Introducing Global E-Learning Entrepreneurship Courses - Case Study Example

Table of Contents Table of Contents 2 Table of Figures 3 Executive Summary 4 Introduction 5 Background 5 Environmental Analysis: The Macro Environment 5 Environmental Analysis: The Operating Environment 6 Resources, Capabilities and Core Competences 7 Strengths, Weaknesses, Opportunities and Threats 8 Marketing of e-Learning 9 The Marketing Mix 9 Product 9 Place 9 Price 9 Promotion 10 Personnel 10 Physical Facilities 10 Process Management 10 The Typical Student/Learner/Customer 10 Marketing Operations 12 Conclusion 12 References 13 Table of Figures Table of Contents 2 Table of Figures 3 Executive Summary 4 Introduction 5 Background 5 Environmental Analysis: The Macro Environment 5 Figure 1: Macro Environmental Analysis 6 Figure 1: Macro Environmental Analysis 6 Environmental Analysis: The Operating Environment 6 Figure 2: Operating Environmental Analysis 7 Figure 2: Operating Environmental Analysis 7 Resources, Capabilities and Core Competences 7 Strengths, Weaknesses, Opportunities and Threats 8 Figure 3: SWOT Analysis 8 Figure 3: SWOT Analysis 8 Marketing of e-Learning 9 The Marketing Mix 9 Product 9 Place 9 Price 9 Promotion 10 Personnel 10 Physical Facilities 10 Process Management 10 The Typical Student/Learner/Customer 10 Marketing Operations 12 Conclusion 12 References 13 Executive Summary This report proposes an income generation project connecting the university’s academic knowledge, skills and experience to a new company providing e-learning courses for students around the world. Analysis indicates that, with the currently volatile environment and the government’s current cost-cutting priorities, there is a danger that the university could find itself short of funds to enable business as usual to continue. This new venture provides a new way to provide courses to those wishing to learn, initially focusing on small business management in the UK and Europe, then expanding for global coverage. It is anticipated that new courses will be added once the initial set up has been completed and has bedded in, allowing expansion of the university’s courses to a global market place through a new company set up specifically for the purpose. The venture should payback the initial capital investment within a period of three years, providing a relatively short period of risk as far as the investment is concerned. The marketing strategy focuses on niche marketing and will target those who might be interested in starting up their own business. With the potential for mass redundancies in both the public and private sectors over the next few years, there is a huge opportunity to help many people set up their own business and achieve the freedom and success that such a venture brings. This is an excellent investment opportunity for the university that will provide another outlet for courses already presented face-to-face and an income stream to support existing operations. Introduction This report sets out the analysis and marketing strategy supporting the introduction of a range of new e-learning courses for global consumption. A strategic analysis is provided, which considers the external environment within which the university operates, together with an analysis of actual and potential sources of competition. The strengths and weaknesses of the university will be combined with the opportunities and threats present in the current climate, to provide a solid foundation for a focused marketing strategy that analyses the proposal using the extended services marketing mix, segmentation and targeting strategies and the profile of the “typical” customer. The report concludes with a summary of the marketing strategy and why it will be successful for the university as a medium-to-long term project. Background Following the recent decision by the government to cut the teaching budgets for universities, it has become necessary for the university to focus on more income-generating activities to enable continued funding of vital activities. After much discussion, it has been decided that the university needs to embrace the digital age and provide exception e-learning products for a global market. UK higher education is viewed as being of high quality, with many foreign nationals attending universities to obtain a UK degree (both undergraduate and postgraduate). However, with the government also restricting the number of foreign students who can enter the country to study here, there is a need to provide our courses in a way that allows international students to continue to benefit from a quality UK education. To start this process, it is proposed that the university set up a small company through which it will provide e-learning solutions for students around the world. The first courses will be in small business management and entrepreneurship, initially focusing on the domestic and European markets to enable the product to gain a reputation for quality and excellence, as well as ensuring all processes supporting the learning are in place and run without problems. It is anticipated that extending the course provision to the global market will take place three-to-five years after the introduction of the courses to the UK market, after appropriate cultural adjustments are made to the course content and methods of delivery. Environmental Analysis: The Macro Environment Worthington and Britton (2009, p.6) define the macro environment as “those ... factors ...which affect a wide variety of businesses and which can emanate not only from local and national sources but also from international and supranational developments”. There are many variants, including different factors, but the framework to be used for this analysis is the STEEPLE framework, representing the Socio-cultural, Technological, Economic, Environmental, Political, Legal and Ethical factors that affect business and over which business has no control. Figure 1: Macro Environmental Analysis The diagram reveals several areas that raise issues for the university, some of which have been identified previously. As the university has no control over these factors, the only option is to react and to plan for their current and future impact. Environmental Analysis: The Operating Environment The next area to be considered is the operating environment. This is the external environment immediately beyond the boundaries of the organisation. The framework used for this analysis is Porter’s (1980, in Johnson et al, 2008) Five Forces model. This considers five factors that determine whether a particular market is attractive and profitable. These factors are new entrants, power of suppliers, power of buyers, substitutes and industry rivalry. Figure 2: Operating Environmental Analysis The operating environment is currently subject to much change following the new government’s policies being announced earlier this year. There is the possibility of a range of courses currently being offered, having to be cancelled if there is no rethink concerning the teaching budgets for the arts and humanities. These represent a possible opportunity for conversion to e-learning and providing courses for a reasonable fee to those who wish to study in these areas on a part time/distance learning basis. There is therefore an additional reason to develop quality e-learning provision through a separate organisation – it enables the university to maximise its income generation potential and opportunities. Resources, Capabilities and Core Competences Before undertaking a SWOT analysis, it is necessary to consider the resources and capabilities of the university, together with its core competences. Johnson et al (2008, p.95)) argue that an organisation needs strategic capability to survive and generate profits. Strategic capability consists of the resources available to the organisation and the organisation’s competences. Barney (1995) identifies four classes of resource: physical, financial, human and organisational. These resources are then combined to create organisational capabilities. Ideally resources and the resulting capabilities should be unique to create a unique competitive advantage, but when considering universities, the final offering of higher education cannot be too unique as students tend to prefer more traditional approaches to learning. An organisation also has core competences. Hamel and Prahalad (1993) argue that how management utilise resources and the degree of their ambition determines organisational competitiveness. In this case, the objective to set up a new organisation to provide quality e-learning for a global audience within five years is a very large undertaking, and how the organisation and its processes are managed will determine whether or not the objective is met. Thus this project fulfils Hamel and Prahalad’s idea of “strategy as stretch and leverage” (1993, p.75). The university has access to the human resources necessary to create quality e-learning as well as the physical resources. An expert in managing such projects should be hired to ensure the best chance of achieving the stated objective. Strengths, Weaknesses, Opportunities and Threats Figure 3: SWOT Analysis The biggest risk for this project is from government in terms of funding streams. If the funds from government are cut back too far, the university will cease to be a viable institution and will have to either close or radically downsize. This project aims to provide alternative funding streams to counter the possibility of closure. Marketing of e-Learning Within the market of e-learning, there are a wide variety of businesses and customers who might be interested in using e-learning to achieve their learning objectives (Lewis and Whitlock, 2003). As such, there is no single model or checklist for the marketing of such services. In the initial phases, it is assumed that marketing to the UK and Europe will follow the same strategy as is currently used to promote our face-to-face offerings. However, during the bedding in period, further work will need to be done to fine tune the marketing strategy and plan for an international market. The Marketing Mix Magrath (1986) identified that, when marketing services, the traditional model of 4 Ps was not sufficient and advocated the adding of three additional elements. The 7 Ps of service marketing will be used to analyse the e-learning offering. Product There will be no physical product delivered by the university. All learning will be delivered online, and will comprise downloadable resources such as study guides in pdf format, lectures and discussions as podcasts and group activities via a content management system. Each element will be made available as the student progresses through the course, to ensure that they do not suffer from overwhelm and to help monitor their progress and, if necessary, provide additional support. Place The student’s place of study will be the place of delivery. It will be delivered via an internet connection, with the physical servers maintained by the company on their premises. Technologies such as web and e-mail servers and uninterruptable power supplies will be required to ensure consistent delivery 24/7/365. Price The price of the course is difficult to establish. Too cheap and there is the risk that the product will be written off as not being of suitable quality, too expensive and students will look elsewhere for their tuition. A niche marketing approach to price will be taken, with the price of individual units being comparable with the university annual fee of £6,000 - £9,000, but being pitched slightly below the normal university fee to make the offer better value for students. Promotion Initially, the internet will be used to promote the service, as well as placing advertisements in places where those who are looking to start up their own businesses meet (e.g. job centres provide advice for the unemployed looking to start their own businesses). Press releases will be issued to highlight the offering in the UK and research will need to be carried out to determine the best places to advertise in Europe (and again for the global release). Personnel In addition to seconding academic staff from the university, extra staff will need to be hired to ensure that students have suitable support via the internet and the telephone. These staff will ideally be junior academic staff or students who have just completed a relevant masters degree, so that they can provide both academic and pastoral care, referring anything serious on to the academic staff where necessary. Physical Facilities Physical facilities will not be required for the students, however, students will require a suitable computer with internet access and (probably) a printer. These will be made a condition of signing up to avoid students claiming mid-way through the course that they cannot complete the course due to no internet connection or a very old computer that cannot run relevant software. Process Management A qualified project manager will be hired to manage the start up and implementation phases for the project, up to and including global expansion. The project manager will need experience in project management methodologies (e.g. PRINCE2), a working knowledge of information and communications technology and an understanding of academia with special reference to e-learning and distance learning pedagogy. Procedures will need to be defined and documented to ensure consistent service for students and appropriate guidance is available for staff dealing with support issues. The Typical Student/Learner/Customer Identifying key characteristics of the learners expected to be interested in the course helps to create a more focused product that meets the learners’ needs more effectively. Rowntree (1994) provides a set of guidelines for constructing the likely learner profile for someone looking to use distance learning. It is therefore appropriate to use them to identify the target learner. The learner could be any age, but is likely to fall between 18 and 50 as this is usually when individuals find themselves considering starting their own business either straight out of school or following a redundancy or serious life-changing event. They are likely to be male, although there will be some female students, so the course must cater for both sexes equally. The learner is likely to be from any cultural background, thus an Anglo-centric view will need to be avoided, even though the businesses being started will be started in the UK. Motivations will centre around independence and freedom, being your own boss can be a big incentive for starting a business. Some will see the potential to earn large amounts of money as a significant factor, while others will be using hobbies and interests to underpin their businesses, so will be potentially running the business for enjoyment. The likelihood is that learners will complete the course because they will have chosen to take it in the first place. There is also the financial investment they have made which will usually keep them going until the end. Expectations of quality and relevant will be high, as will those for learner support. Systems will need to be efficient and work first time to keep learners happy, especially if the fee paid is on the high side. There may be issues with isolation and solitude, but use of the chat room within the virtual learning environment will help to alleviate this. The ultimate objective of those completing the course will be to set up and run a successful business, with success being defined according to their motivations. There will be different levels of background knowledge, so the course will need to cater for those who may already know how to do something and for those who have never done anything that could be related to running a business before. Market Segmentation, Target Marketing and Branding The marketing strategy will be a focused one targeting a niche market of those who are looking to start their own business either immediately or in the very near future. Ideally, a relationship marketing approach will be taken to ensure learners take the full degree programme, possibly advancing to other studies (see marketing operations, below). The core product is access to the tuition and support. The actual product is the degree programme, with the support element being the augmentation element. The company will be set up under the name “Advanced Learning Solutions” and this will be developed as a brand through which all courses can be provided. The market will be segmented initially on geo-demographic lines, with the 18-50 year olds in the UK and Europe being the first target market. When the course has bedded in, the target market will be expanded to include those looking to set up a business in their own country or online from around the world. There is the potential to capture a large share of this market, which is likely to expand over the next few years as many in both the public and private sectors find themselves out of work but with the potential to run their own business. Publications issued within the public sector will be targeted to run advertisements for the courses, and advertisements placed in national newspapers to highlight small business management as an option for those facing redundancy and providing a contact number for those who are interested to discuss their options and the courses on offer. Marketing Operations Academics with appropriate experience in small business management and entrepreneurship will be seconded to the new company to allow them to focus exclusively on the production of the courses required to allow a learner to complete a degree. This is likely to take around three years to complete, with courses being rolled out based on their position within the programme. Thus it will be level four courses developed first, followed by level five and level six. At this point, the level four courses will need to be reviewed to ensure fitness for purpose and to identify what changes, if any, are required to enable them to appeal to a global marketplace. This will be followed by the level five and level six courses. Consideration is to be given to developing a masters degree for those students who have already obtained a first degree and are looking for advanced skills to enable them to start up and run their own businesses. Although the university is governed by quality procedures as laid down by the QAA, the company will need to set up a continuous improvement quality system that ensures the product and supporting services continue to evolve, improving service quality constantly. In the initial phases, it is anticipated that the company will run at a loss, due to initial start-up costs. However, based on costs and revenues experienced by other providers, the company will move into profit in year three (see Lewis and Whitlock, 2003, pp.42-43). Conclusion A focused niche strategy targeting those looking to set up their own business allows a new company providing e-learning in small business management and entrepreneurship to steal a march on those providing face-to-face learning and gain a large market share, especially with the high number of redundancies predicted to take place over the coming years. The university, in safeguarding its own future by generating additional sources of revenue, can build a new company brand to provide courses to a global market and leverage the resources it has to great effect. References Barney, J. B. (1995) ‘Looking inside for competitive advantage’ Academy of Management Executive Vol. 9, No. 4, pp.49-61 Hamel, G. and Prahalad, C. K. (1993) ‘Strategy as stretch and leverage’ Harvard Business Review Vol. 71, No. 2, pp.75-84 Lewis, R. and Whitlock, Q. (2003) How to Plan and Manage an E-learning Programme, Gower Publishing, Aldershot Johnson, G., Scholes, K. and Whittington, R. (2008) Exploring Corporate Strategy: Text and Cases (8th edn.) FT Prentice Hall, Harlow Magrath, A. J. (1986) ‘When marketing services, 4 Ps are not enough’ Business Horizons Vol. 29, No. 3, pp.44-50 Rowntree, D. (1994) Preparing Materials for Open, Distance and Flexible Learning, London, Kogan Page Worthington, I. and Britton, C. (2009) The Business Environment (6th edn.) 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