Pearson is an international company that focuses on education as well as media. It has three divisions in which it focuses its business and this includes consumer publishing, education and business information market. There are various channels that the company uses so as to communicate. For instance, they send out information through the use of online services, books and newspapers. Statistics indicate that several people appreciate the test administration segments and processing for teacher development. The company mainly focuses on Europe and some parts of North America (Pearson Canada, 2011). One can only understand Pearson deeply by focusing on its strategic and financial analysis. The following paper will present the internal strategic analysis of Pearson, as well as competitive analysis, ratio analysis and the future outlook of the company.
Internal Strategic Analysis
Pearson has a well developed policies as well as processes that focus on the social, economic as well as environmental arenas. Pearson strategic team views that it has to add value to whatever can add value to their business. The company focuses on the identification of current as well as emerging risks. Further, the management undertakes a scenario mapping that brings out what the leaders have to do so as to achieve what can be beneficial to the company (Pearson, 2009). Using research and stakeholder engagement is another way through which the company boards uses so as to develop strategy and policies.
This is normally done through adopting the participatory methods which also entails engaging the stakeholders effectively in the process of implementation so as to generate policy decisions, effective communications, advocacy and innovative strategies. The purpose of all these processes is usually to deliver a purposeful innovation and the state of organizational responsibility. The management also takes into consideration the importance of having to deal with risks each opportunity that they present themselves.
In terms of corporate social responsibility, Pearson undertakes to provide complete CSR services as well as assurance and sustainability appraisal to all its stakeholders. Other areas involve non-financial reporting as well as effective research. By using a responsible and innovative approach to work, Pearson ensures that consumers remain attracted to their services hence valuing their output (U.S Securities, 2011). The promise to deliver is also a strategy that is used by the company to ensure effective delivery of services.
The team is made up of professional individuals who have worked in various areas of responsibility and who are well conversed with communication factors, governance, sustainability and business responsibility. On the other hand, the management encourages participation and dialogue so as to enhance effectiveness. As mentioned earlier, Pearson undertakes corporate responsibility and sustainability consulting, CSR training courses, coaching and CSR research.
Pearson Education is widely recognized as operating globally and in several countries. This indicates that it has several competitors. Several competitors are usually presented within the country that the firm operates in. For instance, in the United States, Houghton Mifflin Harcourt leads the list of competitors followed by McGraw Hill Education. In the international scene, Pearson faces the challenge of Macmillan education and the Houghton affiliate EMPGI.
Houghton Mifflin Company is a leading company that is also known for textbook publishing as well as the provision of indispensable materials for different markets including colleges, secondary and elementary. Furthermore, the company is known for the production of testing materials as well literature that can be used by children (Pearson Canada, 2011). It is worth noting that what makes Houghton more competitive as compared to Pearson is the fact that it is able generates award winning trade books which are used in the general public. On the other hand, many are associated with Houghton due to the contents it has that includes traditional materials and electronic products.
It is worth mentioning that all business under Pearson is relatively operating under a charged environmental condition. Apart from the well international establishment, Pearson also faces competition from small niche players that include areas of learning technology and academic discipline. The industry always reflects the fact that it should be able to deliver quality services and products and this is what determines how consumers are aligned (HFI, 2011). For instance, FR Group which is an affiliate of Pearson Education is known to compete with other information sources as well as newspapers. On the other hand, Penguin Group is characterized with competing with companies in fiction and non-fiction books.
The following SWOT analysis best explains the environmental issues as well as the strategic capabilities of Pearson Education. As a result it is easier to know the impact on their strategic development:
Pearson Education is well known for being a strong brand name for over 40 years in the industry. Through the brand orientation, they have been able to attract consumers on a daily basis. Furthermore, it has an effective presence on line and has been successful in using new technology. For instance, consumers can be able to use iPods in researching educational materials that include the audio study (HRM, 2009). Consumers are well targeted through the use of marketing strategies like segmentation. In terms of corporate Social Responsibility, it is well known for its active composition which led to its second ranking in Platinum in 2007.
One major weakness which has been outlined above includes its concentration in North America and which makes it lack major inputs in other continents such as Africa and Asia. It is also known to be concentrating on English language other than incorporating other international languages as well. It is also important to mention that the growth of higher education segment has taken progress on a slow note as compared to other areas of specialization. Pearson is also weak in terms of over-relying on the US government, and more than half of its funds are generated from the government. In a report released by the 2007 Annual Report, there was a decline in the free cash flows contributing to another major weakness (U.S Securities, 2011).
There are several opportunities that are likely to bear much fruit with the growth in other continents. One example is emerging economies like India and the developed countries like China. The two countries are known to have a positive growth in their market signifying the great opportunity that should be taken. Another opportunity that exists is the fact that it has been able to develop e-learning technology and this can be a great step forward.
The intellectual properties of the company can be characterized with limited protection in several countries where it is operating. There is the possibility that infringements on the copyright laws may continue to persist. On the other hand, it will not be easy having to adopt to the competitive environment as a result of the changing channels of distribution.
The Future Outlook
The advent of technology has propelled several organizations to change their strategies so as to adapt to the competitive environment. In order to change lives through books, Pearson must focus on producing great books and which have the ability of influencing history. Furthermore, Pearson can still establish itself with other competitors through producing books and services in other languages other than relying on English (Pearson Canada, 2011). It is also a high time by looking into the future that they limit their association in North America and concentrate on other areas like Africa, Asia and other parts of Europe.
The paper has discussed several issues that concern Pearson Educational Company and which reflect their ideal position in the current market. Pearson has a well developed policies as well as processes that focus on the social, economic as well as environmental arenas. Pearson strategic team views that it has to add value to whatever can add value to their business. The company focuses on the identification of current as well as emerging risks. This is normally done through adopting the participatory methods which also entails engaging the stakeholders effectively in the process of implementation so as to generate policy decisions, effective communications, advocacy and innovative strategies. The purpose of all these processes is usually to deliver a purposeful innovation and the state of organizational responsibility.
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United States Securities & Exchange Commission, (2011), Pearson PLC, Retrieved 25th November 2011