Strategy Management

Introduction

In this 21st century, education sector plays a vital role to contribute to the social, political and economic development. According to Misnistry of Higher Education (HOME), Malaysia had 20 public universities, 111 private universities and 10 foreign university branch campuses, 402 active private colleges, 34 polytechnics and 94 public community colleges in 2015. Nowadays, Higher Education Institution has no longer a want but a need for all people to acquire more knowledge in order to be competitive. Many companies have the intention to seek for excellent workers yet those people with higher qualification might have better opportunities compare to these without. Therefore, it is important that the level of education is viewed as a value perceived in the marketplace. In 2014, High Education Institutions had over a million students approximately 35,592 were international students from about 160 nations. In contrast, about 56,260 Malaysian students were studying overseas in 2014 which are 28% in Australia, 24% in United Kingdom, 13% in United States, 9% in Egypt and 4% in Indonesia. According to the survey, 71% of the local students had applied for loans from the National Higher Education Fund Corporation (PTPTN) but only 56% were successful. The rest of 23%were funded by their parents, 15% were government or corporate scholarships and 6% from self- funded.

Competitive Rivalry

Competitor or rivalry occurs on how many capability of the competitors. If the company have a lot of competitors, therefore they will offer equally attractive products and services. Thus, the company will have small power in the situation because the supplier and buyers will go seek for another company to deal with as you have no deal to bargain for. If the company plays monopoly with the best product and services, therefore it will become the strength of company in competing with another company.

The Malaysia higher education industry includes approximately 402 degree granting colleges and universities. The higher education industry nowadays is very much competitive when competitors are numerous and similarly balanced. With millions of students continue to study every year, the best education services of university and college is the first choice for most students. For example, courses offered, tuition fees, environments, lecturers, donors or government-based funding and research funds. Nilai University is one of the private university in Nilai - a huge education hub includes several colleges and universities. Thus, the competitors for Nilai University is high due to the numerous of universities in Malaysia such as Manipal International University, INTI International University, Universiti Sains Islam Malaysia and Islamic University College of Malaysia.

Besides, standardized products or services such as programmed offered by universities have intensity in price competition. For example, the Malaysian students can make comparison on the tuition fee of Bachelor of Business (Hons) Business Administration, which the fee of INTI International University is additionally RM9, 980 higher than Nilai University in 2017. Therefore, this might be a threat for INTI International University whether students opt of them as priority or not. Consequently, the level of rivalry among competitors in the education industry based on course fees will be high.

In addition, standardized products or services such as programmed offered by universities have intensity in special course competition. Nilai University have offering Aircraft Maintenance Engineering course which is recognised by European Avaiation Safety Agency (EASA), and only four higher education institutions are provide this course in Malaysia. There are Nilai University, University Kuala Lumpur, Taylor’s University and College TAFE Seremban. So, the level of competition rivalry will be high because the rivalry university among Nilai University are only three parties/players.

Threat of new entrant

Threat of new entrant is one of the Porter five forces which means new competitors enter the existing market by delivering greater value to new customers. It will affect the existing market and achieve the market share. It is determined by how hard and how much is the cost to enter an market. New entrants are attracted to industries in which undercutting well-known businesses and making down profit limits across the industry. The threat will be strong when new entrants use their incumbent capabilities and capitals to enter another industry. Karenndaly mentioned that there are some factors of influencing the threat of new entrant, for examples, capital requirement, government policy, switching cost, unequal access to distribution channels, incumbency advantages in terms of technology, brand and best location . New entrants of university are new institutions, foreign or international institutions and duplicants from existing players.

The barrier of new entrants is capital requirement. A new institution needs to spend a huge capital to invest and purchase all the equipments that needed by the students. If the capital requirement is too high, it might reduce the threat of new institutions. Moreover, private institutions are unlikely getting sponsorships from government, they need to collect the large amount of funds by their own ways. Generally, institutions will increase the tuition fees that charged to students to cover the funds. As a resuly, a growing burden has formed on students and their families. For some infrastructure projects, they also need to look for the outside sponsorships to cover the high costs. Take an example of Nilai University, Nilai University is a private university. Most of the funds need to be covered and found by itself. Only public universities can be supported by government. Private university’s funds are mostly from tuition fees and miscellaneous fees of students. If the students are incapable to pay the fees, university might face financial problems. Thus, capital requirement will increase the barries of entry if the new entrants do not have reliable background.

Government policy creates barrrier of new entrants. The provision of higher education is well regulated by law, for instances, The Education Act 1996 (Act 550), The Private Higher Educational Institutions Act, 1996, The National Council of Higher Education Act, 1996, Malaysian Qualifications Agency Act 2007 (replacing the previous namely National Accreditation Board Act 1996 which has been repealed), The Universities and University Colleges (Amendment) Act, 1996, The National Higher Education Fund Corporation Act, 1997. The higher education is under control of Ministry Higher Education (MOHE). In 2007, Malaysian Qualifications Agency (MQA) is assuring the quality of higher education by undertaking the implementation of the Malaysian Qualifications Framework (MQF). MQA is important in quality guarantee and the approval of courses and programmes for all types of higher education institutions. Furthermore, Malaysian Qualifications Register (MQR) provides information on all accredited programs, qualifications and higher education institutions accredited under the MQA. Credit system is operated by MQA to provide uniformity and assist in contrasts of qualifications within Malaysia and with overseas institutions.