6COSC013C - Developing Digital Enterprise: Industry Analysis Report

This report analyzes the educational industry, focusing on the impact of Information and Communication Technology (ICT) and digital enterprise development. It begins with an executive summary highlighting key findings related to Porter's Five Forces, including high barriers to entry, high buyer power, and moderate supplier power. The report then delves into a detailed analysis of Porter's Five Forces, assessing the threats and opportunities within the educational market. The value chain is also examined, emphasizing how the lack of ICT reduces the effectiveness of the educational process. To address this, the report proposes a digital solution: an educational game designed to enhance the learning experience and replace traditional homework assignments. The introduction sets the context by discussing the shift to online education during the COVID-19 pandemic and the need to effectively integrate technology. The analysis concludes by suggesting a differentiation strategy to gain a competitive edge by using unique digital solutions, such as gamified learning platforms, to lower buyer power and increase barriers to entry for new competitors. The report also looks at the introduction of ICT solutions and their impact on the market and on existing suppliers, such as teachers and bookstores.

WESTMINSTER INTERNATIONAL UNIVERSITY IN TASHKENT
COURSEWORK SUBMISSION FORM
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Module Name Developing Digital
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Module Code 6COSC013C Second Marker’s
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Table of Contents
WORD COUNT:3091 EXCLUDING TABLES....................................................................................................2
EXECUTIVE SUMMARY.....................................................................................................................................2
INTRODUCTION...................................................................................................................................................2
PORTER’S 5-FORCES INDUSTRIAL MARKET ANALYSIS...........................................................................3
PORTER’S VALUE CHAIN..................................................................................................................................6
NEW BIS DEVELOPMENT..................................................................................................................................9
NEW INDUSTRIAL AND INTERNAL BUSINESS ENVIRONMENT ANALYSIS.......................................10
REFERENCE LIST...............................................................................................................................................13
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WORD COUNT:3091 EXCLUDING TABLES
EXECUTIVE SUMMARY
From the very beginning, it is worth noting that this report presents an analysis of the educational industry and
how ICT affects it. As for Porter’s five forces and threats of a new entity, the barriers to entry can be considered
high, because financial capital, official registration of a business and various types of certification are required.
With regard to the power of buyers, it can be said that now their power is also high due to the lack of
differentiation and their price sensitivity is absent. Turning to the suppliers, their power is middle because the
power of teachers is high because of the lack of qualified teachers and the power of bookstores is low because
there are a lot of them in the market. The power of intra-industry competitors and the threat of replacement is
high because the cost of switching is minimal. As for the value chain, it can be said that the lack of information
technology reduces the effectiveness of the educational process. Therefore, to solve the above problems, a
digital solution is proposed that will be an educational game that will be a part of the learning process and will
be able to replace homework at school. Its main strengths for industry are digitalization and gamification. Using
ICT tools removes distance during interactions, presents a wide range of online sources and enables learners to
simulate real life situations. As for the porter model, with the introduction of the new digital project, the threat
of switching players to another similar product will become insignificant, since the school will have a
uniqueness in addition to the basic characteristics on market. At the moment, there is no school on the market
where homework in mathematics is done in the form of a game. For the same reason buyers' power will be
reduced. Also, the uniqueness of the technology in the school will be a barrier for the entry of new players,
since in order to win market share, they will have to create something even more unique.
INTRODUCTION
According to UNICEF (2020), more than 100 countries have implemented nationwide school closings,
affecting more than half of the world's students. Some other countries have implemented partial closings of
schools in certain regions. The emergency transition to online education during the quarantine period implies
that educational institutions reproduce everything that was offline. It can be said that the coronavirus does not
interfere with the normal course of life. But it is possible not just recreate the old reality, but think about what
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was superfluous in the usual forms of education and, conversely, what new can now be brought into industry. In
this regard, it is necessary to be able to effectively use these technologies for the benefit of students and the
learning community at large. A correctly chosen innovative solution for organizing training determines the
quality of education and the image of any educational institution (OECD,2016). In order to understand how to
provide reengineering of business processes and choose the best IT solution in the field of education, you need
to analyze the industry. School №110 was taken for the analysis, which is located in the Mirabad district of
Tashkent.
PORTER’S 5-FORCES INDUSTRIAL MARKET ANALYSIS
The more profitable the industry, the more attractive it is for new players. Therefore, both for existing
companies and for those who are just entering the school market, it is important to analyze the situation in order
to determine the level of competition and the attractiveness of doing business, as well as to develop a strategy
of behavior. One of the methods that provides the most complete picture of competition in an industry is
Porter's Five Forces of Competition Model. The model evaluates the intensity and severity of the competitive
forces in the industry. It is based on the analysis and assessment of the magnitude of five parameters identified
by Porter: the threat of the emergence of new players, the market power of suppliers, the market power of
buyers, the threat of the emergence of substitute goods, and intra-industry competition.
THE THREAT OF NEW ENTITY
As for the opening of a new school, it can be said that the barriers to entry can be characterized as high because,
in the first place, there is a need to acquire the necessary intellectual and financial capital, representing serious
obstacles for organizations trying to enter the industry. Additionally, it is needed to create an individual
entrepreneur or a legal entity. Moreover, there are specialized standards for the primary education industry, and
there are mandatory certification procedures that must be passed. In this case, the introduction of ICT solutions
into existing schools will strengthen their position in the market and make them more competitive while
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creating difficulties for new schools to enter. The lack of sufficient funds to transform traditional methods into
digital classes will limit growth, creating an even higher threat to new candidates in the industry.
MARKET POWER OF BUYERS
Buyer’s power for non-IT schools can be considered high because customers can choose from several school
options in different areas. Moreover, a product such as education is basically not unique, and the buyer can
freely switch between schools without incurring additional risks. In addition, the sensitivity of buyers to price is
virtually absent since most schools in Uzbekistan are free and users of private schools choose another school
only if there is a significant difference in price. Despite this, it is worth noting that the introduction of
information systems in the educational process will help reduce buyer’s power. Given the situation with the
coronavirus pandemic, parents are more inclined to choose distance learning using ICT. That is, when
introducing a digital proposal into any of the schools, the buyer will tilt his choice in her direction. Thus, the
purchasing power will decrease due to the fact that the school will differentiate with the introduction of IT
technologies. An additional factor indicating a decrease in purchasing power is the relatively small number of
schools that use digital solutions in education.
THE THREAT OF THE APPEARANCE OF SUBSTITUTE GOODS
There are currently no substitute products on the market as schooling is compulsory.
Relying on the opinion of Chin and Osborne (2008) more students are questioning the value of traditional
theory-based teaching and demanding more relevant application-based teaching. In this case, ICT-based
learning can be seen as a substitute for traditional learning. Given the complex requirements and the strategic
importance of the information product for buyers, it can be assumed that traditional schools without ICT
inclusion will lose out to substitute schools with the introduction of e-learning, although schools offering
software and programs designed to improve learning and reading skills may require more high prices in
exchange for their high quality interactive products due to the influence of the ratio of price to quality. For a
product that is significantly different from the goods and services offered by competitors in the market, and for
this consumers are willing to pay a higher price, and the higher price in this case covers all additional costs
associated with offering a differentiated product (Mailchimp,2020). At the same time, when ICT technologies
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are introduced into the educational process, schools will become more competitive. According to Scott (2020),
the threat of product substitution will decrease if they offer a product/service that is uniquely different from the
existing industry offerings. Moreover, the educational market has fewer technologies and substitute tools and
provides more support for the use of intelligent learning technologies, and therefore there is a low threat of
substitution.
AND COMPETITIVE RIVALRY
With regard to interlocal competition, in relation to traditional schools, we can say that the threat of substitution
is very high. There are 307 secondary schools in Tashkent (Ministry of Public Education of the Republic of
Uzbekistan,2020), and buyers can choose any school in a suitable area. This is because the cost of transferring
to another school is usually minimal. Usually, the transition costs are borne only by students in private schools,
but for most public schools it costs nothing.
THE THREAT OF SUPPLIERS
With an increase in the number of educational institutions and a limited number of trained teachers, it can be
said that suppliers have a high market power in education. The second type of supplier is educational material
providers (bookstores). Strategic CFO (2020) stated, if suppliers offer differentiated products and nothing can
replace what the supplier group is offering, the supplier's influence will be high in the industry. If faculty
members differ in their research and teaching methods, this will be a great advantage for them. From this it can
be concluded that the introduction of digital solutions in the educational process can increase the influence of
such suppliers as teachers. Despite the fact that the introduction of ICT solutions will not be able to affect the
presence of a teacher in the educational process. Richardson (2009) argued that integrating ICT into teaching
continues to be difficult for some teachers due to a lack of training and practice. Thus teachers using ICT will
have a high market power, since their product is differentiated. Also, with the introduction of ICT, the second
suppliers, such as bookstores, will completely change. Online libraries will be able to replace them and the
power of such libraries will also be strong due to the fact that the goods are differentiated. Moreover, according
to Konicek (2018), the demand for programmers in the market is higher than the supply.
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Based on the opinion of Luenendonk (2019), in order to successfully resist competitive forces, it is necessary to
develop a strategy that will protect the company from the action of competitive forces and provide the company
with a reliable competitive advantage in the industry. Taking into account the special forces of the industry and
the specifics of the education market, the most appropriate strategy for companies in this market is a
differentiation strategy, that is, creating a product that will be perceived as unique to the entire industry.
According to Gebauer et al. (2011), differentiation is attractive under conditions if the organization has know-
how. Consequently, with the introduction of an innovative approach, the uniqueness of the school increases the
likelihood that people will be willing to pay for a private school, and the free one will be in demand for as long
as possible. The higher the uniqueness of the educational process, the more difficult it is for students and their
parents to find a replacement and the less their sensitivity to price. This reduces the influence of buyers. To
overcome the uniqueness factor, existing competitors need to enhance the uniqueness of their product. For new
players, this creates another barrier to entry into the industry. Thus, a differentiation strategy will enable us to
simultaneously confront multiple competitive forces.
PORTER’S VALUE CHAIN
Education value chains are heterogeneous associations of educational systems or processes that seek to improve
the quality of education and its relevance to solving life's problems (Mpofu and Chikati,2013). Primary
activities in the education value chain enhance learners' knowledge of a specific area, while secondary activities
serve to support the learning process. The figure below shows the Porter value chain in the education industry.
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Primary activities
Inbound
logistics
These are all the processes associated with the receipt, storage and distribution of resources
within the company that were transferred from suppliers. In the case of education, it can be said
that this is a process of storing knowledge. It is a basic step in the learning process that involves
getting information from a variety of sources, including the Internet, books, classroom, and social
interactions. Also providing registered students with access to their courses through an integrated
portal where they can receive up-to-date information such as lesson records. Looking from the
side of traditional education, then the student cannot find the information he needs always and
everywhere. An example would be that if he missed a lesson at school, then he can no longer be
available to him. Plus, ICT provides information seekers with a wide range of online sources that
are most relevant. It also helps filter and process information as the digital divide narrows the
opportunities available to support the learning process. Consequently, the lack of ICTs reduces
the efficiency with which they are associated, and hence the entire value chain in education will
be affected.
Operations This stage of the chain can be divided into 2 stages such as reflection and interaction. Reflection
is the stage where students apply knowledge to their work situation and reflect on its impact.
Learning using ICT allows students to simulate a real life situation using computer programs.
Those who are digitally disadvantaged will lag behind in thought compared to their peers.
Interaction allows students to compare how to solve certain problems. Through interaction, one
can understand at what angle others solve the problem, thereby replenishing the stock of
knowledge that they already have. Social networks (Facebook, Twitter, WhatsApp and others),
email, chat facilities, blogs, communication networks - all facilitate interaction and are supported
by ICT. However, the digital divide makes it impossible to access such interaction tools, thereby
reducing the list of tools that can be used for interaction and, as a consequence, will affect the
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entire education value chain. Interactions using ICT tools remove distance, spatial and temporal
barriers as interactions can be maintained from anywhere and at any time.
Outbound
logistics
In primary education, outbound logistics can be thought of as storing completed homework
before checkout. In the traditional school approach, there is a high probability of losing a
notebook with completed homework. Also, a student can lie that the notebook was handed over
but the teacher lost it. With the use of ICT, the likelihood of human error is reduced since all
decisions can be stored on one platform.
Marketing The preparation of advertising brochures is a traditional and basic marketing strategy for
promoting a school. Given the fact that this type of advertising decreases its effectiveness every
year due to the fact that its action is not long-term (Barton,2020). Using ICTs and advertisements
such as on social networks will help in promoting the school. Advertising posts on social
networks are used by 76% of B2C marketers and moreover, its effectiveness is rated on a 4 to 5
point scale (Gesenhues,2015).
Service The service sector provides online support (technical and academic) to students, consultations,
tutoring, marking assignments and exams, passing and accepting exams, and keeping student
records. It also includes student self-service through websites and web portals. Failure to use ICT
technology deprives students of such opportunities.
Secondary activities
Technology At the moment, the educational institution uses the Kundalik System, which allows them to
schedule lessons online, form teachers' lesson plans, keep records of attendance and student
progress in electronic forms of a journal and diary. But this system is not aimed at improving the
education process itself.
HRM Schools do not recruit using information technology. Broadly speaking, vacancies are not posted
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on job search platforms. It can be noted that internal recruitment is more appropriate in the
company. Moreover, teachers do not use ICT in professional development, which is not suitable
in the current environment.
Procurement As far as teaching materials are concerned, at the moment, students in the school are still using
printed textbooks, or the teacher sends a photo of the textbooks to the telegram group where the
image quality is poor.
NEW BIS DEVELOPMENT
Considering the above analysis and the fact that a differentiation strategy should be followed and considering
the fact that information technology is a strong lever to provide additional value to buyers in the education
industry, a digital solution will be an educational game for both IOS and Android that will become a
competitive advantage for the school where it will be implemented. Now almost every person has a phone or
tablet. According to statistics of Ghiciuc (2020) by 2021, the number of smartphone users worldwide will be
3.8 billion people. This solution will be a part of the learning process but not complete replacement of
traditional learning. According to Hindustan Times (2020) even the best IT solutions cannot replace general
school education. But they can and should be an effective complement to it. And today, the optimal mix of
online and offline options is blended learning. It is already showing growth in those areas of education. The
idea is creating endless runner whose main characters are cartoon characters similar to “Smeshariki”. They need
to crawl through the books, avoiding obstacles and collecting coins. With the collected coins, the player can
buy a new skin in the store. Also on their way there will be obstacles in the form of bosses. Bosses are
mathematical problems. Which sign will be a math problem depends on the preferences of the player. The
player is presented with 4 categories: addition, subtraction, multiplication, division and a mix of these four
categories. Also the player can choose the level of difficulty. The more difficult the level, the less time will be
given to solve the problem. Having decided the math problem, the player will receive coins. It is also important
to note that this is a game for a record and the player can share his record on the school board. As long-term
goals, it is worth taking into account the fact that since the game will be aimed at practice in the field of
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mathematics, in the future, completing a certain number of levels can replace homework at school. This change
happened with the American platform Duolingo, an online resource for learning foreign languages. Initially, in
this platform it was possible to practice learning 95 different languages. Later, the platform became a tool for an
online language proficiency exam, which replaced IELTS and TOEFL due to the closure of test centers due to
coronavirus infection, forcing students and educational institutions to turn to online exams. It is predicted by Li
and Lalani (2020) that online learning tools will become more widespread and in demand from 2020.
NEW INDUSTRIAL AND INTERNAL BUSINESS ENVIRONMENT ANALYSIS
ADVANTAGES THAT DIGITAL PROJECT SOLUTION MAY BRING TO THE BUSINESS IN THE
INDUSTRY
Considering the advantages of the proposed digital solution there 2 of them: digitalization and gamification of
education. Both of these advantages have their own advantages for the industry. As Iivari, Sharma, and Ventä-
Olkkonen (2020) stated, the coronavirus contributed to the digitalization of education like no one else. The
main trend in education is associated with the digital revolution, which will lead to a radical change in the labor
market, the emergence of new competencies, improved cooperation, increased responsibility of citizens, their
ability to make independent decisions - said Kuzminov (2018). This, in turn, will serve as a reason for the
subsequent reorganization of the educational process. It is also worth noting that the introduction of this game
does not mean that teachers will be replaced by a tablet or smartphone. The introduction of these educational
tools does not mean the abolition of traditional classroom activities. To date, it is talked only about the
inclusion of elements of online learning in educational programs. It is based on the principle of blended
learning. Such a game will help increase efficiency due to greater visualization of the material. Simonson et al.
(2019) the problem is that there is very little visualization and interactivity in all modern online courses,
distance learning systems. Research by Thalheimer (2015) showed that people are only able to remember 10%
of the information they read and 20% of the information they hear. If you show a picture and supplement with
an oral explanation, then this figure rises to 30% percent. However, phenomenal numbers (90%) are achieved
only when people independently complete tasks aimed at learning. This is the essence of the development of an
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educational game. This game will help to improve the teaching of mathematics, online teaching of children with
disabilities, the quality of education in rural schools, the quality of preparation for exams.
Moreover, one cannot but take into account not only the digitalization of education, but also gamification. As
for digital trends, the future of education lies with gamification and virtual and augmented reality
technologies(Fernandez,2017). Additionally, nowadays educational games - "Edutainment" are becoming more
and more popular. As it was said by Edsys (2017) edutainment becomes almost the only way to attract children
and young people to the study of science. For children, the main problem is often the complexity of the process
of learning about the world, assimilating the necessary information and the lack of constant interest in learning.
As a result, the child lacks knowledge and skills. Contrary to common stereotypes, most professional
psychologists agree that mobile games and developmental applications are useful for children, especially if they
are educational, interactive, since they allow the child to form a wide range of new competencies. This was
shown by a study by the Institute of Modern Media (MOMRI). For more support, taking into account the
opinion of Game Learning (undated), which found that educational mobile games help develop the personal
qualities of children - the ability to plan, self-discipline, a sense of responsibility. Another important direction
of the gamification of education is instilling in schoolchildren the desire for self-development. The principle of
lifelong education throughout life assumes that the student is aware of its need, acquires knowledge on his own,
but because he wants and knows how to learn. According to a study Vlachopoulos and Makri (2017) on the
impact of simulations on learners, participants in an e-learning gameplay scored: a 14 percent increase in skills-
based assessments, an 11 percent increase in factual knowledge, and a 9 percent increase in educational
involvement.
HOW DIGITAL PROJECT MAY IMPROVE THE VALUE CHAIN OF THE BUSINESS
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