Analysing the environment – Five Forces Analysis

• Lesson
• Exercise
• Answer

The market for online education

Answers are below: Place the following eight points onto the five forces model:

• Start up costs are very low.
• Sudents have access to books, videos, and paper-based distance learning packs.
• Companies, governments, and self funding students invest huge amounts in their education.
• There are very few high quality web sites available.

Answers

• Start up costs are very low (threat of entry – low barriers to entry).
• Students have access to books, videos, and paper-based distance learning packs (product-for-product substitution).
• Companies, governments, and self-funding students invest huge amounts in education. (High bargaining power of suppliers).
• There are very few high quality web sites available (high bargaining power of suppliers).
• Traditional colleges and universities are adapting their products for on-line learning (threat of new entrants – learning curve effects).
• Government legislation in the US and Europe encourages on-line learning (threat of entry reduced – by legislation).
• The more innovative learning sites give lesson for free just for the love of it (threat of entry – differentiation).
• More people with access to the web every second (bargaining power of buyers).
• Traditional colleges and universities are adapting their products for on-line learning.
• Government legislation in the US and Europe encourages on-line learning.
• The more innovative learning sites give lesson for free just for the love of it.
• More people with access to the web every second.