8/3/2019 SM Michael Bestari
1/38
Table of Contents
Table of Contents.......................................................................................................1
1.0 Corporate Profile ............................................................................................... 3
1.1 History ............................................................................................................... 3
1.2 Vision, Mission and Objectives ........................................................................... 5
Vision ................................................................................................................... 5
Mission ................................................................................................................. 5
Objectives ............................................................................................................ 5
1.3 Corporate Social Responsibility ......................................................................... 6
2.0 External Factors ................................................................................................... 7
2.1 PESTEL analysis ................................................................................................ 7
Political factors ..................................................................................................... 7
Economical factors ............................................................................................... 8
Socio-cultural factors ............................................................................................ 8
Technological factors ........................................................................................... 9
Environmental factors .......................................................................................... 9
Legal factors ....................................................................................................... 10
2.2 Five forces industry analysis ........................................................................... 11
Threat of New Entrants (Weak) .......................................................................... 11
Threat of Substitute Products or Services (High) ................................................ 12
Bargaining power of suppliers (Weak) ................................................................ 12
Bargaining power of buyers (Medium) ............................................................... 12
Degree of Rivalry Among Existing Players (High) ............................................... 12
2.3 Competitive Profile Matrix ............................................................................... 13
3.0 Internal factors ................................................................................................... 15
1
8/3/2019 SM Michael Bestari
2/38
3.1 Strengths, Weaknesses, Opportunities and Threats analysis .......................... 15
3.2 Tows Matrix ..................................................................................................... 17
3.3 Boston Consulting Group Growth Share Matrix ............................................... 19
3.4 Product Life Cycle ............................................................................................ 21
Reminding Advertisements ................................................................................ 21
Maintain the brand names ................................................................................. 21
3.5 Financial Analysis ............................................................................................ 22
4.0 Strategy Development ........................................................................................ 26
4.1Current Strategy .............................................................................................. 26
4.3 Porters original generic strategies .................................................................. 30
4.4 Grand Strategy Matrix ..................................................................................... 31
................................................................................................................................. 31
5.0 Conclusions ........................................................................................................ 33
6.0 Recommendations .............................................................................................. 34
8.1 Articles ............................................................................................................ 36
8.2 Books ............................................................................................................... 36
8.3 Official publications ......................................................................................... 37
8.4 Websites .......................................................................................................... 37
2
8/3/2019 SM Michael Bestari
3/38
1.0 Corporate Profile
1.1 History
Raffles Education Corporation (REC) Limited established its first college in Singapore in
1990 and was founded by Mr Chew Hua Seng. REC provides services in thirty three
cities across thirteen countries in the Asia Pacific region. The Headquarters is located in
Singapore and currently employs two thousand nine hundred academic and
administrative staff. REC currently has more than thirty thousand students enrolled
(Raffles Education Corporation 2009).
REC currently operates with their main brand names such as Raffles Design Institute
(RDI), Raffles Merchandising Institute (RMI), and Raffles School of Business (RSB).
, , (Source: Raffles
Education Corp 2009)
REC has shown rapid growth, it started with one small college and is now a
multinational education provider in thirteen countries. This growth includes an increase
in the number of colleges and levels of education; ranging from Diploma, Degree to
Masters Level. The graph below will help to show REC growth.
3
8/3/2019 SM Michael Bestari
4/38
Source: (Raffles Education Corp 2009)
4
8/3/2019 SM Michael Bestari
5/38
1.2 Vision, Mission and Objectives
Vision
Vision is a driving goal, usually inspiring and on a long term basis (Dess et al 2008).
RECs vision is to be the premier education group in Asia Pacific (Raffles Education
Corp 2009).
RECs vision statement shows a strong direction for their employees and at the same
time it motivates their employees to reach REC long term goals.
Mission
Mission can be defined as a set of organizational goals that include both the purpose ofthe organization and its scope of operations and the basis of its competitive advantage,
It tends to be more specific and address question (Dess et al 2008).
REC is committed to provide quality education through their network of institutions in the
Asia Pacific region to develop industry relevant skilled professionals (Raffles Education
Corp 2009)
The mission statement of REC shows their short term goals. REC wants to provide the
same quality of education in all their branches located in the Asia Pacific and India. This
is to avoid one college having better standards than the other colleges. Due to this
RECs short term goal is to make sure they have standards of quality in all their
branches.
Objectives
RECs objectives are to provide high level of education ranging from arts, design, and
business management (Raffles Education Corp 2009).
Their objectives can be use to support their mission, such as providing high level
standard of education in all their branches. With this they will have a strong global
image.
5
8/3/2019 SM Michael Bestari
6/38
1.3 Corporate Social Responsibility
According to the Chew Hua Seng Foundation (2008) REC take part in the foundation to
help less fortunate students get economic help, in order to seek higher education. This
type of foundation sees things differently compared to other foundations. It does not
help to subsidize the education fee, Chew Hua Seng believes that it is better to help
with their basic social needs like health, water, sanitation, nutrition, and housing. They
believe without all this the students cannot perform at the best of their abilities.
Doing this will give REC a good image in their potential students perception, and
hopefully by doing this REC can attracts more students in the near future.
6
8/3/2019 SM Michael Bestari
7/38
2.0 External Factors
2.1 PESTEL analysis
According to David (2009) the external environment analysis will help to identify the
external opportunities and external threats that may refer to changes in the political,
economical, socio-cultural, technological, environmental, and legal (PESTEL)
framework. Each of the frameworks may link together and most likely will affect the
structure or scope of the business practice.
REC can use the PESTEL framework to analyze its environmental factors such as howthe external factors can affect RECs performance in the global market. Analyzing these
factors will let REC have an upper hand to deal with the threats and opportunities they
are facing.
Political factors
This basically includes how REC is affected by the development or changes that
happen in the political environment such as the laws, government agencies, and many
more (Kotler et al 2006).
Singapore government wants to make Singapore as an Education hub, which is one of
the reasons why students from all over the world are coming to Singapore to complete
and pursue higher education. Singapore has built up an international reputation as a
hub for world class education and research (Singapore Education Government 2006).
EduTrust certification and Fee Protection Scheme (FPS) are there to help and protect
international students (Singapore Government 2006). The EduTrust certification and
FPS are use to maintain the quality of teaching and facilities in order to meet the
standard requirement as the number of International students coming from all over the
world keeps increasing from year to year. The Parliament Report (2008) mentions that
there are currently eighty six thousand students currently studying in Singapore,
increasing from fifty thousand from 2002
7
8/3/2019 SM Michael Bestari
8/38
.
Economical factors
This will affect the buying behavior and spending patterns of consumers (Kotler et al
2006). It might also affect the growth of REC
Singapore has a corruption free, stable prices, and highly developed and successful
free market economy (International Business Publications 2008).
The growth in the Singapore economy will also benefit REC in attracting students from
all over the world. This will also help the economy to grow since the students will be
staying and studying in Singapore. On the other hand, Singapore will also reduce the
unemployment rate.
Socio-cultural factors
Kotler et al (2006) believe that the cultural environment is made up of institutions,
beliefs, religions and other forces that affect societys basic values, perceptions,
preferences and behaviors.
Different cultures will have a different impact towards the company. Started first in
Singapore, REC is used to a mixed culture, since Singapores cultures include;
Chinese, Malays, Indians, and other ethnic groups such as the European, Caucasians
and many more (Singapore Department of Statistic 2010).
In addition the ninety thousand professional expatriates working and living here also
bring their unique cultures and perspective that add value to the Singaporean culture
(College in Singapore 2009).
Singapore has a variety of music, foods, languages and religions due to the different
races that make up Singapore, Chinese, Malays, Indians and others. This will help the
international students that have different religions, language and culture to adapt easier.
8
8/3/2019 SM Michael Bestari
9/38
Technological factors
This is perhaps the most dramatic force that shapes RECs destiny (Kotler et al 2006).
Technologies made it possible to travel all around the world. Students will strive for the
best education they can get, if REC does not meet international technology standardsthen it will surely face troubles such as a decreasing number of students.
Singapore is keeping up with the dynamic change of technologies. It will not be difficult
for REC to adapt and implement new technologies in their college and universities. (IDA
2010). Recently Singapore University of Technology and Design signed a formal
agreement with Massachusetts Institute of Technology. This shows that Singapore
keeps on developing their technology so they will not get outdated (Ministry of
Education 2010).
Recently REC was developing their cyber museum with the National Heritage Board
(Raffles Education Corp 2009). It is an online platform that serves educational, social e-
engagement, and for marketing purposes to attract international students.
Environmental factors
In this case Raffles Education Corporation tends to use more environmental friendly
materials and goods that are able to get recycle (Raffles Education Corporation 2009).
Singapore is a developed country. They use newer, better and more eco-friendly
technologies. In Singapore there are many individuals, groups and organizations that
are starting to spend their time, money and effort to contribute something to the
environment in order to protect, promote and enhance Singapores clean and green
environment (National Environmental Agency 2002).
This will create a good impression and image in the eyes of international students that
are planning to pursue their higher education in Singapore.
9
8/3/2019 SM Michael Bestari
10/38
Legal factors
International students coming here to study need to sign a contract that will protect both
the students and the college or universities. It helps protecting the students from thecollege which performance are below actual standards. Regarding this the Singapore
government gives full support such as giving the Case trust and EduTrust awards to
some universities or college which meet the standard level.
Company like Council for Private Education Singapore (2010) is set up to regulate the
private education sector, it also facilitates to improve or uplift the level of education from
the private sector.
10
8/3/2019 SM Michael Bestari
11/38
2.2 Five forces industry analysis
It was developed and designed to analyze the economic and market forces that can
influence the industry profit. The five forces are the threat of new entrants, threat of
substitute products or services, bargaining power of suppliers, bargaining power ofbuyers, and degree of rivalry among existing competitors (Bensoussan and Fleisher
2008).
Threat of New Entrants (Weak)
-Cost of capital
To set up colleges or universities takes a huge sum of money, information and
experience in the related industry, it pushes the barriers to entry higher. When the
barriers to entry increase it limits the number of potential competitors that might come in
to the market.
11
8/3/2019 SM Michael Bestari
12/38
-Switching costs
Students who are currently enrolled in REC will not even bother to move to a new
college since it will be costly and inconvenient. Students will prefer to pursue and attaincertificates from colleges that are well known.
Threat of Substitute Products or Services (High)
Threat of substitute services may come from other private institutions that provide
similar services with lower cost. The threat of substitute services for REC will be coming
from online courses, seminar, workshop, or internship where the students learn about
the knowledge on the spot itself.
Bargaining power of suppliers (Weak)
For REC the bargaining power of suppliers will be low since REC is providing services
and only take goods such as the stationery, machinery and computers that will last for
more than two-three years. Due to that reason the supplier will not have much power to
bargain.
Bargaining power of buyers (Medium)
-Service provided is common
In this case the bargaining power will be medium; Since REC is not monopolizing the
market. There are competitors that provide similar services in the existing industry. So
the students will have medium bargaining power. It is due to the brand names of REC
that attract the students.
Degree of Rivalry Among Existing Players (High)
-Number of competitors
The rivalry among existing players will be high, since there are other well known
colleges or universities in Singapore that provide design and arts education such as
LaSalle College of the Arts and Nan yang Academy of Fine Arts. They are all roughly
equal in size so they watch each other carefully to match and counter their competitors
move.
12
8/3/2019 SM Michael Bestari
13/38
2.3 Competitive Profile Matrix
Raffles EducationCorp
Nan yang
Academy of FineArts
LaSalle College ofthe Arts
Key Success
Factors
Weigh
t Rating
Weighte
d Score Rating
Weighted
Score Rating
Weighted
ScoreBrand name 0.1 4 0.4 4 0.4 4 0.4variety of
courses 0.1 3 0.3 3 0.3 3 0.3facilities 0.2 3 0.6 3 0.6 4 0.8internship
programs 0.15 3 0.45 3 0.45 3 0.45advertising 0.1 2 0.2 2 0.2 3 0.3price
competitivenes
s 0.05 3 0.15 3 0.15 2 0.1
global
expansion 0.1 4 0.4 2 0.2 3 0.3service quality 0.2 3 0.6 3 0.6 3 0.6
Total 1 3.1 2.9 3.25
Source (created for this assignment, adapted from David Fred R, StrategicManagement concept and cases, 12th edition, 2009, prentice hall, New Jersey).
According to David (2009) the competitive profile matrix (CPM) is used to identify the
strengths and weaknesses of the firm and the major competitors.
The table shows REC ranked 2nd compared to its competitors, there is still room for
improvement. Another factor that REC can improve is advertising, the more they
advertise the more they can attract potential students from all over the world. REC can
advertise in countries which are not fully exposed with colleges or universities
specialized in design and arts.
In conclusion, REC needs to improve in order to win more market share and gain more
students in the future, thus being more competitive. REC strength lies on their global
13
8/3/2019 SM Michael Bestari
14/38
expansion and brand name. All the branches located at Asia Pacific and India give them
more market to penetrate. By using their strengths REC can conquer and target new
market in the future.
14
8/3/2019 SM Michael Bestari
15/38
3.0 Internal factors
3.1 Strengths, Weaknesses, Opportunities and Threats analysis
Wheelen and Hunger (2010) strongly believed that Strengths, Weaknesses,
Opportunities and Threats (SWOT) analysis can be use to develop the corporate
mission, objectives, strategies and policies. The SWOT analysis will cover both the
internal and external analysis.
Strengths
Internationally recognized REC is famous for their high level of education standards anow grew to become a multi-national college that operaaround Asia Pacific and India.
High standard of Teachingstaff
Lecturers at REC are coming from all over the world bringingdiverse background, wealth of technical knowledge, aindustry experience.
Inter College TransferREC are all around Asia Pacific and India, due to that reasonis possible to let the students experience the inter colletransfer , this will benefit the students as they can learn in neenvironments and experience learning in different countries.
Internship and CareerPlacement
Students in REC get the chance to experience their industhrough their internship and commercial projects. This helps tstudents to gain more knowledge regarding the industry, the
commercial companies will end up being there future employeWeaknesses
Limited Scope Branches and colleges are set up all around Asia pacific aIndia, but REC has not reached any other part of the world lAmerica and Europe which makes the REC brand only famoin Asia.
Different learning experience REC has established their branches all over Asia Pacific aIndia, thus it will result in different learning experience tinternational students will face. REC does their best to mainta quality of standards in all over their branches. For examdesign students in Singapore will not get a change to desi
and experience winter compare to those who study in China.
15
8/3/2019 SM Michael Bestari
16/38
Opportunities
Opening more branches Currently REC has closed the geographical gap, as they haveset up colleges across Asia Pacific to India. There are stillplenty of countries that REC can extend their college anduniversities to, by doing this REC can create a global brand and
imageDevelop Online class To be different from its competitors and to close the
geographical gap, REC can start developing online classes asthe technologies now make it possible to conduct onlineclasses.
Improve their other institute REC currently is famous for their RDI, REC can do moreadvertisements in the future to reposition their RMI and RSB inthe student's perception. Other than that REC can improve theirquality of education in RMI and RSB.
Develop their own advertisingcompany By doing this REC can place their students for training and
career as soon as they graduates.Threats
Local Colleges Local colleges have better knowledge about the cultures andpolicies in each country. Not to mention the price factor, wherethe local college can offer a lower price, which might be aserious threat for REC in the near future
Competitors providing the sameservices
In Singapore there are Nan yang Academy of Fine Arts andLaSalle college that provide high level of education focused ondesign and arts. They also provide a wide variety of courseslike business and hospitality
Political situations in the country Riot and government policy sometimes affect how RECoperates. Most of the foreign students will prefer a safe countrywith a stable economy. In the future REC needs to carefullyselect new countries for their branches.
Source: (Created for this assignment)
16
8/3/2019 SM Michael Bestari
17/38
3.2 Tows Matrix
Strengths (S) Weaknesses (W)
1. Internationally recognize
2. High standard of
teaching staff
3. Inter college transfer
4. Internship and career
placement
1. Limited scope
2. Different Learning
experience
Opportunities (O) S-O Strategies W-O Strategies
1. More Branches
2. Developed
Online class
3. Improve their
other institute
4. Develop their
own advertising
company
1. REC can expand into
foreign markets and
improve their brand
image for their entire
institute. (S1, S2, O1,O3)
2. Provide an inter college
transfer to let the
students experience a
new environment.
(S1,S2,S3,O1)
3. Develop E-class to reach
more students
(S1,S2,O2)
4. Create an advertising
company for the purpose
of internship and career
placement. (S4,O4)
1. Opening more branches.
(W1, O1)
2. Develop E-class to expand
its scope and reduce the
different learning
experience. (W1,W2,O2)
3. By preparing RECsadvertising company, REC
can improve their institute
and reduce the different
learning experience.
(W2,O3,O4)
Threats (T) S-T Strategies W-T Strategies
17
Intern
al
Factor
sExterna
l
Factors
8/3/2019 SM Michael Bestari
18/38
1. Local College
2. Competitors
providing the
same services
3. Different
political
situations in the
country.
1. Using their brand name
to compete with local
college.
(S1,S2,S3,S4,T1)
2. Be different by giving
good internship and
career placement, inter
college transfer, and
provide good lecturers..
(S2,S3,S4,T2)
3. REC can try to influence
and cope with the
different political
situations based on their
experiences entering
other market.(S1, T3)
1. Partnership with local
colleges. (W1,W2,T1)
2. Partnerships with local
colleges enable REC tooffer better education and
customize its services to
cope with the differences.
(W1, W2,T2,T3)
3. Closing the geographical
gap by forming alliances
with local colleges.
(W1,T1)
Source: (Created for this assignment, adapted from Wheelen T. L,& Hunger J David,
Strategic Management and Business Policy, 11th
edition, Prentice Education Inc, 2008,New Jersey)
18
8/3/2019 SM Michael Bestari
19/38
3.3 Boston Consulting Group Growth Share Matrix
According to Wheelen and Hunger (2010) the Boston Consulting Group (BCG) Growth
Share Matrix is the simplest way to portray the firms portfolio of investments. In the
BCG matrix each of the firms product or services are plotted on the matrix according tothe number of sales and the growth rate.
(Source: Created for this assignment, adapted from Haberberg A. & Rieple A., 2008,
Strategic Management: Theory and Application, Oxford, UK, Oxford University Press)
All fashion related course such as fashion marketing and fashion design are the most
famous course in REC. The RDI courses are at the cash cow stage in the BCG matrixbecause students from all over the world know about REC and their strengths at these
courses.
19
8/3/2019 SM Michael Bestari
20/38
The cash generated from the REC courses will be use in the Star segments for which
RMI and RSB are still growing. REC can use the cash to do advertisement to attract
more number of potential students.
In the near future all RECs courses will be in the cash cow segments, the cashgenerated there will be use to do reminder advertisement for the consumer to remind
them what REC specialized at.
20
8/3/2019 SM Michael Bestari
21/38
3.4 Product Life Cycle
Source: (Created for this assignment, adapted from Kotler Philip et al, principles of
marketing, 3rd edition, prentice hall, 2008, Australia)
Each product or service has a limited lifetime. The product life cycle will help to analyze
and identify the position and strategies for the firm (Kotler et al 2008).
RDI is in the mature stage as shown in the BCG matrix in the cash cows. RDI is
generating income that able to sustain REC in the industry. While RMI and RSB are still
in the growth stage, they still have the potential to grow and attract more students.
Few strategies that REC can do in this following stage are:
Reminding Advertisements
At this stage, REC can do advertising just like when they first opened up, the difference
is they are not introducing the college, but they are reminding the potential customer
and students that REC offers a high level of education and the colleges are located all
over Asia Pacific and India.
Maintain the brand names
REC needs to maintain its brand names in order to attract future potential students.
Good brand images will affect the students decision to choose REC instead of its
competitors.
21
8/3/2019 SM Michael Bestari
22/38
3.5 Financial Analysis
This part will analyze how REC operates judging from their financial ratios. Here listed
are some common ratios that a firm can use to analyze and evaluate how they perform
from last year compare to this year.
Source: ( Raffles Education Corp 2009)
Liquidity ratio S$'000 S$'000
22
8/3/2019 SM Michael Bestari
23/38
2009 ratio 2008 ratio
Current
ratio
Current Assets 278,0310.89
145,3960.41
Current Liabilities 311,297 350,653
Acid
test
Current Assests- (Inventory+Prepayments)
278031-(597+146,453) 0.42
145,396- (368+52,529) 0.26
current liabilities 311,297 350,653
Cash
ratio
(Cash+ Short term securities ) 115,3140.37
68,5020.2
current liabilities 311,297 350,653
(Created From REC 2008, 2009 and Brealey, Myers & Allen, 2009)
Liquidity ratios are used to measure the company short term financial strength by
measuring the relationship between current assets and current liabilities. (Libby et al.2009).
The current ratio indicates that the short term solvency of both years is below the
accepted standard of 2:1. However, their performance has improved from 0.41:1 to
0.89:1. This show that in 2009 they are more solvent as they have $0.89 worth of
current assets for every $1 worth of current asset.
In term of immediate solvency, REC is also below the accepted standard of 1:1. In 2009
the company was more solvent. This means that REC is able to make short term
investment and increase their profitability instead of holding their assets.
Profitability ratioS$'000 S$'0002009 ratio 2008 ratio
Net Net profit x 100 51,591 x100 25.5 99,406 52.31
23
8/3/2019 SM Michael Bestari
24/38
profit
margin%
x100%
sales 201956 190,020
Return
onAssets
Net income 51,591 x 100
2.6%Average totalassets
(772,185+278,031)+(770,306+145,396)
Return
on
equity
Net income 51,591 x 1009.9%
99,406 x
100 26.7%
equity 518,960 372,719
(Created From REC 2008, 2009 and Brealey, Myers & Allen, 2009)
Net profit has decreased from 52.31% to 25.55%. The fall in the net profit might be due
to the uncontrollable expenses in relation to sales. Libby et al. (2009) believe that
profitability ratios primarily measure the overall success of the company.
The decrease in RECs return on equity shows that the company has taken out more
loans reducing profitability.
Overall, RECs profit dropped a lot from 2008 to 2009. It shows the net profit margin
dropped almost by half. Return on equity it dropped by almost twenty percent.
Efficiency ratioS$'000 S$'0002009 ratio 2008 Ratio
Cash
turnover
Net Sales 201,9562.04
190,0202.77
cash 98,766 68,502
Accounts Net Sales 201,956 1.69
Average (162,120+76526)/224
8/3/2019 SM Michael Bestari
25/38
Receivable
Turnover
Receivables
Bad Debt
to salesratio
Bad debts 4,834
0.024
449
0.0024sales 201,956 190,020
(Created From REC 2008, 2009 and Brealey, Myers & Allen, 2009)
Compared to 2009, 2008 had a better cash turnover. Account receivable turnover is
done to find out how much time REC take to collect the money.REC has 2.04% bad
debts to sales ratio. This shows that some of their creditors have not paid them the
money. This can be improved by improving their management system.
REC in this case is being efficient as a college as the accounts receivable shows that
the students only pay once a year. RECs bad debts show that REC collects all the
money since the ratio is a small value.
Financial Leverage RatioS$'000 S$'000
2009 ratio 2008 ratioTotal
Debts to
Assets
Total Liabilities 510,690
0.48
534,170
0.58Total Assets 1,050,216 915,702
Debt to Total Debt 510,690 0.98 534,170 1.43
25
8/3/2019 SM Michael Bestari
26/38
equity Total equity 518,960 372,719
Interest
Coverag
e Ratio
Earning before interest
and tax
72,886+10,43
6 7.98
105,354+3,32
9 33.53
interest expense 10,436 3,329(Created From REC 2008, 2009 and Brealey, Myers & Allen, 2009)
Libby et al. (2009) believe that the leverage ratios are use for analyzing the companys
ability to meet its long term obligations. In this case RECs total debts to assets have
decreased from 2008 to 2009, assets increased as the ratio was lower.
In terms of their debts to equity ratio, it shows that to each asset is equal to 0.98 debts.
This shows a better performance from last year
While RECs interest coverage ratio shows a decrease in performance in 2009. This is
the ability to cover the interest that REC needs to pay, there is a significant decrease in
REC performance. Other reason might be REC take more loans so REC have more
interests to pay out.
4.0 Strategy Development
4.1Current Strategy
REC currently followed few strategies that had been developed by their top
management. The figure below will help to illustrate RECs current strategies
26
8/3/2019 SM Michael Bestari
27/38
The figure above shows four main strategies that REC currently follows, such as they
want to build existing depths, expand college networks, create value at University City,
and strengthen academic credibility.
The strategies that REC currently adopts will help REC to maintain its position in their
current market as well as entering new market. Building more depth at existing college
will help REC to gain more market share in their current market. They expand their
network to enter new market.
Creating value at University City and Strengthen their academic credibility will let them
have better brand name regarding their brand. This will be use in the future to attract
potential students.
27
8/3/2019 SM Michael Bestari
28/38
4.2 Ansoff growth matrix
Source: (David Fred R, Strategic management concept and cases, 12 th edition, prentice
hall, 2009, New Jersey)
With the help of the above matrix REC can select the right strategy to deal with themarket they currently serve and product they have.
For the market penetration strategy, since REC is serving their current market with their
current services REC should do more advertisement to create brand awareness in the
market and to compete with the competitors
At the same time REC can develop the market development strategy. REC needs to do
a market research on the number of potential students and competitors in the market
and prepare a good marketing strategy to sustain the company in the new market.
Customize the product to meet the local requirements, match the price with the
competitors, rephrase the marketing promotion with the local languages, and select
strategic place to build the college.
28
8/3/2019 SM Michael Bestari
29/38
An alternative and suggestion for future consideration is to develop an online course in
order to be unique and different from its competitors. With the online course REC can
penetrate into new market with their new services the online class. The online class atthe same time can serve more students at once regarding where they are.
29
8/3/2019 SM Michael Bestari
30/38
4.3 Porters original generic strategies
Source: (Hubbard G., Rice J., & Beamish P., 2008, Strategic Management: Thinking,
Analysis, Action, 3rd ed., Frenchs Forest, Australia, Prentice Hall)
Porter suggested that there are three types of strategies that an organization can
pursue in order to have a sustainable competitive advantage. (Beamish 2008)
In the education industry REC is stuck in the middle, since they are famous for arts and
design but there are also other institutes that provide the same courses such as Lasalle
College of the Arts and Nanyang Academy of Fine Arts.
In the future REC may want to provide differentiation by providing their courses via the
internet. Online course will help REC to be different and at the same time close the
geographical boundaries.
REC can also cut down the cost as they have branches all over Asia Pacific and India,
since REC is open to the resources in different areas which enable REC to operate
effectively and efficiently.
30
8/3/2019 SM Michael Bestari
31/38
4.4 Grand Strategy Matrix
Source :( created for this assignment, adapted from David Fred R, Strategic
Management concept and cases, 12th edition, 2009, prentice hall, New Jersey).
Grand Strategy matrix can be use to prepare an alternative strategies based on two
factors such as the competitive position of the firm and the market growth in the
industry.
REC is plotted in quadrant I, it shows that REC has strong competitive position and
rapid market growth. In the Singapore market itself REC is rank second after LaSalle.For this following quadrant REC can develop alternative strategies to overcome future
challenges.
REC is currently using market development and market penetration as have been
discussed in Ansoff matrix. In this matrix it will explain more about the alternative
31
8/3/2019 SM Michael Bestari
32/38
strategies REC can develop and implement in the future such as the forward integration
and related diversification.
Forward Integration for REC will be building and creating their own advertising agency
and clothing store. Building their own advertising agency and clothing store will allow
REC to give a career placement for the students. The advertising agency itself can be aplace where students are going to do their internship.
Related Diversification in REC case is to develop or take new courses from university
partner, by doing this REC can attract more students since they have variety of major in
which students can enrolled with. This will serve as an alternative strategy if the market
penetration and development are not doing well. By preparing this REC will be more
prepare to face the challenges in the dynamic market.
32
8/3/2019 SM Michael Bestari
33/38
5.0 Conclusions
In conclusion, RECs performance shows that it has improved from 2008 to 2009. ThePESTEL framework shows how the different factors impact RECs operations, as so far
REC can cope well with the external factors.
With the SWOT analysis and TOWS matrix, REC will know its current strengths and
weaknesses, thus this will help REC to fully maximize its strength to avoid their threats
and capture their opportunities. PLC and BCG also help to analyze the correct
strategies to use in the stage where REC is in right now, which is in star section moving
to cash cow, the growth going to maturity stage.
The CPM shows that REC ranked 2nd in the market, this will help REC to benchmark
with its competitors in what REC is lacking in at. REC shows their strengths and
weaknesses compare to its competitors Nan yang and LaSalle as shown in the matrix.
With this REC can evaluate and compete with their main competitors in the market.
Financial ratios are also calculated to see how REC perform in the previous years
compare to this year performance. The ratios will help investor to see how REC
performance increases from year to year.
In short REC performance is still far from the best, slowly but surely RECs performance
shows an improvement from 2008 to 2009.
33
8/3/2019 SM Michael Bestari
34/38
6.0 Recommendations
In the future REC might consider doing partnership or joint venture with local college in
order to attract the local market. Since the local college will have better knowledge
about the laws, regulation, customs, and culture of the market.
They can expand their colleges into new countries and REC can establish itself in the
global market. At the same time they can reduce the geographical gap by providing their
services in new markets.
REC can also improve their financial performance, as the financial analysis shows that
they havent do really well this past two years. REC can do this by stop borrowing
money and start paying their short term liabilities or loan. Another way on how REC canimprove their financial performance is by having an alliances or partnership with another
design college.
Online courses is now possible and by doing that REC can attract international students
from all over the world. This is another alternative for REC to reduce the geographical
gap.
Last but not least REC can diversify their services in related industry. Currently REC is
providing services with 3 main partners such as RDI, RMI, and RSB. In the future REC
might want to add more subjects and courses to attract more students with their wide
variety of courses available for the students to enroll with.
34
8/3/2019 SM Michael Bestari
35/38
7.0 Learning Evaluation
This assignment helps to explain how strategic management can be use to a company
like REC deal with its external environment as well as their internal environment. It also
helps to develop its future growth strategies.
This assignment summarized all other previous modules to critically analyze how the
firms like REC perform in the market. Strategic Management also helps in decision
making for the company.
With the help of this assignment, now REC can be clearer of its current position in the
market and REC can start benchmarking with better competitor in the market.
Learning this module and completing the assignment give a clear use of how strategic
management can be use in senior management to do business decision and plan for
future strategies.
35
8/3/2019 SM Michael Bestari
36/38
8.0 Reference list
8.1 Articles
-Peoples Action Party, 2008, Singapore as an education hub, oral answer to questions
Singapore as an education hub, (Online), (Last updated on Monday, 26
th
may 2008),Available at: (http://www.pap.org.sg/articleview.php?id=3461&mode=&cid=23), Viewed
on 26th August 2010.
8.2 Books
-Beamish Hubbard Rice, Strategic Management Thinking Analysis Action, 3th edition,
Pearson Education, 2008, Australia.
-Bensossan b. B. & Fleisher c. S., Analysis Without Paralysis : 10 tools to make better
decisions, Prentice Hall, 2008, New Jersey, USA
-Brealey R. A., Myers S. C. & Allen F., 2009, Principles of Corporate Finance, New
York, USA, McGraw-Hill
- Haberberg A. & Rieple A., 2008, Strategic Management: Theory and Application,
Oxford, UK, Oxford University Press
-David Fred R, Strategic management concept and cases, 12 th edition, prentice hall,
2009, New Jersey
-Dess Gregory D et al, Strategic Management text and cases, 4th edition, McGraw-Hill
Irwin, 2008, New York.
- Hubbard G., Rice J., & Beamish P., 2008, Strategic Management: Thinking, Analysis,
Action, 3rd ed., Frenchs Forest, Australia, Prentice Hall
-Johnson et al, Exploring Corporate Strategy Text and Cases, 7 th edition, Prentice hall,
2005.
36
http://www.pap.org.sg/articleview.php?id=3461&mode=&cid=23http://www.pap.org.sg/articleview.php?id=3461&mode=&cid=238/3/2019 SM Michael Bestari
37/38
-Kotler Philip et al, principles of marketing, 3rd edition, prentice hall, 2008, Australia.
-Kotler Philip et al, Marketing Management An Asian Perspective, 5 th edition, Prentice
hall, 2009, Singapore.
-Libby R., Libby P. A. & Short D. G, 2009, Financial Accounting, 6 th Edition, New York,
USA, McGraw-Hill
-Wheelen T. L,& Hunger J David, Strategic Management and Business Policy, 11th
edition, Prentice Education Inc, 2008, New Jersey
8.3 Official publications
-Central Intelligence Agency (CIA) , 2010, The WORLD Factbook :East & South East
-Asia - Singapore, (Last updated on August 19th, 2010), Viewed on 26th August 2010.
-International Business Publications (IBP), 2008, Singapore : Recent Economic and
political Developments Yearbook; 5th Edition, Washington Dc, USA.
-Raffles Education Corp, Entrepreneurship Innovation & Empowerment, 2009 Annual
Report, Singapore.
-Singapore Department of Statistics, 2010, Singapore in Figure 2010, available at
http://www.singstat.gov.sg/pubn/references/sif2010.pdf , Viewed on 24th August, 2010.
8.4 Websites
-Raffles Education Corp, 2008, Vision, Mission and Philosophy, (Online) Available at:
(http://www.raffles-education-corporation.com/), Viewed on 26th August 2010.
-Singapore Education, 2006,Education on Singapore, (Online) Available at:
http://www.singaporeedu.gov.sg/htm/abo/abo01.htm, Viewed on 25th August 2010
-European University,2010,Why study in Singapore,(Online) Available at:
http://www.euruni.edu/en/Campuses/EU-Partner-in-Singapore/Why--
Singapore/Why_Study_In_Singapore.html, Viewed on 25th August 2010
37
http://www.raffles-education-corporation.com/http://www.singaporeedu.gov.sg/htm/abo/abo01.htmhttp://www.euruni.edu/en/Campuses/EU-Partner-in-Singapore/Why--Singapore/Why_Study_In_Singapore.htmlhttp://www.euruni.edu/en/Campuses/EU-Partner-in-Singapore/Why--Singapore/Why_Study_In_Singapore.htmlhttp://www.raffles-education-corporation.com/http://www.singaporeedu.gov.sg/htm/abo/abo01.htmhttp://www.euruni.edu/en/Campuses/EU-Partner-in-Singapore/Why--Singapore/Why_Study_In_Singapore.htmlhttp://www.euruni.edu/en/Campuses/EU-Partner-in-Singapore/Why--Singapore/Why_Study_In_Singapore.html8/3/2019 SM Michael Bestari
38/38
-Maps of World, 2009,Culture of Singapore,(Online) Available at:
http://www.mapsofworld.com/singapore/culture.html Viewed on 25th August 2010
-Colleges in Singapore, 2009,Singapore Universities and Colleges, (Online) Available
at: http://collegesinsingapore.com/education.html Viewed on 26th August 2010
-CPE, 2009, Council for Private Education, (online) Available at:
http://www.cpe.gov.sg/ Viewed on 26th August 2010
-IDA, 2010,Technology Event, (Online) Available at:
(http://www.ida.gov.sg/Technology/20060418114224.aspx), Viewed 26th August 2010
-Raffles Design Institute, 2008, Cyber-Museum, (Online) Available at:
(http://www.raffles-design-institute.edu.sg/index.php?
option=com_content&view=article&id=33:cyber-museum&catid=3&Itemid=18), Viewed
on 26th August 2010.
-National Environment Agency, 2002, Environmental Awards, (Online) Available at:
(http://app2.nea.gov.sg/ecofriend_awards.aspx), Viewed on 26th August 2010.
http://www.mapsofworld.com/singapore/culture.htmlhttp://collegesinsingapore.com/education.htmlhttp://www.cpe.gov.sg/http://www.ida.gov.sg/Technology/20060418114224.aspx),%20%20Viewed%2026th%20August%202010http://www.raffles-design-institute.edu.sg/index.php?option=com_content&view=article&id=33:cyber-museum&catid=3&Itemid=18http://www.raffles-design-institute.edu.sg/index.php?option=com_content&view=article&id=33:cyber-museum&catid=3&Itemid=18http://app2.nea.gov.sg/ecofriend_awards.aspxhttp://www.mapsofworld.com/singapore/culture.htmlhttp://collegesinsingapore.com/education.htmlhttp://www.cpe.gov.sg/http://www.ida.gov.sg/Technology/20060418114224.aspx),%20%20Viewed%2026th%20August%202010http://www.raffles-design-institute.edu.sg/index.php?option=com_content&view=article&id=33:cyber-museum&catid=3&Itemid=18http://www.raffles-design-institute.edu.sg/index.php?option=com_content&view=article&id=33:cyber-museum&catid=3&Itemid=18http://app2.nea.gov.sg/ecofriend_awards.aspx