Analysing the environment - Five Forces Analysis - Answer.

  • Start up costs are very low (threat of entry - low barriers to entry).
  • Students have access to books, videos, and paper-based distance learning packs (product-for-product substitution).
  • Companies, governments, and self-funding students invest huge amounts in education. (High bargaining power of suppliers).
  • There are very few high quality web sites available (high bargaining power of suppliers).
  • Traditional colleges and universities are adapting their products for on-line learning (threat of new entrants - learning curve effects).
  • Government legislation in the US and Europe encourages on-line learning (threat of entry reduced - by legislation).
  • The more innovative learning sites give lesson for free just for the love of it (threat of entry - differentiation).
  • More people with access to the web every second (bargaining power of buyers).