Initial Business Proposal
Business Concept
Ideas Knowledge (IK) School is an education related. We understand teachers in school are overworked, underpaid and having large amount (35-45) of students in every class and they do not have enough time to finish the syllabus and do further explanations. (Nair, 2012)
Slowly, it becomes parents and guardians worries because parents busy with works and they do not have time for their children education. IK will help to solve difficulty such as improving their weak subjects, coach them, motivate them in studies as well as answer their doubt on academic.
A research of 100 different categories of students was carried out earlier. (Appendix 1) It stated very clearly that only three out of hundred is not attending tuition or coaching. Besides that, tuition industry had contributed RM4 Billion in the growth of Malaysia. With these facts, it is very clear that tuition industry potential and future scenario. (Lim Seng Poh, 2006)
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Malaysian parents even willing to spend RM200 to RM2000 a month on children tuition fees. (Nair, 2012) Research also stated that, two thirds (14%) of the households in Asia/Pacific spending enrichment classes for their children such as academic tuition, foreign language classes and public speaking. (MasterCard, 2013) 46% of Malaysian parents willing to spend extra tuition classes fees. (Appendix 2)
Mission and Vision
Mission
Ideas Knowledge (IK) School belief that it is our responsible to teach and ready them with academic skills and values so that they are able to meet the future challenges. We believe that encourage the students to challenge, question and debate their ideas is good because they able to do critical thinking and very creative individuals in the future. (Gan, 2012)
Vision
Ideas Knowledge (IK) School will inspire the desire for knowledge and learning. Not just with excellence result but also be enterprising, creative spirits, responsible and cultivate caring in children is the future needs and wants of society. We provide the society with independently, proactive learners with interest, motivation, confidence, discipline, skills and characteristics to succeed. In the future, IK will be the leader of tuition industry. Target Market
‘Shadow’ education is expanding at an alarming rate. Household’s income being spend on tutoring. (ADB, 2012) Malaysia parents are more particular in academic tuition (46%), Sport (36%) and music instrument (32%). (Appendix 3) (MasterCard, 2013) From this research, we able to understand that parents nowadays are more concern on children education level.
The number of student enrolled at the primary level in government-aided religious school has increased 9,284 students. (Appendix 4) But, the enrolment in primary level decrease from 2,859,921 in 2011 to 2,708,981 in 2014. (Appendix 5) Tuition and extra classes become the growing industry within Malaysia because there are strong demands towards the supply. At the same time, 2,967 registered tuition centre with the attending number of 194,567 students. (Nair, 2012)
Around Selangor area, there are more than 600 primary schools. We will target the primary school students around Subang Jaya area such as SK Dato Onn Jaafar, SJK (C) Chee Wen and etc. Not just Chinese students, but all ethnic groups of Indian, Chinese and Malays.
Competitive Strategy
4.1 Product and Services
4.2 Price
Ideas Knowledge (IK) School offer tutoring class for primary school students in small group (maximum 10 students) and medium group (not more than 20 students) because this can help them concentrate. (Venus, 2013) However, the variety of the subjects offered in tuition mimics those in schools. (Lim Seng Poh, 2006)
The differences between us and competitors are we provide coaching, counseling and outdoor activities services to the students. We also provide few facilities for the students, such as library. It is to make sure that they are not just excellent mentally but also physically.
Penetration pricing strategy means selling product in lower pricing so that it can attract customers. (Roth, 2007) Sell product lower than the usual price can encourage customer to switch from old to new product. (Riley, 2012) Ideas Knowledge will use this strategy to begin the business. With this, the parents will consider our tuition centre first rather than others. When the business is on the right track, price will slowly be increase. But, no worries of price can’t be afford or not reasonable.
4.3 Place
4.4 Promotion
Ideas Knowledge will locate in USJ 21. It is opposite The Main Place shopping Mall. Nearby area are all residences and office lot. The percentage for parents to visit our tuition centre is higher. There are a lot of facilities nearby such as shopping mall, restaurant, bank, etc.
In the future of two to three years, there will be even more conveniences because rail station will be nearby. (Appendix 6) Students can travel from other place to attend classes.
Through the research and analysis, there are more than 13 million of Malaysian are a Facebook user. It is a fastest and easier way to promote out Ideas Knowledge (IK) School. By using this kind of social media, we do not need to spend a single cent on promoting the business as well have reaching the potential customers. Besides that, in this technology centuries, every students owned social media account for example Facebook, Instagram, etc.
Nevertheless, we will also promote it on school since there are few schools nearby. When promoting in school, students are require to fill up their basic personal data such as name, Facebook account, address, etc. All databases will keep for future uses such as share some academics knowledge, etc. We will also give out some flyers and prizes for students so that they can remember our centre.
PEST
Political
Since independence, Malaysia government keep sustain in investing of education. Malaysia federal governments spend the highest percentage of GDP (Gross Domestic Product) on primary and secondary education in East Asia. (Appendix 6) (MOE, 2012)
Programme for International Student Assessment (PISA) is to evaluate the quality of educational outcomes. Year 2009, it was the first time Malaysia participated in the program and the ranking was not good. (Appendix 7) But, Malaysia aim to rise from bottom third to the top third in PISA ranking within two decades. (Gan, 2012)
Economical
Year 2012, the inflation rate increased up to 1.6%. 2009 and 2012 Department of Statistics’ Household Income Survey stated that it is a huge income gap between years 2009 to 2012. (Appendix 8) (Shams, 2014) As for the Salary Survey 2013 by the Malaysia Employers Federation (MEF), stated that salaries for executive increased 6.3% while salaries for non-executive increased 6.7%. (The Malaysian Insider, 2014) Malaysia Prime Minister introduced a new proposal that will let the civil servant to enjoy annual salary increment between RM80 to RM320 called New Civil Services Remuneration Scheme (SBPA). (The Malaysian Insider, 2014)
Since Goods and Services Tax (GST) going to implemented in April 2015, KPMG Malaysia urged both public and private sectors to gradually increase salaries.
Social
Tutoring is one of the top 16 industries worldwide and the growth rate is 7% in year 2011. (ICEF Monitor, 2012) The magazine and website Inc. stated that start a new business, tutoring is the best choice.
Among the parents, tuition is the latest trend that keeps growing in this recent year. They will send their children into extra classes and early child education programmes. Survey stated that about 82.2% of students said that tutoring allowed them to gain knowledge and 62.4% of students able to aim higher marks are because tutoring. (Kenayathulla, 2014) Even thought parents does not have strong evidence of the effectiveness of tutoring but the strong belief in efficacy of tutoring regarding the teaching and delivery methodologies used in tuition centre. (Tsang, 2012)
Technological
Ministry of Education Malaysia said that the government is trying their best to improve in term of education system and aspiration of individual students. Nevertheless, they also introduce ‘1 BestariNet’ to society. (Terrapinnspore, 2013)Thus project able to provide students and teachers a virtual learning environment.
The latest technology that adopted by the Malaysia Ministry of Education is a technology which is a UK-based Frog / FrogAsia. It’s a type of e-learning system that allowed teachers, students, and parents have connection. They providing user to maximize own strength and develop leadership skills in flexible time and fast growing environment. (Frogasia, n.d.) They also provides effective access to classes, tests, homework, grades, assessments, academic or museum website links, etc. (Strauss, 2013)
Personal and Business SWOT
Strengths
Weaknesses
Able to communicate in few language (Malay, English, Mandarin, Cantonese)
Talkative and friendly
Management knowledge
Lack of leadership skill
Lack of experiences in handling business
Weak social networking
Opportunities
Threats
Quick learning
Willing to gain experiences and listen to others
Competitors in tuition industry keep increasing
Parents and guardians unsatisfactory
Social Aspect
Parents and guardians always busy with work and not involving in children growth. Ideas Knowledge (IK) School created positive impression to the society in tutoring academic. We offer academic tuition, coaching and outdoor activities to children because with this, they can leave electronic devices and enjoy. As for parents, we will discuss and update them their children behavior and academic result once a while. This is to make sure that no matter how busy parents are, they can still involve in children growth.
References
Lim Seng Poh (2006) The impact of Service Quality Dimensions Towards Customers’ Satisfaction in Tuition Centers [online], Available at: http://library.oum.edu.my/repository/241/1/The_impact_of_service_quality.pdf, [accessed 29 Jun 2014]
Venus (2013) Things You Should Know About Sending Your Kids to Tuition [online], Available at: http://www.venusbuzz.com/archives/41600/things-you-should-know-about-sending-your-kids-to-tuition/, [accessed 29 Jun 2014]
The Straits Times (2008) Tuition Nation [online], Available at: http://news.asiaone.com/News/Education/Story/A1Story20080616-71121.html, [accessed 29 Jun 2014]
MasterCard (2013) Press Releases: Two Thirds of Asia/Pacific Parents Spending on Extra Tuition for Kids: MasterCard Survey [online], Available at: http://newsroom.mastercard.com/press-releases/two-thirds-of-asiapacific-parents-spending-on-extra-tuition-for-kids-mastercard-survey/, [accessed 30 Jun 2014]
ADB (Asian Development Bank) (2012) ADB Study Highlights Dark Side of ‘Shadow Education’ [online], Available at: http://www.adb.org/news/adb-study-highlights-dark-side-shadow-education, [accessed 30 Jun 2014]
MOE (2012) Preliminary Report Malaysia Education Blueprint 2013-2025 [online], Available at: http://www.moe.gov.my/userfiles/file/PPP/Preliminary-Blueprint-Eng.pdf, [accessed 1 July 2014]
Penang Monthly (2013) Statistics – November 2013 [online], Available at: http://penangmonthly.com/statistics-november-2013/, [accessed 1 July 2014]
Penang Institute (2013) Statistics – November 2013 [online], Available at: http://penanginstitute.org/v3/resources/articles/statistics/541-statistics-november-2013, [accessed 3 July 2014]
Nair, N. (2012) Increase in Demand for Tuition in Malaysia [online], Available at: http://www.thestar.com.my/story.aspx/?file=%2F2012%2F11%2F5%2Fmetrobiz%2F12265348&sec=metrobiz, [accessed 3 July 2014]
Noordin, Z. (2014) Education first, politics second, says deputy minister [online], Available at: http://www.freemalaysiatoday.com/category/nation/2014/01/20/education-first-politics-second-says-deputy-minister/, [accessed 4 July 2014]
Malaysia Educational Statistics (2013) Quick Facts 2013 [online], Available at: http://emisportal.moe.gov.my/emis/emis2/emisportal2/doc/fckeditor/File/Quickfacts_2013/quickfacts2013.pdf?PHPSESSID=abafcb466e89e750e551d9c7308ad840, [accessed 4 July 2014]
Malaysia Educational Statistics (2012) Quick Facts 2012 [online], Available at: http://emisportal.moe.gov.my/emis/emis2/emisportal2/doc/fckeditor/File/Quickfacts_2012/quickfacts2012.pdf, [accessed 6 July 2014]
EMiS (n.d.) Statistik Ringkas [online], Available at: http://emisportal.moe.gov.my/mainpage.php?module=Maklumat&kategori=47, [accessed 6 July 2014]
Gan, P.L. (2012) Can it transform our education system? [online], Available at: http://www.selangortimes.com/index.php?section=insight&permalink=20121018152643-can-it-transform-our-education-system, [accessed 6 July 2014]
Penang Monthly (2014) East Malaysia in Numbers [online], Available at: http://penangmonthly.com/east-malaysia-in-numbers/, [accessed 6 July 2014]
MOE (2014) Bab 5 Membangun Dan Mengekalkan Modal Insan Bertaraf Dunia [online], Available at: http://www.moe.gov.my/userfiles/file/RMK10bab5%2014_6_10.pdf, [accessed 6 July 2014]
ICEF Monitor (2012) Global Tutoring Industry Experiencing Explosive Growth [online], Available at: http://monitor.icef.com/2012/11/global-tutoring-industry-experiencing-explosive-growth/, [accessed 6 July 2014]
Tsang, H. (2012) Private Tutoring in Malaysia: Regulating for Quality [online], Available at: http://www.asiapacificmemo.ca/private-tutoring-in-malaysia-regulating-for-quality, [accessed 7 July 2014]
Roth .S.A, (2007), “Penetrating Pricing, Understand Pricing Objectives and Strategies” [online], Available: http://pubs.cas.psu.edu/freepubs/pdfs/ua441.pdf, [accessed 7 July 2014]
Kenayathulla, H.B. (2014) Teachers’ perceptions on the effectiveness of private tutoring in Malaysia [online], Available at: http://ries.revues.org/3801?lang=en, [accessed 7 July 2014]
The Malaysian Insider (2014) Statistics Department survey shows average household income up 7.2% – Bernama [online], Available at: http://www.themalaysianinsider.com/malaysia/article/statistics-department-survey-shows-average-household-income-up-7.2-bernama, [accessed 8 July 2014]
Shams, H.N. (2014) [2727] Income Distribution of Malaysian Household, 2009 and 2012 [online], Available at: http://maddruid.com/?p=11965, [accessed 8 July 2014]
Eric (2013) Strategic Location for Main Place Resident [online], Available at: http://mainplaceresidence.blogspot.com/2013/08/strategic-location-for-main-place.html, [accessed 8 July 2014]
Riley, J. (2012) Pricing – Pricing Strategies [online], Available at: http://www.tutor2u.net/business/gcse/marketing_pricing_strategies.htm, [accessed 8 July 2014]
Strauss, K. (2013) Malaysia Taps Frog To Teach Its Youth [online], Available at: http://www.forbes.com/sites/karstenstrauss/2013/05/08/malaysia-taps-frog-to-teach-its-youth/, [accessed 9 July 2014]
Frogasia (n.d.) Careers at Frogasia [online], Available at: http://www.frogasia.com/v3/careers/, [accessed 9 July 2014]
Video
Terrapinnspore (2013) DDG of Ministry of Education, Malaysia, Shares on Education Technology, 11 May, Available at: http://www.youtube.com/watch?v=ceix4SpLBuo, [accessed 10 July 2014] Appendices
Appendix 1
Private Tutors
Tuition Centre
Both ‘type’ of coaching
No tuition
100 Primary, Secondary and junior college students
49
32
16
3
(The Straits Times, 2008)
Appendix 2
Country
Percentage (%)
India
54 %
Taiwan
52 %
Thailand
52 %
Malaysia
46 %
Singapore
45 %
Chinese
53 %
Korean
50 %
Hong Kong
50 %
Households in Asia/Pacific spend extra tuition classes for their children (MasterCard, 2013)
Appendix 3
Academic
Sport
Foreign Language
Music
Art
Public Speaking
Others
Asia/ Pacific
32%
28%
24%
22%
15%
5%
8%
AU
7%
36%
6%
4%
6%
3%
9%
NZ
9%
43%
8%
15%
4%
2%
12%
CN
26%
38%
53%
41%
32%
7%
5%
IN
54%
16%
10%
15%
15%
17%
2%
MY
46%
36%
17%
32%
17%
8%
10%
PH
14%
33%
5%
16%
10%
2%
5%
SG
45%
31%
8%
24%
14%
7%
9%
KR
33%
28%
50%
32%
15%
2%
10%
TW
52%
17%
39%
31%
17%
1%
19%
MM
35%
4%
23%
1%
2%
1%
1%
Children’s Participation in Enrichment Classes in Asia/Pacific (MasterCard, 2013)
Appendix 4
Type of Schools
2011
2012
2013
National
2,150,139
2,106,603
2,063,666
National type (C)
598,488
591,121
566,324
National type (T)
102,642
97,884
92,919
Special education
1,606
1,535
1,479
Sports
11
4
9
Special Model – secondary with primary level from Year 4-6
1,055
1,014
901
Special model (K9) – primary with secondary level from Form 1-3
224
207
1,831
Gars
5,756
6,037
15,040
Total
2,859,921
2,804,405
2,742,169
Enrolment at primary level by type of schools, 2011-2013 (Penang Institute, 2013)
Appendix 5
Schools
2011
2012
2013
2014 (31 Apr 2014)
Pre-school
176,822
186,298
190,874
196,114
Primary
2,859,921
2,804,405
2,742,169
2,708,981
Secondary
2,296,034
2,281,224
2,296,189
2,253,160
Enrolment at Pre-school, Primary and Secondary Level (2011 – 2013) (Malaysia Educational Statistics, 2013)
Appendix 6
Strategic Location for Main Place Residence (Eric, 2013)
Appendix 7
Malaysia’s Basic Education Expenditure 1 As % of Total Government Expenditure for Malaysia and Peers (Penang Monthly, 2013)
Appendix 8
Comparison of Malaysia’s PISA 2009+ ranking against other countries (Gan, P.L., 2012)
Appendix 9
Households’ Monthly Income (Shams, H.N., 2014)
Module Title: ILP 326 New Business Development
Prepared by: Peck Jie YiPage
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