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Introduction:

Many triumphant stories about Strategic Expansion, Innovations, Niches and Blue Ocean Strategy implementation have been focusing on commercial B2C and B2B sectors, especially in the Product genre. However these same concepts can also be used along with a gamut of other decision variables to evaluate the viability of any strategic decision, in services sector like Education as well.

Background of students:
The case study should be taught to students pursuing PGDBM or MBA degrees or PhD students pursuing research in the field of Strategic Decision Making, Niche marketing, Joint Ventures, Blue oceans and Competitive Response domains. For better utilization purposes, the students should be given fair idea of strategies, formulation, tactical planning and their management concepts before going through the narrative. The exercise given at the end refines and aids the understanding of the purported key concepts.

Teaching Objectives/ Purpose:


The learning outcomes that the case seeks to achieve are: The case may serve to help students develop skills related to decision making or the analysis of factors specific to the Education sector. The case may also provide an opportunity to induce or illustrate theoretical concepts that can be applied to real life situations, including: Evaluation of allies and soundness of decisions for joint ventures; Evaluation of competitive dynamics of a market; and Scanning of external or industry environment.

Strategic awareness towards likely attacks & the responses to attacks by competitors to ensure strategic competitiveness and above average returns; Technological innovation and its contribution to a companys different value propositions; Strategic thinking, Strategic Decision making Process. Corporate level Strategy formulation: Diversification and its use to defend market position, Related and constrained growth. Business level Strategy formulation: Differentiation, Niches, Positioning in a Red Ocean market, Resource and Capability building. Blue Ocean Strategies: Crafting a blue ocean segment out of Red ocean. Use of Strategic Gap analysis, four action frameworks, PMS mapping and Competitive Profiling of businesses to identify core competencies and compatibility of businesses with markets. Application of Ansoffs Model to the organizational context under discussion. The practical exercises contained in the case will also be answered through the teaching notes.

Research:
The type of research can be termed as descriptive (provides a description of organizational resources, acumen and capabilities necessary for successful expansion of market, integration of different segment within a brand and implementation of blue ocean strategy within the professional Education sector in tandem with a partnering firm (identify multiple factors that influence value innovation creation in joint ventures.

The time horizon of study is cross-sectional i.e. data collection was done over a short period of 2 months. Data collection methods used was interviews, secondary sources, and observation.

Analysis:
1. The object: This research focuses on the joint venture between two education sector giants from two different countries operating in similar fields in terms of technologies, market cycles and the natures of value propositions; EDUCOMP SOLUIONS LIMITED and RAFFLES EDUCORP LIMITED. 2. The basic units of scrutiny: the current research mainly concentrates on Strategic Move, Strategies, Competitive Advantages, Strategic Competitiveness, Above Average Returns, Business level and Corporate level strategy, Joint Ventures, Blue Oceans, Red Oceans and Positioning as Niches. Strategic move is the set of managerial action and decision involved in making a major market-creating business offering (Kim, Mauborgne). Strategy is an integrated and co-ordinated set of activities and commitments designed to exploit core competencies and gain competitive advantage. ( Ireland, Hoskinsson and Hitt) Competitive Advantage is achieved when a firm implements and has strategic competitiveness which competitors are unable to duplicate or imitate as they are too costly to imitate, or too rare, or non-substitutable or too valuable. ( Ireland, Hoskinsson and Hitt) Above Average Returns are returns in excess of what the investor expects to earn from other investments with similar amount of risk.

Business level strategies: An integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets. ( Hitt, 6e)

Differentiation strategy practised by Educomp Raffles Higher Education to position itself as a niche.

Corporate level strategy: Specifies actions taken by the firm to gain a competitive advantage by selecting and managing a group of different businesses competing in several industries and product markets. (Hitt,6e).

Related Constrained diversification used by Educomp within the Education sector, where in capability expansion is done through Brick and Mortar assets and new highly qualified faculty base. The technological core competency can be extended from the K12 segment aided by Raffles Educorp.

Joint Venture: Is a strategic alliance in which two or more firms create a legally independent company to share some of their resource and capabilities to develop a competitive advantage. ( Ireland, Hoskinsson and Hitt )

Joint Venture

Synergistic alliance

Diversifying Alliance (Educomp's alliance with Raffles to diversify into higher education) Franchising

Diversifying Alliance: It is a corporate level co-operative strategy (e.g. between Educomp Solutions and Raffles Educorp) in which firms share some of their resources and capabilities to diversify into new product market (Higher education for Educomp) or a new geographic market (Indian Education Sector for Raffles). ( Ireland, Hoskinsson and Hitt) Niches: A narrowly defined customer base seeking distinctive mix of benefits.( Kotler, Pearson 13e) Marketers create niches by breaking segments into sub-segments. And when a firm creates a niche where it need not worry about competitors or faces minimal competition, it is called a BLUE OCEAN. A market where there are minimal margins due to cut throat competition among multiple firms is called a RED OCAEN.

Likewise Educomp Raffles Higher Education is trying to create a niche of its own, through technology driven education delivery in its higher education institutes. Novel solutions such as Thomas Profiling, Spider Web Tests etc for students are niche offerings in the Indian market.

Positioning: Create a position in the target customers mind vis--vis a central benefit. ( Kotler, 13e)
As Mr. Pankaj Gupta, VP, Academics, Educomp Raffles Higher Education, puts it, the newly born university will strive to break free from the PLACEMENT ORIENTED POSITIONING of the Indian Education sector. We will cater to students needs through quality delivery, research oriented novel service offerings and counselling, and when you add value to the students placements follow. Its about providing them with an experience and treating them like your advocates and ambassadors rather than consumers.

Ansoffs Model, Educomps portfolio diversification strategies lie in the fourth quadrant

Identifying firms competencies amd strategies:


The companies and the joint venture have been chosen taking in considerations of the Education sectors growth cycle and the implication it holds for the venture in coming times. A thorough analysis of STRATEGIC PROCESSES, COMPETITIVE PROFILE MATRIX, STRATEGIC GAPS MODEL, PMS MAP etc suggests the systematic way of decision making involved in the case and the variables to corroborate before seeking any pastures new in a different target segment( in this case the professional education segment) or forging any joint ventures. Factors to build in table, quality of students, faculty, technology infra, solutions, need based profiling, alumni help, industry interface, corporate tree, placements,
Concepts Helps understanding with Suitable Blue Ocean and Educomps Expansion Strategy must strategic address decisions tactical address Competitive Profile Matrix Critical Success Factors Where organisation must that are particularly excel to outperform ( Exploits High Tech, and plans

Cutting edge innovative solutions for students. E.g. Thomas Profiling, Spider tests, Interactive Databases. Web

valued by a group of competition. customers.

core competence )

Strategic Gaps

Searching creating spaces

for wide free

or Defining opportunities in: open substitute industries; other from strategic value complementary groups, buyer chain, products

Quality Gaps in the

mushrooming institutions. Lack proper counselling and SWOT for of

existing competition.

(or services); new market segment (functional/emotional appeals); over time (first mover advantages).

analysis students. Lack Corporate

of

Tree back up and Industry interface. Value sought by students in terms counsel, teaching, research and exposure. of

The EliminateReduce-RaiseCreate Grid

Supplementary analytic Offering

customer

and

Eliminate the need to have an international marketing communicati on strategy

tool to the four actions company leap in framework: how to act value on all four to create a new value curve.

by partnering with Raffles. Create Raise and value

propositions to form a

niche in the higher education segment. To plot the companys Providing a useful way of current and planned talking about the growth

PMS map

Pioneer innovative solutions segment. Settled,

in

portfolios on a pioneer- potential of current and migratorSettler space. future businesses

championed and has been leading with lions of share in

85%

K12 arena. Now migrating into a similar segment of

higher education, where it has a huge brand to leverage.

The n Tiers of customers

Keen insight into who To converting huge latent customers are and how demand into real demand to unlock their loyalty. in the form of thriving new customers.

Creating and retaining committed student and a

alumni base. To retain

student under the brand, huge from

KG to 13th to higher studies, through intense quality development and appeal. To newer attract and

supreme talent by

delivering on promises with high

efficiency and effectiveness.

Strategic Educomp: Factors

Gaps

and

Competitive

Profile

of

contributing

to

the Educomp

Raffles

Strength

quality gap in other private areas. competitors


Low teacher: Student ratio Reputed faculty base and administration with the likes of Dr. Pankaj Gupta, Dr. Harpreet Singh and visitng faculties from reputed foreign universities Number of books and journals Deep pocket of the huge Educomp brand to ensure proper infrastructure Technological infrastructure and computer Technology has been the core

competency and has the cutting edge technology of Raffles to rely on.

Lack

of

industry

interface

and Has an embedded corporate tree and great industry and academia interface. Enjoys huge brand name in India and genuinely understands the Indian

corporate backing No brand name to leverage

education sector as a market Placement based positioning Positioning based on value addition and novel solutions such as Thomas Profiling, spider web test etc. Also provides a lucrative opportunity to transfer and enrol at any Raffles campus across the globe to continue the studies

Lack of placement opportunities due to Placement has been extremely good poor skill set development for the initial batches so far. And with a great corporate body to back up and value based development of students with knowledge and exposure, placements wont ring the danger bell. Lack of research facilities and Special focus on Consulting and research faculties.

consulting domain.

PMS (Pioneer, Migrator and Settler )Map:


Today Tomorrow

Pioneer value innovation

First mover in the satellite and Will be the First technology enabled education mover in innovative solution market. corporate professional education segment backed

Migratory improvements

value Well spread and well developed Entrenched


segment huge portfolio

alumni

market in the retail schooling base, students from KG-12 can be

potential entrants to the higher education offerings, reputed higher segments Fashion designing Engineering PGDM (JRE) and brand a in

education such as and (RMI), and and

MBA (MAPS).

Settler value adaptation

Joint venture with Pearson for Joint venture with vocational training and online Raffles tutor solutions Educorp,

as Singapore for larger presence in Asia-

complementary services.

Pacific market and further cushion in

technology

base.

Will learn and adapt to the professional education segment

due to two decades of trust it and has

experience

garnered in Indian education sector.

Answer Clues to Exercise Questions:


1. What are the criteria to evaluate fitment of joint venture? How do you select an able ally? Do you feel Joint Venture of Educomp Solutions and Raffles Educorp have a strategic fit?
a. Criteria : i. Vision alignment [Daimler-Chrysler failed due to vision misalignment, Daimler believed in premium car production , where as Chrysler was a player of volumes and mass customization ] ii. Synergy in management iii. Complementary Asset or resources iv. Easy and Effective Integration v. Similarity of business objectives, furthering of mission of organizations through the symbiotic relation vi. Trust and capability exchange b. Strategic Fit of Educomp and Raffles i. Market Related Fit: Marketing and promotion similar in nature and directed towards same target i.e. students. ii. Operation Related Fit: Skill Transfer and Resource sharing,

Technological Orientation of both the organizations in provision of Education Services. iii. Management Fit: Alignment of Vision, Managerial know-how of Educomp to operate in India and Raffles Educorps international exposure and experience. iv. Both the organization have a technological bent. Educomp will provide the brand name, knowledge and experience in the Indian market ( Like

Hero ) , and Raffles will provide cutting edge technological facilities ( Like Honda in Hero Honda JV) v. Educomps international aspirations in the higher education segment (already present in the K12 segment in US, Canada, Srilanka and Singapore) will also be furthered due to JV with Raffles which is leader in Professional education solutions in the Asia Pacific belt.

2. What was the strategic line of thinking behind the expansion strategy of Educomp? a. Analysis of External Environment i. Standard-Cycle market where competitive advantage arent sustainable for long period of time ii. Increasing Competition and fading Differentiation b. SWOT / Internal analysis and PESTEL [Higher Education Sector] i. Large number of colleges mushrooming in the sector-Threat ii. Demand-Capacity Mismatch due to Quality gaps-Opportunity iii. Resources and Expertise in the domain-Strength c. Business and Corporate level strategy i. Expanding into Higher Education Sector ii. Portfolio diversification iii. Joint Venture with Raffles Educorp to further the International presence.

Competition and reducing margins inthe fast changing technology solutions market

Brick Mortar presence lends prominence + Higher Education industry lacks many quality institutions, and the new university can fill the quality gap

Brand's core strentgh is Education Sector solutions + Raffles expertise and international fame

Related Diversification within the same industry enhances performance of the corporate body and reduces risk

3. Sketch out the strategic decision making model based on the case study?

1. The strategic decision making process starts with strategic input phase where first step is to scan the external environment for opportunities and industry related gap identification. (Educomp identified the mistake in positioning and quality gaps by other private colleges as an opportunity to capitalize on). 2. The external environment variables are aligned with internal resources and a firms vision and mission. ( Educomps core competency, brand repute and tenacity to rule the education sector as a leader, married with the expansion strategy) 3. The next stage includes strategic analysis and actions taken by the firm ( Educomps corporate level related-constrained diversification and integration of the brand from K12 to professional levels, Business level strategy to differentiate in terms of technological bundle of benefits and niche positioning, co-operative and international strategy to strike a joint venture with Raffles. Etc.)

4. Based on the learning of the case would you classify Educomp Solutions Ltd as a blue ocean or a red ocean player and why?

*Source: http://www.psclipper.com/BlueOceanDetail.asp

5. Will the idea of integrating education from K-12 to professional level under one umbrella bear success?

Related Constrained Diversification within the same industry, like Educomp Raffles higher Education, yields better returns due to sharing and optimal utilization of corporate resources. ( Source: Ireland, Hoskinsson and Hitt, Indian Edition)

6. Does Educomp Solutions Ltd. require further capacity expansion? Will the brick-mortar model in higher education sector lend further prominence to the brand presence? 7. The decision of Educomp Solutions Ltd to enter into higher education sector was preconceived or a stimulated decision? Provide rationale supporting your answer. 8. Given the prevailing conditions in the higher education sector of India how would you like to position Educomp Raffles Higher Education University? 9.

LESSON PLAN;
Subject Area: Strategic Management

Length of Lesson: 60-120 minutes Instructional Objective(s): The learner will use the case to understand the strategies like blue ocean strategy, strategic management model, joint ventures and expansion/diversification/development [through Ansoffs model] involved in large scale business Long-Term Unit Objective: The case may serve to help students develop skills related to decision making or the analysis of factors specific to the Education sector. The case may also provide an opportunity to induce or illustrate theoretical concepts that can be applied to real life situations, including: o Evaluation of allies and soundness of decisions for joint ventures; o Evaluation of competitive dynamics of a market; and Scanning of external or industry environment. o Strategic awareness towards likely attacks & the responses to attacks by competitors to ensure strategic competitiveness and above average returns; o Technological innovation and its contribution to a companys different value propositions; o Strategic thinking, Strategic Decision making Process. o Corporate level Strategy formulation: Diversification and its use to defend market position, Related and constrained growth. o Business level Strategy formulation: Differentiation, Niches, Positioning in a Red Ocean market, Resource and Capability building. o Blue Ocean Strategies: Crafting a blue ocean segment out of Red ocean. o Use of Strategic Gap analysis, four action frameworks, PMS mapping and Competitive Profiling of businesses to identify core competencies and compatibility of businesses with markets. o Application of Ansoffs Model to the organizational context under discussion.

Prerequisite Knowledge:

Skills:

Active listening, group discussion skills, analytical skills, ability to identify strategic loopholes and decision parameters.

Concepts:

Basic knowledge and understanding of terms like vision, mission, external and internal environment, competitor analysis, diversification, strategies, blue oceans and niches.

Behaviors:

In depth analysis of the narrative, using the cues provided in the Exhibits for data crunching, not interrupting others in discussion

Procedures 1. Preparation o

Identify concepts and details involved Blue Ocean Strategy, Impact of vision and mission on strategy implementation and formulation, core competency and characteristics.

2. Review of Modelso Ansoffs Model o Startegic Management Process o Blue Ocean o Business level strategy- Cost leadership or Differentiation o Corporate level strategy- Diversification o Acquisition strategy- Joint ventures

3. Class to read case o Discussion-Initial reactions, thoughts, conversation and discussion o Analysis o Application of Concepts

4. Closure: o Takeaways from the case

How did you address student learning styles during this lesson? Describe all that apply.

Visual:

Case let Handouts

Auditory:

Class discussion

Assessment Criteria:

What tangible evidence will demonstrate your students learning today? Discussions carried after the case Assignment Questions

What will be considered quality work? Individual responses to the assignment questions

How will you provide practice for this objective?

Students will be asked to choose company of their choice and prepare and analyse the strategic management process through the model explained via Educomps Case. Solution by the students to the ASSIGNMENT QUESTIONS to be gauged.