Business Analysis of The Learning Centre (TLC)

 
Table of Contents
1. Executive Summary
2. Mission, Vision, Values
3. Market analysis
4. Critical Success Factors
5. Strategic Intents & Key Action Items
6.  Key Financial Assumptions
7. Annual Operating Budget
References
Appendix 1
1. Executive Summary
The Learning Centre (TLC) is a nonprofit organization who has been providing training programs to professionals for more than 30 years. With decades of operation, TLC has earned a good reputation national wide thanks to its core curriculum and skilled trainers. People show their interests of joining this team and carry on the excellent training programs. However, due to the switching of focus from training to service delivery, the training programs became money losing sector of TLC. TLC is now financially carried by its service programs. Unfortunately, many signs show that TLC may not be able to continue its service delivery in the coming fiscal year because its customers may not want to renew service contracts with TLC. The organization wants to switch back to its training services and expand its market to corporate training and to outside Ontario market.

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Base on the market analysis and the situation where TLC is at, the board has decided several strategic intents as well as critical success factors. The top priority for the organization is to stabilize its financial performance and divest its service delivery. Meanwhile, TLC needs to establish its corporate training services to bring income, which was brought by service delivery. Moreover, the board expect TLC to show its national presence as like it used to do. To achieve these strategic intents and fulfill all the critical success factors. The Executive Director has made an operation plan with 7 Key Action Items from aspects of location, marketing, client/customer relationships, human resource capability, and government relationships.
With action items above, TLC will be able to survive next year in terms of financial and operational performance. Moreover, with its training service model becomes mature, it has the opportunity to expand national wide. Thus, in the near future, TLC can be back to its glory time when it has many branches operating across the nation.
2. Mission, Vision, Values
In the mission statement, it shows that TLC will not only provide training services to professionals in the social service field, but also to organizations and corporations in order to help them achieve their goals.
The vision of TLC is to focus on organization customers and help them improve quality of service delivery. The vision also indicates that service delivery will no longer be part of TLC operations.
The values of TLC show the inclusiveness and competition strategy of TLC. TLC will not focus on offering cheap training services. Instead, TLC will focus on quality of training and guiding corporations to embrace future opportunities with innovations.
3. Market analysis
TLC is in the industry of training including professional development training, management development training, and business coaching, etc. Organizations in this industry highly rely on corporate customers’ profit, number of businesses in the industry, industrial capacity utilization, national unemployment rate, and needs for professionals in a certain industry (Ross, 2018).

（source：IBISWorld）
After post-recession period ending in 2016, businesses have revived, businesses start considering to take training as a means to increase their competitiveness and operation effectiveness.  By the end of 2018, the revenue of the industry in Canada has reached $1.2 billion and continued to grow till 2023. Thus, the industry has a bright future and it is profitable to run business in this industry (Ross, 2018).
From competition point of view, the players in the industry mainly compete on quality of service, reputation, price, flexibility and marketing, etc. The majority players in the market focus on providing training services to local businesses and professionals in different industries.
Therefore, the scale of competition in the industry stays on a local or regional level. However, the competition level of the industry is high because the competition not only comes from a huge number of the competitors within the industry, but also competitors from external industries such as universities, which can provide better structured and more professional training sessions to customers.
In Toronto market, there is one organization who is providing similar training program at lower price. Their pricing strategy may affect our market share and cause potential industrial price war in Toronto market. When customers are offered low price, their acceptance regarding price may be lowered and their recognition of value can be disturbed. Thus, our organization will be facing more sales and marketing pressure.
Our allies are our customers including schools, school boards, trusteeships and other social service institutes who are purchasing our training services and providing services to communities. Moreover, they also expect our training sessions can help them to improve their competitiveness so that they can better perform in terms of service quality, market share and reputation, etc.
Internal Implications
Strengths
TLC has good reputation over past 30 years, which enables the organization to develop its training programs with a solid customer base. Moreover, it is easier for the organization to use word-of-mouth to spread its competitive advantages in the market.
As a non-profit organization, TLC heavily relies on satisfaction of customers in the market. The reputation of its core curriculums has built a solid foundation for the organization to attract more customers to pay for training courses because customers believe that a well-regarded course is the most likely to bring them satisfied training experience. On top of that, 6 skilled trainers are another proof showing TLC has the capability to offer quality training services to customers.
In terms of expanding market, TLC has another strength, which is the core curriculums have applicability to other markets. In this case, once TLC secures local market, it has huge potential to expand its services national wide, just like what it did in the past.
Weaknesses
The aging problem is one of the major challenges that TLC is facing now. It is not feasible for TLC to depend on these aged trainers for a long time, which means the current operation of training services is not sustainable. To make things worse, TLC does not have recruitment process, which means that there is no approach for TLC to solve this aging problem in the current situation.
Other than human resource problems, TLC also has marketing and sales problems which are indicated in several aspects. The most significant weakness is that TLC has a negative cash flow, which makes the organization impossible to survive. Moreover, training service is losing money, and its poor location makes it difficult for TLC to acquire new trainees to boost its cash flow. On top of all these unfavorable situations, TLC doesn’t have marketing strategies or tactics, which means the organization has no idea and approach to change the situation to a better direction.
External Implications
Opportunities
The new Executive Director has good business connections which can help TLC to run its corporate training programs, and make marketing and public relationship easier to conduct for the organization.
From market point of view, people are interested in working for TLC to become trainers, which solve the aging problem in certain extent. Moreover, there are many areas of Ontario or national wide where TLC has not shown its presence now, which means that the organization still have abundant opportunities in the future if it wants to expand.
Threats
TLC is not the only organization that offers training programs in the market. There is one competitor running similar program at lower price. The competition environment is not favorable for TLC.
Meanwhile, although the organization is considering to divest service program, the losing-money training programs are not ready to take financial responsibility for the organization if the organization lose its service contracts.
4. Critical Success Factors
According to TLC’s mission, vision, values and its current situation. Critical Success Factors has been rearranged in the order basing on the importance of each factor to the survival of the organization.
Location
Location is the most urgent problem that needs to be solve at the moment because it is very difficult to attract new trainees with such a poor location, especially when the organization wants to develop its corporate training programs (Pearson, 1991). Location becomes critical. It is almost impossible for companies or organizations to spend a lot of time on transportation to receive training services. Convenience is as important as quality of training for them. Moreover, poor location increases the difficulty for marketing team to promote TLC to customers because a good location sometimes can indicate the financial and professional presence of an organization.
Marketing
From short-term aspect, the organization may face the situation that its service program may not bring cash flow for the next year, yet its training programs are not strong enough to financially carry the organization. In this situation, recruiting a marketing team becomes crucial for the organization. They can set up marketing and promotion strategies for training programs and take advantage of new Executive Director’s connections to cashing the organization’s reputation, training capability, and 6 experienced trainers.
Client/Customer Relationship
With a new location and a marketing team, the organization is ready to embrace more new customers. If the organization can carefully use its reputation in the market and its marketing team, it is easy for the organization to maintain a good relationship with current and potential customers. Thereafter, word-of-mouth can be easily spread, the reputation and attractiveness of the organization will certainly rise in the market. As a result, the training program will be able to bring positive cash flow to TLC.
Government Relationships
Good government relationships can be a useful insurance for TLC and its kind for two reasons. The first reason is that good government relationship may bring training contracts from governments, which can bring positive cash flow to TLC. Moreover, providing training to governments can help TLC to build an authoritative image to the public. Customers will trust the organization more in terms of its training quality. On the other hand, if the training program does not run well as expected, good government relationship has the potential to bring more grants to TLC, which can financially help the organization to survive longer.
Human Resource Capability
For the long-run, new trainers are a significant factor that decides whether the organization can sustain or not. With a well-designed recruitment process, TLC is able to hire more trainers with potential to help them expand training programs national wide. The 6 experienced trainers can help TLC to coach those new trainers so that the experienced trainers can pay more attentions to management roles with their experience in the market.
5. Strategic Intents & Key Action Items
According to Critical Success Factors above, the Strategic Intents and Key Action Items will be listed in an order basing on the importance of each factor to the survival of the organization. The planning style will be Integrated Planning because TLC is facing a financial crisis and opportunity now, it needs to respond to the market changes quickly. This plan is an ongoing process and actions will be taken towards different directions, they may not have significant influence on each other. Therefore, an Integrated Planning fits best for current situation.
Financial stability
Given the situation that service program may not renew contracts for the coming fiscal year, the only way to achieve financial stability for TLC is to make its training programs profitable. There are several aspects that TLC can do to grow its training branch faster.

Move to central business district (April 1, 2019- May 31, 2019; Administrative Officer)

Given that current location is poor and is rent month by month, TLC can pick a location in the central business district and move as soon as possible. TLC needs to contact office rental agency to find a venue that is best for holding training courses and close to customers. With a good location, TLC can better attract professionals, businesses and organizations. It is also very helpful to achieve the goal of 25% revenue coming from corporate training.

Set up marketing strategies (April 1, 2019- June 30, 2019; Executive Director)

TLC needs to sell its training programs quick and must have a positive cash flow. Therefore, marketing strategies and promotions are in need. The first thing is to identify its market position. There is an organization offering similar program and running at cheaper price, yet TLC cannot afford to have a price war against this organization because positive cash flow is critical to TLC’s survival. Thus, TLC can work on its reputation and core curriculums to differentiate from its competitors. TLC has a good reputation in the market for 30 years, which means it has more competitive edge on the side of quality and reputation. Moreover, TLC is currently focusing on corporate and organization customers, who are less sensitive to price. There is no need to fall into a price wall against its competitor.
Once the marketing strategies are set, TLC can start its promotion programs. It can sell its training programs in pre-paid model, which means if the customers pay for multiple courses in advance, TLC will offer them a discount (Patikar, 2013). This model can help TLC to earn positive cash flow for the short-run. Moreover, TLC can set up a membership program for customers, once the customers become member of TLC, they can enjoy extra trainings with a discount rate. The combination of above methods can boost TLC’s positive cash flow and increase stickiness of customers. This enables TLC has a healthy cash flow in the future.

Improve Human Resource Management (April 15, 2019- March 31, 2020; Human Resource Manager)

Human Resource management is crucial for training providers, especially for TLC. TLC has a marketing strategy of differentiating its training quality from its competitors, which indicates that good trainers are its core competitiveness. Thus, TLC need to work with recruiting agencies and websites to hire more talented trainers. With a comprehensive recruitment process, TLC are able to higher those young trainers who admire TLC’s reputation and history. At the meantime, TCL need to set up a series of human resource management process to have experienced trainers to coach new trainers, offer incentives to ensure that these trainers want to stay and grow within the organizations (Sisson, 2014). In this case, the transfer of experience and knowledge can be stabilized in the organizations. With such a stable talent management process, TLC will have a stable and repeatable business model that enables it to improve its training quality and consider next step of national expansion.
Divest of Service Delivery

Shut down service delivery (April 1, 2019- May 1, 2019; Executive Director)

Given the fact that TLC’s service contracts may not be renewed for the coming year. With the preparation mentioned above done, TLC can divest its service delivery right after it starts marketing activities. Although it will reduce some income from service fees, divestment of service delivery reduces costs for delivering the cost. The pre-paid course fees will make up the loss quickly.
Established as a Corporate Training Centre

Marketing communication and promotions focusing on for profit corporations (May 15, 2019- August 31, 2019; Executive Director, Marketing Officer)

With the new location and Executive Director’s connections, it is easy for TLC to promote its training courses towards for profit corporations. TLC’s reputation in the market can also attract corporations nearby. Therefore, 25% of revenue comes from for profit corporate would not be an unreachable target for TLC.
National Presence
National presence is a long-term and strategic move for TLC. With previous steps done, TLC will have a solid foundation in the Toronto market. The next step is to show its presence in Canada. There are several actions can be taken to ensure that TLC will have a good national presence.

Good Government Relationship (September 1, 2019- March 31, 2019; Executive Director)

Given the fact that new Executive Director has good business connections, he/she may be able to find connections in the government. In addition, as a non-profit organization, TLC has long been working closely with government, which enables it to build close relationship with government. With good government relationship. TLC can have better knowledge of updated polices which are relevant to its training programs. TLC can also receive more support from government when it wants to establish new branch in another city or province (Mondejar & Zhao, 2013).

Investigating other markets (June 1, 2019- July 31, 2019; Executive Director, Marketing Officer)

The TLC curriculum is applicable to other markets, which enables TLC to place its step on markets outside Ontario. The major program that TLC is offering is corporate training. This type of service highly relies on number of businesses in the market. Therefore, the recommendation for next market is Vancouver. British Columbia is the second largest province in Canada in terms of number of businesses, and Vancouver is the most economically active city in BC. Going to Vancouver will bring more opportunities to TLC. By the end of next year, it is possible to achieve 25% revenue coming from outside Ontario.

(Source: IBISWorld)
6.  Key Financial Assumptions

Due to divest of service delivery, there will be no income from service. 30% of service delivery fee will transfer into training income.

Previous customers of service delivery will have to hire service from other organizations or conduct services by themselves. These customers either need someone to help them train their internal service providers, or need training for management so that they can manager external service providers.

Training income will increase by 100% due to the change in marketing strategy and expansion to outside Ontario

Given the fact that new Executive Director has good business connections and new marketing strategy will work well in both Toronto and national market, the sales of training program will increase by 100%.

Costs will increase by 10% due to market expansion.

TLC will move its training branch to central business district and expand its market to BC. The operating costs will increase. However, due to the divestment of service delivery, the cost of delivering service will reduce. Therefore, the total cost will increase 10%.
7. Annual Operating Budget
As shown in Appendix 1, the operating budget for the coming fiscal year is in project style because it is project-based budget which clearly shows how money is earned or spent base on each project.
The budget shows that TLC can well survive in the coming year with new strategy. With the new Executive Director’s business connections and marketing activities. TLC will secure the training contracts from for profit organizations in both Toronto and Vancouver. Meanwhile, previous customers of our service will successfully transform into customers of our training programs. Therefore, our training will bring more than 25% to our organization and more than 25% customers come from outside Ontario.
References

Mondejar, R. P., & Zhao, H. P. (2013). Antecedents to government relationship building and the institutional contingencies in a transition economy. Management International Review, 53(4), 579-605.
Patikar, G. (2013). Service quality analysis of mobile communication: A comparative study between BSNL and private service providers. Sumedha Journal of Management, 2(1), 43-57.
Pearson, T. D. (1991). Location! Location! Location! What is location? The Appraisal Journal, 59(1), 7-20.
Ross, O. (2018). Business coaching in Canada. IBISWorld. Toronto: IBISWorld.
Sisson, M. (2014). How do we begin to embed a coaching culture in our organizations? Strategic HR Review, 13(3), 148-150.

 
Appendix 1

 

The Learning Centre

 

 
 
 
 
 
 
 
 
 

 

Operating Budget 2018/2019

 

 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 

Core

Training

Scarborough

Rexdale

Weston

MCYS

Inspiring Minds

MAD

MCSCS

Workforce

Film Stars

 

INCOME SOURCES

Administration

Services

Steps 2 Success

Steps 2 Success

Steps 2 Success

Outreach

 

 

Outreach

Challenge

Trusteeship

SUBTOTAL

Public Safety Canada Grant

$110,000.00

$110,000.00

 
 
 
 
 
 
 
 
 

$220,000.00

Training Fees

 

$400,000.00

 
 
 
 
 
 
 
 
 

$400,000.00

Thunder Foundation

 

$1,920.00

 
 
 
 

$32,200.00

 
 
 
 

$34,120.00

ESDC/Opportunities Fund

 

$7,500.00

 
 
 
 
 
 
 

$270,000.00

 

$277,500.00

ESDC/Skills Link

 

$30,000.00

$400,000.00

$400,000.00

$400,000.00

 
 
 
 
 
 

$1,230,000.00

Ontario MCSCS

 
 
 
 
 
 
 
 

$57,000.00

 
 

$57,000.00

Donations

 
 
 
 
 
 
 
 
 
 

$5,000.00

$5,000.00

Ontario MCYS

 

$9,360.00

 
 
 

$57,000.00

$90,000.00

$201,800.00

 
 
 

$358,160.00

Film Stars Trusteeship

 

$3,000.00

 
 
 
 
 
 
 
 

$80,000.00

$83,000.00

City of Toronto

 

$22,000.00

$22,000.00

 

$22,000.00

 

$22,000.00

 
 
 
 

$88,000.00

Rogers Toronto

 

$24,000.00

 
 
 
 
 
 
 
 
 

$24,000.00

BELL Toronto

 

$24,000.00

 
 
 
 
 
 
 
 
 

$24,000.00

RBC Toronto

 

$30,000.00

 
 
 
 
 
 
 
 
 

$30,000.00

CIBC Toronto

 

$30,000.00

 
 
 
 
 
 
 
 
 

$30,000.00

Rogers Vancouver

 

$8,000.00

 
 
 
 
 
 
 
 
 

$8,000.00

BELL Vancouver

 

$8,000.00

 
 
 
 
 
 
 
 
 

$8,000.00

RBC Vancouver

 

$10,000.00

 
 
 
 
 
 
 
 
 

$10,000.00

CIBC Vancouver

 

$10,000.00

 
 
 
 
 
 
 
 
 

$10,000.00

SUBTOTAL

$110,000.00

$727,780.00

$422,000.00

$400,000.00

$422,000.00

$57,000.00

$144,200.00

$201,800.00

$57,000.00

$270,000.00

$85,000.00

$2,896,780.00

 
 
 
 
 
 
 
 
 
 
 
 
 

EXPENSES

 
 
 
 
 
 
 
 
 
 
 
 

Salaries

$110,000.00

$22,000.00

$155,000.00

$134,000.00

$155,000.00

$47,000.00

$106,000.00

$107,000.00

$50,000.00

$160,000.00

 

$1,046,000.00

Benefits

$23,000.00

$2,000.00

$16,000.00

$15,000.00

$16,000.00

$6,400.00

$12,000.00

$13,000.00

$1,600.00

$15,000.00

 

$120,000.00

Training Costs

 

$400,000.00

 
 
 
 
 
 
 
 
 

$200,000.00

Youth Stipends & Bonus & Internship Wages

 
 

$190,000.00

$190,000.00

$190,000.00

 
 

$20,000.00

 

$50,000.00

 

$640,000.00

Contract Personnel

$60,000.00

$40,000.00

 
 
 
 
 
 
 
 
 

$100,000.00

Rent

$30,000.00

$15,000.00

$31,000.00

$31,000.00

$31,000.00

 
 

$41,000.00

 

$16,300.00

 

$180,300.00

Project Costs

 
 

$30,000.00

$30,000.00

$30,000.00

 

$12,500.00

$10,000.00

 

$21,800.00

 

$134,300.00

Office Supplies

$2,000.00

$5,000.00

 
 
 
 

$5,000.00

 
 
 
 

$11,000.00

Printing & Photocopying

 

$8,000.00

 
 
 
 
 
 
 
 
 

$8,000.00

Postage & Courier

$1,000.00

$2,000.00

 
 
 
 
 
 
 
 
 

$3,000.00

Telephone & Communication

$4,000.00

$4,000.00

 
 
 

$2,700.00

$2,100.00

$4,000.00

$1,800.00

 
 

$18,600.00

Staff Travel

$4,000.00

 
 
 
 

$900.00

$2,400.00

$2,400.00

$3,600.00

$6,900.00

 

$20,200.00

Board/Committee

$2,000.00

$1,000.00

 
 
 
 
 
 
 
 
 

$3,000.00

Insurance

$7,000.00

$5,000.00

 
 
 
 
 

$1,200.00

 
 
 

$11,200.00

Equipment Purchase & Rental

$3,000.00

 
 
 
 
 

$1,200.00

$1,200.00

 
 
 

$5,400.00

Membership Fees

$4,000.00

 
 
 
 
 
 
 
 
 
 

$2,500.00

Information Technology

$2,000.00

$2,000.00

 
 
 
 

$1,000.00

$1,000.00

 
 
 

$5,000.00

Bank Charges

$1,000.00

 
 
 
 
 
 
 
 
 
 

$1,000.00

Advertising, Sales & Marketing

$10,000.00

$2,000.00

 
 
 
 
 
 
 
 
 

$7,000.00

Professional Fees: Audit Legal Accounting

$22,000.00

 
 
 
 
 

$1,000.00

 
 
 
 

$19,000.00

Repairs & Maintenance

$1,000.00

$1,000.00

 
 
 
 
 
 
 
 
 

$2,000.00

HST Non Recoverable

$13,000.00

 
 
 
 
 
 
 
 
 
 

$13,000.00

Staff Training

$3,000.00

 
 
 
 
 

$1,000.00

$1,000.00

 
 
 

$4,000.00

Conference Expenses

$1,000.00

 
 
 
 
 
 
 
 
 
 

$1,000.00

Film Stars

 
 
 
 
 
 
 
 
 
 

$85,000.00

$85,000.00

SUBTOTAL

$303,000.00

$509,000.00

$422,000.00

$400,000.00

$422,000.00

$57,000.00

$144,200.00

$201,800.00

$57,000.00

$270,000.00

$85,000.00

$2,871,000.00

SURPLUS/DEFICIT

($193,000.00)

$218,780.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$25,780.00