Part (a) Prepare a report to the Imfundo board of directors in which you address the following: (ii) Any other eight key factors the board should consider prior to embarking on this new business model.
Answer
Strategic Considerations
Irreversibility: The decision to sell the building and go online is very difficult to reverse. If it fails, the company could be at high risk.
Competitive Advantage & Revenue Cannibalization: The new flexible fee structure offers a competitive edge but could also reduce overall revenue if students opt for cheaper options.
Market Expansion: The online model offers a chance to attract international students, which could be a source of future growth.
Government Funding: The online format might affect student success rates, which could lead to a reduction in government subsidies.
Website Development Risks: There's a risk of delays and cost overruns in building the online platform, which could impact the launch date and revenue.
Alternative Models: The board should consider a hybrid or a pre-recorded lecture model as a potential alternative to a fully online system.
Operational & Staff
Proctoring Software: The reliability of the new proctoring software is critical to maintain the integrity of assessments and the company's reputation.
Staff Morale: The proposed 20% salary cut could negatively affect staff morale and productivity.
Skill Gaps: The company and its facilitators lack experience in online course design and delivery, which could lead to delays or poor-quality content.
Competition
Late Entrant: Imfundo is a late entrant to the online market and must find a way to differentiate itself from already established competitors.
Global Competition: The online model will expose Imfundo to competition from large international providers, which could make it difficult to attract the target number of candidates.
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