Based on the presentation by Ian Aird at English Australia Conference 2017

Ian Aird presented in a lively and motivating style, linking Gold, PCs, Apple and Nike to show how different companies have faced the challenge of commoditisation.

From an external perspective, ELICOS schools are very similar, including their Unique Selling Proposition of: GE, IELTS, EAP courses, 20 hours a week, maximum of 18 students per class, CELTA-trained teachers, course books, CBD Campus and Homestay accommodation.

Very little unique about them.

Options to resolve this are:

  • Cost leadership - solve the customer problem more cheaply, doesn’t mean he sells more cheaply
  • Differentiation - solve the customer problem better than anyone else

  • Different is fine, but only better is interesting...with a commodity market business there is no differentiation possible, gold is gold, makes no difference where it is from.

    Is ELICOS becoming commoditised?

    For years there is a constant discussion of price per week falling, Education Agents sellings purely on price, online aggregators that list in order of price per week.

    Lessons from the PC Market Commoditisation of the 1990s:

    HP/Compaq tried the "pedal harder" approach, always made the most powerful machines, but too soon the second most powerful was good enough. They collapsed to earning just 4-5% on their PC Business.

    Is your school the same, selling ‘features’ as HP/Compaq tried?

    Dell accepted the commoditisation and tried to go beyond them. They innovated on the Service / Channel / Process / Network and Profit Model.
    Are schools innovation through the use of more advanced solutions such as Advanced Student Management Systems or Payment Providers? Redefining processes to get business costs down. Apple took the approach of “The obstacle is the way!”, and now earn a margin of 30% on their PC business, 6x most others in market, with 45% of total profit of industry, having sold just 7% of the computers. Why?

    Lessons from Apple

    Apple have led an amazing array of innovations, and over 8 years managed every facet of innovation.

    Customer experience - this is NOT customer service. Example with apple stores, celebrate the buying process, cheering those purchasing new iphones and the subsequent customer engagement. Mckinsey & Company Study of 362 companies, 95% said customer focused, 80% said they deliver superior customer experience, and yet when asked their customers only 8% said they delivered superior customer experiences.

    How can schools implement this?

  • Investment & Expertise
  • Strategy & Alignment
  • Meaningful Metrics
  • 360 degree - starts at home, look after staff.

  • Beyond Branding

    Based on this Apple Advert, what is key to their branding? You don’t see them selling on features or their products, instead they sell an identity.

    Keys to surviving in a commoditised market:

  • Product & Service Parity
  • Depth of Brand
  • Authenticity
  • Marketing!

  • Imagine going to work at a company where you are THERE FOR A PURPOSE… What is the purpose of your school?

    Answer that question and you will thrive in a commoditised market.