Exporting Digital Education to the Middle East - Term Paper Example

Internal Marketing In view of the assumed saturation in the domestic market for education content-development services, this paper explores the feasibility of exporting digital education products and services to a country in the Middle East region. It also provides an overview on the company, education product offered as well as the E-learning industry. To establish the viability of the proposed venture, situational and market analyses pertaining to the targeted country are conducted. Moreover, operations of some potential competitors are assessed. Company and Education Product - An Overview XSIQ (International) Pty. Ltd. Is an Australian-based content development company established in 1999. The firm developed Interact suite of resources, which is a range of digital content, and tools used by teachers so as to conveniently utilize existing course material designed for students aged 11 to adult. The Interact Resources and Tools include the following: ("XSIQ" 2005) Interact Subjects These are digital sources that can be loaded onto school servers, intranets or loaded onto instructors' notebooks. To create a conducive learning environment for learners, the digital courses offered features 3-D models, animations, videos, revision activities and quizzes. These were designed in line with a variety of national and international standards for students. The Interact Subjects cover varied key learning areas such as Sciences, Mathematics, English and Literature, Core Humanities, Information Technology, Health and Physical Education and Business Studies. Interact Topics These are specialized modules of digital content presenting individual topics within key learning areas. These digital sources provide smaller content modules with limited number of pages. Interact Course Creator The Course Creator is a tool used for editing to help teachers build digital lessons, lesson series or work units. With this program, educators are enabled to create, manipulate and publish multimedia enhanced learning materials. Moreover, teachers can revise or design new lessons based on their own materials or third party materials in a manner they deem appropriate. Interact Browser This is a browsing tool specifically designed for use with Interact content to permit convenient navigation through the Interact suite of digital resources. The company released the Interact digital education product suite in Australia in 2000. Not long after, the contents were subsequently released in the United States and United Kingdom and currently utilized in both American and British educational institutions. XSIQ has signed agreements with the Software Express, one of the largest education resellers in the US, for the exclusive CD ROM distribution in North America; and Ramesys, one of the UK's largest education solution providers for exclusive representation in the UK. XSIQ Web-Content Developer Company For : MR.____ Senior Manager From : PLACE NAME HERE Business Analyst Date : September 8, 2005 Re : Export Opportunity in the Middle East Proposal Summary XSIQ is operating in the industry of e-learning, a term referring to the use of networked multimedia technology to support learning and covers myriad scenarios and tools for enhancing and supporting teaching and learning process ("Business Ready Branch for Education" 2004). With the technological advancements, education is no longer bound by time and place and homes can become the after-hours classroom ("From Technology Adoption to Educational Innovation" 2001). Although the concept of schooling is generally bound by the cultural beliefs about conventional teaching methods where student-teacher relationship dominates popular view of proper schooling (Cuban 1993), the adoption of new technologies in educational institutions has become a common practice particularly in nations who believes in the importance of education as a tool for progress. Given the perceived saturation in the domestic market of the company's product and service offerings, it is imperative that XSIQ explore the potentials of exporting its Interact product line in another country if the firm aims to maintain its viability. In view of the nature of the firm's primary education products, it needs to consider an export destination that uses technology to provide both teacher-led and self-service courses within the campus or offsite, within or outside the boundaries of normal class hours. XSIQ should consider exporting in a country which puts a premium for education and has thriving market for e-learning products with no strict foreign restrictions. Given these criteria, the firm may opt to export its products in the United Arab Emirates (UAE). The subsequent sections evaluate the business opportunities and potential demand for the XSIQ's education products by studying customer motivations, adequacy of demand, intensity of competition and pricing schemes (Batchelor). As a general marketing strategy, the company should consider the cultural and religious issues especially in the Middle East countries where there is strict enforcement of rules pertaining to culture and religion. Furthermore, it should emphasize the benefits of using the Interact digital resources and tools enumerated as follows ("Business Ready Branch for Education" 2004): Allow learners more choice and conditions (not bound by time or place) based on their learning preferences, style and personal situations; Enable students to learn at their own pace and permits them to revisit resources conveniently as often as they need to; Support students working as a group on self-directed activities; Promote learning productivity and efficiency since more lessons are learned in less time; and Allow educators to modify or create contents based on recommended syllabus. Situational Analysis To assess the UAE market of XSIQ products, research on the demographics, social and economic conditions in the country is undertaken. Findings would indicate if exporting in UAE might prove to be a profitable option for XSIQ and yield the required returns for its investment. Economic and Legal Background The UAE is an oil-rich Middle East country situated in the South East of the Arabian Peninsula. It is comprised of seven emirates, namely Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umon al-Quwan. The country is mainly engaged in the oil industry, revenue from which is utilized for national development financing. One of the richest countries in the world, the UAE has GDP per capita not far below those of leading West European nations ("Wikipedia"). Based on its 2004 Yearbook, the UAE posted sound economic figures indicative of the strong economy coupled with healthy social development and political stability. As per its restrictions on technology and telecommunications as stipulated in Federal Act No. 1 (4) of 1976, the Emirates Telecommunications Corp. is the sole telephone and telecommunications provider in the country. Furthermore, the Emirates Telecommunications Co., more commonly known as Etisalat, is the only internet service provider in the country. With this, the Etisalat actively censors internet sites deemed to be un-Islamic or sheds bad light on the nation's image. Apart from these restrictions, it should be noted that the country practices moderate foreign policy stance. ("Wikipedia") Table 1 - UAE Economic Indicators (Central Bank of the UAE: Ministry of Planning) 2000 2001 2002 Population (000) 3247 3488 3754 Real GDP (Dh million) 214.3 221.8 225.7 Real GDP Growth Rate 12.3% 3.5% 1.8% Consumer Price Index 1.4% 2.7% 2.9% Employees (000) 1736 1929 2031 Note: Effective November 1997, the AED Exchange Rate has been adjusted to AED 3.6725 for each US dollar Demographic Characteristics Given the country's economic state, there has been steady rise in the population over the past few decades. The demographic structure is illustrated in the graph below. In view of the above, the population distribution based on age is summarized as follows: Table 2 - Population Distribution based on Age ("Economic Development") 2002 Less than 15 years old 25% 15-39 years old 55% 40-59 years old 18% Over 60 years old 2% Given the country's demographic structure, wherein more than half of the population is within the schooling age range of 15 to 39 years old, the UAE strengthens the priority that the government places on development of educational facilities. One of the major expenditure groups of the country pertains to the provision of education, re-creation and cultural services. It should be noted that the increases in inflation, 2.9% year-on-year increase as at end-2002, is attributed to the increases in its major expenditure groups, which include education. State of Education The UAE invests substantially on education and is being established as the knowledge hub of the region. As such, the country provides free access to education for all citizens at every level of the system. As at school year 2003-2004, there are about 317,000 primary and secondary students enrolled in around 1,500 public and private schools in the UAE. ("Social Development" 2005) Given that education is one of the top priorities of the UAE, it has formulated and implemented the Education 2020 strategy composed of a series of five-year plans with primary focus on the introduction of educational advancement, skills improvement and self-learning ability of students. In relation to this, the Ministry of Education and Youth indicated a switch from instruction-oriented education to self-education. With this framework, the students, rather than the teachers, are seen as the centre of the educational process. The implementation of this model requires total re-arrangement of teachers' values and methods as well as re-education of teaching population that has been educated and trained under the old regime. ("Social Development" 2005) For the reviewing of curricula and development of education methodology, the National Centre for the Development of Curriculum and Methodology is depended upon. As part of the country's drive for continuous advancement in education and the emergence of English as the primary business language all over the world, English is introduced in the new syllabus of all government schools. Aside from this, the Information Technology Education Project which involves training of high school students in the subject matter is currently undertaken in Dubai and Abu Dhabi. Subsequently, this will be ultimately introduced throughout the UAE. These efforts are indicative of the countries recognition of the importance of integrating information technology education as one of the main keys in maintaining a successful economy. In line with this thrust, the Centre for Excellence for Applied Research and Training (CERT) runs country-wide education programme for all nationalities. Almost 100 on-line courses, designed for professional education and personal enrichment, are offered through the CERT website at cert.hct.ac.ae/. ("UAE Education") To illustrate the effectiveness of its IT programs, the United Nations Development Programme cited the UAE as the most advanced e-learning country in the region in the former's recent academic subject review. ("Social Development" 2005) In terms of educational policies, the government of the UAE is fully aware that constant updating of policies and sustainable investment in infrastructure is required to ensure that graduates are properly equipped to enter the workforce and assist in the country's development ("UAE Education"). In this regard, the Minister of Education, Shaikh Nahyan Bin Mubarak Al Nahyan, called for educational reforms particularly for public schools in UAE. According to the Minister, these reforms are needed to raise the level of UAE education into a "world-class, standard-based education system." Such changes require a comprehensive reform plan which would focus on curriculum, school facilities, teaching methods, learning resources, research centres and quality of educators. The reform plan also aims to make all public schools student-centred and quality oriented and requires well-prepared teachers, modern curricula and relevant technology. (Nissar & Bassam 2005) Market Prospects Given the above discussion, the target market for XSIQ's products could easily be identified. Based on structure of the population in the UAE, where more than half is comprised of those within the secondary, tertiary and post-graduate schooling age range, XSIQ would have bright prospects in the domestic market. In view of the local attitude coupled with the government's objectives pertaining to national education, sustainable demand for e-learning products, which promote self-learning, is perceived. UAE government is expected to support these types of products because these are in line with the educational objectives set for the citizens. The projected demand is deemed to prop-up XSIQ's bottomline with the firm's export yielding sufficient return on investment that is well within the company's criteria. In this regard, the firm may opt to target the following: Universities and other Educational Institutions XSIQ may decide to market its product line to the various educational institutions in UAE, some of which are as follows: Table 3 - Universities in UAE ("Social Development"- UAE Yearbook 2004) University Description Higher Colleges of Technology (HCTs) Offering more technically-oriented education Enrolment Size (School Year 2002/2003): 15,000 UAE students (from 239 students in 1988) Growing at a rate of 30% each year Ajman University of Science and Technology Opened in Fujairah in 2003 Enrolment Size: 6,500-7,000 UAE students American University in Dubai ("AUD.edu") Private non-sectarian university serving UAE nationals and international students since 1995 Offers the following courses: -Information Technology: supports knowledge management environment grounded in information resources, technology, consultation and training -Business: emphasizes students attaining high level of proficiency in the use of IT and ability to upgrade their IT skills in line with rapid advances in IT field -English Proficiency (Intensive English Program): features integrated language laboratory with internet access, instructional software, audio and popular computer applications UAE University Comprised of 9 colleges Committed to its role as the leading teaching and research institution in the country Zayed University Major expansion comprising 6 colleges, departments and laboratory Cooperative venture between Zayed University and IBM: aims to establish new business partner in the UAE for private and public institutions to enhance their e-business and communications activities New universities to come on stream British University: plans to commence post-graduate studies at masteral and Phd levels in association with University of Edinburgh Abu Dhabi University: would offer Business Administration, Education and Computer Science Note that the above list of educational institutions in the UAE is not exhaustive. Aside from the above, XSIQ may consider coordinating with other organizations particularly those within the Knowledge Village (KV). The KV provides conducive working location for institutions as well as individuals involved with the generation and dissemination of knowledge. In general, the KV promotes development of scholarship, education, training, creativity, innovation and entrepreneurial success. ("Economic Development" 2005) Within the KV, organizations like internationally accredited universities, professional training centers as well as e-learning bodies are situated. In addition, there are education service providers, innovations centers and certification and testing organizations operating in the KV. Given the strategic institution mix, XSIQ may consider marketing its e-learning product line in the KV. It should also be noted that this is an opportune time for XSIQ to push through with the proposed export of its products since KV is set to expand dramatically in terms of developments in the tertiary education level. Prestigious institutions which have recently signed up with KV include Purdue University, Birla Institute of Technology and Science, Pilani, Australian-based University of Wollongong, Szabist International Institute for Technology and Management among others. ("Social Development" 2005) Apart from the KV expansion, another factor which presents another opportunity for XSIQ is the recent creation of strategic alliances between the HCTs and a number of multinational organizations to come up with a diverse range of business and technological solutions. One of the undertakings even includes a programme development which is carried out in partnership with the University of Melbourne and the University of Wollongong. ("Social Development" 2005) Individuals On the other hand, XSIQ may opt to target individual learners or the students and teachers. This may be done through touching base with wholesalers or retailers, whichever the company deems as a more viable option. Businesses who are engaged in the marketing and selling of the e-learning products and services may be found in the Dubai Internet City (DIC), the biggest IT infrastructure in the Middle East. The DIC provides a "knowledge economy ecosystem" that was designed to support business development of information and communications technology (ICT) companies. ICT companies in the DIC comprise of software, website development, business services and e-commerce, consultancy, education and training. ("Economic Development" 2005) Given that XSIQ is a newcomer in the UAE industry, it should consider arranging representation of its product through a reputable wholesaler, who is an operator that packages range of products and markets through a network of subsidiary. The firm may greatly benefit from the wholesaler's wider distribution network. Furthermore, XSIQ should settle with a reputable one who has proven track record and profile in the IT market which may produce an equity link for the company. Such would facilitate consumer acceptance of the company's product offering. Moreover, the firm may take advantage of cost savings in choosing this marketing channel since wholesalers print their own brochure and other promotional materials. (Batchelor) Competitors To be able to gain competitive edge over other players in the e-learning industry, the firm should be aware of its competitors in the industry. However, given the rapid advancements in technology and the dramatic increase in the number of IT companies, competition has intensified. Some of the notable e-learning players are the following: e-Arts Consulting FZ LLC (e-Arts) Similar to XSIQ, e-Arts is an e-learning content and system development company which has presence in the UAE specifically in KV, Saudi Arabia and Jordan ("e-Arts Consulting FZ LLC completes phase one of agreement with UAE Ministry of Education and Youth" 2005). Its main product or service line is the Edu2web which is marketed as a fully integrated learning platform that incorporates learning management, learning content management, skill management and live conferencing systems. These are designed to cater to learning infrastructure improvements of corporations, schools, universities and other learning organizations ( "Edu2web" 2005). In 2004, e-Arts was chosen by the Ministry of Education and Youth to provide the Centre for the Development of Curriculum and Methodology with content development based on the company's developed educational materials ("e-Arts Consulting FZ LLC completes phase one of agreement with UAE Ministry of Education and Youth" 2005). In addition, it signed an agreement with Al-Salam private schools in Saudi Arabia to provide modern educational technology curricula where e-learning courses will be made available to students on a wireless network where every student who has a personal computer can access the conveniently - anytime and anywhere within the school campus ("e-Arts Consulting FZ LLC signs agreement with Al-salam Private Schools" 2005). In response to the successful implementation and increasing demand from online users in the Middle East, e-Arts has already launched Edu2web 2.0 ("e-Arts Consulting FZ LLC launches Edu2web 2.0" 2005). Integrated Technology Group (ITG) ITG is the leading Jordanian software and e-content developer which introduced the first comprehensive bilingual electronic learning management system in the Middle East. The firm developed the Eduwave system designed for the Ministry of Education, large universities, businesses and other organizations engaged in the provision of e-learning applications to the educational sector. ("Jordanian Companies to Drive Education Expertise to GITEX 2002" 2002) Eduwave has three components namely Author, Administrator and Portal. The Eduwave Author, facilitates creation of e-content curricula, textbooks and multi-media extra-curricular materials. This meets specific needs of students and helps them study various subjects in efficiently. On the other hand, the Eduwave Administrator allows system administrators to register information relating to education bodies in one database. This program also includes learning object and curricula management systems. The Eduwave Portal provides personalized access to myriad e-learning resources for students, parents, teachers and administrators. It allows interactive capabilities between all channels via email, chatrooms, discussion forums and study sessions. The navigation menu may be designed based on user specification. ("Jordanian Companies to Drive Education Expertise to GITEX 2002" 2002) Turboglen Turboglen Education Supplies LLC, a member of the American Business Council in Dubai, has been distributing books, periodicals, library supplies and CD ROM in the UAE since 1995. The company has an office in Dubai and represents many American and British publishing houses in the Gulf area. Turboglen is a US-based company which has offices in the UK and Middle East where it caters to the education market in Iran, Saudi Arabia and Kuwait among others. ("Turboglen") Microsoft Not to be shunned from the international competition is of course Microsoft, which has provided software training and offered discounted pricing for education software or student seminars like opendoor education designed for educators and students in the UAE. To modernize the education process in the country, the Ministry of Education signed landmark campus agreement with the company in 2002. ("UAE Ministry of Education Awards Microsoft" 2003) Recommendation As the UAE invests heavily on education and shifts its educational model towards self-learning, there is a sizeable market for e-learning products offered by XSIQ. It is also deemed an opportune time for the firm to push through with the proposed export of education products given the increasing number of educational institutions to be set up in UAE specifically in the Knowledge Village. Furthermore, there is the ongoing implementation of IT education project in Abu Dhabi, Dubai and subsequently throughout UAE that XSIQ should take advantage of. Aside from the above, the company should take into account the following: Marketing Strategy Representation Abroad Having a representative who speaks the local language as well as English and has substantial knowledge about product offering is deemed to be extremely helpful in marketing e-learning products (Batchelor). Potential clients, may it be an academic institution, wholesaler or individual who is interested in purchasing XSIQ e-learning products or contracting the firm's services, will feel more comfortable in inquiring about product details with someone who literary knows their language. In this regard, XSIQ may have to locally hire a business representative for selling and marketing purposes who has relevant experience in marketing e-learning products like Interact package. The local representative would also coordinate with the XSIQ head office in Australia regarding administrative matters. Wholesale As mentioned previously, XSIQ may opt to arrange representation of the product through a reputable wholesaler (Batchelor). This is similar to what XSIQ is currently doing in its US and UK operations wherein they signed up representation agreement with Ramesys (UK) and Software Express (US). They locate these wholesalers in the Dubai Internet City. Marketing through a wholesaler would substantially widen XSIQ's distribution network in the UAE. Marketing Consortia XSIQ may also consider associating with a small business marketing consortium. This type of marketing is a well proven technique in the e-learning industry (Batchelor). Working under a similar rationale as marketing through wholesaler, joining a market consortium of small business would improve the market network expanse. Promotions XSIQ may consider distributing promotional materials containing product and service specifications to various education institutions in the UAE. The firm may also remodel its website to make it more appealing to its intended market. Furthermore, it should include an Arabic translation of web content particularly for the UAE market. Partnership In the same way that its competitor like e-Arts and ITG market their products and services, IXIQ may consider forging a joint venture partnership with an educational institution. For instance, Australian-based universities such as University of Wollongong and University of Melbourne are starting to establish their presence in the education sector. In this regard, XSIQ, being another Australian-based company may have a competitive edge over other web content developers in the local market in terms of partnering with these prestigious academic institutions in providing e-learning products and services to their students and faculty. This is because XSIQ is an established and trusted company in Australia and these organizations are most likely aware of the firm's reputation as a reliable web content developer. Subject and Language In venturing into the export of XSIQ products and services in the UAE, the company should also consider the appropriateness of the content and structure of the e-learning packages. The company should take into consideration the Muslim culture adhered by the country as well as the language used. To entice more locals to patronize the products and capture greater market share, XSIQ may consider offering an Arabic version of the Interactive package. Financial and Legal Consideration The financial and legal implications of the above recommended marketing strategy are as follows: Wholesalers usually require a commission of 20% and above in order to cover costs for publicity campaigns and promotions and provide commission for the retailers which normally amounts to 10% of product cost. (Batchelor) Redesign of the website to incorporate Arabic language translation would amount to around AU$2,000. However, XSIQ may opt to assign this work to its in-house team. Representation cost for meetings with various groups and academic institutions should also be considered. In adopting a price structure for the UAE market, XSIQ should further study the pricing of its competitors so that the products and services it would offer would be at par with industry standards. XSIQ should register with the local authorities particularly with the Ministry of Economics for the exports of its products or conducting business in UAE in general. This may entail the payment of various licensing and registration fees for business permit applications. For your comments and approval, please. PLACE SIGNATURE HERE References AUD.edu. (2005). Retrieved September 3, 2005, from http://www. aud.edu/about/index.htm Batchelor, R. "What you need to know about marketing English Language Courses." 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Retrieved September 3, 2005, from http://www.uaeinteract.com Edu2web. (2005). Retrieved September 3, 2005, from http://www.edu2web.com/site/pages/services.html. Jordanian Companies to Drive Education Expertise to GITEX 2002. (2002). Retrieved September 3, 2005, from http://www.witsa.org/awards04/nominees/01_Eduwaver_Oct02_PR1_gitex.doc Nissan H. & Bassam, Z. "Nahyan calls for overhaul of UAE education system" The Nation. Retrieved September 7, 2005, from http://www.gulfnews.com/Artciles/NationNF.aspArticleID=178295 "Population by gender and age groups" Ministry of Planning. Retrieved September 3, 2005, from http://www.uaeinteract.com SIAA Report. (2001). "From Technology Adoption to Educational Innovation." "Social Development" United Arab Emirates Yearbook 2004. (2005). Retrieved September 3, 2005, from http://www.uaeinteract.com Turboglen. Retrieved September 7, 2005, from http://www.turboglen.com "UAE Ministry of Education awards Microsoft" Khaleej Times. (2003). 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