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International Business Case ConnectingEnglish in Morocco Lucile SCHWEITZER 3A5 Marketing

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Page 1: Ppt connecting english

International Business Case

ConnectingEnglish in Morocco

Lucile SCHWEITZER 3A5 Marketing

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Macro-environment

•  Economic opportunities: Perspectives of sustainable growth and development - Morocco attracts foreign investors - Low inflation, improved financial performance, and steady progress in developing the services and industrial sectors – An advanced status in its 2000 Association Agreement with the EU -France remains the country's first provider of Morocco (15.3% of total imports). After Spain (11.8%), China (8.4%), United States (6.9%) and Italy (5.9%) in 2010 - France is also its first client (21.5% of total exports), Spain (16.6%), India (6%), Italy (4.3%) and Britain (3.6%) in 2010.

•  Political stability: some demonstrations during the Spring Revolution but without any violence (the King Mohammed is appreciated by the population) – A moderately free press - King MOHAMMED in 2005 launched a National Initiative for Human Development a $2 billion program – COFACE grade country risk stays unchanged: A4 (it’s not the case for Tunisia, Egypt, Libya, Bahrein, Syria, modified in April 2010)

•  Socio-cultural opportunities: Low labor cost Francophile country (around 70% less expensive) -– French is often the language for business, government and diplomacy - Highly educated skilled resources – minimum wage = 200€

•  Technological & legal opportunities: Reliable and affordable communication infrastructure: telecom and Internet. The law 09/08 for the protection of the intellectual property (near the European legislation) is a good point for Offshoring particularly in BPO and ITO –

•  Geographical advantage: Proximity of the European Market and the Sub-Saharan Africa – A 1 hour time difference with France

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Competition & Risk Analysis Mapping Competition Our real competitor are both local language

center: Calliope and Foreign entrant for practical language training: Berlitz

Risk Analysis   Industrial risks - Personal Data Protection - Intellectual Property   Commercial risks -  Delay in the delivery -  Delay in the payment (from 4 to 6 months) -  High income and financing banking   Human risks -  Quality and quantity for Human Resources -  Level of Training/skills and Language

Register

Quality & Performance

Experience & Recognition

+ -

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Intercultural Management

KEY VALUES -  The family -  The solidarity -  The transparency -  The loyalty -  The honesty -  The reward -  The relationship

CROSSCULTURAL ISSUES Hoffstede’s results:

•  Power Distance Index: 70 – in France: 68 •  Individualism Rate: 46 – in France: 71 •  Masculinity Rate: 53 – in France: 43 •  Uncertainty Avoidance Index: 68 – in France: 86

LANGUAGES Arabic as a local language (public institutions), dialectal

Arabic, French perceived as modernity and education, Spanish as a 2nd or 3rd language (some areas), English for IT and international environment

RELIGIOUS ISSUES A Muslim country = Paternalism - Control - Fatalism -

The integration of social and economic – Passion

PERSONAL BEHAVIORS AND RELATED BEST MANAGEMENT Be patient, loyal, adaptable, thankful, clear in planning

tasks and objectives A mix between Paternalist Management practiced in

Latin countries and participative management practiced in Anglo-Saxon countries

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II / E-learning Services Outsourcing from France to Morocco

Outsourcing the most as possible in Morocco: salary, call centers, CRM… •  Morocco = 1st country for call centers (17 500 employees) – high qualified workforce –

reactive teams speaking currently French – wages are less than in France (minimum wage is 200€) – geographical proximity with France (U€) – Time difference is only 1 hour – Moroccans learn 4 languages at school (Arabic, French, English, Spanish)

In a recent Gartner study, Morocco will stay in the Top 30 of the destinations most attractive for outsourcing in 2011.

OUR NEXT PARTNER is OUTSOURCIA – a French company (headquarters in Paris) created in 2003 with 3 call centers in Casablanca. The company is pioneer in premium outsourcing in its 4 business areas.

Call centers: overall management of the customer relationships, a multilingual (7 languages: French, English, Spanish, Italian, Netherlands, Portuguese, Dutch) & multichannel offer.

BPO: outsourcing business processes, providing back office. ITO: IT services and software development. Offshore Academy: 1st school specialized in the business of customer relationships. Don’t need to train their employees, the company has a lot of experience with prestigious clients

from all over the world.

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II / E-learning Services Outsourcing from France to Casablanca

Casablanca: the city where to setting up

•  80% of call centers are located in Casablanca or Rabat

•  The economic capital in Morocco

Key features for location in CasaNearshore •  A place dedicated to TIC in Morocco

launched in 2005 •  Low rental for trays: 90 DHs/m2 (8€/m2) •  Low income tax of 20% (against 40% to 42%

for income above 5000 DHs per month) •  Tax exemption on profits in the first 5 years •  Telecom costs are 35% below the market

price •  Help for training if recruiting Moroccan people

(5800€ per employee)

The common bases for Outsourcing contract with Service Level Agreement

•  Outsourcia will be in charge of our phoning and our e-learning platform in these languages: French, English, Spanish, Italian, Netherlands, Portuguese, Dutch – in one month

•  ConnectingEnglish will provides to Outsourcia the lessons and teaching methodology used by phone and e-learning but the company ConnectingEnglish stays the only owner.

•  ConnectingEnglish will train Outsourcia team to their teaching methods during 1 month and check at the same time their level in the 4 foreign languages.

•  Outsourcia will present us a complete reporting every month on a PPT document and they will prepare a reporting call each week to show the quality of their work to ConnectingEnglish.

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II / E-learning Services Outsourcing from France to Casablanca

Action Plan

•  To sign up the outsourcing contract and discuss the SLA with Outsourcia – 3 weeks •  To make a trip to Morocco to visit their buildings and meet their teams – 1 week •  To outsource the salary and CRM – 1 testing month •  To report our 1st month of collaboration – 1 day •  To train their teams to our teaching methods, briefing about our company/business/target clients – 1 month •  To outsource of our phoning and e-learning – after 3 months – 1 testing month •  To report these 4 activities outsourced – 1 day

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III / Language training center offshoring for business and sales development in Morocco

Casablanca is the economic capital where there’s a concentration of higher educated workforce and a strong equipment rate of the population

Reasons to offshore: -  Fit a local and a global demand -  A place to learn Arabic: global demand (immersion) -  A lack of language training center with a full range of languages -  E-learning isn’t well develop, it’s a new market with a potential of growth

Key features for location in CasaNearshore : A place dedicated to TIC in Morocco launched in 2005 •  Low rental for trays: 90 DHs/m2 (8€/m2) •  Low income tax of 20% (against 40% to 42% for income above 5000 DHs per month) •  Tax exemption on profits in the first 5 Y •  Telecom costs are 35% below the market price •  Help for training if recruiting Moroccan people

Mode of entry: Moroccan law - partnership with a local company specialized in training Timing: soon as possible because competition is already there

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III / Language training center offshoring for business and sales development in Morocco

Resources needed •  Human: 12 teachers (native speakers and professionals) – 5 administrative employees •  Technical: computers, phones, chairs and tables •  Financial: Rental the building, Telecom/Electricity costs, Wages

Demand/target market: global demand and local demand, particularly professionals/businessmen. Local demand: call-centers/international and large companies Global demand: companies doing business with the Arab World

Marketing mix Service: 6 languages available: French, English, Arabic, Spanish, Hindi, Chinese – lessons for face to

face, phone, e-learning, immersion Promotion: Local Economic Newspapers, Business School, Call-centers Price: affordable price for Moroccan companies and European companies – Package for business group Place: at our local language training center – inside our clients walls – online – phone

Competitive advantage: A French company – 6 languages

Position with the French headquarter: 1st center partner for teaching Arabic – a subsidiary in Morocco

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III / Language training center offshoring for business and sales development in Morocco

The budget Function Number Mensual salary (DH) Annual salary (DH)

Marketing Director 1 10000 130000 HR Responsable 1 10000 130000 Accountant 1 10000 130000 Chief Executive Officer 1 20000 260000 Teachers 12 1200000 15600000 Direction Assistant 1 5000 65000

Total Cost 16315000

Cost Mensual cost Annual Cost (DH) Annual cost (Euros) Rental cost 25000 300000 Water, Internet and Electricity 2000 24000 Phones (15) 10000 120000 Office furniture 100000 1200000 Tables (10 per class) 21000 252000 Security and Cleaning labour 5000 60000 Salary cost 16315000

Total Cost 18271000 1588782,609

Year Number of learners Monthly Training Price Annual Training Price Turnover 1 250 10000 120000 30000000 2 275 10000 120000 33000000 3 300 10000 120000 36000000

The turnover

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Outsourcing VS Offshoring Strengths •  Reduce and control operating cost •  Focus on core capabilities •  Gain access to world class capabilities •  Free resources for other processes •  Resources not available internally •  Reduce time to market •  Accelerate re-engineering benefits •  Function difficult to manage •  Share risk •  Transfer fixed costs into a variable cost model

Weaknesses •  Loss of control on applications •  Fear of sub-optimal cost •  Quality benefits •  Difficulty of managing suppliers with high process

quality standards and different cultures •  Need to match EMS provider with OEM needs

Strengths •  Be present on a new market: respond to a local

demand •  An implementation in the Maghreb Zone: Morocco

as a « country test »: hyphen between Europe and Africa

•  Faster time to market by providing visibility into effort, focus and risks

•  Lower travel and coordination costs •  Higher degrees of trust and goodwill and few

contract cancellations •  Reduce and control operating costs •  More sophisticated jobs can be create if the less

important jobs have been sent oversea

Weaknesses •  Need for adaptable management practices •  Retaining managerial control •  Gaining operational efficiency •  New physical, temporal, cultural, and organization

barriers •  Proprietary Information: way to teach languages •  Losing customers because the company is engaged

in offshoring •  In Morocco, laws are not as protective of workers

and the environment as in France

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IV / Market entry Optimal mode and Strategy

The best solution for Connecting English is to offshore a language training center in Casablanca because this subsidiary could fit with a local and global demand in a long term. Maybe for the moment, htey can just outsource some services to Outsourcia, in order to know better the Moroccan market.

Strategic recommendations •  To invest in communications and BtoB event organization, to be

recognized •  To be perceived as the leader in language teaching on the BtoB

market, within the professional target •  To get paid by customers (Moroccan companies) and ensure them

reimbursement by the State up to 75% (it’s guaranteed by the OFPPT for Moroccan companies)

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IV / Market entry Optimal mode and Strategy

Our Key Success Factors -  We have the best teachers: professionals and native

speakers in various businesses -  A worldwide presence and recognition -  A French company with a real know-how -  An innovative way to teach: e-learning, phoning, face to face

and immersion -  International clients have confidence in ConnectingEnglish