Strategic decision-making for Kava's economic development and transformation

Business Decision Theory

Hi -- I added in their core business in italics in this edition. Thx!

In defining a strategic plan for the development of Kava, Nik and his management team must determine how the innate strengths of the island nation can be capitalized on to create a sustainable business model while also creating enough value so the island nation can become more integral to the global economy. As over 50% of Kava's population is under the age of 15, there is significant need for creating educational systems, healthcare, and financial systems to support the population. Instead of attempting to invest into a potential business venture and relatively quickly have to recruit from other neighboring islands and regions, using the public television investment as a means to provide training for Kava citizens so they can staff the healthcare, finance, and tourism services is the strategic direction Nik and his management team needs to take. The development of vocational schools and educational programs operated for profit will serve to grow the entire Kavaian economy. This will in turn give Nik and his management team more opportunities to invest in ancillary services. There is also the pressing Corporate Social Responsibility (CSR) issue for Nik and his management team, and that is the need to recognize that with over 50% of the island nation being under 15 years of age, there is an urgent need to get educational, healthcare, information services, and financial services businesses in place as well. To the extent an organization can enrich the nations they operate in is the extent to which they gain a lasting competitive advantage (Rehme, 2007). Nik and his management team then must choose businesses that do well by doing good, and seek to enrich the nation while at the same time enriching their own organization. Given the fact that there is such a high percentage of the population less than 15 years old there is the assumption that families on Kava are exceptionally large and that parents must be working several jobs to earn enough to care and feed for so many children. Nik and his team can create enterprises that are financially successful yet also contribute to the long-term stability of the island nation as well, anticipating how the decisions they make will have long-term implications.

Agricultural to Services-Based Economy Shift Needed

In defining the strategic plan for Kava, Nik and the management team must first concentrate on which businesses will have the greatest potential revenue growth and contribution to the Kava economy as well. As the future of the Kava economy goes, so goes the future of Nik's enterprises. To the extent that organizations can capitalize on unmet needs of the nations they serve at a social and financial level is the extent to which organizations attain exceptional competitive advantage (Permani, 2009). For Kava, the need to transition from an agricultural economy to one based on services including education, healthcare, finance and tourism will require exceptionally high levels of education. Underscoring this need is the very high percentage of the population below the age of 15, which indicates that this is a nation most likely with large families, low per capita incomes, and a potential for costly social programs. Nik and the management team needs to realize that if they do not contribute to significant shifts in the Kava economy, social programs will be needed to subsidize these families and opportunities for growth of enterprises will rapidly decline. With the urgency of creating a sustainable economy to ensure long-term growth for their enterprise and others, Nik and his management team must concentrate on the greatest unmet needs of this island nation first.

Conclusion

Of the many strategies that Nik and his team could undertake, it is critically important to consider how their strategic decisions will impact the island nation, enriching it as their own enterprises gain. Going after the educational system and seeking to create profitable businesses is crucial for the island to shift from agricultural to services-based economy. Further, educational system investments and a business that seeks to create an educational value chain will serve as the catalyst of growth for the healthcare, finance, and tourism industries for the island nation as well. As empirical studies have shown that investments in educational systems can in fact transform entire economies (Permani, 2009), this area needs to be where Nik needs to concentrate on first. Ancillary businesses over time will grow as a result of this focus and will also solve potentially significant social problems on Kava before they become significant and drain the country of valuable resources.