Household Expenditure on Tuition in Singapore and the Growth of the Tuition Industry

Analysis of Ownership Formats for the Tuition Centre

Singapore households spent S$1.4 billion on tuition, based on the Household Expenditure Survey conducted by the Department of Statistics from October 2017 to September 2018. This sum has grown steadily over the years, climbing from S$650 million around 15 years ago and S$1.1 billion in 2012/13. A report in The Straits Times noted that the number of tuition and enrichment centres has seen a corresponding increase over the years, growing from about 700 in 2012 to more than 950 today. These figures might seem alarming. But, actually, a more muted picture is painted once one considers these expenditures on a per household-per month basis. Average household spending on tuition amounted to a less striking S$88.40 per month in 2017/2018 (1.35 million households), compared to S$79.90 per month (1.2 million households) in 2012/2013 and S$54.70 (just under a million households) 15 years ago. The picture becomes even more muted if one accounts for inflation. Given that households spent an average of S$4,906 a month on goods and services in 2017/2018, tuition contributed to less than 2 per cent of monthly household expenditure. Despite this, the figures do indicate that families in Singapore are spending a non-trivial amount on private tuition. Why hasn't the tuition industry showed obvious signs of slowing, despite recent reforms by the Ministry of Education to help students discover the joy of learning and to move away from a narrow emphasis on academic grades? Have these reforms been ineffective? I think not. It would be too premature to conclude anything about the efficacy of these reforms at this point. Although reforms such as the removal of mid-year examinations (for selected academic levels), changes to the Primary School Leaving Examinations scoring system, and the abolition of streaming in secondary school have been announced, many have yet to kick in. Because many of the changes have yet to kick in, it would be unrealistic to expect any effects so soon. We are likely to see any effects of these reforms only in decades to come, after the full suite of changes have taken place and parents have a fuller understanding of what they entail. Until then, parents are likely to adopt a cautious attitude, preferring to continue with tuition if they had been doing so prior, if only as a form of insurance. The growth of the tuition industry is fuelled primarily by two factors: Increasing average real incomes of households and the desire for parents to see their children keep up with the competition. MKT353 Copyright © 2020 Singapore University of Social Sciences (SUSS) Page 8 of 9 ECA – July Semester 2020 For many parents, tuition has become the dominant strategy: If other parents enrol their kids for tuition, it would be best to do likewise so that their own kids will not lose out. Adapted for Academic use from: https://www.todayonline.com/, 30 Sep, 2019 Assuming you have decided to set up a tuition centre, teaching Math and English, for primary school students. Questions 1, 2 and 3 should be answered as a proposal to be presented to venture capitalist Mr Eugene Tang, persuading him to invest in your tuition centre. Question 1 Analyse the different characteristics of independent, chain, and franchise retail institutions. Which ownership format would best suit your tuition centre? Support your stand with primary and secondary research evidence.  Question 2 Discuss the controllable and uncontrollable variables when setting up the first outlet of your tuition centre. Question 3 Formulate communication strategies to maintain the image for your tuition centre.  Question 4 This question requires you to conduct a literature search and discuss two research papers. First login to your SUSS Student Portal and access the Library E-resources. Using any of the databases listed, select two (2) articles that examine human resource strategies in the retail industry