AN ANALYSIS OF DISTINCTIVE COMPETENCIES IN COMPETITIVE ADVANTAGES ACHIEVEMENT AT ABROAD DISCOVERY ENGLISH CENTER

FOREIGN TRADE UNIVERSITY
FACULTY OF BUSINESS ADMINISTRATION
---------***--------

INTERNSHIP REPORT
AN ANALYSIS OF DISTINCTIVE COMPETENCIES IN
COMPETITIVE ADVANTAGES ACHIEVEMENT AT
ABROAD DISCOVERY ENGLISH CENTER

Full name: Trinh Thi Quynh Van
Student ID: 111 225 0002
Class: A13 CLC QTKD K50
Supervisor: Ms. Dao Minh Anh, MBA.

Hanoi, July 2014.


Table of Contents
Chapter 1: Literature review ..................................................................................................... 1
1. Competitive advantage within an organization .............................................................. 1
1.1.

Definition of competitive advantage ....................................................................... 1

1.2.

The process of achieving competitive advantage .................................................... 2

2. The role of resources and capabilities in forming distinctive competencies ................. 3
2.1.

The role of resources and capabilities ..................................................................... 3

2.2.

Distinctive competencies ......................................................................................... 5

3. Three main types of business-level strategies with different value creation in
achieving competitive advantage .......................................................................................... 6
Chapter 2: Analyzing distinctive competencies in competitive advantage achievement at
Abroad Discovery English Center (A.D. Center) ..................................................................... 9
1. Overview about A.D. Center: ......................................................................................... 9
1.1.

History of development ........................................................................................... 9

1.2.

Organizational Structure .......................................................................................... 9

1.3.

Field of business .................................................................................................... 10

1.4.

Business performance ............................................................................................ 11

2. Analysis of distinctive competencies at A.D. Center ................................................... 14
2.1.

Resources and capabilities of A.D. Center ............................................................ 14

2.2.

Distinctive competencies at A.D. Center .............................................................. 17

3. Evaluation ..................................................................................................................... 20
Chapter 3: Recommendation for competitive advantage achievement at A.D. Center .......... 22
1. The fundamentals of Balanced Scorecard and why using Balanced Scorecard at A.D.
Center .................................................................................................................................. 22
1.1.

The fundamentals of Balanced Scorecard ............................................................. 22

1.2.

Why using Balanced Scorecard at A.D. Center .................................................... 22

2. The application of Balanced Scorecard at A.D. Center ............................................... 22
2.1.

Strategy map at A.D. Center .................................................................................. 22

2.2.

Action plans in accordance with the four perspectives of Balanced Scorecard .... 24


Conclusion .............................................................................................................................. 27

List of tables
Table 1: Tangible resources within an organization ...............................................................3
Table 2: Intangible resources within an organization .............................................................4
Table 3: Capabilities in different functional areas ..................................................................5
Table 4: Four factors of distinctive competencies ...................................................................6
Table 5: Classes’ schedules at A.D. Center ........................................................................... 10
Table 6: Balance Sheet (For the first half of fiscal year 2014) ............................................. 12
Table 7: Income Statement (For the first half of fiscal year 2014) ....................................... 13
Table 8: Capabilities at each Functional Area at A.D. Center .............................................. 16
Table 9: Tuition fees at other English Centers in Hanoi region ............................................ 20
Table 10: Suggested quality measurement at A.D. Center .................................................... 25

List of figures
Figure 1: The process of strategic management ......................................................................1
Figure 2: Competitive advantage achievement .......................................................................2
Figure 3: Value creation in Differentiation strategy ...............................................................7
Figure 4: Value creation in Cost leadership strategy ..............................................................7
Figure 5: An example of value creation in the three main types of strategy...........................8
Figure 6: Organizational Structure at Abroad Discovery Center .......................................... 10
Figure 7: Teaching process at A.D. Center ........................................................................... 19
Figure 8: Value creation at A.D. Center ................................................................................ 21
Figure 9: Strategy map at A.D. Center .................................................................................. 23


Acknowledgement
I would like to give my sincere thanks and appreciation to Ms. Dao Minh Anh, MBA.,
Lecturer at Foreign Trade University for her thorough instruction in the last one-month
period. Her comments and suggestions, as well as many useful knowledge that she provided,
were of paramount importance for me to learn and accomplish my report.

I am deeply indebted to Mr. Nam Nguyen and Ms. Bich Nguyen, managers at Abroad
Discovery English Center for all their help during my internship. I did learn a lot and gain
many practical experiences relating to my major thanks to their due care and attention.
Lastly, I would like to express my gratitude to every staffs and colleagues for their great
support when I worked at A.D. Center.
Hanoi, 28th July 2014
Trinh Thi Quynh Van


Chapter 1: Literature review
1. Competitive advantage within an organization
1.1.

Definition of competitive advantage

Competitive advantage, firstly, is a decisive category in strategic management. The chart
below depicts the strategic management process including four main steps, namely
Situational Analysis, Strategy Formulation, Strategy Implementation and Strategy
Evaluation. Competitive advantage is the ultimate finding of the first step in which
managers are required to analyze both internal and external situation of the firm before
going any further.

Analyzing
Current
Situation
•Situational
Analysis

Deciding on
Strategies

Putting
Strategies in
Action

•Strategy
Fomulation

•Strategy
Implementa
tion

Evaluating
and Changing
Strategies
•Strategy
Evaluation

Source: Mintzberg, Henry and, Quinn, James Brian (1996).

Figure 1: The process of strategic management
Competitive advantage is academically defined as a firm’s ability to gain profitability that is
greater than the average profitability of the industry. Accordingly, sustainable competitive
advantage is a firm’s ability to maintain profitability and good profit growth that is higher
than average level of the industry for many years.

1


1.2.

The process of achieving competitive advantage

Source: Michael E. Porter (1996).

Figure 2: Competitive advantage achievement
The chart shows how competitive advantage is achieved through the act of analyzing
internal situation within an organization. The two questions promptly emerging in
managers’ mind when looking at his firm’s current state are about ‘what does the firm
possess?’ and ‘how can it make those things work for the company?’. These two queries are
respectively understood as resources and capabilities of an organization. They are key
components contributing to the formation of distinctive competencies which then help shape
the strategy a company may follow. Specifically, strategy is directly derived from distinctive
competencies, an outcome of thorough internal analysis.
Accordingly, there are four types of strategy a firm may pursue: cost leadership,
differentiation, integrated and focus strategy; and different strategies have different ways of
creating value for customers. Cost leadership and differentiation strategy offer consumers a

2


low price and outstanding quality products, respectively. Meanwhile, integrated cost
leadership/differentiation strategy strikes a balance between the two and the focus one only
target in a specific market segment. If a company succeeds in value creation then, in the
long term, it gains competitive advantage with which other firms can hardly compete.
2. The role of resources and capabilities in forming distinctive competencies
2.1.

The role of resources and capabilities

2.1.1. Resources
Resources are vital contributors allowing company to create value for customers. They can
be visible (physical) and invisible (non-physical) ones. The former includes financial,
physical, technological and organizational resources. And the latter involves human
resources, innovation and reputation of the company. Resources are inherent assets of each
firms, however, they could become waste if they are not utilized properly. Hence, a firm
must possess certain skills and knowledge in order to effectively make use of these
resources. In addition, owned and inimitable resources as well as valuable ones that create
large demand for the company’s products form distinctive competencies, the root of
competitive advantage.
As the four types of tangible resources have already been mentioned, the detailed
information on each type is provided in the table below.
Financial Resources

 The firm’s borrowing capacity.
 The firm’s ability to generate internal fund.

Organizational Resources

 The firm’s formal reporting structure and formal
planning, controlling and coordinating systems.

Physical Resources

 Sophistication

and location of a firm’s plant and

equipment
 Access to raw materials.

Technological Resources

 Stock of technology, patents, trademarks, copyrights

3


or trade secret.
Source: Barney, J. (1991).

Table 1: Tangible resources within an organization
In contrast, intangible resources are organization’s assets that can hardly be quantified,
hence, it is virtually related to human, innovation and reputation aspects of a company.
 Knowledge

Human resources

 Trust
 Managerial capabilities
 Organizational routines
Innovation resources

 Ideas
 Scientific capabilities
 Capacity to innovate

Reputation resources

 Brand name
 Reputation with customers and suppliers

 Perceptions of product quality, durability and
reliability

Source: Barney, J. (1991).

Table 2: Intangible resources within an organization
2.1.2. Capabilities
Capability of a company is its ability to coordinate and efficiently utilize the resources.
Human, together with the help of technology, is the major force for any changes within an
organization. Hence, the capacity for coordination and efficient use of resources usually
bases on the development, transfer, and exchange information and knowledge through
human resources in enterprises. And capacity foundation is the knowledge and unique skills
of staff in companies. However, each function within an organization has its own
4


characteristics and skills at coordinating the resources and putting them into productive use.
The table below goes on to further elaboration.
Functional Areas
Supply

Chain

Capabilities
 Effective procurement techniques

Distribution

 Effective logistics management techniques

Human Resources

 Motivate, empower, retain employees

Management
 Effective/ efficient inventory control via point - of –

Information
Systems

purchase data collection
 Effective promo of brand - name product

Marketing

 Effective customer services
 Ability to envision

Management

 Effective organizational structure
 Effective culture
 Design and product skills yielding reliable product

Manufacturing

 Product and design quality
 Production of technologically sophisticated product
 Product and component miniaturization
Research

and

Development

 Exceptional technological capability
 Rapid transformation of technology into new products and
processes

Source: Barney, J. (1991).

Table 3: Capabilities in different Functional Areas
2.2.

Distinctive competencies

If a company succeeds in coordinating its resources and putting them in efficient use, then it
is able to form distinctive competencies. Distinctive competency is a company’s specific

5


strengths allowing them to create product differentiation and/or low cost (strategies) than
competitors in order to gain competitive advantage. It includes four main factors, namely
Value, Rare, Costly to Inimitable and Organized to be exploited.
 Valuable

Allows a firm to neutralize threats or exploit
opportunities in its external environment

 Rare

Possessed by few, if any, current and potential
competitors

 Costly to Inimitable

When other firms either cannot obtain them or must
obtain them at a much higher cost

 Organized to be exploited

The firm must organize appropriately to obtain full
benefits of the resources in order to realize a
competitive advantage.

Source: Barney, J. (1991).

Table 4: Four factors of distinctive competencies
3. Three main types of business-level strategies with different value creation in
achieving competitive advantage
After coordinating its resources and capabilities, a company bases on the distinctive
competencies in order to set out proper strategies it can follow. And different strategy has
different way to create value for customers.
In Cost leadership strategy, a firm performs an integrated set of actions taken to produce
products or services with features that are acceptable to customers at the lowest cost.
Meanwhile, in differentiation strategy, a company aims at producing goods and services at
an acceptable cost that customers perceive as being different in ways that are important to
them. Accordingly, a firm’s focus is on non-standardized products. And the strategy is
appropriate when customer value differentiated features more than they value low cost. The

two charts below give information about value created in cost leadership and differentiation
strategy. In comparison with other firms that do not follow any particular strategy,
6


differentiator satisfies customers’ need by focusing on products’ quality, which may incur
higher cost but create out-standing products’ features, or in other words, greater value for
consumers. In contrast, firms following Cost leadership strategy create value through
offering customers acceptable-quality products at the lowest cost compared to that of other
competitors in the market.

Source: Frank T. Rothaermel (1996).

Figure 3: Value creation in Differentiation strategy

Source: Frank T. Rothaermel (1996).

Figure 4: Value creation in Cost leadership strategy

7


Lastly, Integrated Cost leadership/differentiation strategy allows a firm to simultaneously
pursue low cost and differentiation. This is considered to be a hard strategy to follow. Since
a firm can easily become ‘stuck in the middle’, it cannot achieve the benefits of premium
pricing from differentiation nor cost saving from cost leadership. Below is an example of
three cosmetic firms using different strategy, thus, having different ways of creating value
for consumers. In the middle is Avon, applying Integrated Cost leadership/Differentiated
strategy, which positions itself to be neither the lowest cost nor the most differentiated firm.

Source: Frank T. Rothaermel (1996).

Figure 5: An example of value creation in the three main types of strategy

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Chapter 2: Analyzing distinctive competencies in competitive advantage
achievement at Abroad Discovery English Center (A.D. Center)
1. Overview about A.D. Center:
1.1.

History of development

Name: Abroad Discovery English Center
Address: 115 G2, Thanh Cong, Nguyen Hong street, Ba Dinh
district, Hanoi
Telephone: (04) 2211 1278

Abroad Discovery English Center (A.D. Center) established in November 2011 offers
affordable English courses for all age groups, with a focus on young learners. A.D Center
chooses Incredible English published by Oxford University Express as its main Course book
for all levels. Choosing Incredible English to be a backbone for its programs, A.D. Center
aims at using English as a vehicle to teach other subjects where children develop skills
needed as a part of their general education whilst improving their use of English.
During more than 2 years in operation, A.D Center has experienced many big changes in
infrastructure, from a small flat with only 1 classroom in 2011 to a center with 2 larger
classrooms, a playroom, a library and a small playground in 2013. Moreover, the Center
now has 9 classes with up to 12 students per class and 10 teachers, including 5 Vietnamese
and 5 foreign teachers.

1.2.

Organizational Structure

There are 2 departments at A.D. Center, namely Technical and Finance & Marketing
department. The former includes Teacher and Research & Development team. In A.D.
Center, all of the teachers do not work individually but in a team, hence, they are able to

9


share a consistent methodology of teaching, learn from each other and receive regular
feedback. Besides teaching, the 5 Vietnamese teachers take charge of the Research and
Development process. They have weekly meeting in order to work out the best teaching
materials and methods. Turning to Finance & Marketing Department, there are 2 sub-teams
in charge of the 2 according functions in the company, finance and marketing.

President

Finance &
Marketing
Department

Technical
Department

Teacher Team

Sales &
Marketing

Research &
Development

Finance

Figure 6: Organizational Structure at Abroad Discovery Center
1.3.

Field of business

Abroad Discovery Center is a service company offering English courses for all age groups,
especially young learners. At the present, there are 9 classes en route in accordance with 9
levels of Incredible English program.
Levels

Classes’ names

Incredible Starter

Mango

(4-6 years old)

(4 years old)

Classes’ schedules

Thurs: 17:30-19:00

Vietnamese Foreign
teachers

teachers

Ms. Bich

Ms.
Brooke

10


Pumpkin

Mon: 10:15 – 11:45

Ms. Bich

(5-6 years old)

Brooke

Incredible English 1 Pomelo

Wed: 17:30 – 19:00

(6-8 years old)

Sat: 16:30 – 18:00

Incredible English 2 Cherry (starting) Mon: 17:45 – 19:15

Ms. Huong

Banana (nearly Mon: 17:45 – 19:15
ending)

Ms.
Angela

Mr. Ninh

Fri: 17:45 – 19:15

(7-9 years old)

Ms.

Mr.
Christian

Ms. Bich

Mr. Kyle

Ms. Van

Ms.

Fri: 17:45 – 19:15

Incredible English 3 Apple

Wed: 19:00 – 20:30

(8-11 years old)

Sat: 18:00 – 19:30

Incredible English 4 Strawberry

Wed: 17:30 – 19:00

(10-12 years old)

Sun: 10:15 – 11:45

Incredible English 5 Grapefruit

Wed: 17:30 – 19:00

(11-13 years old)

Sun: 10:15 – 11:45

Incredible English 6 Dragonfruit

Wed: 19:00 – 20:30

Ms. Hoang Mr. Peter

(12-15 years old

Sat: 18:00 – 19:30

Anh

Angela
Ms. Huong

Mr. Peter

Mr. Ninh

Mr. Kyle

Table 5: Classes’ schedules at A.D. Center
1.4.

Business performance

According to the Balance sheet and Income statement provided, the business performance in
the first half of the fiscal year 2014 of A.D. Center is relatively good. The Balance sheet
shows a growth of 6 million VND in Accounts receivable, which is normally considered to
be a negative signal. However, Accounts receivable here means the tuition fee has not been
submitted by new students. They are those having a month of trial studying and not
completing the fee yet. Hence, it appears that the number of students in A.D. Center is
positively changing. Salary & wages payable goes up to more than 100 million VND at the
end of June 2014 dues to the salaries paid for 3 new foreign teachers. In addition, there is

11


also a rise in Equipment and Teaching materials, which indicates considerable investment of
A.D. Center in terms of services quality enhancement.
Consolidated

Results (VND)

Change from start of fiscal year

Current assets
Cash

80,000,000

20,000,000

Accounts receivable

16,000,000

6,000,000

Total current assets

96,000,000

26,000,000

Equipment

75,000,000

9,200,000

Books & Teaching materials

34,000,000

2,400,000

Total non-current assets

109,000,000

11,600,000

Total assets

205,000,000

37,600,000

110,000,000

47,360,000

10,000,000

1,000,000

120,000,000

48,360,000

40,000,000

4,240,000

160,000,000

52,600,000

Long term business loan

45,000,000

-15,000,000

Total non-current liabilities

45,000,000

-15,000,000

205,000,000

37,600,000

Non-current assets

Current liabilities
Accounts payable
Salary & wages payable
Others payable
Total accounts payable
Tax liability (20%)
Total current liabilities
Non-current liabilities

Total liabilities

Table 6: Balance Sheet (For the first half of fiscal year 2014)

12


Turning to the Income statement, the Revenue is calculated based on the tuition fee of 72
students (9 classes and 8 students/ class on average) with 800,000 VND/month. Salary &
wages, teaching materials and printing expenses are the three major expenses that A.D.
Center needs to cover. The net income of the first half of 2014 is 160 million VND, which is
approximately 26 million VND each month.
Revenue
Students' tuition fee submission

345,600,000

Total revenue

345,600,000

Expenses
Salary & wages expenses
Teaching materials expenses

110,000,000
10,700,000

Water & power expenses

8,900,000

Printing expenses

9,000,000

Internet & communication expenses

6,200,000

Depreciation

300,000

Other expenses

500,000

Total expenses

145,600,000

Income before tax

200,000,000

Income tax expense

40,000,000

Net income

160,000,000

Table 7: Income Statement (For the first half of fiscal year 2014)

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2. Analysis of distinctive competencies at A.D. Center
2.1.

Resources and capabilities of A.D. Center

2.1.1. Resources
Resources within a company, as already being mentioned, are classified as tangible and
intangible ones. And, in terms of tangible resources, it is physical and technological
resources that help A.D. Center outperform its rivals. Firstly, A.D. Center locates at 115 G2,

Thanh Cong, Nguyen Hong, Hanoi, which is surrounded by at least 3 primary schools
(Thanh Cong A, Nam Thanh Cong and Ngoc Khanh primary schools) and up to 4 secondary
schools (Thanh Cong, Lang Ha, Phan Chu Trinh and Nguyen Truong To secondary
schools). Since students from the age of 6-15 are its targeted customers, this location is of
benefit to A.D. Center. Moreover, Thanh Cong is a dense residential area, population
density of which is 32,814 residents per km2 (figure from the official website of People
Committee of Ba Dinh District), which can be a stable source of customers for A.D. Center.
Secondly, the Course book Incredible English by Oxford University Express provides more
teaching materials say posters, flashcards, photocopy master, etc. than any other English
books for kids. Since the focus of Incredible English is on engaging students in discovering
surrounding environment through learning English (learn about water cycle, Ancient Egypt
or how to take a pulse, etc.), it needs materials creating visual impact rather than just games
or grammar exercises. All of these materials, including other references, are not only
available on Vietnam’s current market but on the Internet also. Hence, it creates a strong
base for A.D. Center’s technological resources. However, Hanoi is not an area of sparse
population. And no matter where an English center locates, there will always be demand for
English for young learners. In addition, the diversity of teaching materials a center possesses
does not depend much on the Course book it chooses but teachers’ willingness to seek for
innovation. Thus, these two resources cannot be enough to build up distinctive competencies
within the company.

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Turning to intangible resources, human resources are of paramount importance in A.D.
Center. This is crucial since it directly links to innovation resources and reputation ones. The
teacher team at A.D. Center comprises 5 Vietnamese and 5 foreign teachers. They are all
those having at least bachelor degree at their home countries (for foreign teachers) or
studying at top universities in Vietnam (for Vietnamese teachers) say RMIT, Diplomatic
Academy of Vietnam, Foreign Trade University, etc. This is the basic standard of teacher

recruitment at any center. What makes human resources at A.D. Center be distinctive is that
the 5 Vietnamese teachers are recruited through references from acquaintance which is a
reliable source. As a result, the relationship between the teachers and the manager in
particular and A.D. Center in general is quite personal. Specifically, they consider it to be
more than just a part-time job and they have accountability to develop the center. Hence, if a
center normally has 2 top managers who are responsible for strategic management of the
company, then there are 5 people like this at A.D. They are not only able but willing to work
for betterment of the center.
Human resources should be qualified enough to be able to constantly adapt and innovate to
ensure success in a growing market. Innovation is vital in every single company since it
enables a firm to improve product quality and go beyond customers’ expectation. A.D.
Center has strong innovation resources. The teachers have weekly meeting in order to work
out the best teaching methods. Accordingly, A.D. Center after more than 2 years in
operation has earned a reputation as an affordable English center for children with relatively
good quality. Nearly half of the students studying at A.D. Center now are its customers from
the very first days, and most of the rest is from old customers’ references. Some big brands
do enjoy the benefits that theirs reputation resources bring. A.D. Center now is still on a
small scale. However, in the longer term, it can gradually build up its reputation resources if
it is able to stand out from its competitors.

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2.1.2. Capabilities
The table below gives information on how each function at A.D. Center coordinates the
resources and putting them into productive use. Technical Department, including 2 subteams namely Research & Development and Teacher team, needs human and innovation
resources most to operate effectively and efficiently. Meanwhile, Marketing and Finance
function need to utilize tangible resources rather than intangible ones. Thus, different
functions in the company have different capabilities so as not to waste its valuable
resources.

Functional Areas
Technical

Capabilities

Teacher team

Empowerment
At A.D. Center, 10 teachers work together in a team, as a

Department

result, the team leader is able to observe every single
individual and figure out the best way to achieve team
performance and satisfaction. Since human resources are of
vital importance in the success of A.D. Center, the team
leader has to come up with the proper way to keep members
motivated. The teachers are able and willing to work, hence,
they are empowered or given autonomy to accomplish their
jobs.
Research

& Knowledge of English-teaching materials

Development

Research & Development team at A.D. Center has a good
knowledge of teaching materials, including reference books,
flashcards, posters and educational games kits, etc. Together
with a good technological capability, the team is able to get

access to a wide range of materials at a lower cost.

Finance & Marketing

Effective Customer Service

Marketing

Marketing function at A.D. Center is good at Customers

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Relation Management. Many of them are its very first

Department

customers from the beginning, which is a critical attribution
to the success of every single business. Since Word of Mouth
channel (references) is reliable in this field, these customers
are the major force contributing to new arrivals.
Finance

Costs-Saving
Finance at A.D. Center takes costs-saving as the first priority
in financial management. It is hard to reduce costs while
striving for the higher standards. As a result, finance team in
A.D. Center needs to work closely with the other functions to
make any recommendation on costs-saving or teaching
materials investment. In addition, understanding its internal

process is the best way to keep everything in control.

Table 8: Capabilities at each Functional Area at A.D. Center
2.2.

Distinctive competencies at A.D. Center

The above analysis proves that A.D. Center’s ultimate strength lies in its human resources.
Again, the 5 Vietnamese teachers at A.D., who are also members of sub-team Research &
Development, do not work like employees. They are willing to work and innovate as if A.D.
Center was their own start-up firm. Moreover, A.D. Center has capabilities to utilize it in
order to improve teaching quality, the essence of every educational business. Hence, it can
be concluded that human resource is A.D. Center’s distinctive competency, which is
inimitable and valuable, and it allows the firm to form a proper strategy so as to gain
competitive advantage.
A.D. Center offers affordable English courses (Tuition fee at about 100,000 VND/class)
while keeping service quality enhancement. It always strives to go beyond the so-called
‘acceptable quality’ but still offers affordable price for customers. In strategic term, A.D.
17


Center follows Integrated Cost leadership/Differentiated strategy, accordingly, it
simultaneously pursues low-cost and differentiation.
However, a firm’s strategy is not only formed by its distinctive competencies but also
affected by market conditions. Firstly, A.D. Center entered the market when other
competitors had positioned themselves as reliable English schools for children. Apollo
English, British Council and Language Link were all members of multinational groups
entering Vietnam market in the early 1990s. The teachers were 100% native speakers, thus,
the tuition fee was relatively high and not everyone can afford. From 1996 to 1999, there
emerged several English centers (May School, Sunvale School, etc.) established by

Vietnamese, tuition fee of which was much lower than that of the three above-mentioned
centers. May school was one of the most successful centers at that time. After 18 years in
operation, it now has 3 different locations at Bui Thi Xuan, Ngo Thi Nham and Hoang Dao
Thuy street, being perceived as the most reliable English school for children. From 2000 to
2009, more than 20 other English centers for children were established in Hanoi region.
Secondly, A.D. Center starts with small capital, hence, its infrastructure appears to be not as
attractive as that of other centers. Each classroom at A.D. has a television and an airconditioner. And the center has a library and a playroom also. However, on the outside it is
just a simple one-floor house. Regardless of how good the quality could be, customers’
observation strongly affects their perception of the service as well as the amount of money
they are willing to pay. Therefore, A.D. Center cannot charge a higher price than those
rivals with the same scale.
A.D. Center chooses to follow Integrated Cost leadership/Differentiated strategy so it needs
to simultaneously differentiate its service and offer customers an acceptable price. In terms
of service quality, A.D. Center tries to strike a balance between grammar and
communication in English. In other word, there is no special focus on any particular skill,
say Speaking, Listening, Reading or Writing. There are 9 units in one level of Course book
Incredible English, which is supposed to be finished in about 9 months. Each unit is divided

18


into 6-8 lessons and the content of every lesson must base on the book as well as teaching
process that the teachers all agree on. A consistent process helps reduce uncertainties
causing inferior quality in service delivery. The figure below depicts how a unit is
sequentially delivered, taking unit 5 from Incredible English level 4 (Page 37 to 44) for
instance.

Lesson 1 & Lesson 2:
Introducing the topic
and learning

vocabulary
•Topic: At the
aquarium
•Vocabulary: sand,
shark, dolphin,
octopus, starfish,
jellyfish, seahorse,
boat, fish, shell,
crab, water

Lesson 3 & Lesson 4:
Learning grammar
•Grammar: Irregular
verbs

Lesson 5 & Lesson 6:
Learning through
English
•Learn about fresh
water and salt water
fish
•Extra vocabulary:
shallow, deep,
surface, bottom,
trout, pike, cod,
sardineds, ray,
anglerfish,
lanternfish

Lesson 7 & Lesson 8:

Revision and Test
•Revise grammar and
all of the vocabulary

Figure 7: Teaching process at A.D. Center
However, this process can be flexible since learning capability and characteristics of each
class are very different. It may take a class 3 days to revise a unit while another needs only 1
day to do so. But every single unit in any level always contains games, videos and activities
using posters or flashcards. And the result does satisfy parents.
With regard to pricing, A.D. Center’s tuition fee is virtually the same as that of other centers
with the same scale. The table below compares service pricing in A.D. with three other
centers. Like A.D. Center, Merry English Center and Dream English Center appear not to
have any really special feature in teaching method. They all use games and try to make
visual impact through pictures or videos. Amslink Education Center charges customers at a
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higher price, however, its scale is larger so its infrastructure is much better than that of the
other three centers. Moreover, it provides customers with a plethora of benefits, say English
Club for kids or Junior Presenter Hunts contest, etc. Thus, it is perceived that Amslink
creates more value added for customers. Hence, pricing at A.D. Center is acceptable but not
really competitive.
English Center

Address

Abroad Discovery English 115

G2

Thanh

Tuition Fee (VND/class)
Cong,

100,000

Nguyen Hong, Ba Dinh,

Center

Hanoi
Merry English Center

No.9 Thi Sach, Hai Ba

100,000

Trung, Hanoi
Dream English Center

No.182

Tay

Son,

Dan

110,000

Phuong, Hanoi
Amslink Education Center

8/59 Lang Ha, Ba Dinh,

100,000 – 115,000

Hanoi

Table 9: Tuition fees at other English Centers in Hanoi region
3. Evaluation
In a nutshell, A.D. Center does satisfy customers with good service quality and reasonable
pricing. That it is able to simultaneously keep the service this good and set up an affordable
price can help it enjoy a period of stability. On the other hand, this is not enough to be called
‘competitive advantage’ since there are a myriad of similar centers out there whose service
and tuition fee are virtually the same as A.D. Center’s. Hence, in longer term, if A.D. Center
wants to boost the business up and position itself as an expert in the field, it does need to
make its service quality outstanding among its rivals, firstly with those of the same scale
then the whole market.

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