Being part of the academe took me away from the field of business. That was my expectation during the time that I was deployed as a full time IT instructor. A school is an institution that needs administrative power, technical skills and the clients. All these elements are essential in sustaining the operation of the school. My first month in Davao Vision Colleges was a bit easy because all I need to think is the subject loads that I have and conducting my classes. But as the months go by, everything change and became more challenging because I am now part of the decision body of the institution. My first encounter with the faculty and staff meeting was a bit unbelievable because I thought my opinions are just simple yet they valued every suggestion that I gave. It then became a regular Monday faculty meeting and we have to submit weekly reports on what we did in the previous week. Everything went smooth until such time that we reached the semi finals period, which was a shocking time for us because a lot of students dropped out due to financial problems. We were asked to do strategic planning and I felt that this is the start of the real game.
The five competitive forces help me in at least giving balance to any situation that involves strategic planning. A framework created by Michael Porter called Porters Five Forces that may help reduce or increase the competition within the industry and these are:
· The Bargaining Power of Your Customers
· The Threat of New Entrants into your Industry
· The Bargaining Power of Suppliers
· Threat of Substitute Products or Services
· Rivalry Amongst Existing Firms
So we are using an academic institution as the subject in identifying the five competitive forces. As expected, the weight of pressure is less compared to the industry such as private firms. This is based on the statement that the greater the competitive forces in your industry the more pressure you are likely to find on your prices. Whereas, the weaker the competitive forces in your industry the less pressure you are likely to have on your prices.
The Bargaining Power of Your Customers
Davao Vision Colleges is located at Stone Rock Village Catalunan Grande, Davao City. Our target students are mostly from Matina down to Mintal and Toril area. [1]To analyze the Bargaining Power of your Customers you will need to review your industry by considering the following generic criteria.
· The differentiation of outputs
Schools that offer Information Technology are no longer new in Davao City. But most of these schools are located with the downtown area that is why there are new schools that is build on areas that is far from the city. Just like DVC, it main purpose on why is it located in a residential area is to give good education minus the hassle of travelling far. Even though the school is just on its third year of operation the faculty made it sure that the program is competitive enough to compete bigger schools in the metro. It has been an advantage that the instructors as well as the students are members of the IT organizations to keep them updated with the latest events. One of the objectives of the program is to expose the student to the real world given that we are also guided with moral values to keep the balance.
· Switching costs
Switching cost is a cost that your customer would incur if they ceased buying from you and commenced buying from one of your competitors.
Every financial matter is announced to the faculty and to the students to maintain the transparency within the institution. So far, DVC is the only school who offers scholarship to almost half of the population excluding the government scholars. Tuition fee and miscellaneous fee increase should be approved first with the administration then by the Commission on Higher Education (CHED).
· Presence of Substitutes
A substitute is a different product or service that can be used instead of your industries products or services. A substitute is not a competitor’s version of your product. Substitutes are typically products/services that are not in your industry.
The scholarship program and the emphasis of injecting fun in learning IT can give a bigger difference among other IT schools. We may not have the state of the line computer facilities but we impose being resourceful on what we have.
· Industry concentration relative to buyer concentration
Within our target area there are only three schools that we consider as our competitor that is because aside from the location they also operate less than three years. The Saint Peter’s College of Toril, Brokenshire College of Toril and Davao Central Colleges operates 1 year and 2 years respectively. With the current statistics of the number of enrolled students, 45% of them are residing with the area of Catalunan Grande. That is why the promotion for new enrolees will be focused on the areas outside the said location.
· Importance of volume to buyers
The challenge of convincing at least 70 new students for the IT program is way beyond my imagination. The basic strategy is to look back on what have we done last school year to tell everyone what we can offer. With that idea we can create a better program and improve the way IT is served to the students.
· Cost relative to total buyer purchases
Students tend to prioritize their negotiation efforts in the areas where they spend the most money. If the product or service is a large expense for your customer, then you are more likely to be the focus of their negotiations.
At moment we are one of the schools who have the lowest rate of tuition fee and registration fee. The god thing is that most of the expenses of the students were thoroughly discuss to fit in their financial status.
· Impact of outputs on the cost of differentiation
This is an interesting area for consideration, and it boils down to a simple question “Does a unique quality of your product or service help your customer to differentiate their product or service?”
This is one of my doubts during the first period of my teaching on how to give something new and exciting in teaching IT given that there are a lot of schools that offers it better than us. Studying MIT became the solution to upgrade myself as an instructor not just with the curriculum but with the live experiences of my classmates. That gave me the enthusiasm to create better change for IT in DVC.
· Buyer information about supplier products
This tends to relate to technical products, where the technology in the product is different to the technology of the industry. You are trying to answer the question “How easy is it for your customers to understand your product? Or your competitors products?”
As a teacher, you need to make sure that the foundation of the students is strong enough for them to survive the coming years studying with less confusion in their mind. Proper introduction on the course is the key for them to decide whether they go on with IT or shift to different course. In this manner also you are projecting honest and open mined environment within the program.
· Buyer profitability
On any academic institution the student might invested their money but profit that they get depends on how well the program is managed and how the student seriously worked on their studies. The school tries everything to keep the students equipped with the real world.
· Decision makers incentives
Unlike the industry which is usually incentive driven to keep the employees enthusiastic the academe is an institution that gets its incentives based on how many graduate students was able to make it in the real world.
· Threat of backward integration
The academe is not affected with this threat because the competition is not that tough. For as the school is recognized by CHED and able to comply with the requirements in running the school there is no reason to be threatened.
The Threat of New Entrants into your Industry
The new schools that offer IT can be considered as threat if they will able to comply with the CHED requirements to be recognized as a legitimate school. Most of these schools including us are still on the process of the CHED recognition. Once DVC is recognized by CHED it can be ahead of the pack among those schools since we will have graduating students next year.
The Bargaining Power of Suppliers
Since the school is very dependent with the number of enrolees each semester the effort of promoting the program and giving the satisfaction of the parents who shed their money in enrolling their students must be put in to the priority list. The bargaining power of the school administrator will test their credibility on how truthful they with the scholarship grants that they promised before admission.
Threat of Substitute Products or Services
Once a student is dissatisfied with program or having problem with it the solution are to shift to another course, transfer to another school or to stop schooling. These are somehow the loss of the school and may somehow become a big liability. The solution to this is to have the early detection of the problem to at least give possible option to prevent the thing from happening.
Rivalry Amongst Existing Firms
As of press time he DVC is still going through its promotional campaign by visiting high school, motorcade, putting up advertising campaigns to visible areas and distribution of flyers to the public.
The Porters Five Forces gives me an idea to sit down and think at my most comfortable way to analyze these things. It might a tedious job to do but the result is useful in improving the institution.
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