A study on rapid growth of educomp solutions limited

Abstract

Educomp is one of India?s largest players in the education sector in India. The firm started off bysetting up computer labs in private schools. Over the years it has diversified into almost everypossible offering in the education sector.The remarkable growth of Educomp is significant from the point of view of India?s defiantinfrastructure in education with respect to the growing population and the demands of anincreasingly globalized economy. In this report, we attempt to summarize the various segmentsin which Educomp operates in terms of the business model, margins, key success factors andalignment of Educomp?s strategy with these success factors. The major segments are SchoolLearning Systems, Higher Learning Systems, K-12 schools and online/ supplementary/ globalbusiness.Through this study, we attempt to understand the reasons behind the rapid growth of thiscompany. Identification of such reasons would enable us to comment on the sustainability of thisgrowth and whether Educomp can replicate its current success in the new segments like onlineeducation, overseas markets and higher education that it is attempting to enter.We start off by making a list of Educomp?s product offering in business segment. Then, we haveevaluated the competitive advantage that the firm enjoys over its competitors. The mode of entryinto the segment and the reason for its presence in that segment in terms of being the marketleader or overall synergy to the business model or creation of a complementary asset is analyzed.Finally, we have evaluated the major decisions taken by the firm over its history in terms of theircontribution to Educomp?s growth. We have used the article “Staircases to Growth” published inthe McKinsey quarterly in 1996 for the same.Our final verdict is that over the years has invested heavily in a culture of innovation andnurturing entrepreneurial culture. This has paid off in terms of it being able to attract high qualitytalent and create resources like the K-12 digital content library which are very difficult to replicate and enable the firm to tap newer and higher margin revenue streams. A professionalapproach and the willingness to look into the future have paid off for Educomp even in a sectorwhich traditionally has been hampered by numerous regulations and lack of investment.