RUNNING HEAD: KIPP HOUSTON PUBLIC SCHOOLS

Case #1 Analysis: KIPP Houston Public Schools

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A. INTRODUCTION
Knowledge is Power Program (KIPP) Houston Public Schools is a network of charter schools
located in the Houston metro area. The taxpayer funded, public schools, operate independently
of traditional school districts but they are open to all students. There are 125 schools nationally
that use the KIPP name and 21 of the schools operate in the Houston area, 8 elementary schools,
10 middle schools, and 3 high schools. In the 2012-2013 school year, KIPP Houston employed
968 people and served about 8,500 students (Roberts, 2013).
According to Roberts (2013), all KIPP schools share the charter of the foundation in San
Francisco, California. Schools are required to pay a licensing fee; in return the Foundation
provides a yearlong leadership-training program that all schools principals must attend before
founding a new KIPP school. KIPP schools share a set of common operating principles known
as the Five Pillars: High Expectations, Choice & Commitment, More Time, Power to Lead, and
Focus on Results. The schools in the Houston metro area that have adopted this program have
been very successful adhering to these pillars. KIPP Houstons mission is to develop in
underserved students the academic skills, intellectual habits, and qualities of character necessary
to succeed at all levels of pre-kindergarten through twelfth grade (Roberts, 2013). KIPP
Houston also takes college attendance very seriously; a mantra of the organization is getting all
of its students to and through college. To achieve their goals, KIPP Houston provides full time
employees to prepare and support students with their college application process (Roberts, 2013).
B. STEEP ANALYSIS
Social
KIPP Houston seeks to serve students in high-minority, low-income communities and schools
leaders actively recruit students from low rent neighborhoods. Eighty-five percent of the 8,500
students are considered low income, 36 percent are African-American and 62 percent are Latino.
Additionally, 30 percent of the students are classified as having limited English proficiency
(Roberts, 2013). Many of the students come from single and working parent households with
limited education, making it difficult to help their children with homework or prepare for
college. Crime is higher in the lower income neighborhoods and some children have to deal with
exposure to violence and gang activity. From 2010-2012, Houston experienced a 29 percent
increase in gang presence and gangs actively recruit members from low-income neighborhoods
(Roberts, 2013). Middle school age children are primarily the targets, however, some gangs
recruit as early as elementary school. Gangs may offer the camaraderie and protection for some
children that school cannot provide.
Technology
Sehba Ali believes KIPPs focus should remain on recruiting and developing excellent teachers,
she says I come from the Bay Area, where word on the street is that we will put a lot of
computers in classrooms and that will solve all of our problems. But technology is only good in
the hands of great teachers (Roberts, 2013). Ali and Matt Bradford, Director of Knowledge

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Management, also see potential for IT advancements to enhance teacher effectiveness and the
potential to use IT resources to track student learning. KIPP Courage, a newly founded school,
has had great results using more technology in instruction and there are plans for an older
exemplary-rated school to adopt some of their practices (Roberts, 2013). The issues surrounding
these IT initiatives are standardization and support. Schools may not agree on platforms or
systems and without consistency from school to school, such programs would be difficult to
support.
Economic
KIPP Houston faces fiscal pressures from the way public funds are disbursed to schools. Charter
schools do not have the same taxing authority as other public schools and are not entitled to both
types of funding used to fund other schools. John Murphy, KIPP Houston CFO, says the lack of
funding for facilities is the biggest financial challenge the district faces. In the 2009-2010 school
year, KIPP Houston received $966 les per pupil than Houstons Independent School District
(Roberts, 2013). In the past, KIPP Houston has been able to cover the deficit through grants,
fundraising, and philanthropy. They will continue to face challenges as costs rise and
government grants are replaced by philanthropic sources of income. In 2012, KIPP Houstons
total liability for bonds and notes payable was over $125 million (Roberts, 2013).
Environmental/Geographical
The success of KIPP schools has encouraged other schools to break free from the constraints of
operating in a school district of bureaucracy, giving the KIPP foundation free rein to start schools
anywhere in the United States. The KIPP Foundation operates on a regional model; KIPP
schools in the same city or regional area are grouped together in regional networks. There are
currently 183 KIPP schools and 31 regional organizations in 20 states and the District of
Columbia (Roberts, 2013).
Political/Legal
State laws dictate which areas the charter schools have flexibility and areas in which they must
meet the same requirements as other public schools. For example, charter schools are nor
required to hire certified teachers but they are required to teach the learning standards set out in
Texas law (Roberts, 2013). This flexibility comes at a price. The ability for KIPP schools to
maintain a creative spirit and provide different educational opportunities for students means the
school is not provided the same state revenues for operational expenses as other public schools.
Overall Assessment (Summary)
There are currently 21 KIPP schools in the Houston area and each year applications exceed
admittances. To meet the increasing demand the KIPP Turbo initiative was established as an
ambitious growth plan to have 42 KIPP schools in Houston by 2017. According to Roberts
(2013), economic crises in the past have cut education spending and forced the KIPP Turbo
program to scale back; the revised plan now seeks to have 50 schools in Houston by 2033. The
programs goals are realistic, however, economic conditions, fiscal pressures, or shift in the main

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demographic could force the program to scale back again. At this point it is too difficult to
predict the external factors over such a long period of time.
C. FIVE FORCES ANALYSIS
Assessing the impact that industry forces have on the potential for success will enable KIPP
Houston to better position itself in the market and to formulate more effective strategies to match
or exceed organizational goals.
Threat of Entry
When considering threat of entry into the educational market, KIPP Houstons organizational
leaders are aware of the other charter schools and programs provided by the public school
district. Since its inception, KIPP Houston has satisfied a niche in the Houston market that has
not been imitated by competitors. KIPP Houston has maintained differentiation through its
intense focus of getting all students to and through college. KIPP Houstons competitors offer
a different education experience, however, if KIPP is unable to find a sustainable model of
financing, its competitors may continue to grow and take over the market space, find new ways
to change the learning environment, or sources of competitive advantage.
Bargaining Power of Suppliers
According to the case, KIPP Houston is having a problem finding teachers and leaders in the
labor supply available to them. Based on growth projections, KIPP Houston will need to hire
about 1,300 teachers over the next five school years (Roberts, 2013). Teachers are available in
the Houston market, but for KIPP it is a matter of finding the best talent available that is up for
the demanding role of being a KIPP teacher. Historically, KIPP has an established pipeline with
Teach for America (TFA), 32 percent of KIPP teachers are alumni, and KIPP Houston depends
heavily on TFA members (Roberts, 2013). Because of KIPPs heavy reliance on TFA it is crucial
for KIPP to maintain the mutually beneficial relationship.
Bargaining Power of Buyers
The target consumer in this case is low-income student. Although application rates for KIPP
Houston exceeds admittance, school leaders continue to actively recruit students from Houstons
low-rent apartment complexes and neighborhoods. According to Roberts (2013), while tracking
students, KIPP found that 33 percent of alumni had graduated from a four-year college, which is
higher than the national average (30.4 percent) and close to four times the rate of students from
low-income families. Roberts (2013) states that KIPPs goal is to increase college completion
rates to about 75 percent, to meet that goal they must acquire top quality teachers, continue to
invest in human capital, and organization programs and initiatives are aligned with college
aspirations for their students.

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Threat of Substitute Products

The threat of substitute products does not seem to play a significant role in the KIPP Houston
Public Schools case.
Rivalry
Although there is some rivalry among existing schools in the Houston metro area, there seems to
be some cooperation as well. KIPP Houston is able meet enrollment goals and maintains a
waitlist for admittance. Sehba Ali seems to be less concerned about competitors and more
concerned about fiscal pressures, recruiting top quality teachers, and finding ways for KIPP
Houston to be more effective at achieving the organizations goals. She feels that other charter
schools and the HISD fill different niches in the education landscape. The one exception may be
Harmony Public schools, due to the Exemplary ratings, highly defined management system, and
lean operational model; Harmony could become a threat to KIPP Houstons competitive
advantage.
Overall Assessment (Summary):
The market forces described above have the potential to impact KIPP Houstons organizational
goals, novel education techniques, and their honorable mission to serve underprivileged students
in the Houston area. For KIPP Houston, the industry is still attractive. By focusing on the Five
Pillars, the KIPP Turbo program, and the organizations brand, KIPP Houston can continue to be
successful in the education market. Sehba Ali has proven with her experience, training, and
history of successful results, she will be able to maintain KIPPs innovative mind-set and keep
KIPP Houston at the forefront of educational excellence.
D. COMPETITOR ANALYSIS
KIPP Houston, as well as other charter schools in the Houston area, has received high ratings in
the Texas Education Agency measure of school performance. For this reason, the Houston metro
area has new entrants into the market. Based on the 2010-2011 annual state achievement tests,
used to give accountability ratings to schools, KIPP Houstons competitive edge may be
threatened.
Immediate Competition
Although KIPP Houston was once considered a trailblazer in the low-income student model for
public schooling, competitors are starting to emerge. YES Prep, another Houston area charter
school network, received consistent Exemplary ratings for the 2010-2011 school year (the last
year rating were available) (Roberts, 2013). Sehba Ali thinks that KIPP Houston and YES Prep
fill different niches in the market and there are people better suited for each school. Another
competitor is the Houston Independent School District (HISD). In response to the success of
area charter schools, the district has attempted to replicate some of their most effective methods,
including a longer school day, a college bound culture, and one-on-one tutoring, for some of the

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districts underprivileged schools (Roberts, 2013). After the first year of the program, HISD
reported gains similar to those seen in charter schools, however the program is still dependent on
philanthropic gifts for funding.
Impending Competition
Harmony Public Schools is a newer entrant in Houstons education system. Harmony was
founded in 2001 and already has 38 schools in Texas, to include 12 schools in the Houston area
(Roberts, 2013). The schools have received Exemplary or Recognized ratings in 23 of its
campuses. They operate with highly defined management systems, predefined curriculum, and
they were able to expand during economic recession by employing a lean operation model.
Invisible Competition
Not applicable
Overall Assessment (Summary)
Sehba Ali and the organization are aware of KIPP Houstons competitors and their strategies. If
Ali can continue to capitalize on KIPP Houstons core competencies and competitive advantage
she can sustain KIPPs culture and brand. If Sehba Ali can keep new initiatives and strategies in
line with the Five Pillars that made the organization successful she should be able to minimize
threats from competitors and maintain the organizations reputation for innovation, creativity,
and autonomy.

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Reference

Roberts, D. (2013) KIPP Houston Public Schools [management case study]. Strategic
management: Competitiveness & Globalization (11th ed.). Stamford, CT: Cengage
Learning.