ABC Learning in the Japanese Market

International Marketing Plan


Elaboration, 2008
42 Pages, Grade: 79%

Excerpt

Table of contents

Executive summary

Table of Figures and Tables

2.0 Company Analysis
2.1 About ABC Learning
2.2 Product Range
2.3 Market Position
2.4 Porters Diamond model on child care industry Australia

3.0 Market Analysis of Japan
3.1 Environmental Climate
3.2.1 Nature of Demand
3.2.2 Cost Structure of the Industry
3.3 Regulatory Environment
3.4 Competitor Analysis
3.5 Situation Analysis
3.7 Porters Diamond Model on Child Care Industry Japan

4.0 SWOT Analysis

5.0 OBJECTIVES
5.1 Market Objectives
5.2 The Recommended Marketing Strategy
5.2.1 Market Entry Evaluation Evaluation of Entry Mode
5.2.2 Recommended Strategy

6.0 Marketing Mix Strategies and Tactics

7.0 Planning Budget
7.1 Planning Assumptions

8.0 Implementation and Control

9.0 Recommendation

REFERENCES

Appendix

Overview allocations of tasks for project

Table of Figures and Tables

Table 1 : ABC Financials 2006/07

Table 2; Porters Model for Australia

Table 3: Waiting Lists for child care in Japan

Table 4; Regulations and changes in Japan

Table 5: Porters Model for Japan

Table 6: SWOT Analysis

Table 7: Market Entry Modes

Table 8: Promotions Budget

Table 9: Projected Income Statement

Table 10: Contingency Plan

Figure 1: Model of a Nation's competitive advantage (source Porter 1990)

Figure 2: Birthrates in Japan (source PigeonGroup 2005)

Figure 3: Porters Five Forces

Figure 4; Diamond Model (source Porter 1990)

Executive summary

This paper is a detailed international marketing plan for ABC Learning, the Australian child care operator.

The purpose of this international marketing plan is to analyse the viability of opening an ABC child care centre in Japan. Japan has a demand for child care centres and low barriers to entry. A detailed analysis was prepared for the child care industry in Japan as well as for the home market Australia in order for comparisons to be made.

This paper provides a situation analysis about the Japanese environment and a SWOT analysis followed by various models and research. This report will recommend marketing strategies and an estimated planned budget for ABC Learning in order to achieve marketing objectives. Finally, implementation and control will be provided in form of an action plan.

After comprehensive analysis, the recommendation is for ABC learning not to enter the Japanese market at this stage. Reasons for this decision will be discussed throughout the report as well as in the conclusion.

The scope of study was limited to the operations and activities of ABC learning in Australia, based on publicly available information.

1.0 Introduction

ABC Learning is the largest publicly childcare operator in the world, based on centre numbers. ABC Learning was founded in 1988 in Ashgrove, Brisbane, by Edmund Grooves (Global Chief Executive Officer) and was listed on the ASX in 2001 with a market capitalisation of approximately $ 25 million. The company has grown through a combination of organic growth and strategic acquisitions; the latter has been the option used in entering all foreign countries so far. ABC Learning currently has 7,974 employees in Australia. In Australia, ABC has 30% of the child care market (ABC Learning Homepage, 2008).

2.0 Company Analysis

2.1 About ABC Learning

The company currently has operations in Australia, New Zealand, the United States and the United Kingdom. The Group's principal activity is providing childcare services and education.

In terms of Research & Development, ABC Learning is continuously looking for improvements of their services and achieved several awards with these improvements towards a higher quality.

ABC learning has a very strong and active acquisitions strategy. ABC’s main strategy is to grow through international acquisitions to develop the business in specific markets. The chosen markets are done so using thorough research taking into account each region’s economy and environment. In 2007, ABC raised 1 billion in additional capital.

Target market segments in Australia

The target market segments of ABC Learning in Australia is the Business to Consumer (B2C) market , specifically families in which both parents are working, single mothers, single fathers and anyone with a child. The Business to Business (B2B) market contains companies who outsource their day care centres for their employees to ABC Learning such as Westpac, ANZ, etc. The government also belongs to the Business to Business market as approximately 44 % of ABC’s revenues are indirect contributed by government as the government supports parents financially.

ABC’s operating revenues for the past three years

As at December 2007, Total revenue of ABC learning was $1,106.9 million up from December 2006 which had total revenue of $667.8 million. Net profit has dropped significantly by 42% from $63.9 million in december of 2006 to $37.1 million in 2007.

The following is a financial snapshot of the results:

illustration not visible in this excerpt

Table 1 : ABC Financials 2006/07

2.2 Product Range

ABC Learning offers a wide range of services .The services can be divided firstly into different age groups and additionally in before school care, after school care and vacation care (ABC Learning Homepage, 2008).

ABC Learning has an innovative approach in terms of quality. The aim is to create the ideal child care centre in terms of care, education, facilities, security features and outside playgrounds just to name a few.

2.3 Market Position

ABC is the market leader in Australia and has 30 % of the long day care market in Australia.. ABC Learning is the world’s largest childcare group and the biggest provider in Britain, the US and Australia. (The Guardian, 2008) Main Australian competitors

ABC Learning acquired some of their biggest competitors Pepercorn Management Group, Hutchison’s Child Care Services Limited and Kids Campus Limited in the Australian market; therefore only small operating competitors are left (The Guardian, 2008). ABC’s competitors are Family Day Care and Guardian Child care,

2.4 Porters Diamond model on child care industry Australia

illustration not visible in this excerpt

Figure 1: Model of a Nation's competitive advantage (source Porter 1990)

Demand conditions:

- Australia finds itself in a so called child care crisis. The quality of the day care centres could be improved on. Moreover, day carers get low wages. The wage in all Australian industries generally differs between males and females. A woman with the same qualifications as a man earns only 85 % of the man’s wage on average. This is the reason why most families decide that the husband works full time and the woman works part time (ABC 1, 2008). There is demand for more affordable, quality child care facilities.

Factor conditions:

- Half of the workforce in the child care industry is not qualified in the field of child care (ABC 1, 2008).
- Child care centres in Australia are in crisis as they suffer in a lack of quality (ABC1, 2008, The Age, 2008).
- The ‘Australian Census For Child Care’, aims “to ensure working Australian families can access quality, affordable child care and children get the best possible start to life." (Parliamentary Secretary for Early Childhood Education and Child Care, 2008)
- The 2020 plan Kevin Rudd released to establish one-stop child care centres that include providing day care, preschool learning and health services for children up to five years of age (ABC 1, 2008).

Firm Strategy, Structure and Rivalry:

- The rivalry can be regarded as relatively high but definitely not as high as it is in Japan. But it should be taken into account that the Australian population is only about one sixth of the Japanese population.

Government:

- The government’s aim is to improve the level of quality, to drive prices down so child care is affordable for everyone and “...the introduction of more four-year trained early childhood education professionals for all young children regardless of age and provision of education health and other support for children to make sure they are developing both physically and intellectually” (ABC 1, 2008).

Conclusion of the porter’s diamond model for the Australian child care industry:

illustration not visible in this excerpt

Table 2: Porters Model for Australia

3.0 Market Analysis of Japan

3.1 Environmental Climate

The most important environmental factors for the child care industry in Japan are the economic conditions, demographics, culture and the government. The economic conditions show how well the economic looks for ABC to enter the market. Culture is very important in this case as ABC Learning is only in markets with individual approaches and Japan will be the first market to enter with a collective group approach included in the culture. ABC will have to learn the differences in doing business and adapt their services to the culture.

Economic Conditions and Demographics

GDP (purchasing power parity) in 2007 was $ 4.29 trillion (World Fact Book, 2008). The current economic growth is 1.3% (down from 2.0%) and the forecasted economic growth is estimated to be 1.6% (Dawn, 2008). The inflation rate has risen slightly to 1.9 % (Trading Economics, 2008). The unemployment rate is at 3.9 % (World fact Book, 2008).

The disposable income in 2007 in Japan was Yen 441,400 per annum (=US $ 4020) and the annual rate of increase in percent was –0.2% at disposable income (Statistical Bureau Japan, 2007). According to Hayes (2003), 70 % of the population in Japan lives in cities. Japan is a strong, growing economy with a stable economic environment.

According to the World Fact Book created by the CIA, the current population size of Japan is 127,288,419 (July 2008). The age structure is divided as follows: 13.7 % of the Japanese are between 0-14 years of age. 64.6 % of the Japanese are between 15-64 years of age and 21.6 % are 65 and over years of age. The total median age of the population is 43.8 years whereas the median age for males is 42.1 years and the median age for women is 45.7 years of age (World Fact Book, 2008).

Social and Cultural Factors

illustration not visible in this excerpt

Figure 2: Birthrates in Japan (source PigeonGroup 2005)

One of the most important facts influencing the child care industry is the fact that Japan’s population is shrinking at a dramatic pace. As previously mentioned, the current population is approximately 127 million. However, according to government 10

projections, this figure could plummet to a staggering 64 million by the turn of the century. The current population growth rate is – 0.139%. The total fertility rate is 1.22 children born per woman. During the 25 year period commencing from 2005, Japan’s working age population – e.g. workers aged between 15 and 64 – will shrink by 14 million (Austrade, 2007).

This information has led to changing attitudes towards women in the workplace. Japanese employers have recognised that they cannot afford the luxury of failing to attract and retain women in the workforce. Japan has a remarkably low level of female participation in the workforce and any increase in the participation rate will help to offset the loss of 14 million workers. This in return will lead to a requirement for more child care services which are already in demand. Additionally marriage and motherhood no longer mark the automatic exit of women from the workforce as was the norm in Japan previously.

Political , Legal and Institutional Factors

The level of political stability in Japan is high. In the list of the most stable and prosperous countries 2008 Japan is rated 28th (Times Online, 2008).

Australia has established a strong relationship with Japan. In 1957 both nations signed the Commerce Agreement. Japan played a crucial role in developing Australia’s export potential giving Australia the confidence to embrace the region further with the Asian Tigers, ASEAN and now the emerging giants of China and India (Austrade, 2007). Japan and Australia are already in their fifth round of negotiations for a Japan-Australia Free Trade Agreement (JAFTA) which would bring significant benefits to both countries (Austrade, 2008). In the past Japan and Australia worked together hand in hand to establish better conditions for free trade areas such as ASEAN.

The law in Japan is civil code law. Australian companies that enter the Japanese market need to be aware of this law and the differences in comparison to the common law.

The relationship between Japan and Australia can be regarded as an inducive relationship. This can be seen as a supporting factor when entering the Japanese child care market (Austrade, 2007).

Effect of Seasonal or Climatic Factors

Seasonal and climatic factors are not as important for the industry ABC finds itself. However, there is one seasonal factor that has some influence on the child care industry. Every 66 years the birth rate of children rapidly declines as it is believed in Japan that children born in the year of the fire horse will become murders and be bad people in life. The last year of the fire horse was in 1966 and the next will be in 2032. The birth rates in this year are traditionally very low and as a consequence the rate of abortion is very high (Caneora and Graham, 2007).

3.2.1 Nature of Demand

According to the “Labour Force Survey” released by the Statistics Bureau of the Ministry of Internal Affairs and Communications, the number of female employees more than doubled from 9.13 million in 1994 to 22.03 million in 2004.This increase in female employees has been due to a change to the Equal Employment Opportunity Law in 1997 as well as social and economic changes in Japan. More women are working in Japan today, however they are faced with the problem of finding adequate support for childcare whilst they work. Even though there is a declining birth-rate, the increase in the number of female employees and deregulation in the market has created demand for affordable, accessible and quality childcare facilities in Japan.

[...]

Excerpt out of 42 pages

Details

Title
ABC Learning in the Japanese Market
Subtitle
International Marketing Plan
College
University of Western Sydney  (Sydney Graduate School of Management)
Grade
79%
Authors
Year
2008
Pages
42
Catalog Number
V135655
ISBN (eBook)
9783656868064
ISBN (Book)
9783656868071
File size
707 KB
Language
English
Tags
learning, japanese, market, international, marketing, plan
Quote paper
Nina Rakowski (Author)Brenda Fachi (Author)Gao Pengliang (Author)Jun Suh (Author)Pooja Madaan (Author), 2008, ABC Learning in the Japanese Market, Munich, GRIN Verlag, https://www.grin.com/document/135655

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