GSBM as a London Based Business School - Essay Example

GSBM as a London Based Business School Executive Summary Global School of Business Management (GSBM) is the proposed name of new business school that will provide management education of international quality. Increasing demand of gaining managerial skills among young group of students has led to the growth of business management school. GSBM will be a globally operated management school and it will open its institutes in UK, Australia and India. GSBM will be a London based business school. Therefore, it is expected to receive student from entire UK. The MBA market of UK is quite promising and competitive. Macro-economic condition is favourable for the growth of the new business school. Government policy and regulation is main factor that influence the MBA market. Australia is a popular destination for pursuing MBA degree. Australian government policies, strong economic and infrastructure are the major influencing factors for MBA institute presented in this country. In spite of low population, the Australian MBA institute receives a large number of students. Major part of students comes from foreign countries indicating great opportunity for GSBM. Economic and technological condition of India is the major challenge for starting a new business school. However, the government policies encourage higher education. India is expected to be one of the major markets for business schools as huge number of Indian students is available for perusing MBA degree. Introduction Starting a new venture requires extensive market research for the success of the start up venture. Writing a business plan is crucial task before establishing new venture as it includes entire planning of the future activity. This business plan reflects the efficient and innovative quality of entrepreneurs that helps to attract investors like venture capitalist and loans from external sources. According to Holtz, “a business plan is the clear summation of a company’s goal, the plan to reach those goals, the resources they will use along the way, and the measurements they will make to show they have reached the goals” (Holtz, 1994, p.8). Specifically, a business plan provides a road map for a new venture that helps in finding the necessary funds (Tyson and Schell, 2008, p.62). In this respect, a business must include the information related to product or services, market analysis, strategy planning & implementation, organisation & management summary and the projected financial planning. This paper will attempt to deal with the market analysis for new MBA school business. The B-school is expected to operate in three countries with different units. Before establishing the B-school, it is very important to analyse the market of these three countries to ensure sufficient availability of students. At first, a brief description about the B-school and its services will be discussed. Next, the market structure and competitive analysis of three selected countries will be conducted by figuring out major challenges and opportunities. Finally, the paper will conclude by summing up the entire discussion and findings. Brief Description about the Business School and Course Detail The management skill enhances the lifestyle of people as these skills are required at every stage of life including personal and professional. People with charismatic qualities have the inborn feature for managing the daily activities of life. However, proper academic education of management helps the students to develop strong platform for their career growth and success. The modern business world requires people with proper and sound management skills as it very important for organisational growth. A survey by the American Management Association revealed that “the top 10 managerial competencies and skills important to organizations” (Scalzo, 2008, p.162). The following table presents these 10 managerial competencies and skills. Table 1: Managerial Competencies and Organization Skills (Source: Scalzo, 2008, p.163) The academic education helps to shape these management skills and competencies of young students. The demand for MBA (Management in Business Administration) is increasing with increasing number of global students. Starting new B-school is considered to be one of the profitable ventures. ‘Global School of Business Management’ (GSBM) is a new start-up B-school that aims to provide management education to students and aspiring managers. The primary objective of GSBM is to develop management skills in future leaders of the business world. GSBM will be a London based privately-run business school with global operations through various divisional units or campus. Initially, the business school will start its operations in London, Australia and India. Considering the success and growth of its business in three countries, GSBM will decide to expand its operations in other major regions of the world. GSBM will open its business management schools in major areas where sufficient amount of students will be easily available. The core operation of GSBM is to offer academic services i.e. management knowledge and degree. Therefore, the primary focus is on quality of education offered to students. The objectives of the management education offered by GSBM are given below. To provide students technical knowledge about business strategy and its environment To nourish and foster managerial skills and competencies among students. To provide the students with a clear understandings of business activities in the global context. To help students to understand the practical application of the management skills and knowledge. The course content of business will include necessary subjects like, marketing strategic management, human resource, accounts & finance, economics & statistics, marketing research, business intelligence with information technology, international trade etc. In order to provide proper and effective knowledge about these subjects, professors with excellent academic and industrial experience will be recruited and hired. Market Analysis of Business School The GSBM will open its operational units in London, Australia and India for offering managements studies. In this respect, it is necessary to analyse MBA markets of these regions. The PEST analysis helps to understand the macro-environmental factors that influence the business. “PEST divided the overall environment into four areas and covers just about everything that can affect an organisation” and “the four areas are: Political, Economic, Social and Technological” (Gregory, 2000, p.49). Market analysis also includes competitive analysis and opportunities and challenges of a particular market. The MBA market analysis of United Kingdom, India and Australia are discussed below. United Kingdom United Kingdom (UK) includes Northern Ireland, England, Scotland and Wales with stable political structure. The government has established a sound and safe legal system and it is “based on common law tradition with early Roman and modern continental influences” (CIA-a, 2010). Recently, the UK Government has developed a department of education that is responsible for looking after educational affairs and children’s services (Department for Education, 2010). The Government also offers scholarships to potential students for their career growth. The UK has achieved a stable economic growth rate as industry and services sectors are quite developed. In 2009, the growth rate of UK was 4.8% with $35,334 of Per capita GDP (US Department of State-a, 2010). Due to high economic growth, the disposable income of people has increased and financially they have enough to afford higher education. The demographic character of UK is a major advantage for the growth of academic sector. In UK, 99% of the total population is literate. The population of this country is around 62,348,447 and 67.1% of the total population belongs to the age group of 15 to 64 years. The high literacy rate and high rate of young population indicates high opportunities for business school. In 2007, the UK Government allocated 5.6% of total GDP to education expenditures that helped in the growth of education sector (CIA-a, 2010). Technological advancements and infrastructural development are also very important for the growth of education. Well established communication and transportation system have added value to the growth of this economy. Nearly 33.209 million and 75.565 million of UK people are using telephones and mobile cellular respectively. The use of internet in this country has increased significantly in recent years. In 2008, the number of internet users in UK reached to 48.755 million and in this respect, it ranked seventh in the world (CIA-a, 2010). Quality Assurance Agency for Higher Education (QAA) is major authority of the higher regulation and it is responsible for maintaining the standard of higher education and academic infrastructure. QAA has set standard benchmark for maintaining the academic infrastructure that must be followed by the institutions. The following model developed by QAA depicts its responsibility for setting academic quality and standard. Figure 1 (Source: QAA, n.d.) London is the capital and the heart of the entire nation. Every year, a large number of students from abroad come to London for pursuing management degree in several business schools. In UK a number of privately or non-privately run business schools and universities are present that provides standard MBA degree. Some leading business schools and universities are University of Central Lancashire, University of Central England, Middlesex University, London Business School, Cass Business School, and Warwick Business School etc. The presence of these leading MBA institutes intensifies the competition in MBA market. However, the UK MBA market is very popular and, many students from different countries come to pursue business management courses. High availability of students leads to increase in profitability of this sector. Australia Australia has become one of the most preferred destinations for MBA aspiring students. The quality of education regarding management education in Australia has gained an exceptional popularity in the global MBA market. Every year, this country attracts many foreign students for pursuing business management degree. This is the prime reason for choosing Australia for establishing the MBA institute. The Australian Government enjoys federal parliamentary democracy with stable political system. In order to regulate and administrate, Australia is divided into six states and two major territories (US Department of State-b, 2010). The government follows the English common law and it includes proper legal policies for education system. Since 1943, there had been several revisions in higher education policies in order to bring development. The Department of Education, Employment and Workplace Relation is a government authority that is responsible for making “a fundamental contribution to the future of Australia and plays a vital role in Australia’s intellectual, economic, cultural and social development” (Department of Education, Employment and Workplace Relation-a, n.d.). Australia’s highly diversified natural resources are its major economic strength that attract high amount of foreign direct investments for industrial proposes. In 2009, the per capita GDP was around USD 40,000. Economic condition of the local people is healthy and sound as the unemployment rate is quite low i.e. 5.6% (CIA-b, 2010). The population of Australia is quite low as compared to its geographical area. The following graph presents Australian population by age. Figure 2: Population by Age (Source: Australian Bureau of Statistics, 2010) The above figure depicts that total percentage of 15 to 34 years is quite low indicating a threat of lower availability students. However, Australian people are ready to pay for higher education. Besides, in Australia, a large number of overseas student are available. The following table shows the number and percentage of students from different regions. Table 2 (Source: Department of Education, Employment and Workplace Relation-b, 2009) The above figure depicts that from the overseas, the Australian education sectors received 39,733 students and the rate of overseas student visiting Australia is increasing at high rate. Infrastructure and technology is one of the major contributors of growth in the academic sector. The communication system in Australia is quite strong as most of the people can access telephones, mobile cellular and internet. Nearly 15.17 million of people are using internet which is a very necessary part of infrastructure for academic sectors (CIA-b, 2010). The MBA market of Australia is quite competitive as many government and private business schools are present. Melbourne Business School is the most popular among business school. Australian Graduate School of Management, Macquarie Graduate School of Management, Curtin Business School, Griffith University MBA, and Deakin Business School etc are leading business schools of Australia that attract a large number of students. For a new business school in Australia, the overseas students are the major source of revenue (CIA-b, 2010). India India is a developing and the largest democratic nation in the world, situated in Southern Asia. For administrative purposes, the Government has divided the country into 28 states and 7 union territories. Like Australia, the Indian Government follows the English common law with “separate personal law codes apply to Christians, Hindus, and Muslims” (CIA-c, 2010). After its independence in 1947, the Indian government took the responsibility of promoting higher education. The government has established many national universities and colleges for perusing higher education. It also provides scholarships to encourage the meritorious students. The Departments of Higher Education of India has developed many policies “central scheme of scholarship for college and university students (Departments of High Education, n.d.). These activities help the academic sector to grow and it also encourage the private-run educational organisations to promote education. India is a developing nation with weaker economic strength as compared to Australia and United Kingdom. In 2009, India’s real growth rate was around 6.5% and in 2008, per capita GDP was $3,100 (US Department of State-c, 2010). The country is enriched with valuable resources like coal, iron, manganese etc, which makes it a potential market for overseas investors. Currently, India is considered to be one of the profitable markets in world as the Indian market has very huge customer base. In recent years, after the introduction of free trade policy, the disposable income of Indians has increased significantly and they are competing with other giant countries like China. They are now becoming more conscious regarding higher education. India is the second leading country in term of population after China. In July 2010, its population increased to 1,173,108,018 and 64.3% of the total population belong to 15 to 64 years age group. The literacy rate in India is lower than UK and Australia. 61% of the total population is educated. It can be interpreted as a drawback for opening a business school in India but increasing awareness for higher education indicates potential growth of academic sectors. The country’s expenditure on education in 2006 was 3.2% of GDP (CIA-c, 2010). It is expected that with economic development, the Indian Government will increase its expenditure for educational purpose. The strong communication infrastructure of India can be compared with developed nations of the world. 81 million of the population can able to use internet and it ranks fourth in this respect (CIA-c, 2010). To bring technological and infrastructural advancements, the country have collaborated with US and other developed nations. In India, there are more than 1600 business schools that targets fresh student without any experience. There are a large number of Indian student who peruse MBA degree from different national and international institute. In spite of the stiff competition, the profitability in MBA market is very high. Indian Institutes of Management is the leading and world renowned business school and a large numbers of privately-run university affiliated business schools are also present like India Institute of Foreign Trade, S. P. Jain Institute of Management & Research, ICFAI Business School etc. Conclusion Preparing a business plan is very necessary before starting up a new venture as it portrays the probability of success. The business plan helps to pave the way for new ventures for its future growth and development. A business plan includes several aspects of business. This paper presents the market analysis for the new business school. In this respect, it presents four broad sections. The first sections discusses about the new business school and its course structure. The second, third and fourth section analyses the market structure, conditions for opening a MBA school in UK, Australia and India. Reference 1. 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