What are the chances?
an analysis of the market potential of a new service
Rijksuniversiteit Groningen Faculty of Economic and Business
MsC Business Administration - Business Development
Author: Rutger Bartels 1st supervisor: Drs. N. Dag 2nd supervisor: Dr. J.L. Miedema
What are the chances?
an analysis of the market potential of a new service
RBO Damsport 1 9728 PP Groningen Groningen, 15 december 2008 Master’s thesis Rijksuniversiteit Groningen
Preface
In front of you is my master’s thesis. This report describes the research I have executed to complete my study Business Administration, specialization Business Development, at the Rijksuniversiteit Groningen.
The research is executed for RBO in Groningen. RBO is a medium-sized organization that is active in the field where labor market and education meet each other. More and more attention is paid to learning and to keep learning. Education for every one is top priority to the Dutch societt. As a result of this growing attention various developments take place that might offer new market chances for parties active in this dynamic environment. The assignment that forms the foundation for this thesis is a logic result of this turbulent environment.
I owe several people thanks for their contribution to the realization of this thesis. At first, I have to thank Jan Koster and Ard van der Tuuk of RBO for offering me the chance to perform my master thesis in this organization.
Furthermore, I have to thank my first supervisor drs. N. Dag. I want to thank him for the effort and useful feedback he gave during the execution of this research. His insights and experiences helped me to maintain the overview and he made me think critically about how to perform this research. Furthermore I want to thank dr. J.L. Miedema for the feedback and comments he gave in the last steps of this research.
Besides the various supervisors, the role of the interviewees certainly can not be forgotten. I want to thank all the people who were willing to participate in the interviews. I’ve experienced their enthusiasm and willingness to cooperate as real positive.
And as last but certainly not as I want to thank my parents and friends. My parents for their patience and continuous support during my study career. My friends for the support concerning my study and for the great time I have had with them being a student in Groningen.
Management summary
In this report a research is executed concerning the market potential of a new service idea. The research is performed on the authority of RBO in Groningen in the period of April 2008 to December 2008. RBO is primarily active in the connection between labor market and education. Due to its activities on the education market, a lot of knowledge about this market is present inside the organization. Based on this knowledge several people inside RBO have wondered whether it would be an interesting option for RBO to offer an online service related to study choice and study advice. Based on this question a research is carried out. The research question that is answered therefore is:
To what extent does the concept concerning the webbased service have market potential?
To assess what the odds of success a new service or product idea are, in the literature three criteria are identified: product superiority, market attractiveness, and synergy (Cooper, 1985). Due to the fact that RBO for the eventual development and exploitation of the new service has to cooperate with a third (yet unknown) party, the aspect of synergy is excluded from this research.
Product superiority is determined from the viewpoint of the customer. Therefore, by means of interviews the customer needs and wants concerning online study advice are identified. The interviews pointed out that study choice exists of various stages: the orientation, exploration, and decision phase and that the information need and supply widely differ per phase. The service as proposed by RBO might deliver value to its users in the exploration phase of the study choice process. Subsequently, based on a competitive analysis the extent to which RBO is able to deliver unique and superior value to the customer is determined. In comparison with competitive services RBO at best is able to deliver comparable value. However competitive services often are offered in combination with several additional services RBO does not offer. Due to this bundle of services many of these providers are able to create more value to its users than RBO. Besides product superiority the attractiveness of the market is a determinant of the market potential of a new service idea. The expectation is that the target market further will grow the upcoming years. However the competitive situation and the level of market need for RBO’s new service are less favorable to RBO and have a detrimental effect on the odds of success when entering the market.
Table of contents
Introduction ...7 1 - Company description ...7 2 - Problem definition...8 3 - Problem statement ...11 3.1 - Objective...11 3.2 - Research question ...11 3.3 - Preconditions ...12 4 - Theoretical framework ...13 5 - Conceptual model...16 6 - Research methods ...17 Diagnosis ...20 7 - Product definition...20 8 - Product superiority...238.1 - The study choice process...24
8.2 - Product superiority ...29
8.3 - Competitive analysis ...31
8.4 - Conclusion ...37
9 - Market attractiveness...38
9.1 - Market size and market growth ...38
9.2 - Market need and competitive rivalry ...43
9.3 - Conclusion ...44
Conclusion and recommendations ...46
10 - Conclusion...46
11 - Recommendations...47
Discussion...49
Literature...50
Introduction
In this section the research elements will be introduced. At first a short description of the principal and object of research, RBO, will be given. Furthermore the motive for this study as well as the management question will be discussed.
1 - Company description
The case for this thesis is RBO, which is a company located in Groningen in the Netherlands. The organization is established in 1987 and now has over 100 employees. RBO is a nationwide operating organization which core activities are located at the link between education and labour market. Central element in the activities of RBO is the role that education and training plays in (better) qualifying individuals and groups on and for the labour market.
Until the 1990s RBO operated in a relative stable market. The organization only had one or a few large customers and a limited number of well-defined functions and products. The financing of these products and activities was based on governmental subsidies. The organizational structure and the execution of the main activities were based on governmental regulation and there hardly was any form of competition. However, the environment became more and more turbulent. RBO was faced with a larger and more fragmented customer base, more products, and fiercer competition. RBO had to make the choice whether to adapt to the changed environment or to choose the route many comparable organizations took: merge with (the contract-activities) of an MBO-organization (Middelbaar Beroepsonderwijs) or ending the activities. RBO made the choice to go on as a commercial organization. For the current activities there are no distinct financing channels and the organization has to finance itself entirely through the selling of products and services.
The core activities of RBO are located at the link between education and labour market. The main tasks are in improving the employability of employed and job-seekers. RBO supports organizations so participants can enter the labour market and are better able to move in the labour market.
The activities of RBO are directly and indirectly related to training and educating. The products and services RBO offers are separated in three product groups and/or bundles of services:
- Consult and development in relationship to education and education policy; - Purchase of education and training for employed and job-seekers;
- Preparing, monitoring, and facilitating project administration, subsidy applications, and subsidy allocation.
Products of RBO among others are the development of company educational plans, personal development plans, evaluations of company’s training-policy, analysis of needed and available competencies, advice concerning the organization and content of training-policy, and assisting subsidy appeals and the execution of related financial and administrative tasks. Besides that, RBO purchases education for employed and job-seekers and takes care of the financial and administrative aspects involved in this process.
The competition RBO has to face with is twofold. In the area of purchasing education for external parties, there are no competitors that offer a comparable service. The consideration for the customers is to outsource the purchasing task and related activities or to execute these tasks themselves.
Besides the purchasing function many of the products and services RBO offers exist of the preparation, monitoring and facilitation of project administration, subsidy allocation, and subsidy application. In this area RBO is mainly active in the northern regions of the Netherlands. In this market, there are several competitors that offer primarily administrative services related to appealing and monitoring subsidies.
2 - Problem definition
and consist for the majority of courses at MBO (Middelbaar Beroepsonderwijs) level, HBO (Hoger Beroepsonderwijs) level and courses offered by private educational institutions.
The reason for this master thesis is the assignment the executive board of RBO has formulated based on their idea for a new service they possibly want to offer.
The foundation for this new service idea lies in several suggestions and remarks the director of RBO, Mr. Koster, has heard from customers and other institutions related to RBO. RBO received several signals that ‘they were sitting on a goldmine’ because of the knowledge and data RBO has of the Dutch education offering. Especially the possibilities concerning an online service related to offering information where interested parties like individual education seekers, HR professionals, study advisors, and job coaches can find information about the education they are interested in was seen as an interesting and promising idea.
Based on these signals, at RBO the idea originated that RBO in some way could do ‘something’ with ‘this goldmine’. The executive board has further figured out the new service idea and formulated the most interesting option for RBO.
The most interesting and promising idea identified by the board was the offering of a online service that offers its users the opportunity to find information about the courses which best suit their needs. Because RBO’s knowledge and experience is particularly about the vocational education (MBO, HBO, and courses offered by private educational institutions) offering in the Netherlands, the new service will be limited to vocational education. The premise inside RBO is that individual education seekers and professionals active in study advice, career planning, and reintegration might be interested in using this service. The main target markets are people that are looking for the best suited education for themselves or others in the secondary (MBO)and higher
(HBO) vocational education. The secondary and higher vocational education can be
subdivided in the initial and post-initial education. The initial education, or regular education, is the education people attend before they enter the labour market. The post-initial education or adult education is the education people attend after they have left the regular education system. A large share of the adult education is related to education on behalf of people’s work.
Netherlands. The service to offer is a websitte people can visit where they can find the education that suits the best to the needs of the individual education seeker. By stating various preferences and requirements concerning their education of interest, people can find the education that suit their needs best and additional information about this study. Inside RBO several options have been under consideration how to commercialize the concept concerning the database. The possible options mentioned were twofold. The first option is to self develop and exploit the concept idea. This means RBO have to take care of all the activities concerning the development as well as the launch and commercialization of the project. Within RBO there are considerable doubts whether RBO has the competencies and resources to develop and exploit the new service on their own, and after careful consideration this option is seen as a rather unlikely option and is moved aside.
Besides self developing and exploiting, the other option is to sell or license the database or a part of the database to an external party. In this stage of the process, this option is seen as the most viable option and this option serves as the foundation for this thesis. In this option the definite online service will be developed in cooperation with one or more external parties. This means that RBO will approach other parties for some form of joint development and exploitation. In this cooperation RBO sees its role as ‘deliverer of information’. RBO has the knowledge and information about the Dutch education offering and the several characteristics of the various educations offered in the Netherlands. The exact way in which this cooperation will be shaped has to be decided in a later stage of the development process.
Because of the signs the director of RBO, Mr. Koster, received from several customers and other business relations, the expectation is that various parties are interested in this concept and might be interested in some form of cooperation. The exact way in which the cooperation will to be shaped must be determined in a later stadium of the development process.
Therefore the management question is:
To what extent does the new service concept have market potential?
The management question suggests that the company would like to know what the chances of the new product are in succeeding in the marketplace. To answer this question it would be useful to start with an early and more concrete definition of the new service. When the new service is narrower defined the factors that play a role in assessing the market potential of a new service concept need to be determined and investigated.
3 - Problem statement
The function of the problem statement is twofold: synchronization with the customer and the internal guiding of the research (De Leeuw, 2003). The problem statement contains the following subjects: objective, research question, and preconditions.
3.1 - Objective
The objective of this thesis:
To present the executive board of RBO insight in the degree to which the new service concept has a chance of succeeding in the Dutch market so they can make a decision about the new service concept.
3.2 - Research question
Subsequently, the following research question can be formulated:
To what extent does the concept concerning the new service have market potential?
2. To what extent is the new service concept from the standpoint of the user unique and
superior compared to the competitive offering?
a. What are the user’s needs and wants?
b. To what extent is RBO able to deliver a unique and superior service? c. To what extent do the competitors offer a unique and superior service? 3. How attractive is the market?
a. What is the size of the market?
b. What are the growth prospects of the markets? c. What is the level of market need for the new service? d. How is the competitive situation?
3.3 - Preconditions
The preconditions are divided in product and process preconditions (De Leeuw, 2003). The product preconditions that influence the results of the study are:
- The research is limited to the new service concept as formulated by RBO;
- In this research the options with regard to a study advice and information service for the vocational education market are examined.
The process preconditions that influence the results of the study are:
- The research and the reporting of this report will be executed during seven months, from 14 April 2008 to 30 November 2008;
4 - Theoretical framework
In the next section, the theoretical foundation of this thesis will be further explored. First a further exploration of success factors of new product efforts will be explored. Then these factors will be applied to the screening of a new service idea
The development of new products or services can roughly be divided in three areas: the fuzzy front-end, the new product development process, and commercialization (Koen e.a., 2004). RBO is still in the pre-development phase or the fuzzy front-end of the new product development process. In this phase the viability of the business option has to be assessed. Several factors that influence the success probability of a new product effort can be assessed in the front-end stages of the NPD process.
According to Cooper and Kleinschmidt (1993) new product success is fairly predictable. They have executed an extensive study into new product success and failure, and have pinpointed what separates successful from unsuccessful new product efforts. The key success factors are stated below:
- Product superiority – delivering unique benefits to users – has the biggest impact in determining whether a new product or service will be successful. Superior products offer unique features not available on competitive products; met customer needs better than competitors’; had higher relative product quality; solved a problem the customer had; reduced the customer’s total costs; and were innovative. No one product will be distinguishing at all these aspects, but the more unique benefits from a customer’s perspective the bigger the chance of succeeding in the marketplace. - Besides product superiority, the pre-development activities are vital to the success of
a new product. In many new product efforts serious deficiencies in these activities are stated. The pre-development homework exists of activities such as initial screening, preliminary market assessment, preliminary technical appraisal, detailed market studies or marketing research and a financial analysis.
- Furthermore early and sharp product definition dramatically improves the odds of success. The product definition is undertaken before the development phase of the new product and often includes:
o definition of the target market(s) – identification of the intended users; o description of the product concept (what the product will be and do), and
o delineation of the positioning strategy;
o a list of the product features, attributes and requirements.
- A strong market orientation is central to success. The project must be customer focused and market driven. Marketing activities critical to success include preliminary market assessment, detailed market study, customer tests of the product, trial sell and market launch;
- Quality of execution of the technological and production activities is strongly linked to success. Such technical activities included preliminary technical assessment, product development, in-house product testing, trial production and production start up.
As mentioned before certain factors separate winning new product efforts from losing efforts. These factors can roughly be divided in two groups. On the one hand some factors capture the nature and the proficiency of the innovation process; what activities are undertaken, when, how well, how thoroughly, and even how much is spent.
On the other hand there are factors that describe the nature of the project, the market, and the product. These factors can be subdivided in the dimensions synergy, market attractiveness, and product superiority. The factors that describe the nature of the project, and the list of items that comprise those factors, should become key criteria for firms’ screening and project evaluation decisions (Cooper, 1985; Cooper & De Brentani, 1991; Cooper & Kleinschmidt, 1993).
Product superiority
Superior and unique products specifically are products that offer unique features; provide good value-for-money; meet customer needs better; have higher relative product quality; boast superior price/performance characteristics; have benefits perceived as useful; and whose benefits are highly visible (Cooper, 1994). Product superiority is defined from the customer’s standpoint. The definition of what a ‘unique and superior’ product is must be based on an in-depth understanding of customer needs, wants, problems, likes, dislike and preferences (Cooper, 1993).
Market attractiveness
Market attractiveness is also a key criterion in the screening decision. Several aspects play a role in the attractiveness of a market. Cooper (1985, 1994, and 2001) suggests that a company has to look for products aimed at large and growing markets, and where a high level of need exists for the type of product. Furthermore elements of the competitive situation have some impact and might be included as part of market attractiveness. These elements include the absence of intense competition, lack of price competition and weak competitive products (Cooper, 1994).
Synergy
The third key criterion in the screening decision is synergy or fit between the new product and the resources, skills and experience of the firm. Particularly marketing and technological synergies: products that build on in-house development technology, utilize inside engineering skills, and use existing manufacturing resources and skills; and products with a strong project/company fit in terms of sales force, distribution channels, customer service resources, advertising and promotion, and marketing intelligence skills and resources (Cooper, 1994).
The executive board already indicated that RBO is lacking the competencies to develop and exploit the concept on their own. Based on the insights concerning the market chances of the new service concept, the executive board of RBO will make a choice whether they should continue the project and approach other parties to discuss the possibility of a certain form of cooperation related to this new service concept.
5 - Conceptual model
In the choice of theoretical concepts two considerations play a role. On the one hand they have to offer the ability to understand the problem: they have to pinpoint clearly, exactly and completely what the foundation for the research is. On the other hand they have to contribute to the researchability of the research (De Leew, 2003).
Based on the product superiority and uniqueness and attractiveness of the market of the new service concept, the market potential of the new service concept can be assessed. Cooper suggests that the market success of a new product effort is fairly predictable. Several factors distinguish successful from unsuccessful new product efforts. Product superiority, synergy, and market attractiveness should be used in order to make a more effective screening decision. In the case of the new service concept central to this thesis, first the odds of success of the new service concept need to be assessed. Based on the insights in the market chances a decision will be made whether and in which way the process will be proceeded. Therefore the question of synergy between the project and the company can not be determined in this phase of the process.
In assessing the odds of new success of the new service concept Cooper (1994) suggests that the degree of product superiority, product advantage or differentiation is the number one factor that determines the odds of success of a new product project. The other factor that needs to be taken in account in determining the odds of success of the new service concept is the market attractiveness. Particularly the market size, market growth, the degree of market need, and purchase of importance are important in assessing the market attractiveness. Furthermore the competitive situation impacts the attractiveness of the market.
Fig. 5.1: Conceptual model
6 - Research methods
To answer the research questions several research methods are used. Below the several methods will be clarified.
The research conducted can be classified as qualitative. Qualitative research includes an ‘array of interpretive techniques which seek to describe, decode, translate, and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world’ (Cooper & Schindler, 2006). Qualitative research aims to achieve an in-depth understanding of a situation.
Several methods of data collection have contributed to the execution of the research. At first several conversations with people inside RBO are held and several secondary sources are consulted to get more insight in RBO, the environment of RBO, and the specifications, characteristics and basis principles that form the foundation for the new service. The conversations inside RBO are held with mr. Koster, director of RBO; mr. van der Tuuk, manager Bedrijfsbureau; mr. van der Zee, interim manager Bedrijfsbureau; and Mrs. Klopstra, manager Inkoop. Besides the informal conversations, during the problem exploration a theoretical review is executed to get more insight in the theory, models, and concepts related to the subject of this thesis.
In the conceptual model the factors market attractiveness and product superiority are identified as the determinants of the market potential of the new service concept. To get more insight in these factors various data collection methods are used.
Market attractiveness
Product superiority
The degree of product superiority is determined from the standpoint of the user. Because the uniqueness and superiority of the product depends on the needs and wants of the potential users, more insight was needed in the needs, wants, preferences, likes, and dislikes of the user. The primary data collection technique chosen in determining the user’s needs and wants and to get more insight in the market structure are individual interviews. By means of in-depth interviews the attitudes, perceptions, wishes and needs of the potential users are identified and insight in several aspects of the target market is obtained.
Based on these insights several factors that can serve as the foundation for the creation of a differential advantage is determined. Subsequently the extent to which the new service concept as proposed by RBO meets the user’s needs and wants is assessed. Furthermore the attractiveness of the target markets is part of the analysis. The data needed for this analysis is also collected by means of interviews with various professionals active in study choice matters. Besides the data collected during the interviews several secondary sources are consulted to get more insight in the factors that influence the market attractiveness of the new service concept. Amongst many the secondary sources consists of publications released by the Ministry of Education and the
Centraal Bureau voor de Statistiek (CBS). Furthermore several websites, documents
and various conversations with people inside and outside RBO are used to collect the information needed.
As mentioned above, the goal of the interviews is to collect information about several aspects of the education market, and to get more insight in the user needs concerning a webbased service related to study choice.
they have a lot of insight in the structure of the market, the needs and wants of people looking for a study, and the way in which people find and select the best suited study. When interviewing someone, that person can have two roles: informant or respondent. Respondents are interviewed to get to know something about themselves. Informants are interviewed to provide information about matters or people outside themselves. The people interviewed in this research are informants. By interviewing these people information about several aspects of the education market is collected. The interviews can be classified as semi-structured open interviews. In a semi-structured open interview the interviewer and interviewee have the possibility to ask for or give additional information when needed. By means of this a more in-depth discussion of the presented subjects can take place. By means of the interviews more insight in the market structure and the customer needs and wants will be obtained.
To obtain the information during the interview a list with interview questions is used. The interview is formulated according to the method of Emans (2002). The questionnaire is included in the appendix. Based on the experiences and feedback received in the interviews, the interview scheme is adapted several times.
Diagnosis
To answer the research question, in the next part of this thesis a further specification of the proposed new service will be mentioned. Furthermore the extent to which the new service offers differential advantages compared to the competitor’s offering, the environment in which the organization operates, and the attractiveness of the targeted market will be analyzed.
7 - Product definition
To lay the foundation for this research in the following section a further specification of the proposed new service will be given. First the proposed new service idea will be explained. Next the target market will be defined, and subsequently the way in which RBO wants to develop and exploit the new product and the markets targeted will be worked out.
This online service will be free of charge to its users. How this instrument exactly will be shaped will be determined in a later stage in the development of the online instrument and will be based on a thorough understanding of the user’s needs and wants in combination with the skills and competencies RBO can offer.
The proposed new service idea will be limited to the Dutch vocational education. This means that the main target groups are people looking for education at the HBO (Hoger
Beroepsonderwijs) and MBO (Middelbaar Beroepsonderwijs) level and education offered
by public and private education institutions. This target group roughly exists of individuals that are planning to attend vocational education themselves and in that context are looking for education that best meets their needs and requirement. Furthermore professionals that are active in searching and selecting the best suited education for external parties belong to the target group. These professionals are active in several fields. Amongst many they might be active as personnel officers, study consultants and job coaches for several private and public organizations.
Besides in secondary and higher education, the vocational education in the Netherlands can be divided in regular education and adult education. The regular education is the education people attend before they enter the labor market. In the Netherlands, the regular vocational education in 2007 is attended by over 500.00 people at MBO level and by over 370.000 people at the HBO level (Kerncijfers 2003-2007, 2007). The last years the participation in secondary vocational education (MBO) is rising. Furthermore, the participation in fulltime higher education (HBO) has risen strongly the last years. Furthermore, the adult education forms a large share of the vocational education. Adult education is the education people attend after they have finished or left regular education. Adult education in common is attended by people in the age 25 to 64. Adult education exists of all part-time education, plus fulltime-education when the education career in the period before is interrupted for at least 5 years. The participation in adult education has risen from 1,1 million participants in 1995 to 1.3 million participants in 2005 (Jaarboek onderwijs 2008).
way, the proposition is made that the quality of the service delivered will be better on average than the quality of the competitor’s offering.
Besides the online instruments several more traditional instruments are seen as potential competitors or substitutes for the new to offer service. Because of the increasingly growing role of internet in people’s life, RBO is expecting that an online study choice instrument might have market potential.
8 - Product superiority
In the next section the extent to which the new service offers unique and superior value to the customer will be assessed. First the study choice process will be described. Based on this description more insight in what customers value in study advice and information will be obtained. Subsequently, an analysis of the extent to which the proposed new service is unique and superior compared to the competitor’s offering will follow.
As was stated by Cooper (1993) product superiority has the biggest impact in determining whether a new product or service will be successful. Product superiority or uniqueness is defined from the customer’s standpoint (Cooper, 1993), or as Jobber (2004) states: although skills and resources are the sources of competitive advantage, they are translated in a differential advantage only when the firm is providing value above that of the competition. The creation of a differential advantage, then, comes with the marrying of skills and resources with the key attributes (choice criteria) that customers are looking for in a product offering. Cooper (1994) mentions several characteristics of unique and superior products or services. A superior and unique has one or more of the following features.
- Unique attributes and characteristics for the customer – not available from competitive products;
- Good value for money for the customer – positive economic impact on the customer; - Superior to competing products in terms of meeting customer needs;
- Excellent relative product quality – relative to competitor’s products, and in terms of how the customer measures quality;
- Product benefits or attributes easily perceived as being useful by the customer; - Highly visible benefits – very obvious to the customer.
An analysis of the extent to which a product is superior to the competitive offering is determined from the viewpoint of the customer, therefore information is needed about the customers, the customer’s needs and wants, and about the competitor’s offering.
8.1 - The study choice process
The first step in assessing how a new product or service compares to the competitive offering is to determine what customers value in a service. Below a description of the customer needs and wants concerning study advice will follow.
To get more insight in the needs and wants of people concerning study advice, at first it is necessary to know how people choose a study, which information is needed to make a decision, and what the essential factors are on which they base a decision.
The target group of the proposed new idea is quite diverse. On the one hand the target group exists of people that are looking for an education for themselves; on the other hand several professionals like HR managers, career advisors, re-integration officers and managers involved in study choice matters belong to the target group. Besides the division between professionals and students, there is a distinct division between regular and adult education. Furthermore, the education itself is dispersed in a variety of disciplines. Therefore it’s not possible to give an unambiguous description of the customer’s needs and wants concerning study choice and the way in which customers choose the most appropriate education.
Below the customer needs and wants concerning study advice will be given. The customer needs and wants are divided in the needs and wants of people participating in regular education and people participating in adult education.
Furthermore, the study choice process can roughly be divided in three main phases; the orientation phase, the exploration phase, and the phase in which more in-depth information is collected and the final decision is made. The description below is worked out based on this division.
Regular vocational education
made between secondary (MBO) and higher (HBO) vocational education. The biggest inflow in regular vocational education exists of students that directly flow in from secondary school. This group exists for the majority of people in the age of 15 to 18 year. Besides the inflow from secondary education, the inflow in MBO further exists of the side-inflow from a large variety of sources. The inflow in the HBO for the largest part exists of the inflow of secondary education and MBO.
Based on the information gathered in the interviews in combination with the publication of mr. Rietman (www.studiekeuze123.nl) insight is obtained in study choice. In regular education the study choice process in common starts with an orientation phase. People interested in attending an education at first need to determine in which direction and field of interest they want to proceed their further educational career. They have to find out what their interests are about, what their capabilities are, and in which direction they want to continue there educational career. The first inquiry in the choice of profession is often a central theme during this phase. In this phase a first choice must be made with respect to people’s likes and dislikes concerning and their further study and labor career. In the orientation phase several factors play a role and various instruments and services are available in assisting someone in making the various decisions. At first the environment of the student has a major impact on the choice of a student. Someone’s preferences, wishes and requirements are largely influenced by his or her environment. Opinions and behavior of family, friends and teachers play an important role in the decisions students make regarding their further study career and will strongly affect people’s choices.
Besides the influence of environmental forces, the influences of the information supply and assistance in study orientation offered in secondary education plays a significant role in the decision process. In secondary education a lot of attention is paid to careers counseling and various services are available to assist and guide students in choice of profession and study choice. Among many information evenings and career events are organized, conversations with deans and career advisors can be arranged and various profession tests are available to students to get more insight in what they want and need with respect to the next steps in their educational career.
Once students know what their interests are and have made a decision with regard to the direction in which they want to proceed their further education career, the actual process of selecting the best suited study starts. This phase is called the exploration phase. In this phase people have to find out which studies suit their interests and major requirements. In this phase of study choice students interested in receiving education in secondary vocational education at first are looking for an overview of the educations that suits their major preferences and requirements. In common these preferences and requirements are related to the location of the education and the discipline of the study. In relation to the location of the education the choice mostly is limited to only a few options. People in vocational education in the most cases tend to choose an education in the proximity of their residence. In the Netherlands the secondary vocational education has nationwide coverage and is regionally dispersed. Therefore in the most cases the choice for an educational institute is often limited to only one or a few institutes.
The preferences and requirements with regard to the discipline in the most cases directly result from the orientation phase. Studies are selected based on people’s interests and capabilities. Gathering information in the explorative phase occurs in several manners. Concerning the information supply several facilities are available. Secondary schools employ deans and study advisors, study advisors of local education institutes visit secondary schools in their region; information days and career events are organized; websites of the schools and other sources on the internet are consulted; and several other facilities like brochures and study guides are available to future students.
In creating more insight in the extent to which a study fit one’s interests, capabilities, and requirements people have various options to inform themselves. Personal contact with the education or education institute and experiences and opinions of people in someone’s environment are often of large influence on the decision whether a study suits one’s needs and wants. Personal contact with the education or education institutes can take place in several ways. Amongst many Meeloopdagen, Open Dagen, and conversations with study coordinators and advisors are often used to find out whether a study really suits the needs and wants of the student. Furthermore information is gathered in one’s environment, people with some knowledge about or experiences with an education or education institute are often consulted. Based on the information collected a decision is made whether the education suits the needs and wants in a satisfying way and whether one should choose the study concerned.
Adult education
Post-initial education or adult education is the education people are in after they have left the regular fulltime education. Adult education exists of all part-time education, plus the fulltime education when in the preceding period a person’s education career is interrupted for at least five years (Jaarboek Onderwijs, 2008). The age of the people in adult education therefore varies between 15 and 65 years. Besides the age difference, regular and adult education differ in the financing of the education, the largest share (circa 85%) of the adult education is offered by private institutes. Conversely, regular education is offered by institutions that are financed by the government. Furthermore, the diversity in the forms in which the education is offered and received is much bigger than in regular education. There is a wide range of courses and educations available, varying in aspects like length, intensity, costs, level, and subject.
In contrast with regular education, in adult education the orientation phase more or less is skipped, people in adult education in common are more specific in what they want and do not want regarding education. Mostly, the education or training they are looking for relates directly to their profession. The discipline and subject of the education or training therefore in the most cases is determined beforehand.
In choosing the best suited education people in common start with making a selection of a number of studies that fit their major requirements and preferences. This first selection is made at the basis of a variety of criteria. In the interviews with various professionals active in study advice and information repeatedly was stated that the subject, the location, the level and obtainable degree are decisive in this first explorative selection. Besides these dominating factors in some cases the length, costs, and the set-up (contact education versus distance education) might influence the choices made, but are in common less prevailing.
In informing themselves a wide range of information sources are used. In common, people are looking for an education in their direct environment. Often education and education institutes with which people already are known with at first are selected. Experiences and opinions of family, friends and colleagues mostly play a large role in the selection of an education and education institute. Furthermore personnel officers inside the organization often are consulted. Besides the information collected in someone’s the environment various additional sources are consulted to collect the needed information. Study guides, brochures, information days, websites of already known education institutes and online search engines are often mentioned as information sources.
and wants. After this more profound screening of the appropriateness of the education(s) of interest, in common a definite choice is made for a specific education.
In conclusion can be said that several similarities exist between choosing a study in regular and adult education. In both cases the environment has a large influence on the choices made. Furthermore, the location of the education is an important aspect in choosing a study.
Besides the similarities, several differences exist between the study choice process in regular and adult education. In adult education people are more focused in the selection of the best suited education, while in regular education the actual study choice is often preceded by some sort of orientation with regard to one’s capabilities and interests. Furthermore due to the nature and the characteristics of the type of education as well as the motivation and motives for receiving an education the criteria for selecting an education partly differ. These differences make that the information need concerning study choice might vary between the two types of education. In regular education the selection criteria in common mainly relate to the location, level, content and structure of the education, furthermore the ‘likability’ of the education often has a large impact on the choices made. In adult education these factors in the most cases also are of significant influence, however additionally the length of the education and mainly the obtainable degree and certificate are often of decisive influence.
8.2 - Product superiority
In the previous section the study choice process in regular and adult education is described. Furthermore the major instruments and facilities used in the various phases are mentioned. In the next section the extent to which RBO can meet the various needs related to study advice will be analyzed. Based on this analysis, the degree in which RBO is able to deliver superior value to the customers will be assessed.
Positioning RBO
The concept as proposed by RBO contains the majority of the Dutch vocational education and can provide the users an overview of the educations that suits their major requirements. The requirements that can serve as search criteria for the generation of the overview are among others the location, the discipline or subject, the level, the costs of the education, and whether it concerns fulltime or part-time education.
Based on the characteristics of the new service idea as proposed by RBO, the assumption is that the new service concept delivers value to the customers in the exploration phase of the study choice process. The orientation phase relates more to the choice of occupation, finding out where someone’s interests are in, and what their capabilities are. In the last phase of study choice people make more profound inquiries, in this stage in-depth information is needed about the education of interest. To fulfill this information need some form of personal contact with the education is of significant influence.
The exploration phase conversely might offer options for RBO to deliver value to its customers. In this phase value is created for the customers by means of offering an overview of the available educations, courses and trainings of interest to education-seekers. The new service concept of RBO offers the possibility to its users to generate an overview of the educations that meet several preferences and requirements related to for example the level, location and discipline of the education. Based on this overview a selection can be made of several educations or courses that suit one’s requirement. Subsequently people can gather the information to collect more in-depth information about these educations before a final choice for a particular education is made.
The new service as formulated by the executive board of RBO particularly is able to deliver value to its users by means of providing an overview of the educations that meet someone’s specific requirements or conditions. Several sources are consulted to collect the information needed before a decision is made. On the one hand, the decisions made in the several phases of the study choice process are largely influenced and fed by opinions and advice given by people in one’s environment. On the other hand in addition to information gathered in one’s environment various services are used to meet the information and advice need.
future students. Besides these sources, the websites of the education institutes of interest are often consulted, online search engines are used, and several online services with regard to study advice and information are consulted. In practice, often more than one service is consulted to fulfill the information and advice need.
The interviews pointed out that in adult education, the process of choosing a study and the criteria on which a study is selected at several aspects varies from regular education. The motives of adults to participate in education differ from the motives of people in the regular education system. Education received by adults in the most cases relates to their profession, furthermore the adult education in contrast to regular education is not compulsory. The differences in motivation and background have consequences for the needs and wants of this people concerning education and the subsequent information and advice need. Another consequence is that adults often have a more proactive attitude in gathering information. Therefore the process of collecting the needed information at several points differs from regular education. Some services that are available to and needed by regular students are redundant to adults and vice versa. In adult education the employer or principal often is of large influence on the choices made. Furthermore other environmental forces have impact at study choice. Besides the environmental forces services with regard to study advice and information are used to gather the needed information. Among many education institutes are contacted, career events and information days are visited, and the internet is often consulted. The internet is used in a number of ways. Websites of the education institutes are visited, search engines like Google are used, and websites are consulted that intend to provide an overview of the education offer in a specific discipline, at a certain level, in a particular way or a mixture of these aspects.
8.3 - Competitive analysis
Below an analysis of the extent to which RBO is able to deliver and superior value to its customers will follow. In the analysis the new service concept will be compared to several internet-based ventures that more or less are targeting the same markets and that might be consulted in the explorative phase of the study choice process.
part-time education, distance and contact education. In this fragmented market, a lot of online services with regard to study advice are present. These websites differ in area of focus, target groups, type of advice and scale.
In the interviews with experts external to RBO and during several informal conversations inside RBO several competitors are identified. Based on this input a selection of the services that will be analyzed is made. This selection is based on the value that these services intend to create to its users. The new service concept of RBO is an online service that intends to create value to education-seekers in the explorative steps of the study process. The services analyzed are all online services that offer a service that creates value to the same or a specific part of the target group RBO is intending to serve. Furthermore the selection of the competitors is limited to the competitors that offer a service which is intended to offer value to users in the exploration phase of the study choice process. Some of the analyzed services offer, besides a search and compare service, additional services with regard to the labor market, choice of profession and other subjects that are closely related to education.
The information about the competition is obtained in the various interviews and from the websites on which the service is offered. Based on the interviews the conclusion can be drawn that many services are available, but that the market is dominated by only a few providers. The results of the interviews show overlap with respect to what the current dominant providers of online study advice services. The providers mentioned below were most often referred to as competitive providers of online study information services. Furthermore several times was indicated that besides the providers mentioned below many other providers offer several smaller scale services. However the quality and popularity of these services in common is varying and in most cases is limited.
In total 5 competitors are analyzed. The services are analyzed and classified based on the following aspects: target markets, disciplines and level of education, and strengths and weaknesses from the viewpoint of the customer. The following online services are analyzed: www.roc.nl, www.studiekeuze123.nl, www.123studie.nl, www.opleidingenberoep.nl, and www.lerenenwerken.nl.
www.roc.nl
This website is aimed at all secondary education in the Netherlands. Concerning the regular education, the site offers the possibility to search for educations and courses in VMBO (Voorbereidend Middelbaar Beroepsonderwijs), secondary (MBO) and higher vocational education (HBO) and academic education. With regard to the adult education, the site offers an overview of the thuisstudies, the private education, and the
bedrijfsopleidingen.
The site offers the possibility to search on a wide variety of criteria. After the search results are generated, additional information is displayed and contact information is presented.
Besides the search function with regard to the Dutch education, the site offers various instruments and tests related to the choice of career and people’s interests and capabilities. Furthermore, several extra services related to the link between education and the labor market are available on this website.
The service of www.roc.nl is known to all the interviewees. The quality of the services provided on www.roc.nl is classified as more than satisfying. The completeness of the offer, the available information per education, the variety in search options, and the extra options concerning career guidance are mentioned as strengths of this service.
www.studiekeuze123.nl
The website www.studiekeuze123.nl is targeting at the regular higher education in the Netherlands. The site contains all certified bachelor and master educations in the Netherlands, including private education. The service is an initiative of several parties active in higher education, and is executed under the auspices of the Ministerie van
OCW.
On the site all studies in higher educations can be compared with each other. This comparison can be made on in total a maximum of 90 criteria, varying in a wide spectrum of aspects like the quality of the education, gross start salary, and several aspects less related to the education like the housing rents in the city and several other facilities not directly related to the study.
The service offered delivers value to its users due to the completeness, the available information and the ease of use.
www.lerenenwerken.nl
This is the website of the Projectdirectie Leren & Werken. Www.lerenenwerken.nl is an initiative related to the government project Leren & Werken. This project is a joint initiative of the Ministries of OCW (Onderwijs, Cultuur & Wetenschap) en SZW (Sociale
Zaken en Werkgelegenheid) and intends to stimulate and support employers,
employees, citizens, business world, CWI’s (Centra voor Werk en Inkomen), education institutes, local governments, and other regional parties to enable a leven lang leren. At www.lerenenwerken.nl people can search for educations, courses, vacancies, work placements, and Ervaringscertificaten (EVC). Furthermore background information is provided so students, job-seekers, employers or employees can make a well-considered decision with regard to study and work.
For the realization of this site, the initiators of the projects have formed partnerships with several institutes active in the field of Leren & Werken. The initiators are cooperating with various partners to make www.lerenenwerken.nl as complete as possible. Due to this cooperation this provider is able to offer a complete overview of the Dutch education and a large amount of additional information with regard to several aspects of the educations. Furthermore the search function comprises of several search criteria so a more adequate result can be generated. Despite the available information this site nevertheless has some lesser aspects. Particularly the organization and the ease of use are indicated less satisfying.
Besides the study information service a variety of other instruments are offered related to several aspects of study and career planning. Amongst many these instruments and tests are related to people’s capabilities, interests, and strengths and weaknesses and are linked to the educations that fit to the results of the tests.
In sum concerning the content of this service the judgment is rather positive. Furthermore the additional services deliver extra value to the customer. However this site leaves room for improvement with regard to the organization of the site and the ease of use.
www.opleidingenberoep.nl
Also this site is initiated by the Dutch government. Initiators are the directie BVE
(Beroepsonderwijs en Volwasseneneducatie) of the Ministerie van OCW, the Taskforce Jeugdwerkloosheid, and the Projectdirectie Leren & Werken. The website
website aims at youth and adults at the various levels available in the Dutch education system. The site offers the option to search for the best suited studies and courses, work placements and leerplekken, EVC-procedures and background information. Besides a search function, the site offers several instruments and tools related to choice of profession, capability tests and services with respect to the link between education and the labor market. The completeness, amount of relevant information and ease of use are all satisfying and the the interviewees stated that the value the site delivers to its users is positive.
Other online services:
The above mentioned websites all offer a service that covers the entire secondary education in the Netherlands. Besides these marketwide services, several services are available online that aim at a more specific part of the Dutch education system. Many services are mentioned among which: www.schoolweb.nl, www.cursus.nl, www.gobnet.nl and many other smaller scale initiatives. These services mostly are aimed at a specific discipline or type of education.
Besides the various services directly related to searching and comparing educations, search engines like Google and portals as www.startpagina.nl play a role in searching the educations that best suit to the requirements and wishes of the education-seeker. Often these services serve as the starting point of a search query. From this point, people often are directed to the website of a specific education institute or at services like the services mentioned above.
In the interviews, the prevailing view was that concerning the online options related to study choice an overload of services already is available. Furthermore the opinion was that most of the smaller scaled services offered considerably less value to the customer than the larger scale services mentioned earlier in this chapter.
New service concept RBO
Above the major competitors of RBO’s new service concept are described and analyzed on their strengths and weaknesses. Based on this analysis an assessment can be made of the extent to which RBO is able to provide value above the competition.
Cooper (1994) mentions several characteristics of unique and superior products and services. A superior and unique service has one of more of these features. Below the extent to which RBO is able to provide superior value will be assessed.
One feature that is related to product superiority is the degree in which RBO is able to deliver unique attributes and characteristics to the customer. RBO’s new service does not deliver any valuable attribute or characteristic that is not available from competitive services. The information and knowledge that form the foundation for RBO’s new service all in some way is available from competitive services. These services contain the majority of the Dutch education offer, extensive additional information, and the possibility to search for the best suited education on a wide variety of criteria.
Another characteristic of a superior product or service is that it offers good value for money for the customer. The service as proposed by RBO is, similar to the competitive services, free to its users. Therefore the positive economic impact totally depends on the value the service provides.
features are often seen as very useful and valuable to a large share of the education-seekers, however this features must be improved to fully satisfy customer needs. When a party succeeds in meeting the needs and wants of the users, value is provided to the customer that at the moment is not created by any of the competitors.
All in all must be concluded that the proposed new service does not provide unique and superior value to the users. The features RBO intends to offer are available from competitive services in the same degree and quality. Furthermore several competitors offer additional features and services that provide extra value to the customer than RBO is able to.
8.4 - Conclusion
9 - Market attractiveness
In the previous chapter the superiority and uniqueness of the new service concept is analyzed. Besides the product superiority the attractiveness of the market is a determinant of the odds of success of a new service or product. In the next section the attractiveness of the market will be analyzed. In this analysis the size and growth of the market, the level of market need and the degree of competitive rivalry will be discussed.
Market attractiveness is a key criterion in the screening decision. Several aspects play a role in the attractiveness of a market. Cooper (1985, 1994, and 2001) suggests that a company has to look for products aimed at large and growing markets, and where a high level of need exists for the type of product. Furthermore elements of the competitive situation have some impact and might be included as part of market attractiveness. These elements include the absence of intense competition, lack of price competition and weak competitive products (Cooper, 1994).
9.1 - Market size and market growth
Large, growing markets (other things being equal) provide attractive conditions for market entry. Research supports the notion that market growth is a more important consideration than market size (Jobber, 2004). Expectations about future demand rather than existing demand are important.
In the interviews many times was stated that the internet is used more and more in searching information about the various educations available. The people interviewed all noticed that the role of the internet in study advice has grown the last years. The internet as information source is used in many ways. Search engines like Google are often consulted, the websites of education institutes often are visited, and internet-based services as described in the previous chapter face show an obvious increase in the number of visitors and page views.
underlined by the numbers of page views or hits published by various competitors. The figures of more or less comparable services show an obvious rise. The service provided on www.studiekeuze123.nl had about 40.000 unique visitors monthly in the last months of 2007. This is three times as much as the amount of users in the same period in 2006, the year in which the service was launched (Jaarverslag Studiekeuze 123, 2007). This rise however partly is explained by the intensification of the contact with the education institutes and the rise in promotional activities. Besides www.studiekeuze123.nl, www.roc.nl has published its page view numbers. At the moment they serve about three million people per year and they indicate that this number still is growing (www.roc.nl). Hereby however the remark must be made that this number represents the total visitors of the site. As mentioned earlier in this report www.roc.nl is a service that offers facilities and services related to education, apprenticeships, and people’s future career. A number that represents the hits concerning the education services therefore is not known.
However, in total the conclusion can be drawn that the demand for online study advice and information has increased the last years. This is a consequence of the ongoing increase in usage in the use of internet. In the last decade the internet usage has grown enormously. The Sociaal en Cultureel Planbureau (SCP) in 2004 predicted that the diffusion of pc and internet will continue and will near total distribution. The braking impact on participation in the virtual world of factors like lack of interest, high prices of technology, lack of digital skills will become less and less. Furthermore, the SCP in 2007 concluded that the internet use intensified and that more and more Dutch make use of the internet as a source of information concerning a variety of subjects. This forecast means that the use of internet still hasn’t reached its peak and that their still is some growth potential for online services. However the strongest rise in the use of internet already took place in the previous years.
Initial education
Another factor that influences the demand for online study advice and information services is the size and growth of the vocational education in the Netherlands. The vocational education can more or less be divided in the regular vocational education, existing of secondary and higher vocational education, and adult education, the education attended after people have finished or left the regular education system.
The total amount of participants in the secondary vocational education at the moment is well over 490.000. Due to the dropping VMBO (Voorbereidend Middelbaar
Beroepsonderwijs) outflow the amount of
participants till 1998 sank. Since 1998, the participation increased, mainly due to the growing side-inflow and the increasing Internal inflow. In figure 9.1 the forecast of
Fig. 9.1 the development of the participation in MBO
is displayed. The expectation is that the number of participants in the secondary vocational education the upcoming years will increase (Referentieraming 2007, 2007).
The total inflow per year in the secondary vocational education will slightly rise the upcoming years. At this moment, the secondary vocational education has a yearly inflow of approximately 200.000 new participants. For the upcoming years a small rise in the inflow rate is expected.
The participation in higher vocational education (HBO) is rising for years now. The growth of the HBO is mainly caused by the permanent growth of the direct inflow of the
Fig. 9.2 HAVO. Furthermore the direct inflow of MBO
