Final Case Study – Kumon Educational Institute USA
Upon careful review and analysis of the current situation of the Kumon Institute USA it is clear that there are several problems that should be addressed in order for Kumon Institute to succeed in the US market. Although Kumon has been in existence in the US for 10 years now, you have still not implemented a corporate global strategy which will allow for success in the US. You’re currently operating in the same manner as is the Japanese operations, and as a result the same business level strategy that worked in Japan will not provide the same results in the US. Any company seeking expansion at the multinational level must implement a strategy based on analysis of the local market in order to gain and maintain market share, outside of your home country. The Kumon method although successful in Japan is an educational tool that is quite unique to most teaching methods and philosophy that is seen here in the US and Kumon has not changed or modified it’s methods to fit with the American education system or the American family’s culture and values. The assumption is that the Kumon method is appropriate for all students at all levels, but this is just based on an assumption, with no factual backing with regard to success in the US. It’s noted that the retention rate in the US is only 12-13 months in the US as opposed to 29-30 months in Japan, so it will be important tot understand why Kumon students are not sticking with the program in the US. The financial aspects of the company and how the franchises are managed in the US should also be reviewed as there may be some opportunity for modification which will work more effectively and be more accepted in the US. The financial statements from 1989 to 1991 show almost double royalties, however the Net loss has also doubled. Furthermore, there is no marketing strategy, with regard to advertising and identity of the core target and opportunities...
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