NATIONAL ECONOMICS UNIVERSITY

School of Advanced Education

Report

Beta Education business: Issues &

Solution suggested

Class: Market Leader AEP 2

Group: Le Thu Hai – 11181430

Dam Vu Duc Hieu -

Doan Minh Tri -

Hanoi, April 2019

 Introduction
This report provides an analysis of recent Beta Education’s problem about
the decline in its sales and a recommendation on how to improve the situation.

The research is carried out by collecting financial data from the

company’s monthly reports, conducting investigation into its marketing mix, and
real-life experience.

The report draws attention to the fact that the Beta were remarkably
successful in the beginning of its operation and achieved great profit, but all the
indicators changed negatively when the company started to expand its business.
The results of data analyzed show that there are many defects in the business
strategy of the company.

The report consists of 5 main parts:

1. Introduction: An executive summary about the company’s situation.

2. Background: Providing a brief information about the company.

3. Problem: Examining why the company is suffering from profit loss.

4. Solution: Suggested ways of helping the business.

5. Conclusion.

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 1. Background

Beta Education is a joint stock company which was founded in July

2017. Located in Hanoi, the company provides students ranging from 8 to 18
years old with extra Math training. The company has acquired a reputation for its
Math classes for Junior High School students who are vying to attend High
School for Gifted Students.
Each year, there are 3 different Math courses for different groups of
students depending on their targets whether they want to reach the specialized
classes for Math or foreign languages or non-specialized, but the city leading
schools. With a view to fulfilling the mission of re-recognizing Vietnamese
education in the world, during 2 years of hard work, Beta Education has been
formed with an image of high-qualified teachers, well-trained staff and the motto
“Humanism – Passion – Creation – Efficiency” is considered to be the core value
of the company. The leader of the company said that his will was to turn Beta
Education into “Harvard of Vietnam”. In order to make the dream come true, he
set out the plans for the coming years:
1. Until December 31st, 2019, there will be 10 active facilities in
Hanoi.
2. In 2020, the company plans to open 20 more facilities in Hanoi.
3. September 5th, 2022, Beta Education System will be inaugurated.
4. September 5th, 2023, Beta Valley – A symbol for Vietnamese
education – is going to be constructed.
5. September 5th, 2028, Beta becomes the “inspirational ecosystem” –
leading the market with supply chain of five-star services which
can be seen in big cities.

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Some numbers of the company:

 Monthly sale: 700m VND

 Staff number: 57

 Male/ Female ratio: 18:39

 Average age: 23

 Staff turnover rate: 45.6%

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 2. Problems

After 2 years succeeded in running the first facility, Beta Education started
to operate their second center, in order to archive their founder’s pursuit: running
a chain that included 30 facilities in Hanoi. Unfortunately, this new facility has
not been working as efficiently as the directors had expected. The chart below
shows the net sales of both facilities since November 2018.

Net sales of Beta Education 11/2018 – 03/2019

The statistics show that both facilities got quite impressive net sales every
month, except for February 2019. As Tet holiday occurs in the month, the
number of lessons in February greatly decreased, as the sales in February go
down a little bit. However, instead of the net sales, the company’s net profit will
definitely demonstrate the efficiency of the business. Please have a look at
another chart – net profit of two facilities.

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 Net profit of Beta Education 11/2018 – 03/2019

Through the chart above, we are now aware of how ineffectively the
second facility has been working. Since it was operated for the first time in
November 2018, this new facility has been recording loss for 4 out of 5 working
months. While struggling with the loss, some employees decided to quit their job,
this has led to lack of officers in this facility. Our research about the situation in
this company has revealed some significant mistakes, three of them are such
basic blunders that often get recognized in new business.

Firstly, the new facility is little known by parents and students as Beta
Education didn’t put enough effort in publishing it. Not only avoided doing any
marketing methods, they rarely showed the information about the new center to
their students studying in the first facility. As a result, there are very few classes
at the new facility, which also means that the second facility couldn’t make up
for the loss.

The second mistake of Beta Education is that the place selected for the
second center has an extremely high rented price. The rented price often accounts
for nearly 44% of total expenses cost each month – that means too much. Some
employees consider rented price as financial burden of this new facility.

Last but not less, there is a problem with the courses fee that the company
is providing. Compared to the average price of the same courses from other

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providers, the price that Beta Education applying is quite high. The highest is
about 600.000VND for a lesson and the lowest is 400.000VND. That’s another
factor contributed to the fact that they couldn’t attract many students to their
center.

3. Solutions

Understanding the tough situation that Beta Education are dealing with,
our group started to find out some of the best solution for the company. We also
had a research by directly interviewing with 60% employees at the second
facility for the idea to solve the recent problems. As soon as the interview
finished, a group meeting was holding immediately. In that meeting, our group
came up with 3 ideal solution for 3 problems of the company.

The standing of the new facility, of course, belong to marketing aspect.

While considered about how to increase the position of the new center, a member
suggested that Beta Education had forgot a marketing campaign for the release of
the new facility, so that the company needs to have an alternative marketing to
promote the courses in the new center. This new campaign should be focus on
the place element as the company is trying to popularize the new facility. The
campaign should also mention about the location of this second center, how good
is it compare to facilities of other companies, what makes it difference from those
facilities, et cetera. On the one hand, this campaign could be expensive and time-
consuming, as it would take time to research, to come out with suitable methods
and to run the campaign. On the other hand, if the campaign works properly, it
will bring to the company benefits, for example, increasing the number of
students and maybe teachers joining the system, boosting the company’s profit
and the most important factor – raising the company’s reputation.

The renting price problem could be solved by relocating the second

facility. The company has found a new place that has convenient location and
more affordable price – just about 70% as the renting price of the recent place.
Moreover, this new place is 8 kilometers far from the first facility, so it would
help to attract more new students. However, there are some disadvantages if the
relocated process is put into practice instantly. The first problem is that the
company had paid the renting price for a year as a clause in the contract. If Beta
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Education decides to breach the contract, the company will lose 7 months of
renting price – which is about 700 million VND. That will affect to greatly the
capital and operation of the company. The second problem is the new place is
quite far from the old one, as a result, some employees of this facility will find it
difficult when they travel to work. Furthermore, if the relocated process doesn’t
go along with the marketing action, it will not work as efficiently as we expect
because the new facility would have no reputation. Our team, after the
discussion, agreed that the best solution for this problem is starting the relocated
process since the end of July 2019. That way would help the company save more
money than they spend on paying the rented price for new place.

The price of the courses is also an important element. The recent problem
is that the course fee in Beta Education is a bit higher than the fee of other
competitors, that make Beta’s courses less competitive. Our research showed that
if the price of a course is more than 90% of the recent fee, it would be hard for
the company to attract more students, but if the price go down for less than 60%
of the recent price, the company will suffer from loss. Our group agreed that the
ideal solution for this problem is decrease the course fee to 75% the recent price,
as it would not only help to attract more participants but also make profit for the
company.

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 4. Conclusion

In summary, Beta Education is a potential company that has great vision

and high level of teaching quality. However, due to the inappropriate marketing
strategy and money investment, the company has encountered many problems
which eventually caused decline in both the revenue and the number of students
registering for classes. We suggest that the company should simultaneously
relocate their new facility and run a marketing campaign, which focus on
introducing the second center as soon as possible, since there is no individual
solution could put two and two together those troubles. With our deliberate
solution, we hope that we would be able to help the company to overcome the
current difficulties as well as to become one of the leading educational
organizations in Vietnam’s market.

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 Reference

Statistics by Ms. Pham Thi Ngoc Diep and Truong Thi Minh Chau “Beta
Education monthly Reports” (from 11/2018 to 03/2019).

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