Practise explaining and evaluating globalization, international expansion and market-entry decisions for IB Business Management HL.
Dean West was an International Baccalaureate (IB) business management teacher in a developing country (country X). He also offered private tuition to students in need of additional support. Five years ago, he decided to leave teaching and set up Dean West Tutoring (DWT).
With the worldwide growth of online learning in the last few years, Dean saw an opportunity to expand DWT. He discovered a large market in Asia, particularly in China. Online one-to- one tuition in Asia is charged at an hourly rate that is three times higher than that usually charged in country X. DWT would need to hire agents in Asia to find potential students who want to learn online. As the new school year is starting soon in China, Dean will need to act quickly. He is considering drawing up a Gantt chart to assist his planning. However, DWT’s existing tutors are concerned about the expansion due to their lack of experience and equipment for online tutoring.
Dean is now considering two options to ensure that DWT has enough suitable tutors for expansion to online tuition:
• Option 1: Offer training and support to the existing tutors.
• Option 2: Recruit new tutors from anywhere in the world with online teaching experience.
Dean West Tutoring (DWT)
Dean West was an International Baccalaureate (IB) business management teacher in a developing country (country X). He also offered private tuition to students in need of additional support. Five years ago, he decided to leave teaching and set up Dean West Tutoring (DWT).
DWT has grown in the last five years and now employs ten tutors offering face-to-face tuition in a range of IB subjects. The tutors work part-time. DWT takes a percentage of the fees that students pay for the tutoring. To establish positive branding for DWT, Dean expects all tutors to follow a strict code of conduct. He also reviews each tutor's performance and student feedback every week. Some tutors are feeling demotivated.
With the worldwide growth of online learning in the last few years, Dean saw an opportunity to expand DWT. He discovered a large market in Asia, particularly in China. Online one-to-one tuition in Asia is charged at an hourly rate that is three times higher than that usually charged in country X. DWT would need to hire agents in Asia to find potential students who want to learn online.
As the new school year is starting soon in China, Dean will need to act quickly. He is considering drawing up a Gantt chart to assist his planning.
However, DWT's existing tutors are concerned about the expansion due to their lack of experience and equipment for online tutoring.
Dean is now considering two options to ensure that DWT has enough suitable tutors for expansion to online tuition:
- Option 1: Offer training and support to the existing tutors.
- Option 2: Recruit new tutors from anywhere in the world with online teaching experience.
Explain one advantage and one disadvantage for D W T of expanding into online tuition in Asia.
Dean is considering offering online tutoring to countries across the world, especially Asia. He has previously only offered the services of DWT locally and face-to-face. This move is therefore a radical change for DWT.
Advantages:
There is a good chance of increased revenues both in terms of value and volume since
- DTW's market will be developed beyond their current customer base, as it seems that there is a large market, particularly in China, for DWT s service.
- Given that Dean simply takes a commission from work carried out by his team of tutors, the online expansion to Asia might be seen as less risky than other developments e.g. he is not undertaking the training himself.
- The online expansion may lead to further growth beyond Asia as the move embraces changes in technology, and the nature of customer demand, which has led to a worldwide growth of online learning.
- In terms of value, DWT has also good chances of increasing their income, as in Asia tuition fees are paid three times more than in country X .
Disadvantages:
- Asia is a new market for DWT. They have no obvious links (and experience) and DTW might find it hard to generate demand.
- DTW would be very reliant on the quality of the local agents.
- DTW may need to invest in training and IT equipment. Dean may become stretched by trying to manage both aspects of the business.
- Language culture and legal issues may be significant especially based on the reasonable assumption that DWT are not currently based in Asia.
Accept any other relevant advantage / disadvantage.
Mark as [2] + [2].
Award [1] for each correct advantage / disadvantage identified and [1] for a relevant explanation with application to DWT. Award up to a maximum of [2].
[2] cannot be awarded per advantage / disadvantage if the response lacks either explanation and / or application.
For example:
For an identification or a description of an advantage / disadvantage with or without application [1].
For explanation of an advantage / disadvantage with no application [1].
For explanation of an advantage / disadvantage and application [2].
It is NOT application if candidate simply repeats the question, e.g. online tuition in Asia is mentioned in the question.