OakTree Inn Company Analysis - Strategic Options

System0023 [COMPANY NAME] [Company address] STRATEGIC AGILITY Executive summary The report has included the company analysis of OakTree Inn. It is divided into various sections where the fisrt section of the report included a brief summary of the company which stated that Oaktree capital was formed and founded in the year of 1995 by many individuals who have been investing in high yield bonds, distressed debt, control investments, convertible s ecurities, and listed equities since 1995 . Oaktree capital management is known to be the leading alternative global investment firm of management which is expertise in credit strategies . The secod section included the external and internal environment anal ysis of ctivities include investing across the capital structure which has even allowed the firm to cultivate a diversified mixture of investment strategies globally in four categories wh ich are private equity, credit, listed equities, and real assets. The company hold a strong position in the market even after getting affected by some of its external factors. Further, the report included ons which were using in the area and secondly the use of the rising incomes for seeking further investment opportunities which successfully allowed the company to mitigate its risks using these staretgic capabilities. Lastly, the repor t recommended that the strategic capabiltities could be successfully suited to the company it allowed in gaining the competitive advantage and it also suggested that the feasibility of the saretgic options were strongly feasibile as will work best for the firm when in practice especially in bringing more opportunities and growth options to the company. Contents Executive summary ................................ ................................ ................................ .................... 1 Oaktree ................................ ................................ ................................ ................................ ....... 3 Pestle analysis ................................ ................................ ................................ ............................ 3 Model ................................ ................................ ................................ ............. 4 VRIO Analysis ................................ ................................ ................................ ........................... 5 Swot analysis ................................ ................................ ................................ ............................. 6 Strategic options ................................ ................................ ................................ ......................... 6 SAFe analsyis of two Strategic choices and recommendations ................................ ................. 8 References ................................ ................................ ................................ ................................ 10 Oaktree Oaktree capital management is known to be the leading alternative global investment firm of management which is expertise in credit strategies. Oaktree capital was formed and founded in the year of 1995 by many individuals who have been investing in high yield bonds, distressed debt, control investments, convertible securities , and listed equities since 1995. The of fices of the firm are situated in Los Angeles, New York, Amsterdam, Frankfurt, London, Paris, Stamford, Houston , and many more countries ( Oaktree, 2021a). The activities of the firm include investing across the capital structure which has even allowed the firm to cultivate a diversified mixture of investment strategies globally in four categories which are private equity, credit, listed equities , and real assets. It was found that the consistent irm capable of earning a large and distinguished clientele ( Oaktree, 2021b). Oaktree includes global clients where 67 out of 100 are the largest US pension plants, 40 out of 50 are state retirement plan s in the United States, 475 corporations around the gl obe , 15 are sovereign wealth funds and around 300 are endowments and foundations worldwide ( Oaktree, 2021a). Pestle analysis Political factors: the main political factor impacting and posing threat to the firm is sourcing the raw materials. This has helped in gathering a lot of attention from politicians from the source countries. Because of this reason, the firm needs to adhere to the environmental and social norms and the fir m is willing to follow the strategies related to sourcing as it gives impor tance to the trade practices ( Oaktree, 2021a). Economic factors: the ongoing recession of the global economy is known to be the prime external economic driver for Oaktree as this factor tend s to dent the profitability of the firm and this has succeeded in convincing the customers to shift to the cheaper alternatives which is a big loss and a threat to the firm ( Oaktree, 2021a). Some of the economic factors impacting Oaktree is the local environment of the economy in different markets, taxation level , and ma ny more. Social factors: the firm can provide its services at cheaper rates but only after sacrificing the quality so this serve s to be the main socio - cultural challenge for the firm and hence it will end up expanding the customer base including the custom ers from lower and middle tiers of income. Technological factors: Oaktree is known to be in a good position to enjoy the advantages of the emerging technology as it is allowing the company to offer app - based discount coupons ( Oaktree, 2021a). Legal factors : the firm should ensure that it never violates the regulations and the laws of the home country and the countries from where they are buying raw materials. Some of the legal industry and many more ( Oaktree, 2021a). Environmental factors: E nvironmental factors that bring threat to the firm are environmental rules and regulations of every country they are operating in, environmental disasters in the countries, issues of global warming , and many other 1. T he t hreat of new entry: on the international level, the threat of the new competitors or new entrants for Oaktree is less as there are several entry barriers. The threat of new entrants is moderate the firm has good experience in the field and to become a successful competitor of Oaktree, the new entrants would require to create a large number of outlets which would require a massive investment of capital ( Oaktree, 2021c). 2. T he t hreat of substitutes: the thre at of substitutes for Oaktree is moderate or strong as its mission is to deliver superiority in the investment results with controlling the risk ( Oaktree, 2021c). Although, even after being a leading global alternative investment firm of management, the competitors can make the substitutes of the service especially that expertise in credit strategies. 3. The power of buyers: the buyers of Oaktree are considered to be concentrated buyers and have a low switching cost. So, it can be said that the bargaining power of the buyers is less in Oaktree Capital Inn as there exists a high threat of competition between the buyers and the investors in the fir m ( Oaktree Financial Dreams Delivered, 2021). 4. The po wer of suppliers: the suppliers of Oaktree have many options available in the market today because of the existence of the competition. They have an option of easily switching from one firm to another as it carries a high switching cost and there also exis ts a high threat of supplier competition ( Oaktree Financial Dreams Delivered, 2021). 5. Competitive rivalry: the rivalry of the competition is high for Oaktree as there exists too much competition and too much pressure to allow the buyers with reasonable prof its because of the existence of high fixed costs, the rate of industry growth , and high exit barriers ( Oaktree Financial Dreams Delivered, 2021). VRIO Analysis RESOURCES VALUE RARE IMITATION ORGANZIATION COMPETITIVE ADVANTAGE Access to cheap capital YES NO Competitors can imitate Have not been exploited totally Not significant in gaining competitive advanatge Channel management and sales force YES NO Competitors can imitate There hold a great potetial to utilise the sales force in an excellent manner. Potential is there to provide sstainable competitive advantage. Brand awareness YES YES, as distressed Pierre is known to have one of the leading brand inside the industry. NO Distressed Pierre have suc cessfully utilised its position of leading brand into several segments Sustainable competitive advantage. Customer network and loyalty Potential of being valuable as new revenue streams of revenue will be created NO Competitors can imitate Organization ha s not yet utilised all the capabilities to the full extent Has potential Financial resources YES NO Market liquidity and financial instruments are available to all the Hold sustanaible financial position Temporary competitive advantage competitors Brand positioning YES NO Competitors can imitate but it will require big budget of marketing The brands are positioned on the basis of consumer behaviour Temporary competitive advantage Swot analysis STRENGTHS WEAKNESSES 1. Currently present in 13 cities globally (Marks, 2017). 2. The firm target s markets for high returns with potential along with the alignment of philosophy and risk control (Marks, 2017). 3. Highly expertise in the area (Marks, 2017). 4. The firm emphasis onto senior debt in different companies (Marks, 2017). 1. The firm being the alternative firm of investment needs to pay the majority of its profits and earnings in the form of dividends (Marks, 2017). 2. Permits financial breakdown of the market (Marks, 2017). OPPORTUNITIES THREATS 1. The firm can ha ve control of investing by investing in some of the struggling companies and can help them to build and grow (Marks, 2017). 2. Oaktree C apital ha s an opportunity of expanding its operations in new markets (Marks, 2017). 3. With the rising incomes, Oaktree can further seek more investment opportunities (Marks, 2017). 1. Oaktree is known to be highly dependent on the economy of the state which serve s as a big threat (Marks, 2017). 2. It also carries high competition in the market and the major competitors of Oaktree are equity group investment LLC, KPS capital partners LP , and many more (Marks, 2017). 3. Oaktree is also known to be heavily dependent on performance (Marks, 2017). Strategic options The two potential strategic options identified in the SWOT analysis that will mitigate the area and secondly the use of the rising incomes for seeking further investment opportunities ( Oaktree, 2021c). Being the leader among the managers of the global investment and speciali z ing in alternative investment, the firm can use the strength of its expertise which will helps the firm in expanding i ts presence especially in the infrastructures of North America. The s trategy of emerging market opportunities can be launched by the firm which can further be led by the distressed opportunity strategy (Layne and Tishler, 2017). The strategy of emerging ma rkets opportunity with the help of using its expertise, the strategy will help the firm to seek and achieve attractive, distressed, risk - adjusted returns by investing in opportunistically investing into stressed and other investments that are value - oriente d in the emerging markets (Calandro, 2020). The firm can use its experience which serve s to be the understanding of the legal and the cultural differences with the emerging and the new markets which is a critical element in investing in these regions. This will prove to the best potential strategic option for the firm to build and increase it s market share in the new markets by making the emerging markets strong in advance ( Oaktree, 2021c). Giving the nature of global and local crises and telling the fact that investing capital in the market is scarce, the experience and the ability for managi ng the long - term The approach when adopted by the firm will and must emphasise n the bedrock investment philosophy which is rooted in the analysis of credit, bias towards control of risk , and va luation discipline (Calandro, 2020). The firm can use the strength of its expertise to further construction process with an established and flexible external network including the local advisors to enhance the flow of deal, to access the intelligence of the local markets and to address the differences between the intricacies and jurisdictional and between the developments of industries and local regulatory. The expertise and th e team of Oaktree can work closely with other groups of Oaktree investment to research, analyse and source other opportunities to expand for gaining a competitive advantage ( Oaktree, 2021c). As a result, the consistent application of the philosophy and pri nciples, the firm will earn a distinguished and large clientele across the various countries and it will be easy for the firm to expand with a good number of opportunities successfully. The second strategic capability will be using the rising income for seeking further investment opportunities. The firm can feel proud of its long tra ck of investing in some of the successful companies that support the energy infrastructure of various count ries. The firm can build an infrastructure strategy that opportunities (Kaplan, et al., 2020). The firm can use its high rising income to invest in the companies that will provide products and services supporting the utility and energy infrastructure. Oaktree can also use the aging nature of the global infrastructure for moving towards public - private partnerships for creating opportunities for knowledgeable and experienced investors for sourcin g the investments that will benefit the firm and the system of infrastructure. The firm should feel that the time is right for investing in successful companies across the globe that support the energy intrastate and should capitali z e on the extensive expe rience of growing firm in this area of the market and their access to proprietary deal flow by investing their incomes directly in the infrastructure opportunities ( Oaktree, 2021c). The firm can use its expertise in making a team that should be experienced and capable of sharing its investment approach. The team would then be automatically able to source the attractive investment opportunities and will be capable of adding value to the investments once made (Willmer, 2011). This would not only help the firm to grow across the globe but will also help the firm to gain a competitive advantage of its experienced team carrying investment professionals, having a global platform along with having a unifying philosophy of investment. The competitive advantage would serve in the investment philosophy in terms of six tenets such as risk control, market inefficiency, specialisation, consistency, disavowal of the timing of the market , and bottom - up analysis ( Oaktree, 2021c). These tenets will further be complemented by a set of some principles of business that will tend to articulate the commitment of Oaktree to excellence in investing, a cooperative and collaborative culture, commodity of interests along with the clients , and an opportunistic and disciplined approach of offering to expand the investments and operations. SAFe analsyis of two Strategic choices and recommendations The strateg ies proposed should be used by Oaktree as it will not only bring growth to the industry but will also allow the firm to expand its o perations with the help of its expertise. This will provide the firm with an opportunity of building teams with experts in the field wh o will work for the profit of the firm . The proposed strategies will suit the firm as they would help in addressing the key opportunities and constraints that Oaktree will face especially in the area of investment. Further , the strategies would be acceptable as they will be able to meet the expectations of the stakeholders when the investments will be stable and when the level of risk will be acceptable. Similarly, this would also accept the returns in the firm and so the strategy would be accepted by the stakeholders. The feasibility of the strategies would be strong enough because it will work best for the firm when in practice. The strategy would not need any finances and the skills of people would be obtained by practicing these strategies along. Not only this, but the strategies would also allow the firm to obtain and integrate the required resources for the expansion of the firm. References Creating Strategic Value (pp. 97 - 104). Columbia University Press. Kaplan, D., Rosenthal, B., Danhakl, J., Sokoloff, J., Advis ors, K.A.C., Cos, Y., Equity, P., Feliciano, J., Eghbali, B. and Marks, H., THE LIST. energy , 10 , p.420. Layne, T.N. and Tishler, J.C., 2017. Caveat: Professional Fees Payable from a Lender's Collateral May Not Be Capped by a Carve - Out. American Bankruptcy Institute Journal , 36 (4), p.40. Marks, H., 2017. Lines in the Sand. Oaktree Capital Management. https://www. oaktreecapital. com/docs/default - source/memos/lines - in - the - sand. pdf (accessed December 14, 2018) . Oaktree Financial Dreams Delivered, 2021. Product line. [Online] Available at: http://www.oaktreemoney.com/index.php# [Accessed 14/06/2021]. Oaktree, 2021a. About. [Online] Available at: https://www.oaktreecapital.com/about [Accessed 14/06/2021]. Oaktree, 2021b. Investors. [Online] Available at: https://www.oaktreecapital.com/investors [Accessed 14/06/2021]. Oaktree, 2021c. Strategies. [Online] Available at: https://www.oaktreecapital.com/strategies [Accessed 14/06/2021]. Willmer, S., 2011. Oaktree Capital Nears Final Close For Europe Distressed O ffering. The Private Equity Analyst .