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Introduction

Strategic Management

Strategic management is a widely discussed topic in modern-day literature. Strategic management is a continuous process that includes planning, monitoring, and analyzing all the companys needs to meet the strategic goals (Carter, 2013). The purpose of strategic management is to develop and implement a formula that defines how the company is going to compete in the market (Fuertes et al., 2019). Strategic management is associated with a wide variety of monetary and non-monetary benefits for the organization. On the one hand, strategic management sets financial goals and ensures that policies help to achieve the goal (Cattani, Poracand, Thomas, 2017).

On the other hand, strategic planning helps to establish a link between the vision and mission of an organization and its everyday activities, which leads to increased motivation, productivity, and workplace satisfaction of employees (Berisha Qehaja, Kutllovci, and Shiroka Pula, 2017). In general, it has been noticed that the more tediously a company implements a strategic management process, the better its performance in all spheres (Elbanna, S., Al Katheeri, B., and Colak, 2020). Therefore, the importance of strategic management is difficult to overstate.

Report Overview

The present report aims at assessing a recent strategic decision of GrowthDC to acquire additional funding for aggressive development using a strategic management approach. The report assesses the company using the value chain and value system, VRIO framework, Porters five forces, SWOT analysis, PESTLE analysis, gap analysis, performance measures, and Porters generic strategies. These approaches are expected to help to understand how the recent decision to start operations is appropriate according to the companys optimal strategy. The conclusions are drawn from the analyses, which serve as the basis for recommendations for future development.

Company Overview

GrowthDC is a startup company based in United Arab Emirates that operates in the information and communications technology (ICT) and data center consulting industry. The companys main services are data center audit specialists, data center design and build, data center maintenance and management services, data center testing and commissioning services, data center command and control, and data center training. GrowthDC provides Integrated Data Center Management tools to covers end to end reliable data center operational processes from data center infrastructure management (DCIM), building management systems (BMS), energy power management systems (EPMS), computational fluid dynamics (CFD), workflows, cable and asset management, and advisory and performance services. The primary advantage of the company is that it provides physical and virtual 3D visualization of data center infrastructure, which is helpful for potential clients.

Analysis

Value System

Vision Statement

A coherent vision statement for a company is crucial for a company of any caliber for a wide variety of reasons. A vision statement is viewed as a declaration of a companys goals that are supposed to guide the company into the future (Lucas, 1998). A vision statement embraces the internal goals of the company that help the company grow, while the mission statement is focused on external goals (Kirkpatrick, 2017). A vision statement is usually included in all the internal documents, which ensures a strong corporate culture (Raynor, 1998). A good vision statement serves as an ultimate plan for strategic success and helps to attract, retain, and motivate valuable employees (Van der Walt, Kroon, and Fourie, 2004). Thus, GrowDC needs to have a strong vision statement to ensure a successful launch.

GrowthDCs vision statement reads:

Our vision is to evolve into a global company that provides thousands of top-class employment opportunities for the best talents.

The statement is appropriate for the company and has all the characteristics of an effective vision statement. In particular, the statement is clear, specific, inspirational, genuine, authentic, and relevant, which is crucial for any company (Kantabutra and Avery, 2010). Additionally, the statement is unique, even though TEXPO, one of GrowthDCs direct competitors, has a somewhat similar vision statement, which reads, Our vision & aspiration is to evolve & emerge a strong company which can provide millions of employment globally (TEXPO, no date). This may have a negative impact on the companys performance.

Mission Statement

A mission statement is also of extreme importance for all types of companies. A mission is an action-based statement that establishes the purpose of an organization and defines the company that will serve the customers (Alegre et al., 2018). According to Salehi-Kordabadi, Karimi, and Qorbani-Azar (2020), the mission statement directly affects the performance of companies, as it helps to envision the future, establish the purpose, align behaviors, and encourage critical thinking. GrowthDCs mission statement reads:

To boost our clients performance through building effective data infrastructure.

This mission statement is clear, concise, authentic, and unique, which are crucial for a company to develop a strategic view on the operations. GrowthDCs vision makes an emphasis on the customers performance and establishes the means of serving the customer, which are essential characteristics of a good vision statement. Thus, the companys vision statement appears appropriate.

Values

A statement of corporate values is crucial for building an effective corporate culture. Core corporate values help to make strategic decisions, foster teamwork and help to understand the principles of making business, as they define what is important for the company (Posner, Kouzes, and Schmidt, 1985). Corporate values need to be clear, distinct, and perceived as norms to have an effect on employees performance. GrowthDCs corporate values statement reads:

We value trust, sustainability, respect, efficiency, excellence, and equality of opportunity.

While this statement of values is clear, concise, and rememberable, they are not directly related to the vision and mission statements. However, there are some indirect links, as respect and equality of opportunity help to create the best employment opportunities around the globe. At the same time, efficiency and trust help to boost customer experience.

Value Chain

The value chain is a model that describes all the activities a company needs to deliver a product or a service to its customers. Value chain analysis describes and evaluates every step of production to ensure that there are no wastes in the process (Jones, Demirkaya, and Bethmann, 2019). The purpose of the analysis is to maximize the output and minimize costs in every aspect of the production process (Rosales et al., 2017). The most frequently used model for analyzing value chains is Porters value chain model (Koc and Bozdag, 2017). This approach divides the production process into five primary activities and four kinds of supporting activities (Ruan, 2020).

Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service, while the supporting activities include infrastructure, human resource management, technology development, and procurement (Chen, Yang, and Lin, 2020). Value chain analysis is beneficial for GrowthDC to outline its basic activities and identify the strengths and weaknesses of the process.

The advantages of the value chain analysis are intuitive. The model helps to focus on one micro process at a time to ensure efficiency (Simatupang, Piboonrungroj, and Williams, 2017). Focusing on micro-processes promotes innovation on every step of production, which can be translated into monetary and non-monetary benefits (Koc and Bozdag, 2017). However, there is one significant drawback of the approach. In particular, by focusing on micro-processes, the managers may fail to acknowledge a bigger picture, which implies that the strategic view may be lost (Simatupang, Piboonrungroj, and Williams, 2017). While value chain analysis does a good job analyzing every step of the production, it does poorly in building a connection between the processes (Ricciotti, 2020). Thus, it is crucial that the strategic analysis of GrowthDC will be supplemented with additional approaches.

Primary Activities

Inbound and Outbound Logistics

GrowthDC does not use any logistic services, as no products are shipped to or from the company. Even though GrowthDC uses products of other firms, they are digital and delivered to the company using online mailing and sharing services. While the company helps to build data centers, which may involve shipping servers or other network equipment to customers, GrowthDC relies on the logistics of contractors (i.e., equipment providers), as it does not directly sell these products.

Operations

GrowthDC operations are associated with analyzing, modeling, and building data centers. The company uses the latest technology, such as 3d modeling, to increase customer satisfaction and mutual understanding. GrowthDCs employees also maintain and manage data centers, which allows the company to receive continuous income rather than simply relying on projects of building and remodeling data centers. GrowthDC is also ready to share its knowledge by providing data center training courses. All the operations are conducted either in the central office of the company or in the offices of the customers. The distribution of revenues from operations is expected to be the following:

30% from building, modeling, and auditing of data centers;
60% from testing, maintaining, managing, and controlling data centers;
10% from data center training.

Marketing and Sales

GrowthDC focuses on providing top-quality services as the primary marketing tool. The majority of the companys marketing and promotion activity is conducted online using search engine optimization (SEO), email marketing, search engine marketing, and social media marketing. The company also conducts webinars about data center building and management to attract new customers.

Service

GrwothDC aims at building customer loyalty by providing the entire spectrum of services connected with data centers. The company desires to become a one-point stop for the customer to satisfy all the needs associated with data centers.

Supporting Activities

Firm Infrastructure

GrowthDC does not have a clearly established firm infrastructure, such as strategic planning, accounting, legal affairs, and quality management. Currently, the company outsources legal and accounting matters to ensure that high-quality services are provided at the lowest price. However, the company still needs to develop and implement comprehensive strategic planning and quality control practices to ensure long-term growth.

Human Resource Management

HR management is the key to GrowthDCs success, as it employs the most talented managers and specialists in data center building and management. The company maintains a functional workplace culture that ensures the satisfaction and growth of all employees.

Technology Development

While GrowthDC uses technologies created by other companies, it also invests in developing its own technology. In particular, it uses AutoCad to design data centers and provides visual inventory and physical security automation. The company is always in the search for creating and using the latest technology to meet the needs of its customers.

Procurement

GrowthDC has limited procurement activities due to the nature of the business. The companys supply chain is built efficiently to optimize service provision.

Porters Five Forces

Porters Five Forces is a well-established framework that helps to assess a companys competitive environment. The analysis is crucial for identifying an industrys strengths and weaknesses to establish a corporate or a business strategy (Bruijl, 2018). The framework aims at assessing five aspects of the external environment, including threat of new entrants, threat of substitution, bargaining power of suppliers, bargaining power of buyers, and competitive rivalry (Bruijl, 2018). While the framework helps to approach possible threats of conducting business from five crucial sides, it has several disadvantages. Dobbs (2014) states that the model lacks structural analysis, strategic insight, and lack of depth. However, the model is still widely used among scholars, entrepreneurs, and students for a wide variety of purposes.

Porters Five Forces analysis for GrowthDC is provided in Table 1 below.

Table 1. Porters Five Forces.

Threat of New Entrants	Strong Force	ICT is a relatively attractive industry due to its rapid growth and high profit margins. The demand for ICT services of different kinds is growing exponentially, which causes new companies to enter the market worldwide (Canarella and Miller, 2018). Additionally, data center consulting does not require large initial investments, which implies that the barrier to entry in terms of financial services is low. However, entering ICT consulting services requires talents, which may be difficult to obtain.
Competitive Rivalry	Strong Force	There is a relatively intense rivalry among data center consulting companies in the United Arab Emirates and Gulf countries. Such countries as C-Suite Consulting, TEXPO, and Sudlows provide similar services as GrowthDC. Additionally, the nature of the industries forces the company to compete with international companies, such as Vanderweil Engineers, ESD, and Jacobs.
Bargaining Power of Buyers	Strong Force	There are many options that can be selected among, which makes the power of buyers very high. Additionally, the limited number of potential clients that need the services makes the competitors look for the best deals to retain customers.
Threat of substitution	Weak Force	There is a low threat of substitution, as consulting is crucial for building efficient data centers. The only alternative to consulting services is hiring one or several specialists in the sphere to make an appropriate solution. However, this is associated with higher costs and uncertainty.
Bargaining power of suppliers	Weak Force	The company is dependent only on 3D modeling software, which is available in a great variety. In general, GrowthDC is not dependent on suppliers.

PESTLE Analysis

PESTLE analysis is a framework used to assess the external environment in which a firm operates. Analysis of the external environment for companies in the modern day is crucial, as enterprises are forced to operate in extremely hectic environments characterized by high degrees of uncertainty, dynamics, and complexity (Shtal et al., 2018). The most commonly used approaches to analyzing are SWOT analysis, PEST(LE) analysis, STEP analysis, GRID matrix, and SNW analysis (Shtal et al., 2018). The present report will use PESTLE and SWOT frameworks to assess the external environment of GrowthDC.

PESTLE analysis is a largely appreciated tool used in a wide variety of industries, including biofuels, energy markets, the agricultural sector, and retailing (Achinas et al., 2019; Christodoulou and Cullinane, 2019; Mihailova, 2020; Nandonde, 2019). The method helps to gain a macro view on an industry by assessing its political, economic, social, technological, legal, and environmental factors (Rastogi and Trivedi, 2016). The advantages of the method include simplicity, facilitation of understanding of the environment, encouragement of strategic thinking, and helping to spot strategic opportunities (Rastogi and Trivedi, 2016).

However, the method is highly dependent on the accuracy of acquired data, which may be difficult to get for GrowthDC (Nandonde, 2019). Additionally, the action should follow the analysis immediately, as the ICT industry environment is extremely uncertain (Canarella and Miller, 2018). Thus, the PESTLE analysis for the company should be conducted frequently to ensure its relevancy. The PESTLE analysis for GrowthDC is provided in Table 2 below.

Table 2. PESTLE analysis.

Political	UAE is a regional power that has a significant influence on the neighboring countries. This implies that the political situation is expected to help GrowthDC to look for talents in nearby countries. UAE established strong political ties with many countries outside the region, such as the US, Germany, India, and China. These ties will help the company to follow its vision of spreading around the globe.
Economic	UAE has an extremely high GDP per capita of $43,103 (Data Commons, 2020). This is expected to support GrowthDC in its development. UAE attracts high amounts of international investments, which can also help GrowthDC. UAEs economy has suffered significantly from the pandemic; however, the country enters the post-pandemic era, which is associated with an economic rebound (Bocanet, Alpenidze, and Badran, 2021). Gulf countries have very low interest rates due to the pandemic (Saleem et al., 2021).
Sociocultural	While UAE is slowly becoming a multicultural country, there are still some social norms that may be difficult to follow for foreigners (such as clothing and etiquette). This may make the international growth of the company difficult. People around the globe expect that they will have the opportunity to see 3d models of their projects. Since GrowthDC provides such services, it will be accepted by society.
Technological	UAE is a major importer of modern technological devices, which is expected to help the development of GrowthDC The technology GrowthDC uses (visual design, inventory, and IoT automation) is developing rapidly, which will help the company to develop in the future.
Legal	In UAE, citizens are obliged by law to respect Islam and its traditions, which may have a slight negative impact on the international growth of the company.
Environmental	Awareness about environmental issues is growing in the UAE (Al Blooshi et al., 2020). Therefore, companies need to ensure that they adhere to environmentally sustainable practices. GrowthDCs primary value is sustainability, which implies that environmental factors a favorable for the company.

SWOT Analysis

SWOT analysis is another framework that is frequently used to assess both internal and external environments. The framework assesses four types of factors affecting the business, including strengths, weaknesses, opportunities, and threats (Gurl, 2017). The SWOT framework is beneficial for making strategic decisions, as it helps to identify the crucial resources and capabilities of a company and juxtapose them with the current external environment (Gurl, 2017). In simple words, the framework helps to understand and use a companys strengths, capitalize on the opportunities, deter threats, and address weaknesses (Leiber, Stensaker, and Harvey, 2018).

However, the analysis does not directly provide strategies for mitigating risks; instead, it acknowledges them without further recommendations (Leigh, 2009). Additionally, the method can generate too much unstructured information, which may lead to confusion (Leigh, 2009). Even though the approach can generate valuable insights, it does not prioritize issues or quantify their impact, which makes the approach partially useful (Leiber, Stensaker, and Harvey, 2018). However, despite its distinct drawback, numerous countries around the globe use the framework to assess their business (Gurl, 2017). SWOT analysis for GrowthDC is provided in Table 3 below.

Table 3. SWOT analysis.

Strengths

GrowthDC uses the latest technology, which is appreciated by the customers.
The company has talents that can help the company to develop rapidly.
GrowthDC has a clearly established functional workplace culture.
The company works under the management of the most talented leaders in the industry.
Since the company is a startup, it attracts the attention of numerous potential investors.

Opportunities

The ICT market in the world is booming, which implies that the demand for GrowthDCs products is growing (Canarella and Miller, 2018).
The economy of the UAE is expected to rebound after the pandemic (Bocanet, Alpenidze, and Badran, 2021).
The interest rates are low, which implies that the company can address the problem of low financial resources by financing its growth using debt.

Weaknesses

GrowthDC has modest financial resources, which limits its ability for rapid growth.
The company does not have stable revenue streams, which increases uncertainty.
The companys cost of capital is very high, as investors expect large returns on investments due to high risks.

Threats

The current situation with the COVID-19 pandemic adds to uncertainty due to the possibility of future waves (Bocanet, Alpenidze, and Badran, 2021).
The UAEs unique culture may have a negative impact on the international growth of the company outside the Gulf region.

VRIO Analysis

The VRIO framework focuses on the internal environment of the company using the resource-based view. The purpose of the analysis is to identify capabilities and evaluate if they are valuable, rare, inimitable, and organized (Ariyani and Daryanto, 2018). The analysis helps to understand if the capabilities are the sources of long-term strategic advantage (Knot, 2015). VRIO analysis is expected to help GrowthDC to connect its resources with competencies to define the source of sustained growth.

However, there are certain drawbacks to the analysis. In particular, the analysis is considered stationary, which implies that it does not take into account the quickly changing outside environment (Hernández and Garcia, 2018). Therefore, the analysis should be conducted frequently to ensure that the company has the edge over its competitors. Table 4 below provides the capability analysis based on results of previous analyses, and Table 5 provides the VRIO analysis of GrowthDCs identified capabilities.

Table 4. Capability analysis.

Resource	Competence	Capability
Best talents in the industry	Providing the entire spectrum of top-quality services connected with data center management	Using the best talents in the data center management industry to provide the entire spectrum of top-quality services connected with data center management
Latest technology	Meeting the needs of customers in automation and modeling.	Using the latest technology to meet the needs of customers in automation and modeling.

Table 5. VRIO analysis.

Capability	Valuable	Rare	Inimitable	Organized	Conclusion
Using the best talents in the data center management industry to provide the entire spectrum of top-quality services connected with data center management	Yes	Yes	Yes	Yes	Sustainable competitive advantage
Using the latest technology to meet the needs of customers in automation and modeling.	Yes	Yes	No		Temporary Competitive Advantage

The analysis provided above revealed that the companys central source of competitive advantage is the talents that can provide top-quality the entire spectrum of services to the clients. At the same time, technology can only provide a temporary competitive advantage, as it is imitable. VRIO analysis aligns with SWOT, PESTLE, and Porters Five Forces analyses.

Porters Generic Strategies

VRIO analysis demonstrated that the primary source of GrowthDCs sustained competitive advantage is using the exceptional talents the company possesses to provide an entire spectrum of services related to data centers. This capability identifies the generic strategy the company should use to achieve a competitive advantage. According to Porters model, there are five generic strategies a company can use to achieve advantage (Islami, Mustafa, and Latkovikj, 2020). They differ depending on their scope, which can be narrow or broad, and source of competitive advantage, which can be cost or differentiation (Viltard, 2017). The method is widely used by strategic analysts around the globe to identify which path a company should take to distinguish itself from its competitors. The five generic strategies are visualized in Figure 1 below.

While the approach helps to understand how to gain strategic advantage, the approach is very limited. Even Porter, the creator of the framework, understood the there are more dimensions to the generic strategies (Moon, H. C. et al., 2014). For instance, strategies can be based on either product or customer, which extends the list of four original generic strategies to eight (Moon, H. C. et al., 2014). However, despite the limitations of the model, it is still applicable to the GrowthDC.

The analysis demonstrates that the most appropriate generic strategy is differentiation. Companies using this strategy aim at distinguishing their products from the products of their competitors (Islami, Mustafa, and Latkovikj, 2020). The goal of this strategy is to provide unique services and products for a wide variety of customers (Viltard, 2017). The unique feature of GrowthDC is providing an exclusive combination of services, which allows its customers to satisfy all the needs associated with data centers. Companies utilizing this approach rely on customer loyalty and creative marketing to emphasize the uniqueness of services. The generic strategy aligns with VRIO analysis, value system, and value chain.

Performance Measures

Setting performance measures is crucial for any company to have the ability to understand if it is successful. An organization scorecard is a crucial tool that helps to set up adequate performance measures in different spheres using the companys value system, capabilities, strengths, and weaknesses (Tuan, 2020). The framework analyses four categories of performance indicators, including business operations, finance, customers, and growth, to set desired goals (Quesado, Aibar Guzmán, and Lima Rodrigues, 2018).

Additionally, the approach is crucial for conducting gap analysis. The scorecard is beneficial for aligning all the processes in the company, improving information management, boosting strategic planning, and promoting innovation (Quesado, Aibar Guzmán, and Lima Rodrigues, 2018). However, the analysis is complicated for an inexperienced person and requires much data, which limits its use (Hristov, Chirico, and Appolloni, 2019). The organizational scorecard for GrowthDC is provided in Table 6 below.

Table 6. Organizational scorecard for GrowthDC.

Category	Performance Indicator & Measurement	Target or Internal Benchmark	Explanation/References
Business Operations	Maintain high employee retention rates. The indicator is measured using turnover rate.	11%	In the IT industry, the average employee turnover rate is 13% (Stowe, 2021). Since employees are the companys most valuable resource crucial to achieving sustained growth, GrowthDC needs to have lower than average turnover rates.
Finance	Maintain positive profitability. Measured using net profit margin (NPM). Acquire enough working capital to sustain rapid development. Measured using Working capital ratio	1. 0.1% 2. WC = 2	Since the company is a startup, its current objective is to start earning profit. The company needs to make sure that it can cover the current obligations at least twice to be ready to invest in expansion.
Customer	Prioritize high customer satisfaction. Measured using customer satisfaction rate acquired from a customer survey.	95%	Since the company relies on returning customers, it needs to ensure that
Organizational Learning and Growth	Increasing the companys presence in UAE to build the foundation to expand abroad. Measured by the companys market share.	10%	Even though the competition in the industry is hectic, the companys ambition is to have at least 10% of the market in UAE before it can expand abroad to follow its mission and vision.

Gap Analysis

Gap analysis is a crucial method that helps to identify s

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