The university of Glasgow is a leading institute of education sector in UK. The management of the university decided to internationalize hire education and the mission and vision of the university is to be the leading hire education provider world wide. According to the vision of the management a foreign branch campus of the university for Asian region is setup in central Singapore.
Our research and projections indicate that Singapore is the best location in Asian region for a foreign university with the potential growth in the education sector. The revenue figure is based on the projected number of students in first year. The first two years are the most challenging period for the organization, but in the third and fourth year of operations organization get more than 100% increase in its revenue. These sales level will produce respectable net profit in the third year of operations and exponential growth in year four and five.
The first year of formative operations will burn cash until revenue can commence. This is due to the organizational and regulatory obligations. Investment analysis is needed to handle the outflow of cash during this phase of business.
The organization has the following objectives :
- To provide same standard education services as in UK
- To start profit generation in the third year of operation
- To be a leading higher education provider
- To have a reasonable market share in higher education sector by the end of 5 years
- To be a long term profitable institution
To provide quality education and focuses on providing full education services with an emphasis to maintain international standards for higher education
Key to Successes :
- Obtaining the approvals from regulatory authorities
- Securing financing
- Highly experienced management
- Appropriate marketing strategies
- Quality of the services
- Efficient and effective cost management
The university of Glasgow is fourth oldest university of English speaking world. It starts it's operations in 1451 in the period of King James II of Scotland. For its first 9 years university based at Glasgow cathedral. In 1460 the university moved to high street where over the next 400 years it continued to expend both in it's scope and size. Due to expansion in 1870 the university moved to its current familiar west end location at Gilmore hill.
The university is a founder member of universitas 21 ( it is an international grouping of universities dedicated to setting world wide standards for higher educations). The university is the member of IRUN ( International research universities network). It is and international network of broad base research universities. The university of Glasgow is in the top 1% of universities in the world.
As location decision is a costly issue so these decisions carefully evaluated by the accounting and finance department. The decisions about the location is based of the competitive priorities like cost, quality, time and flexibility. The other factors like utilities cost, govt. taxes and real state cost and planning for future expansion is also considered while making the decision. After analyzing the location of competitors the management decided to follow the strategy of critical mass. The geographical information system used by the management for effective decisions about location.
After doing all the reports and analysis the site of Kent Ridge in central Singapore is selected for the foreign branch campus of the university. The hostel buildings will be constructed near by the teaching departments for the convenience of the student. One main library will be constructed in the center of the campus which will be available for all the students and staff of the organization then there will be departmental libraries for each individual department to facilitate the student and staff of that department. The current selected site is the main commercial area of Singapore with lot of other public facilities like entertainment, health and transportation are available in the surrounding of the current site.
The selection decision of the location is based on the following Performance Matrix,
To start up this project the organization require 20 million out of which 11.5 for start up business and 8.5 for cash reserves. High cash are required to offset the operating expenses before the organization reach its targeted revenue. The breakup of the startup cost is given in ANNEXURE 8 of APPENDIX.
Following sections include the description of services, sales literature and future services of the branch campus.
The Branch Campus is in the business of providing educational services. The service approach is that to provide higher education up to the international standards in a way that the organization get the status of leading higher education provider with profits.
All the Branch Campus literature about its courses offering fee's, scholarships, offers for under privilege students and all the marketing literature and about future development of organization is yet to be develop.
Future services of the branch campus included high qualities research degrees in waste area of studies. Offer more scholarships for under privilege students..
Pestle analysis is used to analyze the industry situation as hole and is often use in conjunction with various marketing analysis. Pestle analysis stands for political, economic, sociological, technological, legal and environmental factors. Under this project we analyze political factors which can effect the education industry in Singapore, economic situation and cultural trend of the community and various technological and legal aspects.
According to analysis the university should target the international students in Singapore, because the international students have more spending power and if the organization focus on the strength of consumer spending while making its policies, it will be more beneficial for the organization in long term.
As per social aspects of market analysis in Singapore the people have very strong attitude towards education. So it is still a good market for a British university to open its foreign campus.
Market Segmentation Strategy
Under the market segmentation strategy the Singapore education market can be divided into two segments, students and courses, students can be further divided into local students and international students. After the segmentation of students we can find out the value drivers for each customer segment, which is quality education. The market can be divided further in term of the number of the customers and value of the industry as a hole. The origination's market strategy will be to approach all potent ional customers.
Customer needs in education sector are uniform across different countries and geographical areas. Customer seeks quality, affordability and flexibility in their education. In Singapore education industry there is lot of growth for higher education and customers are expecting more value for their money.
- The competitors can be divided into two sectors
- local competitors
- foreign competitors
- Local Competitors
Following are main local competitors for the organization
The National University of Singapore was established in 1905 it is a public sector university and has a big market share with 33000 numbers of students. This university enjoying the competitive advantage of being the national university of the state. NANYANG TECHNOLOGICAL UNIVERSITY this university also has a big market share with 30256 numbers of students. SINGAPORE MANAGEMENT UNIVERSI is a private sector university which was founded in 2000 and has a 4742 numbers of students. SIM UNIVERSITY has the biggest market share with 7300 no's of students and is a fast growing institution in Singapore. Foreign Competitors
Following are the main foreign competitors for the organization
JAMES COOK UNIVERSITY is an Australian university which has a foreign branch in Singapore. It was established in April 2003 and has the strength of 1200 students. UNIVERSITY OF NEVADA LASVEGAS is an American university and has a foreign branch in Singapore. It is a private sector university with strength of 200 students. It was established in September 2006. UNIVERSITY OF CHICAGO GSB is a private sector university was established in 2000 and providing international standard of education. NEWYORK UNIVERSITY TISCH SCHOOL OF ARTS has its branch in Singapore which was established in 2007.
The foreign branch campus set its standards on course structure, quality, price, service, and location to deal with the competitors.
Marketing is targeted nationally. The advantage of national and highly identifiable market is that the media selections can be limited in a scope. The most effective media is educational publications other media would be all type of electronic media such as different educational programs on TV and radio. Newspaper and other print media can also be used.
To develop an effective marketing strategy to achieve its objective, the approach of marketing mix is followed by the management. Traditionally the marketing mix has been comprised of the 4P's: Product, Price, Promotion and Place (distribution)
However today two additional decisions tend to be added service and staff.
In addition to other marketing programs the organization would follow the right channel selection to provide the effective services to its customers with the view of market coverage and backup support facilities to avoid delaying in process.
Due to the effective cost operating structure of the organization, the organization would be able to offer services at less than 5%of the competitive foreign education market.
The organization would give quantity discount if the students get the admission in a group. The amount of discount varies with the size of the group. It is the pricing strategy of the university to offer special process on different courses. Geographical pricing strategy is followed by the organization in terms of local and international students. The students would provide different payment terms to pay off their tuition fee. The students can pay their fee in installments but there would be some extra amount for this facility. The students who would pay their dues in lump sum would be entitled for a 3% discount.
Promotion would be primarily outdoor advertising. In addition the organization would use the services of the experts for public relations for both customer and financial purposes. The combined budgeted amount for advertising and public relation would be maximum 10% of sales figure.
The customer contact matrix would be followed to provide services. The matrix is the starting point for evaluating and improving a process of service. In customer contact matrix, the front office process has high customer contact where the service provider interacts directly with internal or external customer. The hybrid office process has moderate level of customer contact and standard services. The back office process has low customer contact and little service customization. The back office process would support front office for effective services delivery.
Staff Hiring Process
In addition to other strategies the organization would develop the strategy for staff recruitment. For this purpose the human resource department will be established to select the right people for various business operations. Human resource department will recruit the staff and then select the most suitable people and then determine the market based pay according to their education and the relative work experience. According to the HR strategies the organization can hire 30% of its teaching staff as visiting faculty. The concept of performance related pay would be followed to determine staff salaries, bonuses and other benefits of jobs. According to the HR strategies of the organization there would be different workshops and training sessions for staff development and their capacity building.
The HR department would also develop different code of conducts to deal with various issues like employ relieving from service, grievance policy, and removal from job etc.
Process Strategy Development
In making process decisions, management has to focus on controlling such competitive priorities such as quality. time, cost. Process management is ongoing activity for the organization with the same principles applying to both first time and redesign choices. Process strategy would specify the pattern of decision made in managing processes so that they achieve their competitive priorities. Process strategy guides the organization in variety of process decisions, and intern in guided by operations strategies and the organizations ability to obtain the resources necessary to support them.
All the process of the campus are connected with strategic issues. The business has the right people to manage the processes and they are accountable. The process strategy of the organization is implemented to create an infrastructure for continuous process improvement. The foreign campus has following three core process,
Admission is one of the core processes of the organization. To manage this process the organization develop the different admission criteria for different level of courses. The branch campus will determine the process type relative to the kinds of resources needed. All the resources to carry on the admission process will be partitioned according to their key characteristics. The students and staff will be involved in this process and it will increase their participation. Capital Intensity approach will be followed by the branch campus to dealing with equipment and human skills.
Teaching is also one of the core processes of the business. To manage the quality of the branch campus not only the same teaching standards but also the same syllabus will be followed of the parent university. There will be continue improvement mechanism to manage the teaching process of the organization. The resources will allocated in this process according to it's characteristics. In this core process the strategy of customer involvement will be followed ,by adopting this strategy customer become part of the process.
Exam process of the branch campus is highly developed and systematic. All the examiners will examine the papers according to the standard marking criteria to develop a standardization in the process. All the results must be announced within a certain time frame. In this process the strategy of process structure will be followed by branch campus to determine the process type relative to the kinds of resources needed. The element of cost and quality will be applied through the strategy of capital intensity.
There are two basic change strategies for analyzing and modifying processes.
- Process reengineering and
- Process improvement.
There are three principles concerning process strategies are particularly important.
- The key to successful process decision is to make choices that fit the situation and that make sense together. In the organization they should not work at cross purposes with one process optimized at the expense of other processes. A more effective process is one which matches key process characteristics and has a close strategic fit.
- In individual processes for the organization is to create the whole supply chain. The cumulative effect on the customer satisfaction and competitive advantage is huge.
- Whether processes in the supply chain are performed internally or by external suppliers and customers, management would have to pay particular attention to the interfaces between processes. Having a deal with these interfaces underscores the need for cross functional coordination.
Processes are everywhere and are the basic unit of work in the organization. They are found in accounting, finance, human resources, management information system, marketing and operations. Management must make sure that their processes are adding as much customer value as possible. A coherent process strategy would be followed by the organization to manage supply chains effectively. Each process in the chain from service providers to customer would be designed to achieve its competitive priorities and add value to the work performed.
It will be the main objective of the organization to maintain the quality in various operation of the business for this purpose the organization developed strategy to evaluate the performance of different processes and it is also necessary for managing supply chains. It will be the main focus of the organization to satisfy the customers through the exceptional performance of it's processes. Like other global organizations the university will spend significant time, effort and expense on systems, training and organizational changes to improve the quality and performance of their processes.
In the branch campus of the university to maintain the quality of the process the strategy of TQM will be followed. The main objective of all the processes will be to satisfy the customers. All the employees will encourage to involve in various operations and a continues improvement in the processes will be followed.
In the branch campus the same quality of services will be provided to students towards their education and exam as these services are provided to the students who are studying in the university it self.
The organization's aim is to win the BALDRIGE awards which is a quality award and promotes, recognizes and publicizes, quality, strategies and achievements by out standing organizations.
In the organization the capacity Timing and sizing strategies will be followed to manage number of students and other operational process with respect of time factor in the beginning of the operation most of the process like student recruitment, examination, libraries and IT services will be under utilize but in the coming future are in short run all of these process will work at 100% capacity level. So in the long run the university will have to made a capacity cushion to handle with future uncertainty in terms of various process. The strategy of managing capacity will identify the gaps within the exiting capacity of the organization. It will be very helpful for the organization in the future to major the capacity level of its different process. This capacity gaps may positive or negative and relates to the difference between projected capacity and current capacity.
If in the future the university campus has the situation where the demand of different services and process are grater then the capacity, at this level the organization will incur more cost to increase its capacity to cop with projected gaps. After cop with all capacity gaps the management of the campus will evaluate all the process on basis of qualitative and quantitative concerns.
Table of projected number of students and its graphic presentation are shown in ANNEXURE 2 of APPENDIX.
Supply and demand of the process will be balance if the organization makes the accurate forecast. Forecast will be very helpful to manage processes and supply chains. In university campus one of the core processes is teaching to students so the management will continues observe the demand from market for this process to forecast the future values. The organization will follow the different demand patterns to forecast the different processes and after forecasting the demand the future strategy will be developed for planning capacity, quality, and for different other process. For the effective forecasting the management will hire the services of the experts for collaborative planning, forecasting, and replenishment.
In Singapore campus to estimate the future demand and supply of various process judgment methods are used in the beginning of the operations for this purpose the organization will consider the expert opinions and market surveys. In future or after two to three years of operations the organization will use the causal methods and time-series analysis for forecasting. Causal methods and time series analysis will be based on historical statistical data of the organization in the past years.
The university will treat the forecasting as a continues process of the organization rather than a set of techniques and it will be the cause of success for the organization in the long run.
Table for projected number of students is given in ANNEXURE 2 of APPENDIX.
Table of the projected revenue figures is given in ANNEXURE 3 of APPENDIX
The process of operational planning and scheduling will be followed to insure the balance of demand and supply. All the functions of the campus will be coordinate with planning and scheduling. All the department of the organization will have their own work force and management of the departments have the choice of to schedule the work. In the Singapore campus the management will plan and schedule the different process like admissions, recruitment, class schedule, exam schedule, results, IT facilities, libraries and staff availability. Scheduling is the last step it takes the operation and scheduling process form planning to execution. It is an important aspect of supply chain. The management developed the schedule for each process to carry on the operations smoothly like in the beginning of each semester the cut off dates will be announce for admission and recruitment. After this, process of class schedule will be manage and than the schedule for exam and the process to notify the results to the students will be develop.
To deal with working capacity the work force scheduling will be followed. This is a type of scheduling that determine when employees work. By adopting this management can work out more effectively on duty and off duty periods of every employee within a certain time. While dealing with work force scheduling the management of the campus consider all the constraints including the legal and behavioral considerations in Singapore. The management adopt the policy of rotating schedule in this way each employee will have same opportunity of working day and non working days.
The management of foreign campus in Singapore is highly qualified. All of the members have vast experience of education sector. On the back of the foreign campus the management of Glasgow university in UK is very supported and helpful. The management of campus is also very effective to deal with governmental approval procedures and to deal with different managerial and operational issues. We believe that due to having the team of experts, it will enhance our ability to obtain the required objectives.
Division of Structures
- Management department.
- Accounting and finance department.
- Operational department.
- Marketing department.
- Services department.
- Mr. N Abid (President) N Abid has 25 years of teaching experience and was retired from the position of head of department of managerial studies in the university of Bradford.
- Mrs. Chitra sing ( Head of Operations)
- Mr. B J Noshad (Head of Accounting and Finance)
- Mrs. Sonali kapoor (Head of Marketing)
- Mr. James Thomos (Head of service Department)
The financial plan is based on some important assumptions which are listed down,
- It is assumed that in the economy of Singapore there is no major recession.
- It is assumed that equity capital and finance is sufficient to maintain the financial needs.
- It is assumed that in Singapore there is no political issues for foreign nationals.
Key Financial Indicators
Following are the key financial indicators of the business,
Projected Cash Flow
The balance of cash flow is positive from the initial capital infusion. From first year of business the organization is generating cash from it's operations which is continually increasing in every coming year. The organization has enough cash reserves so, there is no need for any borrowing.
Projected Income Statement
The business is generating profit in the first year of operations and this profitability improves with modest percent of sales in the second year. In the next coming years the business is generating healthy amounts of profit due to increase in the revenue.
Projected Balance Sheet
The projected balance sheet is showing the financial strength of the organization and it will illustrate the growth of the business.
The key business measurement ratios are provided these ratios are based on the projected values and will explain the business situation in more effective way. In the first year net income was 38.55% of sales which increase to 58.14% in 2nd year and is continually increasing in the coming years due to effective business strategies.
The projected result and analysis show that it will be a successful project to open a branch campus of foreign university in Singapore. The growth of the business will be broadly based on the operational strategies of the organization. In the future the branch campus can increase it's customer base by expending it's operational capacity. As the projected analysis shows the overall revenue and net profit figures are increasing in every year and net cash inflow from activities also showing a very good performance for the organization. The branch campus performance is driven by operational strategies of key processes of the business.
The overall financial and operational performance of the business is quite strong with encouraging growth figures in equity and profitability.
- J.Krajewski, P.Ritzman, K.Malhotra. Operations Management 9th ed