increase costs as the business seek to adopt the guidelines provided in the new laws (Doole & Lowe, 2008). The current political party is also contemplating changing the banking and insurance regulations that may lead to unfavorable premium and interest rates making it difficult for the firm to take risks in efforts to expand the operations.

Technological

The modern world is associated with advanced technological changes that offer both opportunities and threats in market positioning (Doole & Lowe, 2008). Opportunities arise due to the improved information and communication technologies that improve the efficiency of the operations as well as the reduction of costs incurred in the production of services. Threats arise due to the associated high costs of the technological assets, problems such as data breaches, and cyber-security issues.

Opportunities

The technological opportunities are possible in Australia due to the availability of the information technology infrastructure and services such as social media, broad band, and the internet that enable efficient communication with the clients. The improved communication infrastructure is useful in the provision of the services such as the rapid response to cases of incase of disasters to ensure timely recovery of the client’s damaged assets.

Threats

The associated threats in the Australian market include the high costs related to cyber security risks. Further challenges arise due to the lack of some information technology infrastructure consequently requiring the business to incur additional investments such as through acquisition of cloud systems. The possibility of data breaches also makes the business to be susceptible to infringement of the company’s information.

Recommendations

The organization should aim at protecting the business from the environmental threats through the implementation of appropriate brand positioning strategy. The socio-cultural threats can be turned into opportunities by branding strategies that address the cultural diversity in the country (Doole & Lowe, 2008). For instance, the business should tailor-make their recovery services to suit the particular lifestyle of individual customers. The legal threats can be turned into advantage formulating flexible policies that suit different regulations. The business should for instance, adopt policies that address the procedures for handling oral contracts to make it easy for the cooperation with the customers. Economic threats can be addressed through measures such as enactment of cost-effective techniques that are not only aimed at ensuring profitability but are also geared towards protecting the firm against the slump in economic activities. The business policies should also aim at adopting an appropriate framework to capitalize on the prevailing political conditions such as changes in legislations. Technological changes are also associated with environmental threats that can be turned into opportunities through the provision of products to meet the challenges in the market such as offering data recovery and protection services in case of disasters.

Conclusion

Strategic global positioning entails a proper assessment of the impact of the external factors that may contribute to threats or opportunities in the target. Globalization is associated with various opportunities and strengths such as increased market demand and availability of cheap labor. Flexibility in laws and regulations as well as the ease of doing business in the international market environment are some of the elements that are favoring the global positioning of companies. Other factors include the favorable tax regimes that encourage investment activities with high returns and profitability. On the other hand, threats and challenges arise in the global business environment due to factors like diverse culture, high interest rates, unfavorable regulations and lack of skilled labor. The study has used the case of Belfor USA to evaluate the possible opportunities and threats that may arise from the Australian market.

References

BELFOR USA. (2018). BELFOR USA | BELFOR. Belfor.com. Retrieved 12 April 2018, from https://www.belfor.com/en/us

Doole, I., & Lowe, R. (2008). International marketing strategy: analysis, development and implementation. Cengage Learning EMEA.

Ortiz, J. (2010). The global environment through the SLEPT framework. International Journal of Business and Globalisation, 5(4), 475-492.