Project Study Report

A Project Study Report On Training Undertaken at

Element Akademia Titled "------------------- (BENCH MARKING) -----------------------" Submitted in partial fulfillment for the Award of degree of Master of Business Administration

Submitted To:Mr.SuhaibSiddiqui

Submitted By: Devendra Singh MBA 4th SEM

2007-2009

ACKNOWLEDGEMENT

With deep sense of gratitude, I would like to take this opportunity to Mr. Suhaib Siddiqi Under whom guidance I had completed the current project. I also like to pay my Gratitude to Mr. Vinay Sharma (M D Element Akademia). Their involvement & unstinted support has always gives me the confidence to do my work. Without their guidance this project report would not have seen the light of the day. I am also thankful for my friends for their kind co-operation to complete this project report. I would like to thank the people who took their time to help me to complete this project. I would like thanking my friends who were of immense help to me. Last but not the least; I would like to thank my parents who were a source of support throughout the making of the report.

Thanks

Devendra Singh M.B.A. 4th Sem.

PREFACE The viewing of the marketing in business administration of an organization is a fast growing concept in India. Marketing in any undertaking requires aptitude, skills, expertise, knowledge and efforts in sales as well as marketing. Marketing is considered to be the most valuable asset of the organization in revenue generation, which is greatly influenced by the performance of its executives. All professional post graduates course like MBA envisage for a student to acquire proficiency in academic knowledge as well as its application in practice by way of exposure to the business world. Projects and case studies are therefore a part of MBA curriculum, which helps in developing analytical and interpreting skills in the students through application of several concepts of management to understand the functioning of industries. This study has been taken over the “Vocational Institute in Jaipur."

Devendra Singh M.B.A. 4th Sem.,

Objectives

Objectives specify what learners will be able to do, or perform, to be considered competent. As such, they provide clear reasons for project study... Another way to view objectives is that they are goals redrafted to state performances in terms that are clearly tangible to the reader.

Reasons for objectives: Objectives are useful for students, instructors, and instructional designers. Some of the ways in which they are used include: To select and design instructional content, materials, or methods, it is necessary to have a sound basis by which success can be measured. Clearly defined objectives allow designers and instructors a method to find how successful their material has been. The purpose of instruction is to improve performance. By clearly stating the results we want the learners to accomplish, we can identify if they have gained the appropriate skills and knowledge.

During Survey I have following objectives:*

To know where EA stands against competitors in jaipur city.

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To know awareness of EA between Graduate students.

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To know what a future prospect think while joining an institute

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To know how prospects get information for selecting an institute

ABOUT Company Elements Akademia is a private limited company registered in NCR, India. It is fully funded by the management team and a group of angel investors, who are typically IIM alumni and mid/senior professionals from some of the world's most admired companies like Goldman Sachs, CSFB, GE, P&G, and Bank of America etc.

We have a BIG, BOLD vision to be the leader in high-quality job oriented courses in India and other developing countries. We have courses on Banking, Financial Services, and Retail and Insurance being offered to students in North India and courses on LPO, KPO etc. in the pipeline - our focus on growth makes us continue to look at niche, as yet unexploited areas.

Our tie-up with SIMSR (KJ Somaiya's Bschool, India' Top 20 MBA programmes) assures a very high academic rigour and quality. The current growth projection is "10 by 10"... $10mn revenues by 2010.

Vision Providing 10,000 jobs by 2010 Elements Akademia - conceptualized, funded and run by a group of IIM Alumni - is envisaged as an innovative national chain of vocational schools.

India's Service Sector is booming (60% of GDP, up from less than 40% in 1970) but faces an acute skilled manpower shortage, despite the presence of a large graduate pool (15mn+). A part of the malady is perhaps in our university education system which offers degrees but often fails to make graduates "employable".

Elements Akademia Aims to bridge that gap by offering a 6 month part-time vocational course designed with the help of our corporate partners, who are leading players in various service sectors like Insurance (MNYL), BPO/KPO (Genpact), Retail (Reliance), Banking (KMB) etc. This prepares Graduates in Tier II cities for Entry Level Jobs in the booming Service Sector of India like Insurance, KPOs/BPOs, Banking, Retail, Telecom, Hospitality etc.

MANAGEMENT TEAM CEO: Nishant Saxena Nishant has eight years of experience in Corporate Finance/Planning with Procter & Gamble – including Strategic Planning, M&A, and Corporate Finance. Worked across various geographies in Asia (Japan, Philippines, India and Singapore). Nishant has also taught in IIM-Bangalore, IIM-Lucknow, National University of Singapore and SP Jain as guest/adjunct faculty. He has been profiled by Business World as a "Leader-in-Making", and has been a consistent top talent within P&G. He is returning to India to start this company. Nishant is a BE from NITT and MBA from IIML.

COO: Vinay Sharma Vinay has 12 years of work experience in some of India’s Bluechip companies like Bharti Airtel, Comsat Max (JV with Lockheed Martin), Blowpast (Makers of VIP luggage). He has a very rich cross industry experience across Marketing and Sales function - including Product Launches, Advertising Communication, Business Development, Institutional Sales, and Customer Relationship Management – and has handled full P&L responsibility. He has consistently won Outstanding Performer Awards or equivalent based on consistent target achievement. Vinay is a BE (PEC, Chandigarh, 1994) and MBA (IIM Calcutta, 1996).

Honorary Dean: Prof. Tapan Bagchi Prof. Bagchi served 16 years in Exxon Mobil US and was a recipient of Extraordinary Contributor award. He then returned to India to teach in IIT Kanpur – where he set up IITK's Bschool, then headed NITIE and finally moved as Dean, SP Jain Dubai Bschool. He has authored 6 test books and 75 papers. He currently is associated with IIT Mumbai and is leading research into KPOs. Prof. Bagchi is a BTech from IIT Kanpur and PhD from University of Toronto, Ontario in Canada.

Head, Operations: Ankur Agrawal Ankur brings extensive experience in starting companies. Most recently, he started an HR consulting/recruiting firm (jobsjunction), and scaled it from zero to 5 cities in less than a year. Prior to that, in ICICI Lombard (new client acquisition) and Philips (setup rural distribution network in 4 states). Ankur is a Commerce Graduate and an MBA from IIML.

Head, Training: Amit Jyot Singh Amit has been working in field of training and capability development for the last 9 years, with a long experience in leading training delivery at Hero ITES. He has also worked with companies like Bharti, Vangurad info, etc. Amit is a Post Graduate in English from DU.

ACADEMIC ADVISORS

Overall Advisor: Prof. Pritam Singh, Padmashri. Former Director, IIM Lucknow. Former Director (and Professor of Eminence), MDI Gurgaon Dr. Pritam Singh has devoted his life to the development of management education: He led refocussing of IIM Bangalore as an integrated management school, catapulted IIML to India's Top Bschool, delivered a dramatic turnaround of MDI and developed more than thirty international collaborations in 5 years. He is on the board of nearly a hundred top institutions (RBI, HAL, Oriental, SCI, UTI etc). He has also been conferred with many prestigious awards including ESCORT Award¸ FORE Award¸ Best Motivating Professor IIM Bangalore Award¸ Best Director of Indian Management Schools¸ Outstanding CEO (Chief Executive Officer) National HRD Award etc. Dr. Singh is the author of seven academically reputed books and published over 50 research papers. An M.Com (BHU) ¸ MBA (USA) ¸ Ph.D. (BHU) ¸ Dr. Singh is the author of seven academically reputed books and published over 50 research papers.

Advisor, Academic Programme: Prof. Suresh Ghai, Director, KJ Somaiya Business School Prof. Suresh Ghai has been the Director of K J Somaiya Institute of Management Studies and Research, one of the top 20 Management Institutes in India, since 2001. Prof. Ghai has worked in the Industry for 28 years in the areas of Marketing and International Business. He has conducted several senior level MDPs and has presented papers at several prestigious conferences and seminars. Prof. Ghai is the Honorary Secretary of Bombay Management Association. Prof. Ghai is a BE from IIT Roorkee and an MBA from IIM, Ahmedabad.

Advisor, Operations: Prof. Rajiv Srivastava, Former Dean, IIM Lucknow Rajiv Srivastava is a Professor at IIM Lucknow focusing on Operations Management. His emphasis on Manufacturing and IT applications in Operations Management has helped create one of the most comprehensive collections of Operations Management software in any academic institution. Prof. Srivastava is Batch (IIT K), PGDIE (NITIE Mumbai) and Ph.D. (Virginia Tech. USA)

Advisor, Business Communication: Prof. Neerja Pandey, Chair Communications Group, IIM Lucknow Prof Neeraja Pande is an Associate Professor in IIM Lucknow in the communications group. She teaches Communication for Management and International Business Communication courses. Her research interests are in Corporate Communication; Managerial Excellence through Effective Communication and Organizational Integration Through Strategic Communication. She is currently consulting on Interpersonal Communication Skills; Media and Crisis Communication Skills and Communication Strategies for Business Image Development. Prof. Pandey is a PhD in English from LU.

Advisor, Managerial Effectiveness: Prof. Archana Shukla, PGP Chair, IIM Lucknow Prof. Archana Shukla is a Professor in the Human Resource Management group in IIM Lucknow. She teaches Organizational Structure & Design and Team Building courses. Her research interests are in Knowledge Management and New forms of organizations. Her consulting interests are in Group dynamics, Team building and Organizational design. She has been a management consultant for J&J, Reckitt Benkiser, Hughes Software, SBI, SAIL; Crompton Greaves etc. Prof. Archana Shukla has a Ph.D. (Organizational Behaviour) from IIT Kanpur.

INVESTORS Elements Akademia is a private limited company incorporated in NCR, India and started operations in Sept 2007. It is fully funded by the management team and a group of 10 IIM Alumni investors, who are typically senior professionals with experience in some of world's most admired companies. It believes that the current university education system in India has an inherent flaw in that it offers degrees but not jobs. Elements bridges that gap by offering a high quality but affordable vocational training, designed with the help of its corporate partners who are leading players in various service sectors like Insurance (MNYL), BPO/KPO (Genpact), Retail (Reliance), Banking (KMB) etc. The 6 month part-time course is targeted at graduates in Tier II cities. The angel investing round is now complete (Mar 2008) and the company has raised the requisite capital at the targeted valuation. The next round (VC Series A) is envisaged for first quarter of 2009 requiring $2mn funding to help expand in 15 more cities. Investors interested may write to [email protected].

Partners Elements Akademia partners with leading MNCs to design job-oriented courses in the most booming sectors of Indian economy. Typically, we have spent many weeks to fully understand the skill requirements of our corporate partners, and then – together with them and our academic advisors – design a curriculum that prepares students for the career with these companies.

Our academic partner, SIMSR, KJ Somaiya’s Business school (India’s Top 20 MBA programme) supervises the academic rigour and offers their formal certificate to successful candidates.

8REASONS TO JOIN EA

“We offer Careers, not just English.” 1. A Comprehensive Life Enhancer Course: While English Language capability is an important component, this course offers a complete set of skills required to succeed (managerial and domain skills, grooming, sensitization to MNC work environment, IT skills etc.). This is different from usual courses that either offer only language or only personality development etc. We have seen success requires a balance between various skills.

“World’s best companies, who also return your course fees.” 2. Placement opportunities: Our lead corporate partner is Genpact - ranked by Nasscom as India's largest 3rd party BPO Company for 2 consecutive years. Our unique tie-up with them ensures reimbursement of your course fees (Rs. 10,000) after a year of service, so effectively your course becomes almost free. In the worst case that you don’t get selected, we provide retraining and re-interviews (also with other partners). Our planned conversion is 90%+.

“This is a serious school, not a coaching centre” 3. Rigorous Academic Programme: Students are required to attend regular classes (minimum 85% attendance or else asked to leave), do regular homework (1-1.5 hour of self-study every alternate day), and regularly take assessments (to know how they are improving). Conversely, students give regular feedback on the class/faculty.

“Highly Credible Management Team” 4. Conceptualized, funded and run by IIM alumni: Conceptualized, funded and run by IIM alumni - many returning to India with the vision to make India's youth employable. Very capable management team (Our Honorary Dean is the former Chair of the IIT Kanpur Business School). Course content advised by senior IIM Faculty. We are also Associate Members of Nasscom, India's leading chamber of commerce for BPO/KPO.

“Formal Course Certificate” 5. Long Term Value: Our Academic Partner, SIMSR, KJ Somaiya’s Business School, ranks amongst the Top 20 MBA programmes in India. Each student who successfully passes the course will be given a certificate endorsed by SIMSR. This is a nationally recognized certificate with a lifelong intrinsic value.

“Not everyone who applies is admitted” 6. Honest Assessment: There is a strict entrance criterion to admit only those students who can realistically be “employable” in 6 months. Our research shows that very modest level of English typically requires longer duration courses and even then success rates are low. We are honest with such individuals and recommend them against joining this course.

“We teach exactly what the industry wants” 7. Industry relevant course: We have done extensive research with multiple companies to understand what exactly are they looking for in a candidate and then worked with their HR to design this course. The objective is that our course/exam is exactly in line with the entrance recruitment process of these corporates, so success in our exam should mean success in actual recruitment.

“You will be our student ambassadors” 8. Ongoing Relationship: Once you have successfully completed our course, you join our exclusive alumni network for life – which provides help on various alumni issues. Example: we provide a comprehensive relocation advisory if you need help in changing cities. We also try to find industry mentors, and ongoing networking opportunities. Your and our destinies are intertwined – we can only grow together.

BUSINESS MODEL

Elements Akademia offers an industry customized Pre-Hire Training School – providing a consistent quantity of trained manpower. We work with our corporate partners to design a programme and then: Do focused marketing to attract target number of students of “right profile” in at least 15 non-metro cities. We expect to hire approximately 500-1000 per city per year.

Formally screen them before programme enrollment on “fit” specifications laid down by our corporate partners.

Train them on skills/content designed based on inputs from our corporate partners.

Enable hiring with constant equity building of corporate partner, early visibility of candidates, and campus interviews.

Help in Relocation by providing complete relocation advisory to the students.

We minimize commitment on the part of our corporate partners – they only hire students who meet their hurdle rate in the usual hiring interview.

Our key request to the corporate partner is to help us fully understand their requirements – so we can develop the right pre-screening and right training programme. Our internal goal is to ensure 90% of our students get selected

CONTACT NEW DELHI (Corporate Office): Elements Akademia Pvt Ltd. Corporate Office #C -1067, Sushant Lok Phase I, Gurgaon - 122001 Tel: +91 (0124) 4203235 Mobile: +91 9717298732 Email: [email protected]

BHOPAL CENTRE: SF - 15, 2nd Floor, Mansarover Complex, (Near Habibganj Railway Station) Bhopal - 462016 Tel: +91 (755) 4290010 Mobile: +91 9993500700 Email: mailto:[email protected]

JAIPUR CENTRE: D-103/C, Lal Kothi Marg, Siwad Area, Bapu Nagar, Jaipur - 302015 Tel: +91 (141) 4028855 Mobile: +91 9929066555 Email:mailto:[email protected]

KANPUR CENTRE: 16/79H, Civil Lines, (UTI Lane, Behind RBI), Kanpur - 208001. Tel: +91 9307207200 Mobile: +91 9793093333 Email: mailto:[email protected]

LUCKNOW CENTRE: A-1/9B, Sector B Aliganj, Lucknow - 226024 Tel: +91 (522) 4000050 Mobile: +91 9956290290 Email: [email protected]

ENTREPRENEUR DETAIL

Entrepreneur's Details Name

Nishant Saxena

Age

31

Hometown

Allahabad, Uttar Pradesh

Family background

First gen entrepreneur

More than 1 company?

No

Education

Masters

Graduated from

IIM

Former employer

P&G Asia Pacific

Former designation

Head of M&A

Area of responsibility

Head

Favorite book/movie

The Shawshank Redemption

INTERVIEW Can you give an insight about the elements that make ‘Elements Akademia’ so sang-froid. After spending quite some years in corporate life, objective was to do something which is not only a good business but also serves the larger interests of our country and society. So, education and within education, employability is a burning issue which is not only leading to societal unrest on one side but also is a slowing the growth of economy due to dearth of right skilled people.

We have twin customers. The student whose #1 unmet needs (survey across graduates in 10 Tier II cities) is a Job. We help them get a top notch placement in a good MNC. The Corporates are our other customers. The #1 unmet need of HR there is the availability of large pool of ready to perform hires. We meet this need by training students on precisely the skill sets required by the companies.

“We offer Careers, not just English.” Element Akademia offers scope in Insurance, KPOs/BPOs, Banking, Retail, Telecom, Hospitality etc whereas English is a major concern for only BPO’s - Why did particularly emphasize on rectifying something that no one is pondering about?

After interacting with leading influencers and educationists we understood this problem of un-employability. On the other hand, our interaction and experience in industry tell us the real shortage of talent especially at entry level for service sectors like Retail, banking, insurance and BPO/KPO.

Hence, we found this to be win-win propositions where in we can develop a business model by bridging this skill gap

Tell us about your team members. Are you planning to include some more workforce at present? Nishant Saxena, CEO, an IIM-L alumnus, has extensive Pan-Asian (Japan, Philippines, India, Singapore) experience in P&G, consistently rated as one of World’s Top 3 Most Admired companies. He worked in areas of Finance and Strategy (Regional M&A Head and before that deputy CFO of India Operations), and has been profiled by Business World as a “Leader-in-Making”. He is also a visiting faculty in IIMs, NUS, SP Jain etc.

Vinay Sharma, COO, an IIM-C Alumnus with more than 12 years of experience, was most recently BU Head of Marketing in Airtel India, and prior to that was a Senior Manager in Comsat Max (JV with Lockheed Martin), Blowplast (Makers of VIP luggage) etc. He has consistently won Outstanding Performer awards and brings with him rich Marketing & Sales experience.

Prof. Tapan Bagchi, BTech from IIT Kanpur & PhD from Canada, is the Honorary Dean. He brings with him four decades of experience which spans 16 years in Exxon Mobil US, as well as founding Chair of IIT Kanpur’s B-school, which he set up in 1983. He also headed NITIE as Director and helped setup SP Jain Dubai B-school as Dean. He has authored 6 test books and 75 papers.

The Academic Advisory Board includes Padmashri Prof. Pritam Singh (former Director, IIML), Prof. Rajeev Srivastav (Former Dean, IIM Lucknow), Prof. Neerja Pandey (IIML, founder chairperson of communication group), Prof. Archana Shukla (IIML, National HR expert) and Dr. Sashi Rai (Member, UGC).

So, each plays a complementary role leading to expertise and experience in all critical areas. We keep on recruiting as and when required but as of now team has stabilized.

What are the growth prospects of a pass out from Elements Akademia? How far should he ascertain his career horizon?

Students are undergoing our 6 month Executive Programme in Services Management in our centers and are getting placed with our corporate partners like Genpact, MNYL, Bank of America, Shopper Stop etc. After that, they can grow and build good careers within these top companies Institutes and corporates avail our services leading to enhancement of their students/ employees and making them more productive and employable

What are your plans about geographical expansion?

Scale up shall happen through 5 avenues:

1. Immediate will be to become bigger in existing cities. Currently our revenue in most existing centers is only 20% of the revenues of the largest education company in that same city. We need to bridge this gap. 2. Second will be geographic expansion. Once we hit Rs. 1-1.5 crore revenues in key cities, we will expand from current 5 cities to 20 cities. 3. We will focus more on Strategic Alliances and long term contracts. We are in final stages of discussions with various governments, MFIs, and organizations for contracts worth 50 lac each. 4. We will look at offering more/high priced courses. 5. Long term, we see the same unmet need being present in most developing countries.

India is a country with huge manpower resource with more job seekers than providers; do you think that the trend will change?

We don’t think the scenario will change immediately. However there is an important issues of mismatch between what job providers want and what job seekers have. This gross mismatch in skills if taken care of can significantly affect the unemployment problem and let these youth join mainstream corporate sector. This is what we are trying to do.

Hence, skills development as opposed to conventional education will be more effective in solving unemployment problem.

What would you like to share about your revenue model?

Our revenue Model has three revenue streams

1. Fees provided by students who undergo the courses in our centers. 2. Fees received from companies for providing trained manpower. 3. Revenue from strategic training assignments with leading institutions and companies.

How did the cash flow in the initial stages of Elements Academia? How did you bootstrap?

Personal savings and fund support from friends and mentors. Networks amongst High Net Worth individuals, a business plan that appealed to people and personal credibility.

We started off at the usual slow note where the first trench of funds took 9 months to materialize. But then the moment we had shown initial success, and were ready to go for Series B funding, we had more subscribers than investment needed and actually had to say no to some people. What a circle!

How do you plan to legalize? Government licensing as a school or a firm under Companies Act?

Ours is a private limited company which is a ‘for profit’ organization

What’s the biggest surprise you’ve had in the Elements Academia recently?

Success we received in our strategic business despite starting late on this part of business.

What are the learning experiences at Elements Academia?

• • • • •

Scaling up while maintaining consistency and quality of training delivery Building a high performing second level of team at centers which can help release our bandwidth for expansion and new initiatives Building a scalable training engine which has technology solutions Building a retail brand

What’s your opinion about the similar training Institutes and how do your institute differ from them?

At one level our competition is similar employment oriented courses like NIIT, Aviation. At second level, competition is also from tier II, tier III MBA colleges where also students go for enhancing employability. AT third level, there are mom and pop shops which claim to offer English/personality/job oriented courses but (generally) deliver very low quality. However, the market is so big and diffused that a quality offering with results which we are providing will surely make us a Tier I service provider

Benchmarking: A Discovery Mechanism for Six Sigma Learning Abstract The process of benchmarking was developed in the late 1970’s by Xerox Corporation as it needed to rapidly learn how to combat the ongoing commercial attack by Japanese industry and preserve its survival in the copier business. In this process Xerox learned that evaluating competitors and copying what others are doing, while this may be a time-honored characteristic of human behavior from the earliest of times, it is not a necessary and sufficient condition to ensure that an organization remains competitive. This fact raises an important question: What has characterized the development in this process of benchmarking and what have we learned over the past thirty years it has been practiced? Perhaps even more important is the question: What is the role that benchmarking fulfills in a modern quality management system whose foundation is built upon the principles and methods that are characterized as "Six Sigma" methods for quality management? This paper describes how the method of benchmarking is being blended into the analysis methods for process improvement approach using Six Sigma, Lean Enterprise solutions, and Decision Workouts to stimulate change management. Process benchmarking acts as the critical methodology for generating a portfolio of improvement projects which can systematically increase organization performance effectiveness, efficiency, and economy as it continues in its journey toward performance excellence.

Introduction Ever since 1990 when Roger Milliken declared that "benchmarking is the art of stealing shamelessly" the definition benchmarking has evolved into a "quick fix" for making quick business performance improvement. Benchmarking is a systematic and scientific methodology for comparing performance between organizations to evaluate the relative excellence of their alternative business practices based on the measured achievements of analytical benchmarks. But, benchmarking is not a quick fix, it is a rigorous process that requires both sweat equity, learning about one's own processes and coordinating logistics of study mission to other organizations, and analytical integrity, measurement and analysis of sustained work process performance through the detailed mapping of processes and head-to-head evaluation of performance differences. In a typical benchmarking study the analytical information contained in a benchmark or a comparative measure of process or results performance is used to establish which organization is candidate for a "best practice" for a particular business process. Then the business process must be specified in detail to understand how the benchmark result was achieved and to determine which specific activities enabled the successful performance. Finally, learning must be customized to apply new knowledge to organizations that have not attained the level of "best of the best." A benchmarking study must be analytically as well as culturally successful. The methodology should heed the warning of Dr. W. Edwards Deming who said (Deming, 1982): "It is hazard to copy. One must understand the theory of what one wishes to do." Cultural and business model adaptation is necessary to assure that the lessons observed in one organization can be successfully transferred to another organization whichoperates in a different cultural framework. As Dr. Deming further cautioned (Deming, 1982): "Adapt, don't adopt. It is error to copy." In the development of Total Quality Management (TQM), benchmarking has a unique place as both a tool to stimulate improvement and a management technique that aids in strategic positioning of an organization. Benchmarking provides opportunities for full organizational participation in business process improvement by engaging the management team in the architecture of change and choice of focus areas for study; involving the middle managers in self-assessment of the work processes that they own and in adapting the lessons learned from other organizations; and relying on the study

of related processes by the organization's front-line process experts who are charged with discovery of the significant differences that lead to performance gaps. The objective of benchmarking is to accelerate the strategic change leading to both breakthrough and continuous improvement in products, services, and processes, thereby resulting in enhanced customer satisfaction, lower operating costs, and improved competitive advantage by adapting best practices and business process improvements of those organizations that are recognized for superior performance. Benchmarking is a method that forces organizations to look outside them selves in order to avoid myopic illusions of grandeur that come from reflecting on internal experience without external validation. Benchmarking is not just a checklist or set of numbers that are used to make management feel better about their current performance. Benchmarking really should make management uncomfortable due to the identification of gaps in business performance. Benchmarking should challenge management due to the discovery of performance enablers that could help them to improve. Perhaps the following juxtapositions can help describe this situation

Benchmarking is: A discovery process An improvement methodology A source of breakthrough innovation An opportunity to gain profound knowledge An objective analysis of working processes A process-based learning approach A way to generate ideas for creative A way to capture tacit process knowledge

Benchmarking is not: A fixed, rigorous cookbook process A panacea for developing all problem Supporting continuation of "business as A management fad or "tool of the day" Based on a subjective "gut feeling" or Just a measurement of performance results Merely a set of quantitative comparisons Limited to within industry/competitor analysis Table 1: Benchmarking Application Scope Analysis

It is important to observe that the logic of the benchmarking process does not fail the test that was issued by Dr. Deming in the early 1980s, when he cautioned executives against deadly diseases in the management of business that were derived from setting arbitrary goals based solely on visible performance measures, without understanding the depth of profound (process-related) knowledge that lay underneath most high level performance measures. For instance, Deming would call "arbitrary" the use of benchmarking using the logic that is described in the first column of Table 2 where change is made based on superficial observations or anecdotal evidence. The logic of benchmarking is much more process-oriented and requires the development of the type of profound knowledge advocated by Dr. Deming - knowledge of how the process achieves statistically significant results based on the operational definition of work process activities which have been meticulously specified in order to understand those specific differences that could then be properly called the "root cause" of the performance distinctions that have been observed. This logic is based on statistically sound observations of process performance in order to discover the drivers of exceptional results as shown in the second column of Table 2. Traditional Logic: Benchmarking Logic:

The price of our competitor's product is The leading companies have very similar 15% lower than our costs; therefore, we operations that are consistently 20% more must reduce our costs by 15%. effective and efficient that our operations. The reasons that there operations are more effective and efficient is because they have implemented these specific enablers. The specific practices used to improve this work and produce this outcome include a limited set of performance drivers. The following enhancements in our way of working would be appropriate for our own business model and culture and should be able to lead us to improved performance. The estimate of performance improvement that could be gained from implementing a program of process enhancements would be able to attain this theoretical gain. Table 2: Comparison of Traditional Logic with Benchmarking Logic The ability to apply this logic to learn about and understand the root cause of process improvement at the benchmark organization thus encourages translation of these lessons into appropriate change for the investigating organizations. By this process of conscientious learning and cautious adaptation, a company can learn the lessons needed to transition it to a level of World Class performance. Lee Raymond, CEO of ExxonMobil, remarked in a meeting that I attended: "Benchmarking has been the most important practice for the continuous improvement of our corporation."

History of Benchmarking Benchmarking is a management process developed in the 20th century. It has transitioned through four generations of development and now is in a fifth generation of maturity. This chapter expands on previous writings and clarifies the relationships in the transition of benchmarking that has brought it to its current level of global benchmarking through the ubiquitous access to data and information that is offered through the Internet (Watson, 1992, 1993, and 2007). Tracing the historical context of benchmarking allows an improved understanding of how it can contribute to performance improvement today. Let's begin this historical journey by gaining the perspective from the close of the 19th century to understand how the industrial revolution and its approach to interchangeable parts fostered the idea of interchangeable business processes and the application of the scientific method to study business became extended into the use of business measurements to define best practices. The maturing of benchmarking could be viewed as a series of generations or stages in development... This taxonomy of benchmarking is messy as the stages overlap and some have no clear beginning or ending. But, perhaps by putting them in writing, along with the logic that defines their boundary conditions, this will help managers to clarify what exactly it is they are doing when they seek information to improve their business. However, in this paper we will observe that there have been about five generations of development for this methodology. Moreover, we can observe, just like Sir Isaac Newton, that benchmarking enables us to say: "If I have seen further, it is because I have stood on the shoulders of giants." We see more clearly and make better decisions because we are not replicating the mistakes of the past, but using the analysis of the past to sharpen our focus on the future! Discovering profound knowledge from history can help you to see the future with more perfect vision!

The Dawn before Benchmarking Science In the late 1800's the management science work of Frederick Taylor encouraged comparison of work processes through the application of the scientific method. Taylor's concept was that there was "one best way" to do work and that it could be discovered through the scientific study of the way that work was performed. When the best way was discovered then this should be applied as the standard for work performance until a better way was discovered. These technical studies of work practices were conducted by industrial psychologists and industrial engineers. During the Second World War, this practice of making comparisons extended so that it became commonplace for companies to 'check' with other companies in order to develop standards for pay, working hours, safety regulations and related business hygiene factors.

First Generation — Competitive Product Analysis and Reverse Engineering This first generation of benchmarking could also be labeled 'natural curiosity and its natural extension.' Even when production was done by craftsmen forming individual works with their own hands - artisans who saw each piece for its uniqueness, there was a tendency to compare your own work with that of others to determine which was the 'best of the best' in your field. This concept of 'best of the best' is described by the Japanese word 'dantotsu' which was the term Fuji Xerox used to describe the object of the search for best practice. Today, this practice is observed through the engineering teardown analysis used in reverse engineering to understand how competitive products have been designed, what materials have been used, and what technologies were employed in their production. Another focus is the competitive product analysis which can take one of two forms: marketing-based comparing features or functional performance to customer perception and technology-focused comparing degree of performance that is delivered against a standard (e.g., computer run speed for a benchmark software program). This form of 'benchmarking' will probably continue ad infmitum. Perhaps the most interesting insight in this period leading up to the development of benchmarking comes from comments describing how comparative product analysis and reverse engineering were applied in Japanese industry. In his book describing the development of the Toyota Production System, Taiichi Ohno, former vice president of manufacturing and co-architect of this system with industrial engineer colleague Shigeo Shingo, described the visit that opened their eyes to the possibility of 'lean manufacturing' as he talks about the observation of the stock replenishment system that allowed fruits and vegetables to be sold while fresh and reducing waste from spoilage. As he admits: "from the supermarket we got the idea of viewing the earlier process in the production process as a kind of a store." He further observed (Ohno, 1990) that the Japanese adopted many of these practices because of their innate "curiosity and fondness for imitation." Indeed during the period of 1950-1975 many American businessmen felt that Japan was merely a Sopycat' and therefore it did not present a serious business threat since it did not invent any new technologies. At the macro-economic level this may be true, but what the Japanese did invent was the ability to produce products with minimum waste because they did not have a resource-rich environment that could tolerate the loss to society that came from indiscriminate use of its scarce materials or poor productivity practices. Indeed, during this time many Americans joked about the stereo-type Japanese industrial tour where engineering visitors came gawking at the magnitude of American industry taking many photographs to illustrate its greatness. These pundits

missed the point of the tours - to identify ideas that could be transitioned to Japanese industry and improved to assure congruence with their developing manufacturing practices that focused on lean operations. At the same time that its engineers toured American plants, others stripped down the products and looked for ways to deliver the same functions at lower prices - effectively value engineering the products by eliminating waste from the design and its production process simultaneously.

Second Generation - Informal Visits and Process Touring In a paradoxical way the second generation of benchmarking is once again more art than science in benchmarking. There is a syndrome among managers to seek the popular, adopting what is new, and worshiping what is popular without making a critical assessment of its validity or applicability. These are weaknesses that are inherent in many 'art-like' benchmarking processes. Taking a walk in a factory does not constitute a benchmarking site-visit - this is industrial tourism. Brief conversations with colleagues at a conference are not benchmarking - these are chats. Benchmarking must include three elements: definition of an object of study, performance measurement of the object and comparison to other similar objects in order to determine which alternative has achieved the best capability and why. While these forms of 'benchmarking' will probably also continue ad infinitum, they should be strongly discouraged, as they cannot produce profound knowledge of the process that allows your organization to drive improvement. During this same period, American industry tended to internalize its efforts rather than look toward external influences as if they would somehow poison the miracle of the post-war industrial might that was transforming American into the world's greatest economy. In its arrogance, many leaders in American industry believed that Yankee ingenuity' was the solution to everything and that they had no need to look elsewhere for creative ideas in either product or process technology. Given this internal focus, it is not surprising that in the 1950's business leaders like Hewlett-Packard's Bill Hewlett and Dave Packard encouraged their engineers to develop "next bench syndrome" - the practice of checking with engineering colleagues to define those functions and designs to be developed and implemented. This commercial arrogance was prevalent in American products -engineering push of features into the marketplace without consulting customers about needs or desires. This lead to a systemic vulnerability that could be exploited by Japanese companies if they could discover what it was that customers wanted and deliver it first. And they did exploit this vulnerability. Throughout this first seventy-five years of the last century, methods related to benchmarking could be best described as an art rather than a science. The development of benchmarking into a science was the contribution of the Xerox Corporation as it sought to fight an onslaught of Japanese businesses that were taking advantage of a court ruling that stripped Xerox of its patent protection for its copier business due to its monopolistic business practices. The largest beneficiary of this ruling were the Japanese firms that developed disruptive technology at the low-end of the copier business and caused Xerox to lose market share drastically in the period from 1976 to 1979 - with a subsequent drop in return on net assets from 25% to under 5%. How did Xerox respond to this crisis? Third Generation — Competitive Benchmarking (1976-present) This phase of the benchmarking evolution was marked by the use of a scientific approach to benchmarking commenced by competitive benchmarking as an extension of competitive intelligence and market research. Competitive benchmarking seeks to

discover the specific actions that are being taken by competitors to gain advantage in the market place through their strategic choices and capital investments in products and processes. Since competition is the defining ingredient in a free market, this type of benchmarking is an essential ingredient in every informed company's portfolio of tools in their strategic business planning process. After Xerox was forced to put its patents into the public domain in 1975, a steady stream of foreign Competitors entered its markets - lead by Canon of Japan and Savin from France. The manner in which they chose to enter into competition caused little concern among Xerox managers because the competitors were only producing personal copiers - low throughput devices that fit onto a manager's desktop or file cabinet and were only capable of reproducing a single page at a time and very slowly, compared to the large, big-speed copiers that Xerox sold for use in central copying locations. However, it became clear over a number of years that these small machines were taking work away from the larger machines and the Xerox business model leased the machines but sold individual copies that they produced. Thus, Xerox was losing its business one page at a time! The Xerox benchmarking of mail-order giant L. L. Bean is a classic tale in modern business history. However, one lesson has been lost in this history - what was the catalyst for doing this study and how did it get exposed? The Xerox management team learned about their performance gap to their new competitors in Japan from their Japanese subsidiary - Fuji Xerox, a joint venture firm that had been established between Xerox and Fuji Photo Film. Yotoro "Tony" Kobyashi was the CEO of Fuji Xerox at the time and it was his people who evaluated their Japanese competitors to allow a three-way comparison to be accomplished. By comparing scarce open source knowledge of the Japanese competitors to the detailed knowledge of a fierce, but captive competitor (Fuji Xerox), Xerox Corporation was able to 'triangulate' (which means to estimate performance of a third party using two known variables) and determine their standing against the competition. This is what Bob Camp would call 'Step Zero' in a benchmarking study - a strategic discovery process that I call strategic benchmarking (Camp, 1995 and Watson, 1993). Without this step and discovery, Xerox would not have the insight about what or where it must focus its benchmarking lessons to learn about what must change in its operations in order to make improvement endure. Xerox CEO David Kearns turned to his Fuji-Xerox Japanese joint venture lead by Kobyashi to discover what could be done to stem the tide of lost sales and profitability. The Xerox benchmarking method was borne out of the business requirement to estimate their competitor's strength by triangulating from two known sets of performance results (Xerox USA and Fuji Xerox) to learn about the unknown capability of their Japanese competitors (Hillkirk,1986; Camp, 1989, and Palermo and Watson, 1994). This created a real wakeup call for the Xerox business leaders - not only were Xerox new products twice as long in development, but their manufacturing cost was equal to the sales price of the competing products. Thus, there was no way that Xerox could compete head-to-head on these disruptive technologies.1 This provided the first indication that there was real trouble at Xerox -performance indicators that demonstrated that there was a gap in performance, but it didn't tell what the gap was, why it existed, or what to do about it! Competitive benchmarking proved its value by delivering this wake-up call, but it wasn't capable of providing a change agenda that would return Xerox to profitability. For this, Xerox had to learn from business leaders in each of the performance areas where they suffered from shortfalls against the competition, so they put together a team to create a process for learning which they called benchmarking. While the lessons learned from competitive benchmarking told what was wrong and estimated how far Xerox lagged behind the competition, it was the benchmarking of

industry best practice that gave sparks to fuel the creative imitation of leading processes that brought Xerox out of its crisis. Xerox turned to companies with successful practices in those areas where they had observed their own 1

Harvard Professor Michael Porter in is early book Competitive Strategy (New York: The Free Press, 1985) describes the competitive dynamic for a market entrant where the barrier to competition has been removed (patent protection) and the entrant has cost-differentiated itself from the market leader. Harvard Professor Clayton M. Christenson in his insightful books, The Innovator's Dilemma (New York: Harper Business, 2003) and The Innovator's Solution (with Michael E. Raynor (Boston Harvard Business School Pres, 2003)), calls this approach to a competition 'disruptive innovation' in which new market entrants fundamentally change the game of the competition by seeking a lower-profit, vulnerable market from which to attack the mainstream market. In this environment, the new market entrant is given freedom to operate in this market because it costs too much in terms of lost gross profit margin for the entrenched leader to defend a poor profit market. Over time the market entrant earns the right to compete for the mainstream market. This is precisely what Canon and its Japanese competitive cohort did to Xerox. shortcomings - the retailer Sears provided insights into inventory management, while the mail order firm L. L. Bean contributed learning of warehouse operations. Learning was incorporated at a furious rate and Xerox converted itself into a new company with the result that by 1985 Xerox had increased its return on net assets to over 10%. However, benchmarking was restricted at this time to the few companies that Xerox studied and was largely held as an internal practice within the Xerox Benchmarking Network - about 100 middle managers who conducted these studies. It was only after Xerox put these methods into the public domain by opening sharing the practice after they won the Malcolm Baldrige National Quality Award in 1989 that the interest in benchmarking expanded Afterwards Corporate Partnerships and Sharing Flourished In 1981, a second event stimulated interest in business improvement. Dr. W. Edwards Deming was featured in the NBC television White Paper titled "If Japan Can, Why Can't We?" A challenge was issued to American management - they could improve their business and survive or allow it to grow stagnate in the face of the Japanese competition and die! At this time many American industries were under attack by Japanese firms Xerox was not alone; however, the influence of Deming was just to focus management on the need to improve. Deming was not a big fan of benchmarking (Deming, 1982): "I think that the people here [in America] expect miracles. American management thinks that they can just copy from Japan. But they don't know what to copy." However, Dr. Joseph M. Juran was the quality consultant who most influenced Xerox and it is unclear if Dr. Deming ever really understood how the Xerox benchmarking methodology worked. Deming talked as if he felt that benchmarking was more an art than the science it had become under the coaching of Kobyashi at Xerox! But, Deming always asked the question: "How do you know?" It is this question that is central to any effort at benchmarking and is the point where Deming's philosophy and benchmarking merge. The effect of Deming's television white paper should not be diminished - it did stimulate both an active dialog among companies as well as the sharing of best practices (although not derived using the scientific method as at Xerox). In the early 1980s a number of companies engaged in cross-company sharing and studies which were foundational as subsequent benchmarking networks. Some examples from my direct experience at Hewlett-Packard during this time include:

•General Motors Cross Industry Study of quality best practice in quality and reliability

-a 1983 study of business leaders in different industries to define which quality management practices lead to improved business performance. •General Electric Best Practice Network - a consortium of some sixteen companies who met regularly to discuss best practice in non-competitive areas. These companies were selected so that none competed against any other participant, thus creating an open environment for sharing sensitive information about business practices. Hewlett-Packard also had a wide variety of collaborative efforts with other businesses. For instance, HP helped Proctor & Gamble understand about policy deployment (hoshin kanri or the planning process that grew to maturity at HP's Yokagawa Hewlett-Packard subsidiary). The nature of this collaboration included inviting two P&G executives to work inside of HP for a six-month period to experience first-hand how this planning process

•Worked. Another

company that enjoyed a special relationship was Xerox as it actively sought to learn from the leaders in product development and HP had a strong reputation for effective new product development. Also, Ford and HP conducted business practice sharing on many different levels as the chief executive officers were on each others boards of directors. HP also was a founding member of the GOAL/QPC Research Committee, a consortium of some thirty or so companies established to study Japanese quality practices and translate Japanese training and academic research material into English. Finally, HP joined with many other firms to give support to Florida Power & Light as they successfully challenged the Deming Prize of the Japanese Union of Scientists and Engineers (JUSE). FPL and HP shared the same Japanese Quality consultants which facilitated this cross-company learning (most notable among these 'shared consultants' were Dr. Hajime Makabe and Dr. Noriaki Kano).

The Diffusion of Benchmarking as a Practice Another significant event that accelerated the spread of benchmarking as a recognized business best practice was the presentation of the Malcolm Baldrige National Quality Award to Xerox which put a public spotlight on benchmarking as a practice that made a difference at Xerox. David Kearns, the Xerox CEO who lead the company throughout its turnaround effort, decided to put all of its quality practices into the public domain (these included the benchmarking process, problem solving process and quality improvement process) and Xerox also followed the practice of Baldrige Award Winners of offering seminars to explain what they did and how it was accomplished. Bob Camp's successful book reported on the work of "Team Xerox" to develop and deploy a common method for benchmarking throughout the company. Following these efforts, benchmarking gained more public attention as a number of books that were published

in the 1992-3 period that facilitated the diffusion of learning about the benchmarking process.2 Fourth Generation — Process Benchmarking (1992-present): Process benchmarking can be either strategic or operational in its focus depending on where it is focused. The importance of the subject and the breadth of its application distinguish between these types of studies. It is this type of benchmarking that forms the core of scientific studies. Process benchmarking will be the continuing focus of serious business investigations and will provide insights into the way businesses achieve flawless execution of their processes to achieve excellence in the perspective of their customers. Institutionalization of the Practice of Benchmarking However, it wasn't until the Houston-based American Productivity & Quality Center (APQC) established The Benchmarking Clearinghouse (IBC) in 1992 that a common methodology and approach for benchmarking was spread into a consortium of companies who purposefully gather to share and study their internal practices in common interest groups. The IBC was the brainchild of Dr. C. Jackson Gray son, the founder of the APQC and one of the drivers behind establishment of the Malcolm Baldrige National Quality Award. Grayson believed that benchmarking was not just a fad but it was an essential business practice. Grayson had been a dean of two graduate schools of business and administrator of the wage and price controls process put in place to control runaway inflation in the early 1970s under the Nixon administration. An endorsement about the business value of benchmarking coming from him was indeed high praise, but to have him actively engage in a process to broaden the scope of benchmarking through developing a forum that facilitated crosscompany learning was truly indicative that benchmarking had transitioned from a company-specific quality improvement tool to an essential ingredient of management best practice.3 The contribution of the IBC that lead to the eventual mainstreaming the practice of benchmarking was four-fold: •Creating a benchmarking network among a broad spectrum of industries and supported by an information data base and library located at its Houston office. •Conducting benchmarking consortium studies on topics of common interest to members. •Standardizing training materials around a simple benchmarking process and development of generic business process taxonomy (in collaboration with Andersen Consulting) that could form a common process language and facilitate cross-company performance comparison. •Accelerating the diffusion of benchmarking as an accepted management practice through the propagation of the Benchmarking Code of Conduct that governs how companies collaborate with each other during the course of a study. The final event that cemented the coming spread of benchmarking was its pervasive inclusion in the criteria for the 1991 version of the Malcolm Baldrige National Quality Award which mentioned the use of benchmarking or competitive analysis in 12 of the 32

evaluation criteria sections. This level of reference surpassed all other quality tools and methods in terms of the number of mentions in the award criteria and indicates that benchmarking was fast-becoming a mainstream practice during this time. Mainstreaming Benchmarking into Business By 1994 the IBC had directly reached over 1,000 companies in promulgating benchmarking; the Malcolm Baldrige Award criteria had been ordered by over 100,000 companies and the combined sales of benchmarking books had surpassed 200,000 copies. Over the past ten years (1994-2004), a number of channels have come available for diffusing the practice of benchmarking even further. Two channels for benchmarking are worthy of particular attention: the Internet and the Global Benchmarking Network (GBN). It is clear that the advent of the Internet has changed many aspects of life by creating 'instant access' to both information and people. These are critical enablers of benchmarking and thus allowing a much broader search for information and contact possibility than was previously obtainable through personal contacts and crossorganizational affiliations. The advent of the World-Wide Web as a global communication resource strengths the ability to gain access to data, but it also complicates the interpretation of information because there are no standards for analysis and thus the web is inundated with a plethora of "Theory Opinion" that must be sorted and sifted to discover truth. In my opinion, the full impact of the Internet on benchmarking practices has yet to be felt.4 In 1993, discussions between the UK Benchmarking Centre, the Strategic Planning Institute (SPI) (USA), the Swedish Institute for Quality (SIQ) (Sweden), the Informationszentrum Benchmarking (IZB) (Germany) and the Benchmarking Club of Italy came together to evaluate the possibility of a co-operative network. In 1994 the Global Benchmarking Network (GBN) was officially established by these founding members as a community of legally independent benchmarking centers, with the objective to achieve a consistent understanding of benchmarking as a management method and to promote its worldwide spread and utilisation. I view the GBN as an extension of the Benchmarking Council of the Strategic Planning Institute which preceded the founding of the APQC International Benchmarking Clearinghouse, but focused on a few member companies following the model used by The Conference Board for cross-company sharing thereby reducing its impact on diffusion of the benchmarking methods to a wider audience.5 The GBN currently includes benchmarking centers of 4

In an article that I wrote the potential for e-Benchmarking and other electronic tools is described: Gregory H. Watson, "Digital Hammers and Electronic Nails," Quality Progress, volume 31, number 7, July 1998, pp. 21-26. 5 The Strategic Planning Institute has returned to their original focus as provider of the PIMS data base (Profit Impact of Market Strategy) which was first developed by General Electric and Harvard University and Seventeen nations. Together, they represent more than 25,000 businesses and government agencies. The President of GBN is Dr. Robert C. Camp of The Best Practice Institute in the United States and author of the first book on benchmarking.6'7 Definitions So, what is benchmarking? In order to understand this methodology we must first define some key terms. There are three sets of definitions which will be presented. The first terms that must be defined are those that identify the different ways to apply benchmarking studies:

Process Benchmarking Process benchmarking is a method for comparing performance between two unique or distinct implementations of the same fundamental process. The method includes internal inspection of an organization's own performance as well as the external study of organizations recognized for achieving superior performance as evidenced by objective standards by comparative analysis (the performance level is observed is called a benchmark). The objective of a study for process benchmarking is not to calculate the quantitative gaps in performance, but to identify best practices that may be adapted for improvement of organizational performance. There are four types of process benchmarking studies: strategic, operational, performance and perceptual benchmarking.

Strategic Benchmarking The process benchmarking of organizational strategy or key business process performance in order to determine breakthrough opportunities for profitability and productivity improvement is called strategic benchmarking. This type of study focuses on those critical business areas that must change to attain or maintain the competitive advantage of a business. Strategic benchmarking studies focus on critical business assumptions, primary competence areas, core business processes, technology inflection points, or business fundamentals that define organizational purpose. The purpose of strategic benchmarking studies is to challenge the management to move from a current state to a desired state of the whole business. Examples of strategic benchmarking studies include: evaluation of options for the design of an organization's governance structure; assessment of approaches used to implement advanced technology (e.g., enterprise management software or paperless document handling); or strategic business issues that are faced by the organization (e.g., creating a web-based business capability; managing the technology transition across generations of advancement; or managing the routine work of the organization through management methods such as balanced scorecard, performance management and business excellence assessments).

Operational Benchmarking The process benchmarking of work processes or practices in order to discover opportunities that will provide productivity improvement in the areas of effectiveness, efficiency, or economy of the routine business operations is called operational benchmarking. This type of study focuses on specific work activities that need to be improved and seeks to identify the work procedures, production equipment, skills or competence training, or analytical methods that result in sustained performance improvement as indicated by objective measures of process productivity (Process throughput, cost per unit, defect opportunities, cycle time, etc.)- Examples of operational benchmarking studies include: analysis of invoicing procedures to determine the most productive process; evaluation of production methods to determine the highest throughput methods that deliver lowest cost and least defects; and study of logistics distribution methods that result in both high delivery service performance and low levels of finished goods inventory.

Performance benchmarking The process benchmarking of product or service results using a standard comparison or test under known operating conditions is called performance benchmarking. This type of study seeks to answer the question: which product or service is better based upon rigorous assessment using objective performance criteria. Examples of performance benchmarking studies include: consumer product analysis that evaluates products on a "head-to-head" basis using a fixed set of criteria for performance;

evaluate of product performance using a standard test, such as operating time to run a specific application; or endurance tests that identify the ability of product to perform over a fixed period of time under comparable operating conditions.

Perceptual Benchmarking The process benchmarking feelings or attitudes about process, product, or service performance by the recipient of the process output is called perceptual benchmarking. This type of study seeks to answer questions like: how do you perceive the delivery of service, performance of product, or execution of process by the people who are recipients of these outputs? Perceptual benchmarking uses attribute or categorical data to quantify subjective feelings and establish relative ranking of performance based on such criteria as timeliness of performance, goodness of knowledge transfer, soundness of information, courtesy of delivery agents, etc. Examples of perceptual benchmarking include: surveys of training satisfaction at the completion of a course; employee satisfaction surveys to assess work climate or structural issues about compensation and benefits; or customer satisfaction with the product or service delivery to the market. A second set of definitions identify sources of data used in conducting a specific benchmarking study. These terms categorize benchmarking practices according to the relative utility of information from the information sources.

Competitive Benchmarking An approach to benchmarking that targets specific product designs, process capabilities, or administrative methods used by one's direct competitors. For example, in order to stimulate business model change Compaq made a detailed study of the study of the performance in the laptop computer industry to determine business model features that should consider as it initially determined how to enter into this market. Here they studied the performance of the business models of those companies that would become its competitors.

Industry Benchmarking An approach to benchmarking that seeks information from the same functional area in a particular application or industry (e.g., benchmarking the purchasing function to determine the most successful approach for managing a supplier base). Internal Benchmarking An approach to benchmarking where organizations learn from "sister" companies, divisions, or operating units that are part of the same operating group or company (e.g., the study of internal research and development groups to determine best practices that reduce time-to-market for the new product introduction process).

Generic Benchmarking An approach to benchmarking that seeks process performance information that is from outside one's own industry. Enablers are translated from one organization to another through the interpretation of their analogous relationship (e.g., learning about reducing cycle time in production operations by the study of inventory management methods used in stocking fresh vegetable in grocery stores).

Comparative advantages and disadvantages of these alternative benchmarking data sources are presented in below in Table 3.

Source of Data Competitive Benchmarking

Advantages Provides a strategic insight into marketplace competitiveness and a "wake-up" call to action.

Industry Benchmarking

Takes advantage of functional and professional networks to gain study participants.

Internal Benchmarking

Generic Benchmarking

Provides highest degree of process detail and simplified access to process information.

-Has the greatest

opportunity for process breakthroughs -Because organizations don't compete, reliable detailed information is usually available -Provides incentive for strategic change initiatives.

Disadvantages -Legal issues regarding data sharing among competitors. -Study detail may not be good enough for process diagnosis.

-Functional concentration

tends to support operational rather than strategic studies -Does not challenge paradigm of functional thinking.______ The internal focus tends to be operational, rather than strategic, and reinforce the organization's cultural norms. -Difficulty in developing an analogy between dissimilar businesses. -Difficulty in identifying the companies to benchmark, -Difficulty in establishing the appropriate contact for a study.

Table 3: Benefits Analysis of Benchmarking Data Sources Another set of terms are used to describe the different components of a benchmarking

study: Benchmark A benchmark is a performance measure that is used to compare the products, services, or processes between two analogous organizations in order to establish superiority in sustained performance. Note that many of the benchmarks that are publicly promoted indicate only "spot" performance at a specific point in time and do not meet the criteria of "enduring success" by failing to establish the difference in performance between a "special cause event" and a "common cause" management process. A lack of statistical discipline in the use of benchmarks threatens to diminish the perceived value of the process of benchmarking (see the section of this paper on presenting analysis results).

Best Practice Best practices are that set of activities, tasks, resources, training, and management methods that created an observed benchmark performance in a work process. In a process benchmarking study, in order to qualify as a "best practice" the performance must be observed and mapped to Assure that the work performed is properly identified and that process experts have validated and verified the distinctions between observed best practices and merely good practice. Without the objective assessment by work process experts, "best practice" becomes a subjective claim that is not verifiable.

Critical Success Factor (CSF) These are quantifiable, measurable, and auditable indicators of process performance and process capability in key business processes. They indicate in basic business terms the performance level obtained in a comparative manner using such basic building blocks of processes to describe the performance of business effectiveness (quality), efficiency (cycle time), and economy (cost). Key critical success factors are universal and may be used for cross-organizational comparisons for the same process.

Enabler The specific activity, action, method or technique that stimulated progress in one process over the comparative processes and lead to identification of a best practice (e.g., the way Quality Function Deployment or Failure Mode and Effects Analysis was used in a product design process; a process for data presentation that more clearly indicated the action to be taken by front-line operators; or an employee training and development system that delivers the appropriate skills and competence to process workers as they require these methods to perform their work in a changing technological environment).

Entitlement The set of key work process actions that are derived by examination of one's own processes and discovery of wasted activities, duplicated steps or non-value added work that can be eliminated or modified based solely on the self-analysis phase of benchmarking. An organization is "entitled" to make such process changes without relying on the lessons learned from external discovery. Such improvements permit the process to operate as intended and represent gap closure between original process

design and current process performance. Entitlement also refers to the gap that may exist between the capability designed into the process and the process capability achieved during the discipline of its daily management. Organizations are entitled to receive the performance that they designed and investing in. However, the methods of standard cost accounting provide only average estimates (based on summary data) thereby obscuring the effect of variation and making it more difficult to understand what is the potential improvement that is achievable in the process if it could operate consistently close to its design capability.

Gap Analysis This methodology evaluates the performance difference between current internal performance and benchmark performance at the best practice organization. To be effective, a gap analysis should include both the use of statistical confidence intervals and tests of difference (for both means and variance) to demonstrate that a real performance gap has been observed, not a gap due to chance observations.

Radar Diagram This graphical presentation tool provides a multi-variable display of comparative performance for several dimensions of interest (e.g., cost, cycle time, quality, and productivity). These dimensions are displayed on a single chart as spokes from the center where each measure has its own unique scale, but all indicators are shown on the same graphic to illustrate a performance profile for a specific process. The radar diagram provides a more complete benchmarking assessment than a single point measure of performance comparison. Baseline Analysis This analysis method compares performance baseline data across all benchmarked processes. A common scale is used for each comparison based on the variation observed in process performance. A best process is one that has both the highest average sustained performance and the lowest variation in the daily results. The performance baseline comprehends both of these factors using a standardized metric for process comparisons (e.g., process standard deviation as calculated using the defects per million opportunities as evaluated against a common customer requirement for targeted performance). The baseline analysis may be presented as an Analysis of Variance showing sampled performance as a function of the different process locations.

World Class While it is intuitively clear that there is no one world best performance that exists at a particular point in time (the enormity of analysis to support such a claim would be unmanageable), it is possible to define a category of performance as "World Class" by the fact that using a standardized measurement process (e.g., the performance baseline analysis), the process was observed in the top 5% of all performance noted in the study. This indicates that there is a high confidence level that the process is in a leadership position and worthy of investigation for potential best practice areas.

The Benchmarking Process The generic four-phases that these steps cover roughly follow a Plan-Do-Check-Act (PDCA) process that is called the Deming Cycle and which is generic in all process improvement models for process management and improvement. The PDCA approach to process benchmarking is shown in Figure 1.

Plan - Do - Check - Act: Deming Cycle of Process Benchmarking However, the process that I favor has seven steps which highlight the work that must be done in a benchmarking study and which follow the four-phase. The seven activities in a benchmarking process include: •Identify Subject - choose what to benchmark •Plan Study - identify your partners and plan your data collection •Collect Information - actively collect the data and visit partners •Analyze Data - analyze the data for performance trends and consistency over time •Compare Performance - compare results and test differences for statistical significance •Adapt Applications - prepare the lessons learned for transition to your own culture •Improve Performance - implement projects to improve your processes Each phase of the PDCA benchmarking process can be described using a set of questions that identify items to address in these four phases of a study. Please note that many of these questions are the same as the basic questions that one asks during any TQM improvement project. Benchmarking Step 1: Choosing the Benchmarking Topic and Planning the Study Questions that must be answered in order to plan a benchmarking study include: •What process should we benchmark? •What is our process and how does it work? •How do we measure it? •How well is it performing today? •Who are the customers of our process? •What products and services do we deliver to our customers? •What do our customers expect from our process? •What are the critical success factors for this process? •What is our process performance goal? •How did we establish that goal? •What data should we collect for comparisons?

Benchmarking Step 2: Identifying Partners, Collecting Data, and Answering Questions Questions that must be answered during this during the data collection phase of a benchmarking study include: •What companies perform this process better? •Which company is best at performing this process? •What can we learn from that company? •Who should we contact to participate as our partners? •What is their process? •How representative is the process across different areas of their organization? •How do they measure process performance? •What is their performance goal and how was it set? •How well does their process perform over time? •Is there any difference in performance at different locations or based on seasonal

change? •What business practices, methods, or tasks contribute to the process performance? What factors could inhibit the adaptation of their process into our company?

Benchmarking Step 3: Analyzing Performance and Comparing Processes Questions to be answered during this analyze phase of a benchmarking study include •What is the basis for comparing our process measurements? •How does their process performance compare with our process performance? •What is the magnitude of the performance gap? •What is the nature or root cause of the performance gap? •How much will their process continue to improve? •What characteristics distinguish their process as superior? •What activities within our process are candidates for improvement?

Benchmarking Step 4: Implementing Recommended Change to Improve the Process Questions to be answered during this improve phase of a benchmarking study include: •How does our knowledge of their process help us to improve our process? •How should we forecast the future effectiveness of their process performance? •Should we redesign our process or reset our performance goal based on this benchmark? •What activities in their process need to be modified to adapt it into our business model? •What have we learned during this study that will allow us to improve on "best" practice? •What goals should we set for our own process improvement? •How can we implement the changes in our process? •How will other companies continue to improve this process? Note that many of the questions addressed above are the same as would be addressed in managing implementation in any project improvement process. Method Definition Existing Data Review Analysis of data that already exists in-house or in the public Domain. Mailed Questionnaire Written survey provided to the benchmarking Organizations. It may contain any type of question: true and false,

When to Use Before conducting original in order to fix the Baseline.

Advantages A large number of sources may be available information Systems.

Disadvantages Measurements may lack integrity and not all of the important factors will be recorded to conduct a root Cause analysis. When you need Permits Response rates to gather data data gathering are low; answers information over time, can may be from a large analyzed using and creative number of computer rarely surface as different software and the there is no Or data is easy to and it is difficult Compile. to use a written

multiple forced choice, scaled choice, Or openA written script of questions used to solicit data over the telephone in anticipation of engaging in a Specific dialog.

form to probe into difficult "how to" types of Questions. If information is Can cover a Locating the right needed quickly group of person to or you need to respondents logistics of screen potential quickly and getting the sources for people are likely on-line, and there in-depth follow to be more is only a small Up later. candid over the opportunity to Telephone. Exchange ideas.

Method Face-to-Face

Definition A meeting with a partner using questions that are prepared and distributed In advance.

When to Use When you need one-on-one interaction to probe and drive data collection to a specific objective or Level of detail.

Focus Group

An open-form panel or group discussion with a third-party facilitator coordinating The dialog.

Site Visit

An on-premise meeting at a facility to the follow-up to an interview, focus group or and combines data analysis with direct work process Observation.

Telephone Survey

Advantages Encourages interaction, indepth and open-ended questions using a flexible style unexpected information can Be revealed. When you want Direct sharing of to gather data data and internal information best practices from more than among partners one source at as a working same time or group that can when there are discuss topics diverse a mutually set or ways to Agenda. toward an issue Or problem. When you need Can observe the to observe actual practices, specific work or verify process Practices. performance interpersonal its observation is characteristics, necessary to well as assess evaluate enablers and the aspects" of the measurement process Systems. Performance.

Disadvantages The interview process takes time to and execute and interviewees may be reluctant to discuss sensitive issues, concerns, Or performance. Logistics must carefully Managed. If is no openness, "lowest common denominator" may be found as opposed to any Best practices. Requires careful advanced plans And For example, asks what question of Whom?

Table 4: Comparison of Alternative Data Collection Methods Used in Benchmarking

Methods of Data Collection

In conducting a benchmarking study, there are several different approaches to data collection that can be pursued by a benchmarking team. Table 4 describes the approach, as well as the advantages and disadvantages, associated with each of the most popular methods used in benchmarking studies.

Presenting Benchmarking Study Results Some final points should be made about the process of benchmarking relative to the analysis and presentation of benchmarking data. Care must be taken in the data analysis efforts to assure that benchmarks are representative of real-world performance. Specific cautions include the following statistical problems in benchmarking: •Single data point measurements or observations that are passed off as a "benchmark" •Measurement systems not validated for sensitivity of observation or calibration •Averages used to represent performance benchmarks •Missing variation data in process characterization •Components of variance not identified according to their source •Comparative charts not indicating both mean and variance •Process changes not correlated with performance shifts •Interactions not identified among the different process variables Clearly, there can be many issues that create problems in the measurement and analysis of results from benchmarking studies. Careful planning and solid data collection and analysis efforts can achieve the elimination of these opportunities for error introduction into a benchmarking study. Whenever possible, analysts conducting benchmarking projects should have the same education as Six Sigma Black Belts in statistical analysis to assure the analytical soundness of study results. Perhaps it will help to consider some examples in order to understand benchmarking studies a little better. Consider the following four examples of benchmarking studies and the factors that caused management to initiate each study.

Triangulation Warning: Benefits and Pitfalls of Benchmarking Benchmarking is a business process that encourages managed change. It encourages an organization to take an objective, external perspective in evaluating its performance. The benefit of benchmarking comes from three specific actions: •The gap between internal and external practices creates the need for change. •Understanding the benchmarked best practices identifies what must change. •Externally benchmarked practices provide a picture of the potential result from change. However, no business improvement methodology is a stand-alone solution to all problems. Lest process benchmarking appear to be a panacea for problem-resolution, the following set of potential pitfalls in conducting benchmarking studies must also be disclosed:

•Selecting benchmarking partners that do not convince management (not-respected) •Choosing benchmarking partners to meet popularity tests with no performance substance •Accepting public relations claims as process performance benchmarks •Assuming that measurements are the same in different organizations (without checking) •Identifying process measures that are not traceable from strategic to operational levels •Conducting statistical analyses that represent surface observations - not root causality •Failure to validate performance with on-site inspection to verify benchmark claims •Enforcing implementation of a benchmarking lesson across a cultural barrier •Use of "benchmarks" for management decisions without recalibration over time These pitfalls in benchmarking applications can be avoided by taking a professional approach to the conduct of a study and using trained employees to facilitate improvement projects that will use this methodology to seek ideas for improvement. The improvement through "creative imitation" as the study team seeks innovative ways to apply the lessons it has learned through the study.

Comparative Analysis and Competitive Advantage What does an organization gain in the way of competitive advantage from benchmarking? In the long run competitive advantage comes from out-thinking and out-performing competition. When an organization uses benchmarking effectively, they are able to think ahead of their industry and to act efficiently by adapting lessons learned from crossindustry studies to permit them to creatively imitate the best performing processes in the world. Over the long-haul this can establish them as the thought-leader within their own industry. In the final analysis, it is not out-thinking or prior knowledge that results in competitive advantage, it is in the excellence of execution of such new knowledge and the creative application of breakthrough insights that wins in the long-term. To achieve a dominant position in a market, a company must both know and do better than its most aggressive competitors. Benchmarking can help develop the competence to achieve this position, but it must be supplemented by management will and knowledge in order to make success happen.

Six Sigma Learning Approach According to ancient Greek philosopher Heraclites "everything is in a state of change." One often-expounded comment is: Do you need to manage change or change the management? Unfortunately, many organizations take a 'slash and burn' approach to "restructuring" or change management - cutting here and there, moving units or groups to consolidate their functions, merging or acquiring, etc. - without fundamentally understanding what is the critical issue facing their business and the way it is currently working. This is not what we will consider in thinking about change management stimulated by benchmarking. Our basis for thinking about managing change relies on organizational learning principles of industrial psychology. Harvard psychologist Chris Argyus defined "single-loop learning" as the 'detection and correction of errors' or learning what to do. One could argue that this is the objective of a Six Sigma project. "Double-loop learning" is 'questioning the system of learning itself resulting in a correction of the underlying principles, theories, policies of the organization or implementing insights for change that were identified in the detection and correction process. (Argyris and Schon, 1978) One could also argue that this is the rationale for leveraging the learning of in a benchmarking project. Robert L. Hood (Hood and Room, 1996) extended this concept to define triple-loop learning - learning what we need to

learn - learning how to learn differently - permanent learning that changes the way people work at the institutional or cultural level because the change masters have the power to mandate the new processes! Thus, in benchmarking projects, single loop learning occurs during the analysis process and double-loop learning occurs during the management review of the benchmarking project outcomes as the lessons are integrated throughout the organization. Triple loop learning must occur through a senior level reflective review of overall continuous improvement efforts of the organization focusing of its work to "recognize" what change must be encouraged and selected as an improvement project to create enduring quality as a way of working in their organizational culture. An old point must be reiterated. In the mid-1900s industrial psychologist Allan H. Mogensen -known as the father of work simplification - used the process chart (among other tools) to organize and study work. He drew on the common sense of people who did the actual work for improvement ideas. Mogensen (Graham, 2002) defended participative management: "The person doing the job knows far more than anyone else as to the best way to do that job, and therefore is the one person best fitted to improve it." This describes a basic belief of employee involvement and teamwork programs. When employees can 'see their fingerprints' on a change initiative they tend to be supportive rather than resistant to change. However, failure of change initiatives is typically not due to non-involvement of employees - it is usually a leadership problem. Harvard Professor John P. Kotter observed that there are eight major errors that inhibit success in non-enduring change initiatives - all of these errors are associated with the leadership of an organization (Kotter, 1995): • Not establishing great enough sense of urgency. •Not creating a powerful enough guiding coalition. •Lacking a vision. •Under-communicating the vision by a factor of ten. •Not removing obstacles to the vision. •Not systematically planning for and creating short-term wins. •Declaring victory too soon. •Not anchoring the vision in the corporation's culture. Indeed, there are some strong implications of these errors when doing process improvement projects -especially regarding the need for appropriate communication with the project's stakeholders. However, the far deeper application of error-correcting behavior can be made when the organization's business leaders are engaged in improvement project review and are active contributors to the definition, resourcing and implementation of the solutions based on the project team's work. Close engagement and alignment of managers to these projects will increase the effectiveness of solution implementations as well as decrease the time required to make the solutions fully operational. Harvard Professor Rosabeth Moss Kanter (Moss Kanter, 1983) defined a change master as: "those people and organizations adept at the art of anticipating the need for, and of leading productive change." Becoming an effective change master is a challenge for the business leaders who act as the champions change projects. While quality managers and process improvement specialists (e.g., such as Six Sigma Black Belts) serve as the 'technical maestros' who drive the first two loops of the organizational learning process, it is the business leaders who are the true catalysts of change at the triple loop level. The Change Master is one who masters the circumstances of the organization, rather than its detail. Only through anticipatory change can organic growth occur in an organization. Thus, leading long-term, sustainable growth efforts - a critical success factor for business leaders - requires mastery of the future state of the business and change focused in

the right direction to drive continuing success. This is the job of those people who serve as business leaders and take the responsibility for bringing the organization to new levels of performance improvement.

Adaptation of Learning from the Triple Loop of Benchmarking Process benchmarking is an important tool in any organization's TQM methodology repertoire and it can help improve strategic direction as well as operational performance. However, the practice of process benchmarking is almost thirty years old. It has been a discovery methodology that is used to stimulate learning and help organizations to think about creative options to design and implement new ways to improve its business processes. Coupled with solid statistical data analysis, best practice identification and cultural adaptation have helped organizations to both "learn" and "do" business process improvement more effectively. What is the next step in the development of benchmarking?

Fifth Generation — Global Benchmarking (1996-present): The roots of the fifth generation benchmarking were laid in the mid-1990s with the advent of the Internet which provides global access to information. Thus, global benchmarking was born in about 1996 and continues to the present. Global benchmarking extends the boundary of benchmarking geographically to encompass the best process that can be found in any location and in any analogous business. Thus global benchmarking uses a generic approach as in process benchmarking for interorganizational comparisons of processes and it couples this with e-Benchmarking to employ the Internet for screening performance information, identifying potential benchmarking partners, and communicating in the study (via web-casts, pod-casts, wikis, blogs, and other related group learning and communication techniques) to share the results of studies. In this evolving age, benchmarking will become much easier and more accessible as a learning device for organizational leaders Aristotle taught that excellence is borne out of habit. We know that habit is the consistent repetition or doing the exact same thing over and over again when confronted with the same set of circumstances. This also happens to define the concept of a process. When processes consistently are able to produce excellence, then they have become an organizational habit which enables this result. It is the obligation of organizational leaders to produce both short term excellence as well as long-term strength in the organization so that it may sustain excellence. Today, Six Sigma represents the most widely-accepted approach for assuring organizational excellence; however, it is not such a comprehensive methodology that it is able to satisfy all improvement needs of an organization. Indeed, organizations must blend their Six Sigma problem-solving methodology with a number of other learning and organizational change methods Change management is an essential success ingredient in any quality program; however, the emphasis should be placed on the third order or 'triple-loop' role of the business leaders who serve as project champions, steering committee members or deployment leaders. For quality professionals and team leaders the emphasis should be placed on the second level or 'double-loop' learning and their facilitation of change management at the working level to make change more acceptable to the people who are affected by it - by involving them in the project and actively communicating project progress to all affected stakeholders so there are no 'surprises' at the end of the project. Finally, people who are working on the front-line of the process should emphasize the primary order of business or the first loop of learning which is getting the job done for the

customer - consistently delivering reliable results as judged by their customer's performance standard. Six Sigma methods do not provide a stand-alone solution to organizational problems any more than do the methods of benchmarking. However, Six Sigma represents a best practice methodology which managers can wield to improve issues facing their organization and drive performance improvement in the content of the organization's work. Today the developmental journey of the Six Sigma methodologies has transitioned to the point where it is blending a number of methodologies into a comprehensive quality toolkit for design as a process of management (which is distinct from the content of both strategy and management). This paper has describes how the method of benchmarking has been blended into the process improvement analysis methods called Six Sigma. In addition to process benchmarking, other methodologies that have been blended into the core quality and statistical toolkit that initially defined Six Sigma methods, includes Lean Enterprise solutions modeled after the management systems developed at Toyota, policy deployment (hoshin kanri) planning systems developed through a number of companies in Japan as coordinated by a number of quality experts, along with the Change Acceleration Process and Decision Workouts that General Electric developed to coordinate change management. Process benchmarking acts as the critical methodology in this toolkit as it generates ideas that feed a portfolio of potential improvement projects. Senior management must choose which projects to accomplish and how to coordinate it resources to systematically increase organizational performance effectiveness, efficiency, and economy as they continue in their journey toward performance excellence in the conduct of their mission. The leading organizations in the world plan to win and win by planning. Benchmarking permits the improvement of performance for any organization by providing it with a methodology to learn and thereby challenge its critical strategic and operational assumptions by thinking differently about its direction and how it is planning to achieve its vision. Applying benchmarking as a tool of quality management is an effective way to evaluate options and perform an assessment of alternatives by considering the strategic implications that may be observed in other analogous situations. Learning such lessons will reduce the likelihood of "repeating the mistakes of others" enhancing the capability to perform in the future.

INDIAN RDUCATION SECTOR (IES) IES: THE’ LARGEST'... IES is by far the largest capitalized space in India with government spend of $30bn (2006; at ^3.7% of GDP, it is in line with the global average). For the 11' 5-year Plan, the Centre has allocated a 6x higher spend on education. Importantly, the extent of the spends have created one of the 'largest' education networks globally of ^lm schools and 18,000 higher education institutes (HEIs) in India, home to the largest population within the age group 0-24 years. The statistics are indeed impressive, but a closer look reveals that these spends are not only 'insufficient' but also 'inefficient'. Considering global distribution patterns of public education expenditure (international PPP$) and population, India's spend on education is highly disproportionate! While countries in North America and Western Europe account for more than half of the global spend on public education, less than 10% of the world's school-age population (5-25 years of age; from primary to tertiary levels) lives in these countries. USA's assigned public spend amounts to 25% of the cumulative spend on just 4% of the target population group. In sharp contrast, India's public spend on education amounts to ^5.2% of the world's cumulative public spend, but the country is home to 20% of the population in the target group. Further, a break-up of government spend shows that only a miniscule 0.82% component goes towards capital expenditure. A whopping 80% of the revenue expenditure on teachers' salaries leaves little to be spent on infrastructure creation, which eventually translates into 'ineffective' infrastructure/ quality of education. While India has a network of more than 1m schools, 66% of these are only till the primary level. Inefficiency of the public education system is amply captured in the fact that only 61% of the target group is enrolled in schools and with dropouts as high as 40%, net enrollment levels are a dismal 37%. Q 'Private' players - balancing the 'inefficient' equation Given the dismal state that IES (read government-run schools/ institutions) is in, consumers are increasingly veering towards private institutions, typically perceived as hallmarks of quality (even though quality comes at a price). In this backdrop, the market for private formal education has grown to a stupendous $40bn in size over the past few decades. Not only that, a $10bn market has evolved around the formal education segment.

We have divided the private spend of $50bn (IES opportunity) into two segments: Formal ($40bn) and Non-Formal ($10bn) IES. Below we give the broad structure followed by formal IES and the key non-formal segments flanking it. Formal IES: The formal educational system in India broadly comprises schools (often classified as K12 -kindergarten to 12th) and higher education (HE) level. All the levels, from school to higher education, fall under the purview of the Ministry of Human Resource Development (Department of School Education and Literacy &

Department of Higher Education). Schools cater to the '3-17 years' age group. With no central governing body for K12, they are ruled by state boards/ ICSE/ CBSE/ International Boards. Higher education institutes cater to the '18-22 years' & above age group. With a single governing body (UGC), HE comprises graduate/ diploma/ professional courses. This may be followed by post graduation courses. Non-formal IES: The non-formal education segments flanking the formal ones include preschools (1.5-3 years), coaching classes, multimedia/ IT to schools and colleges (catering to both private and public institutions), vocational training and the books market. The segments are free of any regulations (i.e. no governing/ regulatory bodies for this segment). Private institutes in the formal education space (K12 and HE) have proliferated rapidly over the past many decades — and as many as 75,000 schools out of the total 1m existing schools are privately-run. The importance of private participation is underlined by the fact that even as only 7% of the total schools are private, they dispense education to 40% of India's total students enrolled. This is despite K12 (schools) being a focus area for the government as less than 10% of the total public expenditure on education is assigned to higher and university education. As a result, 77% of India's -18,000 HEIs are private. Spends on private education to increase to $80bn by 2012E: India's current spend on education is at 5% of average household (HH) income, showing a CAGR of 8.6% versus consumption growth of 3.2% over 1995-2005. Going forward, we expect the consuming class, i.e. HHs with annual income >Rs90, 000, to burgeon from 28% of the total population in 2002 to 48% in 2010. Increasing affluence has been fostering higher aspirations for India's populace, and the ability as also willingness to pay are guiding its education sector through a phase of price discovery. The $13bn spent annually by Indians on higher education in the overseas markets asserts the pay power of the education-hungry Indians. With an inefficient public education system, a growing young population, a bourgeoning middle class (with the intent and ability to spend) and price discovery that the IES has seen over the past decade, we expect 14% CAGR in private spends on education ($80bn by 2012). Non-formal segments are fast-growing areas of the education landscape — we expect 18% CAGR for them over the next few years against 13% CAGR for the formal education space. (For further details on formal and non-formal segments of IES, refer to page 20 and 21.) A failed public education system, high socio-aspirational value attached to education and increasing affordability have all converged to drive demand for quality education (synonymous with private institutes). The $50bn education market, estimated to expand to $80bn by 2012, portends a great opportunity at hand for wealth creation. BUT the ground reality is in stark contrast. While private players have been active in the formal IES for a few decades, the 'not-forprofit' mandate has kept profit-driven corporates away from the $40bn opportunity. In the $10bn non-formal space, scalability remains an issue in most pockets. Inability to transform the businesses into a 'process-driven' model from 'people-driven', as also lumpy nature of revenues, has materially curtailed scalability in the highly fragmented

and largely regional markets. While scale is attainable in a few pockets, we maintain education is a difficult business to scale - our stand is vindicated by the dearth of scaled-up players in the space. Q Formal IES - regulations a 'big bully' While India has been proactive on liberalization, IES has remained largely untouched by the reforms process. A 'priority sector' status does ensure fund flow to an extent, but the government's agenda of 'social inclusion' has trapped IES in a regulatory maze. Archaic rules mandate all formal educational institutes in India to be run as 'notfor-profit' centers under a society (registration under the Societies Registration Act 1860) or a public trust (Registration Act 1908). Any surplus funds generated in the process of running formal schools/ HEIs have to be ploughed back into the same school/ HEI and no dividends can be distributed. K12 segment; At $20bn, schools (also popularly known as K12, i.e. from Kindergarten to 12th standard) form a core of the total market. A student can continue to be a part of the education system — or his/ her 10' or 12' grade scores would be recognized — only if he/ she passes out from a K12 institute affiliated to a board recognized by the system. Hence, all K12 institutes have to be affiliated to an education board — either central boards like ICSE and CBSE or a state board. While a few states confer on schools the right to act as profit-generating entities, educational boards still demand strict adherence to the not-for-profit structure. Of late, a trend has emerged wherein some schools have been seeking affiliations with various international boards such as IGCSE (International General Certificate of Secondary Education) and IB (International Baccalaureate from Geneva); in terms of operating structure, while these schools can opt for either a not-for-profit trust or a forprofit company, they can do so only after evaluating the state laws (e.g. Haryana allows schools to be run for-profit while most states do not). HEIs (Higher Education Institutes): At $6.5bn ($20bn including cash transactions of ^$1.5bn and the $13bn spend outside the country), HE is the second largest opportunity in IES. HEIs seeking recognition by the apex regulatory authority named UGC (University Grants Commission) also need to be run in the form of a trust/ society. Technical education institutes find themselves regulated under various professional councils as well — e.g. AICTE (All India Council for Technical Education) is the regulating authority for engineering and MBA colleges. With most of these bodies perceived as extremely corrupt and bureaucratic (a typical case of'over-regulation but under-governance'), it is difficult for new players to enter and existing players to expand in the space. However, an HEI (unlike K12) can do without recognition from these bodies — as long as they are a quality institute with acceptance from the industry (a student typically joins the industry after passing out from HEIs). A case in point is ISB (Indian School of Business, Hyderabad — a premiere business school), which has proved that a quality institute with strong industry acceptance does not require the stamp of affiliation with these bodies.

This implies that 80% (formal IES) of the market potential is not directly exploitable by corporates with profit-driven business models. Due to the high involvement of politicians with respect to ownership and the shortage of quality institutes leading to lucrative cash transactions, the much-required structural change in education does

not appear to be in sight. Other issues that plague the sector are high land prices and little clarity on FDI pertaining to this space.

Q Non-formal IES - scores low on scalability While we expect the non-regulated $10bn non-formal market to witness 18% CAGR till 2012, the market broadly consists of segments that are inherently difficult to scale. In fact, scalability can be achieved only in less than 5% of the market while three of the largest segments (95% of the opportunity — coaching class; ^64%, vocational training; 15% and books; 17%) offer limited value creation potential.

Market remains regional and fragmented... India's non-formal education market is currently dominated by coaching class business (accounting for 64% of the total). However, the business ($6.4bn; 15% CAGR till 2012E) is inherently regional in nature and person-centric (a people-driven model), which implies high dependence on a 'brand-teacher', or a low degree of stability and scalability. We believe ^80% of the coaching class market arises from subject/ concept-based school and tertiary level coaching, which has to be localized to suit the dynamic needs of various institutions and has high dependence on 'brand teachers'. Mahesh Tutorials (revenues of Rs700m in FY09E) is one of the few coaching class players that have managed to achieve some 'scale' in this non-scalable segment. Notably, the remaining 20% of the coaching class market has people and a larger focus on national level content, making players to attain scale. Against this backdrop, players in the test JEE (revenues of Rsl.2bn), IMS (Rslbn), Career Launcher (Rslbn) - have attained a relatively higher scale.

lower dependence on it relatively easier for prep space - like FIIT(Rs900m) and TIME

The vocational training market ($1.5bn, 25% CAGR) accounts for 15% of the nonformal IES pie. Though the market is continuously evolving with emergence of a host of new avenues beyond IT trainings (financials, retail, aviation, management certifications and spoken-English trainings), scalability remains low. Given the dominance of unorganized segment, and inconsistent revenue flows in the corporate and retail training verticals (trainings is a discretionary spend), there are hardly any scaled-up/ scalable players. In the books business ($1.7bn, 9% CAGR), high reusability of books has been instrumental in capping the growth potential for players.

...scalability only in pockets Barring a few like Educomp Solutions and NUT that have acquired the 'relevant' scale, the 'largest' players across the space are still small. Some scalability has been seen within the coaching class space focusing on the post-grad test prep space (mediumhigh scalability in our view). Going forward, we expect a few relevant players to be able to create scale and value within the nascent organized preschool market ($300m; 36% CAGR till 2012E). Multimedia for private schools, though currently a small market ($70m, "60% CAGR till 2012E), offers value creation potential given that it is highly under penetrated and a technology-driven model. Educomp Solutions has a lion's share ("45%) of the multimedia for private schools market and a distinct first mover advantage in the space. ICT (Information and Communication Technology — $90m, "70% CAGR till 2012E), at market penetration of <11% suggests high potential, but ability to create value is relatively limited in view of LI bidding followed for award of contracts. LOW /Q OF IES, BUT WE ARE BETTING ON MAVERICKS_____________ While inefficiencies in the public education system and price discovery have created a substantial opportunity in the private IES space, there is a dearth of players across segments offering scale. We believe this is the key reason for the sector to have attracted limited capital chase (private equity of $ 180m till date). Notably, there have been no significant investments in the formal education space (except Manipal Universal Learning). Also, ^20% of the investments in the unlisted space have been in US-centric e-learning companies which cater to the outsourcing needs of publishing houses and training needs of companies. Other deals have been in non-formal areas such as preschools, tutoring, test prep, Multimedia/ ICT and vocational training.

Q 4Cs differentiate the 'men' from boys With few scalable players, the lucrative IES market possesses low IQ. We have identified some unique KSFs which, according to us, equip players to attain a higher IQ; thus, our investment thesis in IES rests on the 4Cs — Credibility (management intent and ability), Capital (built to last), Creativity (ability to 'manage' the over-regulated environment) and Content (ability to differentiate and build annuity).

Q Credibility - management intent and ability A management's 'intent' and 'ability' to attain scale and create value are the key factors to determine its IQin IES. While the success of Educomp Solutions (among world's top 15 companies by market capitalization within the education space; excluding the books market) has lured many a players to join the fray, we believe just a handful of them has it in them to compete in the long haul. Only a few players have been able to earn credibility in terms of ability to scale. Players that have managed to do so as also create a BRAND will be at a distinct advantage going forward (in education sector, brand creation is a tough and long-term

game — a minimum of three batches, i.e. six years, should pass out and be successfully placed within the industry before an HEI creates a brand). Thus, we see incumbent leaders with strong brands in respective segments scoring over peers. Given that most segments of IES offer limited scalability, some players — to expedite scale — are increasingly looking to lever their established credibility in one part of the value chain to other areas of the education landscape. For example, preschool operators like Kidzee, Euro Kids and Kangaroo Kids are levering their brands to enter into the K12 space, while NIIT is extending its brand in IT trainings to BFSI, spokenEnglish and BPO training segments. Coaching class players like IMS are planning to straddle the HE spectrum (vocational training and HEIs), and Career Launcher is working on attaining a footprint across the value chain. Going forward, consolidation (acquisitions) could be adopted as a way to grow faster in existing and new operations within IES.

Q Capital - built to last Education is a capital-intensive business with majority of the formal and nonformal segments requiring heavy upfront investments. Setting up a K12 school entails a cost of ^RslOOm (excluding land cost) while HEIs require much higher investments (a medical college would typically require Rs4bn-5bn). A few businesses in the non-formal space also call for heavy upfront investments e.g. upfront capex of ^Rs85, 000 per class per school for Multimedia in private schools and Rs250, 000-300,000 per school in the ICT business. Q Creativity - 'manage' the over-regulated environment Taking a cue from independent school-owners 'extracting' profits from trusts (schools and HEIs) in the form of lease rentals and management fee, some players have taken the age-old informal structure to the next level. The nascent corporate activity in the formal education space is using a two-level structure to circumvent the 'not-for-profit' diktat. While multi-layered regulations have meant that 80% of the opportunity (formal education) remains elusive to commercial activity, 'innovative' players like Educomp in K12 space are successfully using these structures to scale up. A host of other players like Kidzee, Euro Kids, Kangaroo Kids and Career Launcher are also looking to scale up within the K12 space by using similar structures. Innovative structures — The 'innovative structures' have emerged to break the 'trust' issue. The company creates a trust (a not-for-profit body) that runs the educational institute at one level. It further creates a subsidiary that supplies land, services and infrastructure to the trust in lieu of rental/ fees. In this way, the entity manages to unlock the 'surplus' and distribute it as dividends or use it to fund other ventures.

Clearing the air on 'Regulatory Ambiguity' With strong social connotations attached to education, the risk associated with two-tier corporate structures cannot be completely eliminated. In this direction, we sought views of various industry and legal experts on the survival quotient of these structures. The key highlights are as follows: Regulations governing the K12 space: The CBSE/ ICSE and state board regulations stipulate running of a K12 institution ONLY as a trust or society. Income from the trust is non-taxable but the 'reasonable surplus' (not defined) can be used only for development of the same institution and cannot be distributed as dividends. Regulations governing the Higher & Technical Education space: The rules are more stringent here than for K12 as an HEI is simultaneously governed by a central body (University Grants Commission — UGC) and a regulatory body specific to the field of specialization offered by the HEI (e.g. AICTE for engineering and medical colleges). The UGC stipulates that the Higher and Technical Education institutions be run as a trust or society where all the infrastructure and capital goods have to be on the books of the university. AICTE further has its own set of rules wrt infrastructure and curriculum - in case an HEI fails to comply with the same, it is blacklisted (110 universities blacklisted as on date). However, taking UGC or AICTE's approval is the prerogative of a University. For example, ISB and Amity have been running as not-for-profit structures but without seeking recognition from AICTE. Regulations governing a corporate entity providing management services and land/ capital goods on lease to a K12 institution running as a trust: A company set up to offer services and land/ capital on lease can be run as a for-profit body and does not fall under the purview of the school education boards. The trust will have teachers on the rolls and collect fees from students while the remaining services are outsourced. This structure has been in existence for years and has not been challenged. However, it is recommended for the trust and the managing company not to be run by the same management and common directors, and that the transactions are done at an arm's length. (The transactions have to be done at a fair market value, as if the two parties were unrelated.)

Q Content - ability to differentiate and build annuity While education is a difficult business to scale up due to high dependence on people and low revenue visibility, scale can be achieved with the 'right' content/ offerings. Thus, we believe players with the ability to create a differentiated product/ process with annuity business model can break the scalability barrier.

PRESCHOOLS: PLAY TIME

A part of non-formal IES, the $300m preschool segment is expected to be a $1bn market by 2012 (36% CAGR) led by low penetration (1 out of 100 preschool-aged children enrolled) and further price discovery. With low entry barriers, corporate activity has gathered pace and 11 major chains and ~10 smaller players are active in the space. While the scale-up has so far been on the franchisee platform, corporates are increasingly forming JVs with builders/ partners and moving up the value chain by upgrading to K12 schools. The strategy imparts resilience to the model against high lease rentals besides ensuring scalability. With players planning aggressive rollouts, the organized segment is growing faster than the industry (50% vs. 36% CAGR). Within this highly fragmented market, we expect Euro Kids (one of the largest preschool chains) and Kangaroo Kids (an innovative player) to be relevant players going forward.

Preschool market: multifold growth Playschools, more popularly known as preschools, traditionally cater to the 1.5-3 years age group. Increasing awareness among parents about the benefits of a quality preschool education has been driving penetration levels and price discovery in the segment. Led by these factors, we expect the market to expand by more than 3x in size by 2012. While the market is currently highly fragmented and unorganized in nature, increasing prosperity is driving a shift towards the organized segment. A largely urban phenomenon, there has been rapid proliferation of organized preschool chains beyond metros and tier 1 cities in the last five years.

Q Getting more organized Households with annual income in excess of Rs200, 000, which form an estimated 8% of India's total population, are the primary target customers for preschools. We estimate a target market of 5.5m preschoolers, of which 12% are currently enrolled. Considering an average annual spends of Rsl8, 000 per student (price discovery still in initial stages), we estimate the segment to be $300m in size. Going forward, we expect the preschool market to grow on the back of low penetration, increasing paying propensity and organized supply creating awareness about the importance of preschool education. We expect the total preschool market to touch $lbn (on a low base of ^1,700 schools and 200,000 students) by 2012. Interestingly, the organized market is likely to grow faster, at a CAGR of 50% over

Organized market: supply creating demand The preschool market has, over the last 5-6 years, seen a shift towards organized players. KidZee (recently renamed as Zee Learn) - India's largest preschool chain -has set up 623 preschools in just five years since inception and plans to add another 1,000 preschools over the next two years. There are 11 major preschool chains in India including KidZee, Euro Kids, Bachpan, Apple Kids, Shemrock, Kangaroo Kids, Podar Jumbo Kids, Tree House, Mother's Pride, DRS Kids and Sunshine, and around 10 smaller players. Organized players have largely scaled up using the franchisee route (-1,700 schools catering to 200,000 students).

These preschools cater to segments across income groups ranging from consuming to affluent. While Kangaroo Kids is primarily a premium brand at an average annual fee of Rs35,00045,000, Tree House charges an average annual fee of Rsl8,000. Players in other segments of the education value chain are also entering this space — e.g. Mahesh Tutorials' (a brand in the private tuitions space) 'Little Tigers' and Career Launcher's (test prep) 'Ananda'. The trend of rapid rollouts indicates that 'quality' supply of preschools is bringing latent demand to the fore. Further, education major Educomp has forayed into the space under the brand 'Roots to Wings' (60 preschools at present) and has also acquired a 50% stake in Euro Kids (-484 centers) for Rs390m. Despite the increasing share of organized segment (currently 17% of the total market), the preschool market remains highly fragmented and regional in nature. Though the shift is clearly evident, the largest player (Kid Zee) holds only 7% share of the total market.

...BUT, THE BUSINESS NOT A CHILD'S PLAY There is enough demand for preschools (as reflected by the rapid proliferation) and capex requirements are also relatively lower, which means that it is play time for preschool chains. However, the model is fraught with risks including the inability to attract preschoolers beyond a catchment area of 2km, high lease rentals, intense competition from the unorganized segment (at considerably lower cost to customer) and increasing competition among organized players. Q Limit to lever infrastructure for preschool children Any preschool, however strong the brand, ideally has a customer pull within a 2km radius (parents prefer to send toddlers within a limited radius for safety/ comfort reasons). Also, the segment caters only to customers who can afford annual fees of Rs20,000-45,000, which further limits the scope of the market.

Q Tail wags the dog - rental costs! Preschools are currently being run primarily on the franchisee model, which has so far evolved largely on the back of two factors - low cost of setting up a franchisee, and housewife occupation that typically does not consider the opportunity cost of lease rentals (schools are being set up on existing premises which otherwise also do not generate returns). Considering the economics of the preschool business, lease rent forms the largest expense for running a preschool and can eat into profitability of the business.

Q The unorganized neighbor With awareness levels still low, the unorganized market provides 'the same' care but at a much lower price. With more than 80% of the target market still with the 'trustworthy' neighbor, it may take some time before organized players are able to establish the importance of a quality preschool education. Q A non-regulated market - low entry barriers The preschool market is non-regulated and hence entails no regulatory barriers for new entrants. Given the relatively low investment required, competition is intensifying in this segment. Q Economics of a preschool Except for a few preschool chains (Kangaroo Kids going in for JVs with developers and Tree House with largely owned schools), all other players have opted for the franchisee model to scale up. Under this model, a franchisee has to pay a brand/ franchisee fee (Rs60,000-70,000 pa) as also some part of the revenues to the franchisor (^20% of total) in lieu of using the latter's brand name and for the handholding required to run a preschool. Assumptions: We have assumed a model premise of 1,200 sq. ft with rent at Rs70 per sq. ft. (Only 60% of the total area can be used for classrooms and a minimum of 1015 sq. ft per student is considered optimal). The one-time capex broadly comprises furniture and fittings cost and excludes brand fee (we have assumed an average franchisee fee of Rs200,000, which is renewable every three years and amortized over a period of three years). We have assumed three classes and two batches a day, which translates into a maximum capacity of 20 students per class (thereby a maximum of 120 students per preschool) and an annual fee of Rs25,000.

IQ: high (subject to benign lease rentals) A non-regulated space, preschool chains have largely grown using the franchisee route. Low upfront investment requirements by a franchisee (ideal for housewife occupation) and an under penetrated market have led to the emergence of a high-growth market. However, the limited catchment area for a preschool implies limited scalability per branch; also, with a large section of the franchisees being run on owned premises, the model ignores lease rentals — a major cost-head. Thus, the business for a franchisee runs the risk of becoming economically unviable in a scenario of high rentals (it has been observed that while franchisees keep mushrooming, there has also been a considerable churn in existing franchisors under high rental costs). To improve economic viability of the model, some franchisors are seen to be levering the existing infrastructure beyond the 1.5-3 year age group for programmes like mothertoddlers (children aged between 6-12 months) and activities like dance, music, pottery classes, etc (children aged three years and above). Going forward, increasing clutter in the organized segment would mean further fragmentation. Having said that, dominant players like Euro Kids (50% acquired by Educomp) and those using innovative models (like Kangaroo Kids) are expected to emerge as relevant players going forward. Kangaroo Kids, besides expanding through the pure franchisee route, is also using a JV model for further scale-up. The company has signed 400 such JVs with developers and key partners. Also, preschool chains that have their own high schools get a benefit premium over standalone preschools. Kidzee, Euro Kids and Kangaroo Kids among others are upgrading to K12 schools, with the preschool population acting as a feed for the higher classes. Globally, Kinder Care (USA), ABS Learning Centres (Australia, New Zealand and UK) and Bright Horizons (USA, Europe and Canada) are a few scaled-up success stories among preschool chains. But these models cannot be superimposed on the Indian market as the cost structure and business models are quite different. Globally, preschools are primarily day-care centres while in India they are perceived as early training grounds for children to develop skills and secure admission into a good school.

K12 (SCHOOLS): A NO BRAINER? NOT YET! K12, the largest segment ($20bn) within IES, is expected to grow to $30bn by 2012 (14% CAGR) on the back of world's largest school-aged population and price discovery. While dominated by standalone schools and chains confined to charitable, political and religious individuals/ groups, corporate activity is catching up in this annuity business free from recessionary pressure. Though regulations mandate K12 to be 'not-for-profit' structures run by only Trusts/ Societies, 2-tier structures (a trust and a managing entity) are being adopted to unlock the surplus as lease rentals, management fee, etc (an age-old practice followed by standalone schools). Going forward, we believe serious players intent on gaining scale and credibility should help dispel investor concerns on under-reporting of cash. The space will realize its full potential the day favourable regulations fall into place. We find 'commercial' K12 chains like Educomp Solutions (11 operational schools, 150 planned by FY12), Zee Learn (23 operational, 100 by FY11E), GEMS (6 schools under a management contract) and Kangaroo Kids (6 operational schools) as interesting plays in this space.

K12: THE LARGEST IN IES Schools, globally known as K12 (Kindergarten to 12' grade), come under the formal education space. These schools broadly address education needs of students between the age group of 3-17 years. Some states in India follow the system of K10 + 2 (in which case, the last two years form a part of higher education). Following a preschool stint (an optional course), a child has to be enrolled in a recognized school (affiliated to/ registered with either a state board or central boards like ICSE/ CBSE) in order to be considered as a part of the formal education system.

Q Public K12 schools - short on efficiency Globally, India has one of the lowest enrollment and highest dropout ratios, translating into net enrollment levels among the lowest in the world. The 1,025,000 schools in India are clearly not enough to meet the demand in terms of both quality and quantity. Notably, 66% of these schools are only till the primary level. With only 132m (37%) of the Indian K12 population net enrolled in schools, the system has apparently failed. According to NCERT, at least 200,000 schools are required to plug this gap.

Q Private market - large is attractive... At 36lm, India has the largest population globally in the K12 age group (5.5x USA's K12 population). Despite a mere 37% of the K12 age group net enrolled on school rosters, private spends on K12 schools stand at an astounding $20bn — which makes the segment the largest within IES. The large market can be explained by a consistent shift towards private schools - catalyzed by the absence of quality public schools and growing awareness about importance of quality education as also increasing ability and willingness of Indians to pay.

Out of the total 1m schools in the country, ^75,000 are private. With considerable preference for private schools, the average number of students in a private school stands at a much higher 1,200 versus 146 for a public school. The private schools can be classified into private aided (that receive aid from the government in order to run the school), private unaided standard and private unaided premium schools. The private aided schools charge an average fee of Rs5,000-6,000 per annum till the primary stage (5th grade), after which students are charged a nominal fee. The private unaided standard schools charge an average tuition fee of RslO,000 per annum while private unaided premium schools charge Rsl5,000 (up to Rs45,000 per annum in some cases). We estimate an annual total spend of $3bn in the private aided segment and $18bn in the private unaided segment of K12.

Q

... .a $30bn market by 2012E

With aspirations and awareness meeting affordability, the K12 segment is in a price discovery phase. To put this in perspective, Jamnabai Narsee Monjee School - a premium and prestigious private school in the suburbs of Mumbai — has shown a 12% CAGR in annual fees over the last 10 years. The school has recently also started an IB (International Baccalaureate) division which charges an average annual fee of Rs600, 000. The relatively new trend of international schools is catching up slowly but steadily across the country with K12 fees ranging from Rs500, 000-800,000 per annum. This underpins the increasing paying propensity of the Indian populace. Pay ability of education-hungry Indians is also indicated by the growing preference for private schools - 40% of students enrolled in the K12 system attend private schools, which are just 7% of total schools in the country. With public schools unlikely to become efficient in the near future, we expect the shift to continue. Within the private K12 space, the last decade has seen a gradual shift from private aided to private unaided (i.e. costlier) schools. This clearly indicates that more and more parents now prefer to spend substantially higher amounts in their quest for better quality of education for their children. Driven by such price discovery and growing acceptance of private schools as the medium for quality education, we expect K12 to grow to a $30bn market by 2012 (14% CAGR).

The 'big bad' corporate: ruled with an iron hand Education has strong social connotations in any economy (more so in India). Thus, schools have traditionally been a state responsibility to be run with a 'noble' cause and without being tarnished by the 'ulterior motive' of making monetary profit out of the activity. In this backdrop, it has always been mandatory by regulation that all schools be registered as a trust or society; also, the educational trust/ society cannot distribute dividends, or even invest the surplus to fund another school (refer to the judgment in the Modern School versus Union of India case given below). Further, the surplus generated is necessarily to be used for running the same school and only towards its development.

Modern school vs. Union of India: Missing the woods for trees? A three-judge bench of the Supreme Court - comprising Chief Justice VN Khare, Justice SB Sinha and Justice SH Kapadia, in a 2:1 majority judgment delivered on 27 April 2004 — ruled that the Society or Trust running a school CANNOT invest the surplus generated in running that school in another school (i.e. surplus money generated by one school cannot be transferred to the parent society administering the school and has to be kept for that very school). Regulations like these have prevented the emergence of any major chains in the K12 space as a corporate running various schools cannot create a common pool (internal accruals) to be used across schools of that particular chain and every new school/ branch opened requires fresh capital infusion. The rationale given is that if a society/ trust running schools has to ring-fence each school separately in a financial sense, and is not allowed to transfer funds from one school to another, it has no reason to try and generate a surplus in any school (translating into low tuition fees in each school). We see this as a perfect example of missing the woods (increasing the supply of high-quality education) for trees (keeping fees as low as possible in each and every school).

Q School'rule book' With no regulatory central body governing the K12 space, regulations vary from state to state. A student can continue to be a part of the education system - or his/ her 10' or 12' grade scores would be recognized — only if he/ she passes out from a K12 institute affiliated to a board recognized by the system; hence, all K12 institutes have to be affiliated to an education board — either central boards like ICSE and CBSE or a state board. While states may or may not relax the 'not-for-profit' stipulation, the boards mandate the schools to be run as a society/ trust. While a school can be affiliated to any board, it needs to secure an NOC from the state and has to abide by any additional rules imposed by the state. In order to get the NOC and affiliation to a board, schools are mandated to be established by societies registered under the Societies Registration Act 1860 of the Government of India or under Acts of the state governments as educational, charitable or religious societies having non-proprietary character or by Trusts (some states like Haryana do not follow this structure and allow 'for-profit' activity in the segment).

Q If there's a rule, there must be a way to bend it! The not-for-profit mandate is the single-largest deterrent that has kept serious corporate activity at a bay in the otherwise attractive K12 segment. Most schools in India are standalone and any chains till recently were usually set up by private charitable, political and/ or religious groups — including Vidya Bharti schools (affiliated to the right wing political organization RSS) with more than 18,000 schools, Dayanand Anglo Vedic (DAV) schools with >600 schools and Chinmaya Vidyalaya with 75 schools among others. DPS (Delhi Public School) with its 120 schools — 107 in India and 13 outside — is a franchisee chain.

Two-tier structures - a norm in the making? Ironically, when corporates looking to set up large for-profit chains have been cautious to tread here, individual schools have been 'profit-making' propositions since long. The entities have been using indirect means like lease rentals, management fee, etc to extract the surplus stuck in the trust. Taking a cue from these schools, IES has been witnessing some corporate activity in the K12 space on similar lines, but in formal version of these age-old structures. Archaic regulations have been surmounted through an innovative two-tier structure, which bypasses the 'trust' regulation and enables promoters (on corporate level) to generate profits from the venture. In order to own and operate schools, companies like Educomp Solutions have created a structure wherein a trust (non-profit body) is created to run the school at one level. At another level, the company creates an entity that supplies the trust with land, services and infrastructure for a rental/ fee. In this way, the 'surplus' profit flows to the latter entity in the form of fees for providing these services and is at its disposal to be then distributed as dividend or used to fund another venture. The model runs the risk of being struck down in view of education being a 'socially sensitive' sector, more so at K12 level. However, the structure has been in existence for a long time at the standalone school level and we believe the model could become the norm till regulations change for the better.

Higher education: time to 'degree shop'? India's private HEIs have grown to be a $6.5bn market (excluding $1.5bn-2bn 'capitation' spends), with 12% CAGR estimated over FY08-12. Of late, private HEIs have mushroomed with the trend veering towards professional courses with high payback potential (engineering, medical and MBA colleges). However, the not-for-profit mandate, regulatory obeisance to multiple bodies, hefty investments required to set up an HEI and longer gestation cap IQ of the segment. Given the high participation of politicians in the field (vested interests), we do not see any structural change in the near term. With a head-start in the capital- and time-intensive business, we believe Manipal Universal Learning (equipped with the 4Cs) is the only player in the space promising value creation potential.

HIGHER EDUCATION: HIGHER PRIVATE SPENDS

A part of the formal education system, the Indian Higher Education market - at $8bn — is next only to the K12 segment in size. Considering the $13bn spent on importing education, we estimate the paying propensity of Indians within the HE space to be at ^$20bn. The HE segment consists of graduation (targeting population between 18-21 years) and post graduation (>22 years) courses, offered after completion of K12 stint. The graduation market can further be classified based on the nature of education into graduate courses (18-20 years), diplomas/ nongraduate courses (16-20 years) and professional courses (18-21 years) such as Engineering (4-year tenure at graduate level) and Medical (5-year). While indirectly controlled by the Ministry of Human Resource Development, all colleges offering these courses need to be affiliated to a University (in turn under the purview of the central regulatory body called UGC — University Grants Commission). While most universities are administered by the state government, there are 24 Central Universities maintained by the Centre. Further, each stream is monitored by an apex body (e.g. AICTE is the regulatory body for Engineering and Management colleges). While India may have one of world's highest enrollments for HE (llm) as also networks of HEIs (currently estimated at 18,064), it has abysmally low GER of 9.97.

Q Private HEIs dominate Over the years, public spend on higher education has been gradually reducing — and rightly so as the focus of governments globally is (and should be) on primary education. But the strategy has resulted in India having one of the lowest public spends per student on higher education. Given the dearth of quality institutes, private HEIs have boomed since 2004 and the number is growing. With liberalization opening up newer and better job avenues, the proliferation of private institutions has largely been in the area of professional courses like Engineering and Medical as also post graduation courses like MBA. Other factors that have contributed to the phenomenon include the increasing pay propensity of Indians and prospects of higher returns (payback in the form of fat salary packages) offered by these career-focused products. Today, more than 40% of India's HEIs are privately owned and funded (77% are privately owned).

However, more is necessarily not enough. Despite the speed and extent of privatization in the segment, there still exists a yawning demand-and-QUALITY supply gap which is apparent in the high cash transactions (donations/ capitation fees) within quality institutes. This gives rise to the need for more conventional as also alternative modes (such as distance learning) of disseminating higher education.

Q India goes degree shopping! The HE space is bestowed with high potential volumes. The increasing ability as also intent to pay in return for securing a 'good career', and hence a 'good future', has led to a $6.5bn private spend — primarily on career-focused courses (more than 80% of the estimated spends on engineering courses). Interestingly, even though India has more than 1,600 engineering colleges (1,200 of these are private), most of the colleges have seats which are 'sold' at as high as 5x the regular fee. High capitation fee — currently deemed illegal — and black marketing of 'NRI Quota' seats are estimated to account for $1.5bn-2bn of additional spend in the space.

Also, a large number of Indian students opt for further education outside the country and spend a whopping $13bn every year on securing quality education. This further underpins the paying propensity of Indians. At 30% of the total inbound US HE traffic, India is one of the largest exporters of education globally.

Higher education: rules, rules and more rules HEIs are a part of the formal education system and in order to seek recognition from the central regulatory body (UGC) are required to be run under a not-for-profit trust/ society (Rules are more stringent than at the K12 level). In contrast to the K12 segment wherein a school has to be affiliated to a board recognized by the formal education system, it is possible to set up an HEI outside the purview of UGC regulations (applicable only in case of niche world class institutions that find acceptance with industry and academic circles; but cannot be superimposed on the entire segment). The higher education segment is a part of the formal education system, and like other segments in the space, is required to be run under a not-for-profit trust/ society. However, regulations are more stringent here vis-a-vis the K12 segment. The process of securing registration/ affiliation with a regulatory body is long-drawn and a single HEI is simultaneously governed by various bodies. While UGC (University Grants Commission) is the central governing body, there are individual regulatory bodies for specific professional courses, e.g. AICTE (All India Council for Technical Education) for management and engineering colleges and MCI (Medical Council of India) for medical colleges. Accreditation for universities in India is required by law unless it has been created through an Act of Parliament. Without accreditation, "these fake institutions have no legal entity to call themselves as University/ Vishwvidyalaya and to award 'degrees' which are not treated as valid for academic/ employment purposes" -University Grants Commission Act 1956.

These bodies not only have very stringent and archaic rules, they are considered highly corrupt by most industry factions. As of date, AICTE has black-listed 110

universities for not seeking recognition from the body. Further, regulations within the space are not clear - as can be seen in the ambiguity in judgments for private HEIs in the past. Regulatory conditions are unlikely to change in a hurry as education is a highly politically and socially sensitive sector. If the government does decide to throw open the formal education sector to for-profit private players, we expect the liberalization process to start with HE. Though there have been talks of liberalizing private HE entities (especially Medical Colleges), there is no single bill pending in the Parliament with the intent. Further, the high involvement of politicians (^70% of HEIs in Maharashtra are run by politicians) given the segment's high profit generation potential (though indirect) make the much-needed realignment and a structural shift look too difficult to achieve.

Q No regulations - an option Unlike in the K12 segment wherein a school HAS to be affiliated to one board or the other for its pass-outs (grades 10' and 12 ) to be recognized as part of the formal education system and eligible for further studies, it is possible to set up an HEI outside the purview of UGC regulations. The products of these institutes (students passing out) do not have to conform to acceptance standards of the education system but of the industry. As long as industry quarters perceive the products to be of superior quality, the HEI can do without these cumbersome affiliations. For example, ISB (Indian School of Business, Hyderabad) is a venerated name in the industry corridors despite it not being affiliated to any regulatory board. The diploma offered by ISB holds as much (arguably more) value as any UGC-accredited certification. But importantly, this status requires maintenance of world-class quality and strong industry support. Thus, it cannot be superimposed on the entire segment. HIGH HOPES FROM INNOVATIVE STRUCTURES Issues related to trust formation, regulatory ambiguity and vested political interest are the key barriers to capital commitment from for-profit organizations. Setting up an HEI is an investment-heavy proposition (^Rs5bn for a medical college). However, there are some players that, despite being affiliated and hence recognized by the relevant regulatory bodies, have managed to extract legitimate profits from these universities through innovative structures.

Q Distance Education - an alternate mode India's low GER renders a greater need for a higher number of conventional institutions as also an alternative mode of HEIs such as ODL (Open and Distance Learning) institutes. One way to improve GERs is to allow foreign universities to set up shop in India. FDI in education, including higher education, has been allowed under the automatic route without any sectoral cap since 2000; yet there is ambiguity around the space and degrees awarded by foreign universities are not recognized by the UGC or AICTE. This further underscores the need for alternative forms of learning. Supplementing the brick-and-mortar educational institutes, Distance Education can be considered an

effective and low-cost alternative to on-campus HEIs. The DEC (Distance Education Council), set up under a clause within IGNOU (Indira Gandhi National Open University), has till date extended approval to more than 130 institutions to offer distance education. Also, the ODL model does not impose any limits on the number of students in terms of infrastructure. Currently, IGNOU is India's largest distance education provider with ^ 500,000 students enrolled for 1,100 courses through 129 programmes, 64 regional subcenters and 1,621 study centers. The body is also the regulator in the space, which has led to certain quarters raising demand for an autonomous body to govern the space (a bill is pending approval pertaining to the same). There is large untapped potential in the segment as out of the "10% population enrolled in HEIs in India, a miniscule -7% go in for Distance Education. Though this portends a huge opportunity, perception of low quality has led to Distance Learning being treated inferior to on-campus education. While Distance Education has low entry barriers for suppliers, the industry too has low regard for this medium. However, given that quality of a course can be controlled by improving the input and thus the output, we feel that an apt model and superior pedagogic measures can establish a strong brand. By doing all the right things, Sikkim Manipal University (SMU; a distance learning institute) has managed to achieve significant scale with ^100,000 students enrolled for its various programmes

IQ: high (but long-gestation period) Globally, most of the top education companies by market cap belong to the US (where Tor-profit' education is permitted) and also to the HE space where they have managed to create strong brand equity over the years. Extrapolating the returns that these companies have generated over a period of time, we observe that most of them have outperformed the benchmark index performance consistently and significantly. While Indian HE space is dominated by private institutions, we do not see any Apollos (revenues at $2.7bn) or Devrys (revenues at $933m) in the country. This is largely due to HE being a part of the formal education and mandated to be run as notfor-profit trusts and over-regulated by bodies like AICTE. The largest player within the space is Manipal Universal Learning (revenues at $180m). Overall, higher education is a long-term game and players in the space will have to invest considerable assets and time to gain credibility. The capital-intensive nature (a medical college entails an investment of ^Rs5bn) and long gestation (minimum six years required to build a worthwhile brand) make this a long-term game. Scalability and value creation can be achieved only by those players that have managed to establish creativity (to circumvent the regulatory requirements), capital (built to last), content (reputed courses with pricing & annuity power) and credibility (of the management to build a long-term value proposition). Having earned a name in

the field, it then becomes an annuity model. Due to the lower capex requirements for setting up MBA colleges, we expect maximum private participation in this part of the opportunity. While distance education (as against setting up brick-and-mortar institutes) is an alternative and less capital-intensive model to build scale, time taken to build a brand and the low brand perception emerge as the key concerns. While it is not yet time for degree shops in India, we believe players like Manipal Universal — that have an already-established scale and brand in the HE space — are at an advantage vis-a-vis new players moving up the value chain (like IMS and Career Launcher — two strong brands in the coaching class market).

VOCATIONAL TRAINING: NEW VISTAS

The imperative for students/ employees to draw on skill sets to effectively compete in a dynamic business environment has given birth to vocational training - a parallel $1.5bn education system. Also, the increasing relevance of services sector in the Indian economy calls for enhanced technical/ soft skill sets. Corporates (across industries) too are gleaning from their global counterparts the culture of continuous upgradation in skill sets of employees at all levels. While the factors suggest rapid growth (25% 3-year CAGR) as new training areas (retail, aviation, hospitality, management, English language/ soft skills trainings, etc) emerge, the space remains highly fragmented. Also, non-sticky nature of corporate trainings implies low revenue visibility, thereby hampering scale. At this stage, only a few players like NUT and Aptech (leaders in IT trainings) have managed to accumulate mass. Others players with the potential to 'scale' include ELEMENT AKADEMIA (English training) and ICA (financials trainings).

Vocational training providers: new kids on the block Vocational training has been broadly defined as training that prepares individuals for specific vocations or jobs. Vocational training has assumed growing importance in India's growth story. The economy's 8%+ growth for three consecutive years can largely be attributed to increasing contribution from its services sector (up to -55% in the last decade or so). Further, vocational training has moved beyond IT/ ITES into verticals like financials, retail, media, aviation, hospitality, etc. In any services business, human capital is the key asset and upgradation of workers' skills at all levels becomes an imperative to sustain growth. In developed economies, a month per year is reserved for training/ re-training/ re-education of employee’s right up to the age of 55-60 years. Also, corporates are laying ever-increasing emphasis on productivity from day one, which is prompting employees to work on enhancing their skill sets.

Q India a largely untrained nation Nearly 95% of the youth in the 15-25 years age group formally learn a trade or acquire a skill/ competency in most of the developed world. In contrast, only 5% of

India's young labour force (19-24 years) is estimated to have acquired formal training. Low enrollments and high dropout rates throughout the education chain result in an inefficient supply of workforce. With a net 37% enrollment at school level, ^230m Indians are not equipped to work in the organized sector. Further, 87% of the people drop out after the school level. This leads to only 10% of college-aged population actually attending HEIs; further, 80% of the graduates in general streams (i.e. non-career specific courses) like BSc/ BA are unemployable. Due to the high dropout rates and inefficiencies rampant in the system, a large chunk of the population needs to be trained. The government, to provide vocational training at various levels, has set up a network of ITIs (Industrial Training Institutes) falling under the purview of the labour ministry. The ^5,500 government-run ITIs impart vocational training covering 110 trades including carpentry, electricians, masonry, etc and offer a collective capacity of 749,000 seats. Also, there are 500 polytechnic colleges offering diplomas in technical courses. However, quality and capacity constraints as also growing relevance of newage trades mean that this network is not sufficient to meet the demand.

Q A $1.5bn private market; growing rapidly The space encompasses training services at all levels, be it for students passing out from schools and colleges or re-training needs of the employed set. We estimate the $1.5bn market to grow rapidly (^25% CAGR) in the coming years. The following exhibit points to the high underlying demand for vocational training across sectors like IT, financial services, retail, aviation, hospitality and English language training.

While the importance of corporate trainings has not been completely realized in the Indian market, it forms 10% of the Indian IT training market and is expected to grow. Infosys (one of the largest recruiters in India) has set up a Rs2.6bn Global Education Center in Mysore (Karnataka) in 2005 with a further Rs6bn planned to be spent on the facility for expansion. Also, the company spends Rs200, 000 on every graduate selected for the global training programme. While this presents a large opportunity for private players in the space of training before and after employment, it does not convert/ translate into opportunity if not outsourced. Currently, the corporate training market (predominantly in IT) stands at ^$50m. A new order setting in — formal education meets vocational: The ever-changing dynamics of education and employability in a knowledge-driven economy are throwing up interesting trends. Employers are increasingly seeking employees that can contribute to the company's topline/ bottomline from day-one and skill sets have to be continuously updated to remain competitive.

In this backdrop, the lines between formal and non-formal education have started to blur. To ensure quality training, employer companies are joining hands with private players to impart customized training to future employees. An interesting example of the same is the arrangement between ICICI and Manipal University to form ICICI-Manipal Academy (IMA) — a 1-year campus programme that is employer (ICICI) sponsored and guarantees employment to students after completion of the course. Manipal University charges a mutually agreed fee to ICICI for the same. PPP — a beginning has been made: Another opportunity, though small in size, is on the horizon for private players in the space. The Centre has approved PPP, or Public Private Partnership, Scheme to upgrade 1,396 ITIs and transform them into Centres of Excellence. Educomp has taken over running of 18 ITIs as well as 12 skill development centers erstwhile run by the state government in Gujarat. More such arrangements are expected to follow. The focus of the Indian government is to dispense education with stress on employment. The 11' Plan has allocated Rs721bn to be spent on ICT and Vocational training. Of this, Rs4llbn has been earmarked for setting up ICT labs for computer aided learning and Edusat Centers for distance learning programmes while Rs310bn has been allocated to National Skill Development Programme for training through Virtual Centers for Vocationalization. According to the statement of Mr. N. K. Singh, Deputy Chairman, Planning Commission, 250,000 vocational schools will be opened in India in next five years in PPPs, wherein the corporate sector will play a major role.

With quality skills-related training, India could capitalize on potential global workforce shortage Based on current and estimated population demographics, India would have a surplus of 47m people in the working age group by 2020 while Row would see a shortage of 56m in this age group. In this backdrop, increasing mobility of the Indian workforce and its unique demographic dividend (a young working age population) can work in India's favour, subject to the country upgrading the quality of its education and skill set development.

IQ: Low (still to scale) Vocational training, a non-formal and non-regulated segment of IES, has emerged into a $1.5bn market. We expect 25% CAGR in the market over 2008-12. With the high degree of dropouts and non skilled workforce, there is a substantial need for vocational trainings. However, the market has not evolved to its full potential yet as the importance of training over the lifecycle of an employee has not been fully realized in India. Further, a shortage of quality trained personnel to dispense this education and lack of process-driven models have kept scalability at bay. While corporate spends on training

are discretionary and based on competitive pricing, a lumpy stream of revenues within this space is another deterrent to scalability. The market has remained largely fragmented barring a few like NUT and Aptech (leading players in IT training space). In the English Language training space, VETA (revenues of Rsl.2bn) has grown by using a mix of owned and franchisee outlets with smaller players like Liqvid tapping the opportunity through the product licensing route. ICA in the accounting training space as also Frankfinn in aviation and hospitality trainings are other leading players in their respective categories.

Coaching classes: Is the 'coach' scalable? The $6.4bn coaching class market is growing at ~15% yoy led by a dearth of quality institutions in India and cut-throat competition for entry into professional colleges. Notably, 80% of the market lies in 'subject-based tutoring in schools and colleges' - and thus is highly dependent on local 'brand-teachers'. Despite its non-regulated nature, peoplecentric models make scalability onerous in the space and cap value creation. Mahesh Tutorials is the only player to have achieved a relatively higher scale (revenues of ~Rs700m) on the back of some process-driven effort. While the Grad and Post-Grad test prep market ($1.2bn) offers limited scalability as it is more content-driven, FIITJEE, Bansal Classes, IMS, TIME and Career Launcher have achieved scale within the segment and are extending their presence across segments to expand the addressable market. The quality conundrum: genesis of coaching class market India's already inadequate education system is being further stretched due to its increasing population. So much so that a $6.4bn segment (64% of the total nonformal IES; next only to K12 and HE) - coaching classes - has sprouted around formal IES. The market is rapidly growing as the Indian education system lays heavy emphasis on marks scored in an exam. A shortage of quality HEIs is further fuelling growth. This is evident in the fact that the number of seats in Indian IIMs (Indian Institutes of Management) has increased merely 3% (2003-2008) but the number of CAT aspirants has shown a CAGR of 19% in the same period.

Q Tuitions market- low scalability At $5.1bn, the tuitions market forms 80% of the coaching class opportunity and are inherently difficult to scale. A highly fragmented market, the business is person-centric and individual teachers attached to schools/ colleges are much in demand. For exams held on a national level (10 , 12 and university exams at tertiary level), our interactions with industry players throw up instances of students moving en-masse to another coaching class, to follow the brand-teacher who has joined a particular institute. Thus, crowd-pulling ability in this segment rests with brand-teachers (especially attached to schools/ colleges) and not brand-institutes. This, in turn, translates into lack of stability and scalability for coaching classes.

Q Online tutoring market - in its infancy The phenomenon of online tutoring is very new in India. With ^3m broadband connections (less than 1% penetration), India is way behind the global average. In the coming few years, penetration is expected to double as the national Broadband and Wireless Policy targets to bring 25m subscribers to the broadband fold by 2012. Players like Tutor Vista that have a pure online model in the US are looking to follow a hybrid model in India to tap the potential in this segment.

IQ: Low: A non-regulated space, the $6.4bn coaching class market is one of the largest opportunities within the IES (following K12 and HE) and is expected to witness 15% CAGR till 2012. Yet, we see limited value creation potential in the space as scalability is a challenge in 80% of the market (tuitions). In the remaining 20% of the market offering coaching for aptitude-based entrance exams to engineering/ professional courses, players find it relatively easier to attain scalability.

RESEARCH METHODOLOGY Research is a common parlance refers to search of knowledge. Infact one can define the research as scientific and systematic search for pertinent information on specific topic. Research comprises defining and redefining the problem, formulating hypothesis, suggest solution, collecting, organizing, and evaluating data, reaching at a specific conclusion and at the same time careful evaluation of the conclusion.

Marketing research is a systematic and objective process of identifying and formulating the market problems, setting research objectives and method for collecting, editing, coding, tabulating, evaluating, analyzing, interpreting and preventing data in order to find justified solutions for these problems.

Research methodology is a systematic way to solve the research problem. The research process consists of series of closely related activities and to solve a research problem adopt the following process.

1) Research Design: “A research design is needed because it facilitates the smooth sailing of various operations thereby making research as effective as possible yielding maximum information with minimum efforts. The research was descriptive, as it required studying the scope of investment options in the low interest regime. A formal design is required to ensure that the description covers all phases desired. Precise

statement of the problem indicated what information is required. Then the study was designed to provide for the collection of this information.

2) Data collection method: The information was collected through both primary and secondary data. The information collected in the form of questionnaires was primary. The data was collected through field investigation. Personnel interview was adopted, taking into consideration the availability of time and other resources, whenever need arouse various supplementary questions were asked to get maximum information from the respondents. Secondary data was collected from the company profile of company, pamphlets, magazines, web sites.

3) Sample Design: Sample size and sample area is two important things in sample design. Sample size means number of customers, clients visited during the project. Sample area means area covered for conducting the research.

Sample Size: A sample of 73 clients of various categories viz. Business class, under graduate, graduate, post graduate Professionals, Service Class was taken. The number of respondents was less due to time shortage. Sample Unit: The sampling unit included any individual who is investing his/her money in any form.

Sample Area: Sample area means the area in which research is conducted. For my project sample area is jaipur only.

Target audience: Primary target: Graduate student Secondary target: Post graduate Third target

: 10+2, Working class

4) Sampling Technique: The universe and coverage area of the study was too large. As a result, samples, which were easily accessible, were chosen.

5) Data Analysis and Interpretation: After collection of data it was compiled, classified and tabulated manually. Using appropriate mathematical tools then processed this data. The questions that had alternate choices have been analyzed by taking percentages. In case of ranking questions total score has been added, mean score was obtained and then final ranking was given. In case of four-point scale question, weighted score ad percentages were calculated. The questions to which there were specific answer ranges have been clubbed and percentages were calculated. In case of explanatory questions explanation has been given. Bar-diagram and pie charts have been used for presenting more information.

6) Preparation of Report: Finally the report will be prepared on the basis of the above research methodology

BENCHMARKING ON INSTITUTES Institute

ASPIRATION

Duration of course

3 /4/5 month

Fee

3000/4000/5000

Class hour

1 hour

Total number of hour

90/60/45hour

Placement facility

Yes

Trainers experience

Fresher

Number of student in a batch Total number of admission in a month

15

Courses offered

Spoken English

Mission statement

none

Attendance and Assessment

No

Walk ins

NA

Student profile

10th ,10+2,Graduate,Post Gaduate,Working class

Certification

No

Fee variation

No

Impressive things

None

Unimpressive things

Lack of staff

Good or Bad points of counseling

Informal language,Not convincing

Wi-Fi

No

2*15=30

Institute

ADROIT

Duration of course

3 month

Fee

3200

Class hour Total number of hour

1 hour

Placement facility

Yes

Trainers experience Number of student in a batch Total number of admission in a month

NA

Courses offered

Power (YES) English,CAT,MAT,JEMAT,IELTS,TOFEL

Mission statement

None

Attendance and Assessment

Yes

Walk ins

NA

Student profile

10th ,10+2,Graduate,Post Gaduate,Working class

Certification

Yes(80% attendance is must for that)

40-45

Fee variation Impressive things

Spacious Rooms

Unimpressive things

No library

Good or Bad points of counseling Wi-Fi

No

Location

Vaishali Nagar

Institute

AMERICAN

Duration of course

3 month

Fee

2800

Class hour

1 and half hour

Total number of hour

Not based on hour

Placement facility

Yes

Trainers experience

More than 7 years

Number of student in a batch Total number of admission in a month

More than 50

Courses offered

Spoken English

Mission statement

None

Attendance and Assessment

No

Walk ins

NA

Student profile

From 8th standard to working class

Certification

No

Fee variation

Yes

Impressive things

None

Unimpressive things

Infrastructure(chair are bad quality),No AC

Good or Bad points of counseling

counselor is trainer

Wi-Fi

No

Location

Vaishali nagar

40-60

Institute

VETA

Duration of course

1,2,3 Month

Fee

220,044,006,200

Class hour

2 hour

Total number of hour Placement facility

No

Trainers experience

Fresher to Experienced

Number of student in a batch Total number of admission in a month

15-Oct

Courses offered

Spoken English

Mission statement

Yes

Attendance and Assessment

Yes

Walk ins

260 Per month

Student profile

10+2 to working class

Certification

Yes

Fee variation

Yes

Impressive things

situated in prime location

Unimpressive things Good or Bad points of counseling

No library facility counseling is based on current grammar knowledge of student

Wi-Fi

No

Location

Vaishali Nagar

60

Institute

ACE

Duration of course

3 month

Fee

3200+10.3% tax

Class hour

1 and half hour

Total number of hour

90 hour

Placement facility

No

Trainers experience

7 years

Number of student in a batch

mora than 50,usually 150

Total number of admission in a month Courses offered

50-80

Mission statement

None

Attendance and Assessment

No

Walk ins

500

Student profile

8 th standard to working class

Certification

No

Fee variation

Yes

Impressive things

None

Unimpressive things

Too many student in a batch

Good or Bad points of counseling

counseling was not convincing

Wi-Fi

No

Location

Banipark

Spoken English

Institute

Focus

Duration of course

3 month

Fee

3400

Class hour

1 hour

Total number of hour Placement facility

Yes

Trainers experience

more than 10 years

Number of student in a batch

25

Total number of admission in a month

30

Courses offered

Spoken English

Mission statement

None

Attendance and Assessment

Yes

Walk ins

70

Student profile

10th to working class

Certification

None

Fee variation

Yes

Impressive things

Trainer is hard worker

Unimpressive things Good or Bad points of counseling

No fan/Ac when I visited center Every prospect is suggested basic course irrespective of knowledge of that prospect

Wi-Fi

No

Location

Ambabari

Institute

Kingfisher training academy

Duration of course

1 years

Fee

125000/135000

Class hour

2 hour

Total number of hour

Not based on hour

Placement facility

Yes

Trainers experience

NA

Number of student in a batch Total number of admission in a month

20

Courses offered

NA Advanced Certificate Course in Aviation And Hospitality Management

Mission statement

None

Attendance and Assessment

Yes

Walk ins

NA

Student profile

10+2

Certification

Yes

Fee variation

Not disclosed

Impressive things

Virtual library, infrastructure

Unimpressive things

None

Good or Bad points of counseling

Counseling was comprehensive

Wi-Fi

Yes

Location

Lal kothi

Institute

Speak well

Duration of course

3 month

Fee

3000/4000

Class hour

1 and half hour

Total number of hour

Not based on hour

Placement facility

No

Trainers experience Number of student in a batch Total number of admission in a month

24 years

Courses offered

25 40 English language and speaking ,Group discussion & interview technique, Creative writing,IELTS/TOFEL,GMAT/GRE

Mission statement Attendance and Assessment

None

Walk ins

120

Student profile

10+2,Graduate,Post graduate, Working class

Certification

No

Fee variation

No

Impressive things

AC rooms

Unimpressive things Good or Bad points of counseling

None

Wi-Fi

No

Location

Lal kothi

No

No assessment of student

Institute Institute

VETA VCC

Duration of course Duration of course

1& month to 3 Month 2/3half month

Fee Fee

3200/4200 2000/2650

ClassClass hour hour

11and andhalf halfmonth hour

TotalTotal number of hour number of hour

80 hour 111 hours

Placement facility Placement facility

No No

Trainers experience Trainers experience

Around 7 years More than 7 years

Number of student in a batch Number of student in a batch Total number of admission in a Totalmonth number of admission in a month

25 25

Courses offered Courses offered

Spoken SpokenEnglish English

Mission statement Mission statement

None Develop self invocated creative youth

Attendance and Assessment Attendance and Assessment

Yes Yes

WalkWalk ins ins

NA 40-60 Per month

Student profile Student profile

Graduate, Postto graduate, 8 th standard working working class class

Certification Certification

Yes Yes

Fee variation Fee variation

Yes Yes

Impressive things Impressive things

Spacious room,18 running Library and spacious roombatch Most student are 10 or 10+2,there is no scope for No library learning

Unimpressive things Unimpressive things

40 30

GoodGood or Bad of counseling or points Bad points of counseling Average Trainer is counselor Wi-FiWi-Fi

No No

Location Location

Lal kothi Jhotwara

Institute

VARNISH

Duration of course

3 month

Fee

2000+200

Class hour

1 hour

Total number of hour

Not based on hour

Placement facility

No

Trainers experience

2 Years

Number of student in a batch Total number of admission in a month

15

Courses offered

Spoken English, Diploma in animation

Mission statement

None

Attendance and Assessment

No

Walk ins

NA

Student profile

10,10+2,Graduate

Certification

No

Fee variation

No

Impressive things

Computer lab,Intrnet facility

Unimpressive things Good or Bad points of counseling

Single course for all student

Wi-Fi

No

Location

Vidhadhar nagar

30

Not in good location

Institute

II JT

Duration of course

6 month,1 year

Fee

22000

Class hour

2 hour

Total number of hour

Not based on hour

Placement facility

Yes

Trainers experience

Minimum 3 years

Number of student in a batch Total number of admission in a month

10

Courses offered

Spoken English,Diploma in animation

Mission statement

None

Attendance and Assessment

No

Walk ins

NA

Student profile

10+2,under graduate

Certification

Yes

Fee variation

NA

Impressive things

Infrastructure, Well equipped computer library

Unimpressive things

None

Good or Bad points of counseling

Does not consider students level

Wi-Fi

No

Location

Lal kothi

NA

Institute

HERO MINDMINE

Duration of course

3 month

Fee

4000/5000/5500/6100

Class hour

2 hour

Total number of hour

200+60 hour for computer

Placement facility

Yes

Trainers experience

2 and half years

Number of student in a batch Total number of admission in a

15-Jan

month

30

Courses offered

Spoken English(foundation,Level1,2,3)

Mission statement

None

Attendance and Assessment

Yes

Walk ins

NA

Student profile

Graduate, Post Graduate, Working Class

Certification

Yes

Fee variation

Yes

Impressive things

Dyned software

Unimpressive things

Location

Good or Bad points of counseling

Good

Wi-Fi

No

Location

Adarsh Nagar

AMERICAN (INSTITUTE OF ENGLISH Institute

LANGUAGE PVT. LTD.

Duration of course

3 MONTH

Fee

3000

Class hour

1 and half hour

Total number of hour

90 hour

Placement facility

No

Trainers experience

NA

Number of student in a batch Total number of admission in a

25-30

month

100

Courses offered

Spoken English

Mission statement

None

Attendance and Assessment

No

Walk ins

NA

Student profile

8th standard to Post Graduate, Working Class

Certification

No

Fee variation

Yes

Impressive things

None

Unimpressive things

Number of student is more than 50.it is not 25

Good or Bad points of counseling

Poor

Wi-Fi

No

Location

Adarsh Nagar

Institute

ADROIT

Duration of course

2 and half month

Fee

2800

Class hour

1 hour

Total number of hour

Not based on hour

Placement facility

Yes

Trainers experience

NA

Number of student in a batch Total number of admission in a

20

month

30 Power (YES)

Courses offered

English,CAT,MAT,JEMAT,IELTS,TOFEL

Mission statement

None

Attendance and Assessment

Yes

Walk ins

6 10th ,10+2,Graduate,Post Gaduate,Working

Student profile

class

Certification

Yes(80% attendance is must for that)

Fee variation

Yes

Impressive things

Spacious Rooms, library

Unimpressive things

None

Good or Bad points of counseling

Average

Wi-Fi

No

Location

Lal Kothi

Institute

HERO MINDMINE

Duration of course

3 month

Fee

4000/4900/5350/5890

Class hour

2 hour

Total number of hour

200+60 hour for computer

Placement facility

Yes

Trainers experience

2 and half years

Number of student in a batch Total number of admission in a

12-Jan

month

12 Spoken

Courses offered

English(foundation,Level1,2,3)

Mission statement

None

Attendance and Assessment

Yes

Walk ins

8 Per month Graduate, Post Graduate, Working

Student profile

Class

Certification

Yes

Fee variation

No

Impressive things

Dyned software

Unimpressive things

Location

Good or Bad points of counseling

average

Wi-Fi

No

Location

Vaishali Nagar

Institute

PLANET-EX

Duration of course

3 month

Fee

3200

Class hour

1 and half hour

Total number of hour

Not based on hour

Placement facility

No

Trainers experience

Around 4 years

Number of student in a batch Total number of admission in a

20

month

20-30

Courses offered

Spoken english,IELTS,TOFEL

Mission statement

None

Attendance and Assessment

No

Walk ins

100 Per month

Student profile

10+2,Graduate,Post Graduate

Certification

No

Fee variation

No

Impressive things

None

Unimpressive things

Lack of staff

Good or Bad points of counseling

Inexperienced counselor

Wi-Fi

No

Location

Vaishali Nagar GOENKA PROFESSIONAL TRAINING INSTITUTE(BBC

Institute

LEARNING)

Duration of course

3 month

Fee

4900/5900

Class hour

1 and half hour

Total number of hour

Not based on hour

Placement facility

No Minimum 2 years, Director is one of the most experienced

Trainers experience

in jaipur

Number of student in a batch Total number of admission in a

20

month

40

Courses offered

Spoken English,IELTS,TOFEL

Mission statement

None

Attendance and Assessment

Yes

Walk ins

5-10,20-30

Student profile

Under Graduate,Graduate,Post Graduate, Working Class

Certification

Yes(BBC Certification)

Fee variation

No

Impressive things

CBT Software, Computer Lab

Unimpressive things

None

Good or Bad points of counseling

Excellent counseling, Maintain Privacy

Wi-Fi

No

Location

Tilak Nagar

Institute

NIFA

Duration of course

15 month

Fee

30652/33000

Class hour

2 hour

Total number of hour

Not based on hour

Placement facility

Yes

Trainers experience

NA

Number of student in a batch Total number of admission in a

10

month

10

Courses offered

Diploma in Computer Accountancy

Mission statement

None

Attendance and Assessment

No

Walk ins

NA

Student profile

10+2,Under Graduate

Certification

Yes

Fee variation

NA

Impressive things

None Infrastructure,Brochere was not available at

Unimpressive things Good or Bad points of

counseling

counseling

Poor

Wi-Fi

No

Location

Lal kothi

Institute

CREATE COMPILE CATER

Duration of course

3 month

Fee

3400

Class hour

1 and half hour

Total number of hour

Not based on hour

Placement facility

No

Trainers experience

5 years

Number of student in a batch Total number of admission in a

20

month

35

Courses offered

Speak English

Mission statement

None

Attendance and Assessment

Yes

Walk ins

NA

Student profile

10+2,Graduate

Certification

No

Fee variation

No

Impressive things

Library facility

Unimpressive things Good or Bad points of

None average/course is offered after according to

counseling

knowledge

Wi-Fi

No

Location

Lal kothi

Institute

Focus

Duration of course

3 month

Fee

4900

Class hour

1 and half hour

Institute Total number of hour

AHAbased on hour Not

Duration of facility course Placement

3 Month Yes

Fee Trainers experience

25,000 5 years Minimum

Class hour Number of student in a batch

2 Hour 25

Total number of admission hour in a

Not Based on Hour More than 60

month Placement facility Courses offered

Yes Spoken English

Trainers experience Mission statement

NA None

Number of student in a batch Attendance and Assessment

20 No

Total of admission in a Walk number ins month Courses offered Student profile

400 Admission Per Year NA Business Communication, Diploma inGraduate Aviation 10+2,Under Graduate,Graduate,Post

Certification Mission statement

&Hospitality No None

Fee variationand Assessment Attendance

Yes Yes

Impressive Walk ins things

18 running batches, thereSeminar is environment to speak 4000 Per Year Including

Student profilethings Unimpressive

English 10+2,Under Graduate Administrative head is rude towards workers

Certification Good or Bad points of

Yes Average

counseling Fee Wi-Fivariation

NA No

Impressive Location things

Infrastructure Lal kothi

Unimpressive things

None

Good or Bad points of

Comprehensive & Good

counseling Wi-Fi

No

Location

M I Road

Institute

Planet Rex

Duration of course

4 month

Fee

4500

Class hour

1 and half hour

Total number of hour

Not based on hour

Placement facility

Yes

Trainers experience

Minimum 3 Years

Number of student in a batch Total number of admission in a

15

month

NA

Courses offered

Spoken English,IELTS,TOFEL

Mission statement

None

Attendance and Assessment

No

Walk ins

NA

Student profile

10+2,Graduate,Post Graduate, Working Class

Certification

NO

Fee variation

NO

Impressive things

Infrastructure, Directors publicity

Unimpressive things Good or Bad points of

None

counseling

Average

Wi-Fi

No

Location

Vaishali Nagar

Institute

ELEMENT AKADEMIA

Duration of course

3 Month

Fee

Rs. 6000

Class hour

2 Hour

Total number of hour

Not based on hour

Placement facility

Yes

QUESTIONNAIRE 1 Name : _________________________________________ Contact number : _________________________________________ E-mail address : _________________________________________ DOB : _________________________________________ Sex (Male/Female) : _________________________________________ Q.1What is your academic qualification? Please mention name of college/course if pursuing.

No. of Respondant

35

33

30

25

20

No. of Respondant

15 12 10

5 2 0 UG

G

PG

Q.2Do you have any work experience? If yes, which company and how many months/years? No. of Respondant 35 30 30

25

20 No. of Respondant 15

10

12 9

5

0 Yes

No

No Answ er

Q.3Are you looking for some course which can help you in getting a good job? No. of Respondant 25 22 20

15

13

12

No. of Respondant

10

5

0 Yes

No

No Answ er

Q.4Where do you look for information related to different courses?(please Tick) a. (A)newspaper b. (B)friends c. (C)parents d. (D)hoarding/kiosks e. (E)career fairs f. (F) seminars g. (G)any other (please specify) No. of Response 40

38 36

35 30 25 20

No. of Response 15

16

15 11 10 6 5

2

0 new spaper

friends

parents

hoarding/kiosks

career fairs

seminars

any other (please specify)

Q.5Whom do you consult to take decisions about your career?(please Tick) (A)parents (B)friends (C)teachers/mentors (D)career counselors (E)any other (please specify)

No. of Response 35 31

30

30 25 19

20

No. of Response 15 10 10 5 1 0 parents

friends

teachers/mentors

career counsellors

any other (please specify)

Q.6What are the criteria’s on which you decide to join any institute? Please tick the most important ones. (A)Course duration (B)Course content (C)Course fee (D)Number of students in a batch (E)Job interview guarantee (F)Job placement guarantee (G)Faculty (H)Infrastructure (I)Past placement record (J)Credibility (K)Distance from home/office (L)Promotional offers/discounts (M)Any other (please specify)

Score

35

31

30 25 20

17

15

18

16

14

10

Score

14

12 8

6

5

5

5

3

5 1

An y

m ot

io n

ce Pr o

an is t D

al

fro

of

m

fe

ho m e/

di bi re C

en ce m la

tp Pa s

of fic e rs / di ot sc he ou r( nt pl ea s se sp ec ify ) N o an sw er

li t y

d tr ec or

re tu ru c st

fra In

e

cu lty Fa

te ua

tg

pl ac em en

gu Jo

b

er vi ew in t

b Jo

ra n

te ar an

ba a in s

nt de fs tu

ro um be N

e

h tc

e fe rs e ou

C

rs e ou C

C

ou

rs e

du

co n

ra

te

tio

nt

n

0

Q.7Rate the following criteria’s in terms of priority from 1 to 13. (1 being the most important and 13 being the least important) (A)Course duration (B)Course content (C)Course fee (D)Number of students in a batch (E)Job interview guarantee (F)Job placement guarantee (G)Faculty (I)Infrastructure (J)Past placement record (K)Credibility (L)Distance from home/office (M)Promotional offers/discounts (N)Any other (please specify) Score 25 20 20 15 Score 10

7 5

4

5 1

0

4

1

0

1

0

1

2 0

re di bi li

ty m ho m io e/ na of lo fic ffe e An r y s/ di ot sc he ou r( nt pl ea s se sp ec ify ) N o an sw er

d C

fro an ce is t

Pr om ot

en tr

ec or

ur e ru ct

ra st In f

Pa st

pl ac em

D

um be N

Fa cu lty

ou ro rs fs e tu fe de e nt s Jo i n b a in ba te rv tc ie h w Jo g b u pl ar ac an em te e en tg ua ra nt ee

C

se ou r C

C

ou rs e

du r

co nt

at io

en t

n

0

Q.8What are the most important skill as per you that you should have in order to get a job with a top MNC (A)communication skill (B)PD/Grooming (C)Managerial skill (D)Domain knowledge/technical skill (E)Any other (Please specify) Score 30 25 25

20 15 15

Score

13

10 6

5

5

0 communication skill

PD/Grooming

Managerial skill

Domain know ledge/technical skill

No Answ er

Q.9Have you ever joined any training to improve your skills? If yes, which institute

No. of Respondant 35

33

30

25

20 No. of Respondant 15

10

7 5

5

0 Yes

No

No Answ er

Q.10What is the right time to join any such training?

Response 20

19

18 16

15

14 12 10

Response 8

8 6 4 2 2 0 Winter

Summer

This Year

No Answ er

Q.11Have you heard of these institutes? (Please Tick) (A)Hero Mindmine (B)Elements Akademia (C)BBC English edge (D)VETA (E)Focus (F)Ace academy

Aw areness 25

20

19

20

21

16 15

13 Aw areness

10 7 4

5

0 Hero Mindmine

Elements Akademia

BBC English edge

VETA

Focus

Ace academy

No Answ er

Q.12Have you ever visited any of the above institutes and attended a counseling session?

Visit 40 34

35 30 25 20

Visit

15 10 10 5 1 0 Yes

No

No Answ er

Q.13How do you believe that the institute is credible and established? Please tick the important ones. (A)placements (B)branding (C))infrastructure (D)advertisements (E)PR articles in newspapers (F)fee (G)tie-ups with companies/institutions (H)certification (I)management profile

Score 30 26 25

20 17

17 14

15 11 10

Score

11

8

8 6 4

5

An sw er No

e en tp ro f il

n

an ag em

at io m

co m wi th ti e -u ps

ce rti fic

fe e

in ar t ic le s PR

pa ni es / in st itu t io ns

ne ws pa pe rs

en ts se m ad ve r ti

in fra st ru ct ur e

di ng Br an

pl a

ce m

en ts

0

Q.14If you wish to join any such course then who will pay the course fee? You or your parents?

No. of Response 35 31 30

25

20 No. of Response 15

10 7

6 5 1 0 Parents

Self

Both

No Answer

Q.15Which mode of payment will you choose to pay the course fee? Full payment or installments?

No. of Response 20

19

18

16

14

12

12 11

10

No. of Response

8

6

4

3

2

0 Full Payment

Thank you

Installment

No Answer

Both

QUESTIONNARE 2 New Students

Name Family Income

Education City

1. Are you a graduate/graduation FY student? ] No. of Respondant

1 4

5

12th G Final Year PG

9

2. Are you doing any professional course? If yes, which one?

NO. of Respondant

12

Yes 13

No

3. Are you interested in career in one or more of the following jobs? Tick the ones you are interested in BPO BANKING ACCOUNTS SALES OFFICE JOB/BACKENED OPERATIONS If s/he is interested in BPO/office, than proceed.

Interest

4

6

19

BPO Banking Accounts

3

Sales Office Job No Answer

8

7

4. Have you applied/given interview for BPO/Office jobs?

Response

3 6

Yes No No Answer

16

Response

0

9

Yes

5. Were you selected? If No, why

No No Answer

16

Response

0

9

Yes No No Answer

16

6. Do you think you need training for getting International BPO jobs?

Response

5

1 Yes No No Answer

19

7. What kind of training do you need?

Response

7

7

Communication Skills Personality/Grooming

2

Confidence Building Computer Accent English Account 8

7

3

1

1

No Answer

8. What, as per you can be the duration and fee of such a training? If fees mentioned are less than 15000/-, please ask this question Response

6 8

3 Months 4 Months 6 Months No Answer

4

7

Response

1 2

1

7

4000 5000 5500 6000 7000 8000 6

10000 12000

1

No Answer

2

1 4

9. If there is a very high quality institute providing specialized training for BPO/KPO and office jobs including domain expertise, business communication, IT and grooming and assuring jobs in top International BPOs like genpact,how much extra can you pay for it

Response

5

10 1

0 1000 2000 8000 2500 No Answer 2 11

6

10 When are you planning to do this course?

Response

8

This Year Next Year No Answer 14

3

11 On what basis would you choose the institute?

Response

2 6

1 1 2

1

1

Aid Publicity No. of Student

1

Infrastructure Content Faculty Placement Fee Time 9

11

No Answer

MY FINDINGS •

During the survey it was found that EA has best facility in jaipur for business communication.

•

Lake of Awareness in student. Many people are not known about EA especially under graduate.

•

When I interviewed people then many of the people can not recall EA. It shows Lake of Advertisement or advertisement is not timely given or advertisement is not given on right time.

•

In its advertisement is not using any brand ambassador which attracts all age group people like VETA.

•

There is lake of creativity in advertisement.

•

BBC ENGLISH is main competitor and strategically better performer then EA.

SUGGESTIONS

1. Company should increase awareness in exterior part of jaipur through news paper 2. According to my view company should open new centre in jaipur especially inVAISHALI NAGAR

3. Company should search courses for increasing sales. 4. Company should give attractive offer to other institute like NFA 5. Company must make strategy to fight local brand 6. Company should hold seminar in RAJASTHAN UNIVERSITY

LIMITATIONS OF STUDY

•

Considering the fact that nothing is perfect in this world. Every individual is bound to make mistake at some point or the other.

•

The information is collected only from Institutes and by questionnaire form.

•

Information collection took 15 days.

•

The respondent may be based or influence by some other factor.

•

The minor concept and technique at the marketing management are used significant in the project concern.

•

Some time respondents were not in reply with full confidence and sometime they reply without thinking over the matter.