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Business Management: Kumon Singapore Add in library

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Question:

Analyse business environment at Community Clubs and examine a business opportunity as a franchise?
 
 

Answer:

Executive Summary

The community clubs in Singapore are run by the People’s Association. It has a common meeting ground for the residents in Singapore. The community clubs are set in Singapore to promote social cohesion and harmony. The clubs has started various activities such as cultural, recreational and social based activities which are used to promote the cultural values in the community. Kumon Singapore is one of the reputed preschool education centers in Singapore. It is planning to open its center in Ace, The Place community club.There are large numbers of community clubs in Singapore which offer the same service to the clients. The urban lifestyle is hectic and fast. There is lack of refreshment in the lives of the people. In this context, the community clubs have emerged as a popular form of business. The range of products and services offered by Ace the Place, Our Community Club has been discussed in the report. The value proposition for the community club has been proposed in the report. The ways in which the community club can maximize its value has been proposed in the feasibility report. The quality of the service is essential for the success of the business. The feasibility of the community club in the market has been studied. The potential market for the community club in Singapore has been discussed in the report. The market potential of the community club can be assessed in terms of market segmentation, analysis of the target customers and analyzing the characteristics of the customers. The potential market for the firm has been studied in the report. The success of the business will depend on the promotional activities. The firm undertook various promotional activities for the success of the organization. The feasibility study also includes study of the financial feasibility of the community club. The income and expenses from the community club business has been studied. The capital justification of the outflows and inflows has been studied in the form of NPV and IRR. The feasibility of the organization in Singapore has been studied in the report. The industry of hospitality and community clubs has been studied by Porter Five forces analysis. It is seen that there is immense threat of new substitutes and entrants in the market. The industry analysis also shows that since there are large number of competing firms exists in the market which creates immense rivalry in the business. But the community clubs has emerged as a potential form of business in Singapore. The fast pace of life of the residents of Singapore lacks social cohesion and harmony. 

Competitive Analysis

Kumon method is a unique way of learning. This method of learning has remained consistent over the last 50 years in Singapore and it has spread across 48 countries. The community club has gained attention over the past years due to the uniqueness in its program. Despite of the differences in lifestyle, educational system and the culture Kumon community center has made itself as an important place in Singapore. Porter five forces analysis has been done for starting Kumon in Ace, The Place community club (Sg.kumonglobal.com, 2015).

Porter’s 5 Forces

Porter’s five forces provide a framework of the industry being influenced by the five forces. The strategic business manager can develop their firm over the rival firms using this model. This helps to understand the industry in which the firm operates in a better way (Porter, 2003).

Supplier power

The power of the supplier cannot be ignored. They can drive up the prices of the product at the same time they can lower the prices of the product. The increase in the number of suppliers provides an opportunity to switch from one supplier to another supplier. The less the number of supplier, the more the business will require the need of the suppliers (Porter, 1998). The suppliers will have the power to dictate the price of supplying the product.  The power of the suppliers increases (Roy, 2009). The community club has been started in Singapore for the promotion of educating the children for their development via various activity programs. In the fast pace life it is difficult for the community members to get time for one another. In such a situation, the community clubs have emerged in the country to promote social cohesion among the residents (Hill & Jones, n.d.). Kumon Singapore is one of the premiere child care center in Singapore that promotes the education system provided to the children. Since Ace the place is a reputed community centre in Singapore, Kumon will gain a good position .This will result in sharing of cultural values among the community members (Ho, 1997).  This was a measure to bridge the gap between the community members in the country. There is no power of suppliers (Schwarzinger, 2012). The parents can admit their students in the Kumon Singapore community center. It depends on the choice of the residents in Singapore. There is no pressure on the children to be a part of the club. Thus the supplier power can be ignored (Pa.gov.sg, 2014).

Buyer power

The buyers have the power to bring the prices down. The prices are influenced by the existence of large number of buyers in the market, importance of the buyers in the organization and the cost incurred to switch from one supplier to another supplier (Porter, 1991). The community club named Ace the Place has been started in order to promote social cohesion amongst the community members in Singapore. The children education centre Kumon will be a good start in the community club. The center will gain recognition as it will be part of reputed community club. The parents will allow their children to be a part of the education center. The concept of community clubs was started by People’s Association in the year 1960(Grundy, 2006). There are a range of community clubs in Singapore. With the introduction of the community center the Kumon education center will become popular. Thus the residents in Singapore have the power to choose the community club that satisfies their preference.  The buyers have high power in Singapore (Yuen, 2008).

Competitive rivalry

The existence of large number of sellers in the same line of business results in the rivalry in the business. If there is large number of sellers selling the same quality of product then there little power in the situation. However competition and rivalry among the sellers increases the quality of the product and the service. The concept of community club was started by People’s Association in the year 1960. The major reason behind the concept was increase in the social cohesion so that the people residing in Singapore can get an idea of community living. There are large numbers of community clubs in Singapore (Yeoh & Khoo, 1998). Kumon education center for the children developed for the pre-school education of the children has lot of competitors in the market. They will receive competition from Abacus, Crestar and other pre-school training center for children (Abacus.com.sg, 2015). This results in great degree of competition among the community clubs in terms of the benefits that they offer to the customers and the quality of service. The rivalry among the firms has resulted in the rise of the quality of service (Narayanan & Fahey, 2005).

 

Threat of substitutes

The existence of large number of sellers in the same line of business creates threat from the substitutes. The customer shows the likelihood to switch between the alternatives in response to the increase in price. The threat from the substitutes leads to reduction in the power of the suppliers and there is reduction of the market attractiveness. There are large numbers of community clubs in Singapore. The mission of the community clubs is same. They want to promote social cohesion in the urban lifestyle of the residents in Singapore. The community clubs in Singapore have become a popular place of gathering for the residents of Singapore. Kumon Singapore has threat from the substitute pre-school teaching organizations like Abacus , Crestar .The threat of substitutes is high. Thus the community clubs do not have the authority to set the price and the other service provided by them. There is high threat of substitute in the hospitality business of the community clubs (Burnett, 2006).

Threat of new entry

The business form which is profitable in nature attracts new entrants. The increase in the number of competing firms results in erosion of the profitability. If the entry to the market is not strong and tough there is potential freedom of the suppliers to enter in the market. The rise in the number of competing firms results in the decline of the profit margin. Since the community clubs are very popular in Singapore, it has become a very popular form of business (Beaverstock, 2011). Large numbers of community clubs have opened over the couple of years. With the development of the community centers, the pre-school education centers in Singapore have developed. It becomes mandatory for the children to go through a preschool training. Thus new pre-school training centers are developing in Singapore. The residents in Singapore prefer their children to go to the pre-school training centers so that their brain can develop at an early stage. There is lot of opportunity for such schools in Simgapore (Sg.kumonglobal.com, 2015) . Thus the community clubs has emerged as a successful business in Singapore. The threat of new entry is prominent in the country club business (Thang, 2006).

 

References

Abacus.com.sg,. (2015). Abacus Singapore. Retrieved 21 February 2015, from https://www.abacus.com.sg/singapore

Beaverstock, J. (2011). Servicing British Expatriate ‘Talent’ in Singapore: Exploring Ordinary Transnationalism and the Role of the ‘Expatriate’ Club. Journal Of Ethnic And Migration Studies, 37(5), 709-728. doi:10.1080/1369183x.2011.559714

Burnett, C. (2006). Building Social Capital Through an `Active Community Club'. International Review For The Sociology Of Sport, 41(3-4), 283-294. doi:10.1177/1012690207078381

Grundy, T. (2006). Rethinking and reinventing Michael Porter's five forces model. Strat. Change, 15(5), 213-229. doi:10.1002/jsc.764

Hill, C., & Jones, G. Strategic management theory.

Ho, J. (1997). Corporate wellness programmes in Singapore: effect on stress, satisfaction and absenteeism. Journal Of Managerial Psych, 12(3), 177-189. doi:10.1108/02683949710174801

Narayanan, V., & Fahey, L. (2005). The Relevance of the Institutional Underpinnings of Porter's Five Forces Framework to Emerging Economies: An Epistemological Analysis. Journal Of Management Studies, 42(1), 207-223. doi:10.1111/j.1467-6486.2005.00494.x

Pa.gov.sg,. (2014). Singapore Government. Retrieved 12 February 2015, from https://www.pa.gov.sg/about-us.html

Porter, M. (1991). Towards a dynamic theory of strategy. Strat. Mgmt. J., 12(S2), 95-117. doi:10.1002/smj.4250121008

Porter, M. (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors.

Porter, M. (2003). The Competitive Strategy: Techniques for Analyzing Industries and Competitors.

Roy, D. (2009). Strategic Foresight and Porter’s Five Forces: Towards a Synthesis.

Schwarzinger, A. (2012). Porter's Five Forces Framework - An Analysis of the Swiss TV-Broadcasting Industry: Seminararbeit der Veranstaltung "Business Policy and Strategy" an der Universität Zürich.

Sg.kumonglobal.com,. (2015). About the Organisation:KUMON SINGAPORE. Retrieved 21 February 2015, from https://sg.kumonglobal.com/page.jsp?id=791&version=sg&ID=00_000_pt

Thang, L. (2006). Experiencing Leisure in Later Life: A Study of Retirees and Activity in Singapore. J Cross Cult Gerontol, 20(4), 307-318. doi:10.1007/s10823-006-9010-6

Yeoh, B., & Khoo, L. (1998). Home, Work and Community: Skilled International Migration and Expatriate Women in Singapore. International Migration, 36(2), 159-186. doi:10.1111/1468-2435.00041

Yuen, B. (2008). Sport and urban development in Singapore. Cities, 25(1), 29-36. doi:10.1016/j.cities.2007.11.004

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