The Five Competitive Forces that Shape Strategy

ANALYSIS AND IMPLICATIONS OF PORTER’S FIVE FORCES IN OUR SCHOOL

Force 1: The Degree of Rivalry

In the year 1980’s and 1990’s Andres Soriano College (ASC) was the most popular and had big population as compared to other three (3) neighboring private colleges which are also offering tertiary education. But in the year 2000, University of Southeastern Philippines (USEP) Bislig Branch was opened. USEP is the only public school in the locality which offers collegiate degree courses at very affordable price. This implies that there is a constant entry of new competitor in the market to meet the demand of the customers/students in terms of education.

Potential customers/students have a transparent market where they can choose which school they want to enroll in. They can compare tuition fees and services among the different schools. In spite of the high competition ASC was not greatly affected because the school was located at the heart of the city thus, it is very accessible. ASC also ranks 2 among schools having lowest tuition fee rates. Currently ASC charges only Two Hundred and 50/100 (P 200.50) per unit.

The core competencies that we have are the following:

1. She aims to deliver a quality education, foster awareness, personal discipline and ability to make creative and sound judgment among its students.
2. The instructors/faculties are qualified to teach because we meet and passed the requirements set by the Commission on Higher Education (CHED). We have faculties having PhD’s, EdD’s, DM, MA’s, MIT’s degrees, and others having earned units in masteral courses.
3. The instructors/faculties will be sent seminars and trainings either national or local to become more effective and updated of the new trends, techniques and strategies in teaching.

Force 2 : Threat of Substitutes

The threat that substitute product in our school maybe in terms of services. Why? Its because most of our building is made up of wood, only the computer laboratories and college library is concrete. Equipment and facilities in our school is not complete and high tech compared from other schools but the quality of education the institution can guaranteed. ASC products can compete globally especially in our locality in Bislig City.

There are some courses that was offered by other school that we don’t have such as criminology, Nursing Aid, Midwifery, Engineering, HRM and etc.

Force 3: Bargaining Power of Your customers

When considering the differentiation of outputs the products in our school like our students. The institution is trying to give them best equipped them with knowledge and skills to become more effective and productive individual. The student was very fortunate because as they exit the portal of their alma mater they have all the weapons to face whatever circumstances that they may encounter in life.

The school is giving the scholarship to the deserving students. The Linkage Industry of the School was GREPPOO located here in Davao City to make the faculty as well as our student be updated and will be trained very well because GREPPOO Industry giving us the service like conducting seminars and training workshop in terms of new technology deploying our third year OJT student to the different IT Industry here in Davao.

Switching Cost

ASC is advantage in terms of tuition fee rate because ASC belong to rank 2 among school having lowest tuition fee rate in the amount of P200.50 per unit compare to other school here in our locality.

ASC is the only school who offered Masteral Courses like Masters of Art in Education.

Presence of Substitute

ASC is advantage among schools in our locality because ASC is the only school that offers a course of Bachelor of Science in Accountancy (BSA).

ASC is trying not to increase their tuition fee for about two consecutive years in order for the students to be more attractive and convinced most to stay in ASC because aside from acquiring quality education they also always avail the very low and affordable tuition fees.

Force 4: The Supplier (School) Power

A school basically needs qualified and competitive personnel, good and updated facilities and equipment such as computer and science laboratories, library holdings, sports facilities and others. These requirements if met by the school it could of course attract students to enroll in that school.

In our locality, there are four (4) private schools and one (1) public school existed that offered tertiary courses, namely: Andres Soriano College (ASC), Saint Vincent de Paul Diocesan College (SVDPDC), De La Salle John Bosco College (DLS-JBC), Southern Technological Institute of the Philippines (STIP) and University of Southeastern Philippines (USEP) – Bislig Branch, respectively. Among the private schools present, DLS-JBC is ahead in terms of facilities and equipment as they are subsidized by De La Salle Standard guidelines and owned by De La Salle Brothers. Yet, ASC – though its facilities have only met the minimum requirements set by the Commission on Higher Education (CHED) - can compete with the DLS-JBC in terms of academic competition. Aside from that, ASC’s tuition fee ranked number 2 as to the least tuition fee among the competing private schools. Another edge of ASC is that she is the only school in the locality offering accountancy program. In October 2010 CPA board exam, one of our students passed.

On the other hand, due to fact the competing schools have offered same programs with ASC, we cannot deny the fact that enrolment is affected. Because USEP is now offering education courses, ASC’s education department have slowly declined. Long before that, the education department of ASC is the strongest department. Its population is great.

ASC’s power is depicted in the Operational Highlights and Academic and Co-Curricular Accomplishment extracted from the presentation of the Andres Soriano Colleges, Inc. 2010 Annual Report presented to its membership during the 58 Annual General Membership Assembly held on October 3, 2010.

TESDA, particularly Computer Hardware Servicing (CHS), Food and Beverage Services (FBS) and Commercial Cooking NC II passers excels in this part of the region.

Now ASC is an Accredited Assessment Center

Force 5: The Threat of New Entrants

Economies of Scale

The tertiary courses of ASC is about 41 years old in our locality. In the past 37 years of existence, ASC proved to provide quality education and produces quality products. Unfortunately, way back four (4) years ago, its enrollment was declining because of the shutting down of PICOP industry which was known as the “biggest industry in Asia”. It was a sad reality that most of the students’ parents were working in PICOP industry where their source of living originated. Consequently, many families moved to other places because they were jobless. Thus, the enrollment in ASC declined. Plus, it was also during those periods when USEP Bislig Branch was opened. This threat causes gradual declination in enrollment. Another factor that caused the downward of enrollment is the existence of the three (3) competitors, namely, De La Salle John Bosco College (DLS-JBC), Saint Vincent de Paul Diocesan College (SVDPDC) and Southern Technological Institute of the Philippines (STIP).

The administrators encounter difficulties on how to sustained and maintained the salaries and benefits of the employees that is why the administration plans to convert the high school and elementary department into cooperative excluding college department. Behind that hardship that the school is facing, the corporators of ASC is struggling still looking for better ways and by applying the some strategic planning and models used in organization such as Porter’s Five Forces, SWOT, and others.

Recommendation

As a result of this study, the following suggestions were recommended:

• The school and even the Heads of the different programs should use the Porter’s Five Forces to analyze carefully the different forces and to determine the strength and weak points of the organization.
• The critical forces should be wisely monitored and prioritized to work out.
• The school should implement the Five Year Development Plan base on the result of analysis of Porter’s Five Forces and for further understanding towards the organization SWOT analysis will do also.