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Sm Project Report

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Post Graduate Program for Working Executive 2012-2014
Third trimester

Strategic Management Project Report
Analyzing Education Industry
Firm in Question: Engineering College in Chhattisgarh
Tools of analysis: Porter’s 5F & Ansoff’s Matrix
Submitted by Group X
Members : Gaurav Jain,Anil Bharadwaj & Dushyant Das

Course Conducted by : Dr.Ajit Prasad

Education Industry in CG
Entry Gates:
1. Tuitions.
2. Coaching Institute.
3. Kindergarten (play schools)
4. Primary Schools
5. H.S.Schools
6. UG Colleges
7. Professional Colleges (Engg/Mgmt & Medical Etc)
Monetarty Investment Range : 00.00 to ∞
Players : Consumers (Students) , Customers (Parents/Students), Teachers & Others.

Education Industry in CG is a fast gowing one. The range of the educational institutes varies from a local (in house) teaching to a Private University. Recently there is a huge traffic jam in the entry gate to the industry as its found and perceived to be a very easy and respected industry. People with knowledge mingle with the one with finances and they together come up with an institute and become a part of the industry.
Education industry was not taken to be an industry but a voluntary service in the beginning but now it even provides bright careers to both the customers and the providers.
This is the only industry that brings in revenue as well as reverence in the society.

Firm in Question : Engineering College
Establishment Details ( as per AICTE norms):
S.No Prerequisite Cost to Company
1 Land (5-10 Acres)* 3-10 Crores
2 Registration Fee* 1Crore
3 Infrastructure 100000
4 Faculties 25000 /faculty/month
5 Others 25-30 L
Faculty Student Ratio : 1:15.
Therefore, for a strength of 240 seats, one requires 16 faculties.
And hence the CTC goes 16 x 25,000 x12 = 4,800,000 Rupees.
This increases with increasing numbers.
Fee cannot be increased because it’s the fee decision committee that decides the same for the college.
For 240 students @ 65,000 pa : Revenue = 15,600,000/-
Since the investment is very high (Both the fixed and working), Engineering college is always going to be a costly affair so far as establishing the same is concerned.

Analysis on the basis of PORTER’S 5 F:

Bargaining Power of suppliers High
Threat of New entrants High
Bargaining Power of Buyers Low
Threat of substitute High
Rivalry among existing players High
Complementors High

Explanation :
• HIGH Bargaining Power of Suppliers: Suppliers here are the Faculty members ,Staff of the engineering Colleges. Experienced faculty and staff command higher prices which adds to the prestige of the college. Recommendation : Though the bargaining power of suppliers is high It is recommended that investing in quality faculty and staff adds value to an educational institute.
• HIGH threat of New entrants : Although opening a new college is a costly and tedious yet considering the profits and scope in the industry there is high threat of new entrants . Recommendation : Keep updating about the new ideas and market behavior/consumer behavior.
• LOW bargaining Power of buyers: The Bargaining power of buyers is low as it depends on the rate of growth for the specific industry and the value of the buyer to the industry as a whole. The rate of growth of education industry is high and the value to the buyer is precious thus low bargaining power.

• THREAT of substitute : Every educational institution has got a natural threat of a surrogate. Education industry is so wide that there exist numerous products and services. In a mile of a simple walk ,one can find almost all of them . The industry is sensitive enough to deviate the consumer in just a fraction of a second.
Recommendation : Keep providing cutting edge products and services. Keep the consumers intact and satisfied to achieve and maintain sustained growth . Develop and protect the core competence for better future values.
• RIVALRY among existing players: This rivalry in the industry is very high. Products are not imitated but the services are badly imitated. Be it the monetary aspect or the delivery aspect. This makes any organization very difficult to be complacent.
Recommendation: Services can be imitated but not the core competence and the culture of any organization. Protect the integrity of the organization and make the difference.
• COMPLEMENTORS: New technologies, particularly the digital broadband, interactive, online technology ,Automation and mechanization has promoted the demand for more engineering students thereby acting as complementary force.

Market Penetration : Providing Extra Laboratory hours or Doubt clearing sessions by Experts. Providing Personality development classes for the students.
Market Development : Launching online/offline study programs and study centers at various locations.
Product development : Introduction of Coaching facility to existing students for higher studies in India and abroad.
Diversification : Introducing new courses like MBA,MCA .

Recommendation for growth :
1. Education is about creating people of value and knowledge. It’s the faculties and the learning facilities that make the difference. Hence, experienced faculties need to be appointed.
2. Modern training tools and methodologies must be made available for the students.
3. Feedback system should be a handy instrument to track the performance of any educational institute.
4. Retain existing customers and serve them to satisfaction because education industry is more of a referral and brand based industry. If you are a brand than retain the value. On the other hand if you are a beginner, retain, retreat and satisfy the existing ones.
5. Keep a vigil on industry variances, keep looking for Add-On that can be merged into the services.

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