Description of the Product and Its Features - B-School - Essay Example

?Business Plan Executive Summary With the increase in awareness of education among the people in most of the countries like the UK, Australia and India, more and more business schools are being set up. In light of these opportunities, the Global School of Business Management has been thought of to be the new venture. The school will provide all the modern facilities to its students with experienced teachers in the related field. Initially the UK has been chosen as the country where the college will be established. The country seems to have a stable political structure with stable economic growth rate. Every year increasing number of students from abroad comes to London for pursuing management degree in several business schools of the UK. Therefore, there seems to be greater demand of the MBA schools in the UK. The business plan will take into account the PESTEL analysis of the UK and the Porter’s Five Forces Model in order to understand the relative opportunities that lie for the new venture. It will also undergo internal analysis to understand the strengths and the weaknesses. Key success factors will also be determined in brief. Financial plan of the business school will be made to reflect the number of years required to breakeven. Initially for two consecutive years the B-School is projected to incur losses. However, from third year onwards profit is expected from the business plan of the B-School. Table of Contents Executive Summary 2 Description of the Business Plan 4 Description of the Product and Its Features 4 Situation Analysis 5 Internal Analysis 8 Generic Strategies 8 Market Segmentation 9 Core Competencies 9 Value Chain Analysis 10 Financial Overview 13 Strategic Option 15 References 17 Bibliography 20 Description of the Business Plan The business plan is all about the B-school that will be headquartered in the United Kingdom. The B-school will serve the students with a Masters of Business Administration course initially. The new venture has been named as Global School of Business Management. The business school will be a privately run school aiming to operate globally. Description of the Product and Its Features The B-school will primarily focus upon the MBA programme as a start up venture. It will later look to expand its operations. The modern business world demands candidates who have excellent managerial capabilities and skills that would help in the overall organisational growth. The course aims at building the foundation of work by providing new skills and knowledge to enable the students to make the transition to a higher level of responsibility. On top of that, the candidate is able to identify the business problem. It is only through this kind of programmes (MBA) that help the candidates to shape their skills and competencies to match with the organisational requirements. Situation Analysis The Global School of Business Management will be initially set up in the UK. It is through PESTEL analysis that the macro environmental factors that influence the business of a particular country can be best understood. Political Environment The country has three arms of the state namely the executive, the legislature and the judiciary (Roger Darlington, 2010). Safe and sound legal system has been established by the government, with the development of the department of education that would look after the educational affairs and children services. Economic Environment The population of the country is increasing thus demanding increasing number of large homes (Meikle, 2010). In the UK, there is considerable amount of inclination among people towards gaining academic knowledge and also of gaining higher education. This scenario can be comprehended by the fact that the education undertaken by 54-64 years old people is comparatively high than other countries (Seniorwatch, n.d.). It is due to high economic growth that the disposable income of the people has increased and can afford higher education. The UK government has made a significant increased commitment to education and has planned to spend (US $17 billion) on education. Social Environment The UK has an ageing population. The literacy rate of the UK is 99% where the attendance of the students is almost 100% (US Department of States, 2010). Technological Environment The technological environment also has an impact upon the operation of any venture. The advancement in the technology and the infrastructural development seem to have improved in the recent days. Internet has also improved the entire system of operation of business. Environmental Factors The climate of the UK has been moderate with cool summers, steady rainfalls and mild winters. The pleasant climatic condition that is primarily present in the UK attracts people from all over the world. Therefore, there is a prospect of attracting young minds from worldwide for the proposed B-school (Environment Change Network, n.d.). Legal Environment There has been change in the relationship among schools, government, students and parents within the education system of Europe. With the increased use of the quality assurance mechanism the government wants the schools to be more accountable to parents (PJB, 2007). Porters Five Forces Model The Degree of Rivalry In the UK, there are numbers of private or non-private run B-schools that provide standard MBA Degree. The major competitors in these fields will be London Business School, Cass Business School, and University of Central Lancashire and so on. Therefore, the new B-school will have to face intense competition. Threat of Entry The various legal factors such as Quality Assurance Agency Regulation and the increasing competition may restrict the new firms from entering into this market. Threat of Substitute The threat of substitute in this case can be the introduction of the online MBA courses and the distance learning courses. The students who don’t want to appear for full time courses and who are busy with their work life generally prefer to opt for distance education. Buyer Power The bargaining power of the buyers seems to be quite less as there are large number of students who are choosing MBA as a potential career option. The UK MBA market is quite popular and students from different countries come to pursue business management courses. Supplier Power The bargaining power of the suppliers in this case seems to be higher as there are lots of B-schools in the UK. In light of this scenario, it can be observed that the new B-school needs to provide quality education and also other necessary facilities to establish itself as a prime choice for the students in future. Threats and Opportunities The main threat for the new B-school will be in the form of intense competition, the introduction of online courses and distance learning courses also pose a threat for the new venture. The main opportunities for the new company are the increasing government support and the increasing number of students that gets attracted towards the course, which is the biggest opportunity for the new venture. Internal Analysis Generic Strategies The new proposed B-school must take into account the cost of operation and the competitors’ movement in order to stay competitively ahead and to increase the market share in the UK market. Therefore, it is important to conduct internal market analysis to understand the companies’ strengths and weaknesses. Focusing on any one of the generic strategies such as cost leadership, differentiation or focus strategy would be difficult at the start up phase. However, the new venture can focus more on the differentiation strategy with a blend of cost leadership. For instance, along with MBA courses it can also provide other short term courses that would be scheduled for three to six months. The course would primarily be focused on personality development or it may be based on entrepreneurship. This kind of short term courses would help the new B-school to attract more students. Cost leadership will be difficult to follow initially as the new B-school will have to provide best infrastructure and education in order to survive. However, the other short term courses that other colleges or universities are providing for relatively higher price can be provided for lesser cost by focusing on one particular segment initially such as entrepreneurship course for six months. Moreover, as an alternative option for the students along with regular two year MBA programme a shortened one year MBA and other short term courses can be offered that will help to achieve cost leadership. Market Segmentation The basic aim of the new venture will be to target the high potential group primarily the outstanding graduate business students. The main target group will be the talented students who have completed their BBA or other relevant bachelor level program from reputed educational institutions. Initially the UK market will be targeted. Latter after few years of operation the expansion strategy will be applied by the B-school in the countries of Australia and India. Core Competencies Management and the managerial skills can be the core competency that may be required for the economic prosperity and the economic development. However, for the new venture to attract the students, infrastructure needs to be the best in comparison to other colleges with state-of-the-art facility. It will have all the modern facilities that are normally required by any B-schools such as Wi-Fi class rooms, libraries with all kinds of books, a separate room for group discussions, a modern canteen and internet lab where the students get enough scope to learn and grow. Teachers will be hired by taking tests and the best possible teachers will be recruited. Apart from acquiring young fresher in among the teachers, emphasis will be provided to those teachers who have at least 2 to 5 years of experience in the related field with excellent educational background. Value Chain Analysis Firm Infrastructure In order to excel the school must comprise all the modern infrastructures and state-of-the-art facilities in order to attract the candidates from all over the globe and the domestic market. The school needs to have research-led environment which provides an opportunity to the students to learn in a better manner. Human Resources Management Since the B-school is at introduction stage, therefore total number of students that can be enrolled is approximately 350. Teacher student ratio needs to be 1:20 against the standard ratio 1:30. By keeping the ratio as 1:20 the new B-school can pay more attention towards the students. This can be an added advantage for the new B-school. Technological Development The new B-School will focus more on the technology and innovation in order to provide its student a better learning and its teachers a better teaching experience. The classrooms will have Wi-Fi connection with the aim that students can access internet any time. ? Procurement The teachers will be hired only after they have passed various self held college test. Due attention will be provided to see that both young and experienced teachers are recruited. The funds will be procured via various means such as partnership with the local schools having good reputation. Inbound Logistics The inbound logistics for the new business school are the students. Initially, a facility for around 350 students will be provided in B-school with an aim to increase it in future in the UK B-school as well as globally in places such as Australia and India. Operation Initially the college will focus on providing full time MBA courses along with online MBA and distant MBA as well. Specialisation will be made available for only two subjects namely finance and marketing as finance has greater scope in the UK. Along with that various short term courses can be provided to students at relatively lower cost than other institutions. The total course fee would be 22000(in pounds) per students. Outbound logistics High class education will be provided to the students with all the modern facilities. The classes will be held thrice in a week. The students will be taught by the teachers with real professional business and entrepreneurial experiences and expertise. Lectures and seminars along with group work will form part of the learning method. ? Marketing and Sales The advertisement for promoting the B-school will be held via trade fairs in the UK where the students will get an opportunity to discuss career plan and meet representatives from the leading business school. Print medias, hoardings, television will play a major role in advertising regarding the product. Service The B-school will cater scholarship facilities to merit students who had excelled in their academics. It will provide scholarship on individual merit based on academic credentials and academic references. Collaboration In order to acquire funds the best technique would be to seek partnership with any of the top international business school. Such kind of collaboration will serve the organisational purpose. The students will also be benefited at the same time. Key Success Factors The key success factor for the new company is the teacher to student ratio that the school will operate in (Docstoc, n.d.). The main key success factor will be the managerial skills of the teachers, the service offering at reasonable cost (Slideshare, n.d.). The provision of online MBA programme and distance courses are other key success factors for the B-school. Adoption of the modern technology along with state-of-the-art facility can also be considered as key success factor. Strength and Weakness A full time MBA course along with other short term courses is the main strength of the B-school. The teacher to student ratio is feature that can work as strength for the B-school. The main weakness for the B-school can be poor financial scenario at the inception stage and increased cost of operation. Financial Overview It is imperative to have a financial plan for any business in order to determine the financial position of the company. The various expenses of the planned B-school can be listed in the table below: Items Cost in pounds Land 1500000 Establishment 3500000 Furniture 1000000 Technical equipments 1500000 Others 500000 Pay Back Period Here, total investment = 8000000 Fees received per year = 3850000 Pay back period = 2.07 years It has been estimated that Variable cost per student will not be more than 1500 per annum (in pounds) = 1500 (Variable cost includes Internet connection, electricity, salary of staffs and miscellaneous) Fixed Cost (in pounds) =40000000 (It includes salary of faculties, books rendered to students, Laptops provided to the students). Total course fee charges from students (in pounds) = 22000 Therefore, the course fee per year will be 11500 (in pounds). Thus, total fees receive per year will be 385, 00, 00 (in pounds). Therefore, contribution per student will be 11500-1500=10000 Formula for Break even point (BEP) = fixed cost/ contribution BEP = 400 Therefore, when there are 400 students then the school will reach break even point. In this note the Gross Profit margin can also be calculated. GP Ratio= 3850000-(4000000+500000)/3850000 = (16.88) % In the first year the school will incur loss of 16.88 percent. However from next year onwards the loss will reduce as student might increase. From third year onwards the B-school is expected to have profit. Strategic Option The company’s main aim will be to target other two countries to expand its operation after they are settled in the UK. The countries that can be targeted for expansion are Australia and India. Australia is one of the most preferred destinations for the MBA students. The country has gained immense popularity for the quality of education it provides to its students. The political as well as legal system of the country seems to be favourable for the establishment of business management schools. The country’s economic condition has been improving at a rapid rate. The biggest opportunity for the expansion is that increasingly number of students visits Australia to complete their higher education. The infrastructure and technology have been other favourable factors for the expansion of business in Australia. Another probable country will be India where the expansion strategy seems to be viable. The Indian Government follows the English common laws. The country has full support from the government as the Indian government took the responsibility of promoting the higher education after its independence. Because of the various schemes developed by the department of higher education, there has been growth in the academic sector and it has also encouraged the private-run educational organisations to promote the education. It is to be noted that the disposable income of the Indians have increased along with an increment in the awareness for education. Therefore, setting up B-school can be an opportunity. The technology and infrastructure has quite advanced and there is large number of Indian students pursuing MBA degree from different universities. Therefore, expansion strategies will be aimed at these two countries. Moreover, in the near future may be after two to three years when the B-school will have increased its market share and brand awareness among the consumers, it will aims to introduce certain other courses with emphasis on all specialisation subjects like information technology, operations, human resources, Economics, Accounting, Quantitative methods (British Council, n.d.). It will also try to keep itself abreast with the modern technology and keep making changes in its teaching methodology as per the needs and demands of the students. The school will try to have a shift in the school product offerings from traditional MBA programs to part-time programs as well (Friga & Et. Al., 2003). References British Council, No Date. UK MBA Programmes. UK MBA Programmes Available To Study. [Online] Available at: http://www.educationuk.org/Article/UK-MBA-programmes [Accessed January 10, 2011]. Docstoc, No Date. Change in Graduate Management Education and New Business School. Docs. [Online] Available at: http://www.docstoc.com/docs/69005075/Changes-in-Graduate-Management-Education-and-New-Business-School [Accessed January 10, 2011]. Environment Change Network, No Date. The United Kingdom Environmental Change Network. The Climate. [Online] Available at: http://www.ecn.ac.uk/Education/climatic_factors.htm [Accessed January 10, 2011]. Friga, P. N. & Et. Al., 2003. Changes in Graduate Management Education and New Business School Strategies for the 21st Century. Academy of Management Learning and Education. [Online] Available at: http://www.paulfriga.com/upload/resources/200807210959341240360074_thefutureofmanagementeducationamlefrigaetal2003.pdf [Accessed January 10, 2011]. Meikle, J., 2010. UK Economic Recovery 'Poses Threat to Environment'. Environment. [Online] Available at: http://www.guardian.co.uk/environment/2010/nov/30/uk-economic-recovery-environment-eu [Accessed January 10, 2011]. PJB, 2007. New Perspectives for Learning - Briefing Paper 53. Context of the Research. [Online] Available at: http://www.pjb.co.uk/npl/bp53.htm [Accessed January 10, 2011]. Roger Darlington, 2010. A Short Guide to the British Political System. Background History. [Online] Available at: http://www.rogerdarlington.me.uk/Britishpoliticalsystem.html [Accessed January 10, 2011]. Slideshare, No Date. Disaggregation of the Value Chain: Emergence of New Business. Alistercrowe. [Online] Available at: http://www.slideshare.net/Alistercrowe/disaggregation-of-the-value-chain-emergence-of-new-business [Accessed January 10, 2011]. Seniorwatch, No Date. Socio-Economic Environment: United Kingdom. United Kingdom. [Online] Available at: http://www.seniorwatch.de/country/united_kingdom/Socio-econenvir%28UK%29.htm [Accessed January 10, 2011]. US Department of States, 2010. Background Note: United kingdom. People. [Online] Available at: http://www.state.gov/r/pa/ei/bgn/3846.htm [Accessed January 10, 2011]. Bibliography Department for Education, 2010. About the Department. Departmental Information. [Online] Available at: http://www.education.gov.uk/aboutdfe [Accessed January 10, 2011]. Infozee, 2000. UK MBA Programs Business Schools in U.K. - England & Scotland. Featured UK Business Schools (MBA Programmes). [Online] Available at: http://www.infozee.com/channels/mba/uk/mba-uk.htm [Accessed January 10, 2011]. QAA, No Date. Academic Standards And Quality. 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