4 Major Risks in Running an English Language School in Asia (P.3)
In the last article about how to go sustainable in running an English language school in Asia, we talked about how to build a sustainable English school by putting up with quality and qualified services. In this article, I would share the 4 major risks that anyone who runs a school business in Asia could face.
1. Lack of a competitive advantage
“If you don’t have a competitive advantage, don’t compete.” – Jack Welch
To have a “sustainable” competitive advantage, an English language school business needs to have a core competence that its competitors are unable to duplicate the benefits of the business’s strategy. Its generic strategy must be grounded in an attribute that meets four criteria. It must be:
- Valuable—it is of value to consumers.
- Rare—it is not commonplace or easily obtained.
- Inimitable—it cannot be easily imitated or copied by competitors.
- Non-substitutable—consumers cannot or will not substitute another product.
And this becomes provocative if your market leaders have held or created a “sustainable” competitive advantage.
2. Heavy Fixed cost
- Rental cost: Some cities in Asia such as Tokyo, Beijing, Shanghai, and Ho Chi Minh have expensive for office space while running a school need large space in which you need time to fulfill the capacity of your building.
- Operating cost: To build a sustainable education business needs heavy overhead costs when expats are included in your operations. This takes longer time to break even and reduce competitive capacity.
3. Lack of quality management:
The lack of quality management and innovation is a corporate problem for most of small business. Here are the risks:
- Lack of a continuous improvement process will not allow a product to be continued to improve in quality, function, and use.
- Lack of a customer satisfaction program will drive customers to look elsewhere for similar products from companies who respond to their needs.
- Lack of Innovation resulted in decreasing competitive capacity as profits depend on knowledge workers’ ability to generate new solutions, think on their feet and make complex decisions.
4. Teacher’s shortage
Under expansion of big players and growth of English schools in the past years, the lack of qualified English language instructors presents one of the largest challenges to educators and citizens across Asia.