Open University Business Plan - March 2011

1. Content




1. Content

2. Executive Summary

3. Business Concept and Strategy

4. Organization and Management

5. Revenue Streams

6. Market Analysis

7. Competitor Analysis

8. Market Strategy

9. Risk Assessment

10. Financial Forecast



2. Executive Summary



Education.

Knowledge economy.

First world economy.

Three phrases we hear often.

Why? Because we all aspire to be the best we can.

When I worked at Lotus it was a matter of pride that we were considered cutting edge.

My view point is that we should capitalise on that.

How?

By leveraging our technology capabilities with a certificated educational body or bodies and package that capability into saleable modules accessible globally online.

I intend to lead this project.

My background is automotive. I have worked in design for many blue chip automotive companies in Europe, Asia and North America.

I am the Senior Adviser at Backpacking Asia. I have tapped into their expertise periodically, particularly when producing videos and presentations. I consider them part of my team.

In addition I am on the board of a UK media company.

I have identified 4 (four) campuses.

Europe:

Hethel Engineering centre in combination with the Group lotus Campus.

Asia:

Johor FIA approved Circuit

North America:

An oval circuit between Ann Arbor and Lansing – For sale $350,000

The Honda test facility California – For sale $3,000,000+

I would expect to be hired by the funding conglomerate on a £100,000 basic annual salary, with an extensive executive package in place.

My team would be my choice chosen by me after funding is in place. Trust me I will employ capable people.

I see funding coming from the Group Lotus owners. Petronas are major share holders. They have an extensive interest in Motorsport. They sponsor Mercedes in F1 and Yamaha in Moto GP. They are very active in Malaysia.

Proton produce production cars and have a Rally team. Tengku Djan, who I would like as a team member is a well known Drift champion.

Group Lotus is in F1 Indy car and many other motorsport activities.

Petronas, in addition have a fully functional private University in Malaysia. When the oil runs out this proposal could have them morph into a world leader in Online Education.

The combination of real world corporations joining hands in a global educational venture should not be underestimated.

3. Business Concept and Strategy

The concept is simple:

Group Lotus develops two engines for their sports car range:

Certified Educational institutions are brought on board to participate in the development.

The Design and marketing process is documented and modulated.

Saleable modules are then approved for sale as educational commodities by the board of Higher education.

These Modules now have educational value.

They are sold online to markets where they are recognised and approved.

3.1. SWOT Analysis

Strengths:

Using the Lotus Brand is a definite plus. Having the funding in place using the financial and educational backing of Petronas is paramount, at least in the early years.

Proton and Group Lotus have a long term plan to participate in Motorsport while actively developing new products which lend themselves to educational modules.

Petronas can participate in Motorsport as more than just sponsors.

3.1.2. Weaknesses

Historically, corporations look on ‘Training’ as a loss making enterprise. This attitude is disastrous.

As yet funding is not in place. A large sum is needed to buy the campuses and upgrade them.

Educational partners will need paying before we sell any products. Presently the funding is not in place.

3.1.3 Opportunities

Phoenix University in North America has approximately half a million students. It operates in a developed market.

This proposal covers North America Europe and Asia. I see the established markets being important. The developing markets in Asia are the most interesting in terms of growth.

One million online students is in my opinion an achievable goal.

3.2.4. Threats

Ferrari . Mercedes. BMW.

All of these companies have the same potential to enter this market.

4. Organization and Management

I would enter Group Lotus as an executive. I would hire from within and without as appropriate. Getting top people will not be a problem.

I have never met an educational entity that did not show an interest in participating in a project like this.

5. Revenue Streams

Using Phoenix University as a benchmark.

One million students = £ 4billion pounds per year (approx)

Using Malaysia OU student fees:

One million students =£ 1 billion pounds per year (approx)

Globally, it would not be unrealistic to expect £2 billion pounds per year revenue from one million students.

A 10% profit margin would give you £200,000,000 pounds per year profit.

I would hope to achieve this within ten years.

This does not include the positive effects this global exposure will have on Proton, Group Lotus, Petronas on their sales of cars and lubricants.

Additionally, I have not included merchandising etc.

6. Market Analysis

The online educational market is well established in America. Phoenix University has half a million students.

Britain has an Open University which partners with the BBC.

Malaysia has several OU facilities.

The online market for education is growing. The internet is everywhere. It is becoming more accessible daily. Online payment is easy.

In the Developing markets Qatar and Malaysia have western University campuses. This trend seems set to continue.

Group Lotus is well known brand globally. This project will bring it and our partners into contact with a paying global audience.

7. Competitor Analysis

Presently, OEM’s have not ventured into education as a core business.

Educational suppliers are more likely to come onboard as partners, as opposed to competitors.

Once we are successful there will be others eyeing the market.

8. Marketing Strategy

Promote Education through Motorsport. On a more rudimentary level F1inschools already does this.

This project will target a more adult audience. We offer a University quality product, which has a tangible value to the student.

Dany Bahar is the Marketing man for Lotus. I would defer to him on the marketing possibilities. Marketing could and should be tide into our partners needs.

9.1. Risk Management Plan

Risk can be a real problem. Banks get greedy and ignore it. The consequences are there for all to see in the global economy. Japan is presently suffering greatly from a tsunami. There is a real possibility of nuclear radiation spreading across the region.

Risk needs to be addressed.

Here is a very simple overview of risk.

Negligible Risk:

Operational performance of a specific area of the business would not be materially affected.

Low Risk

Slight inconvenience / difficulty in operational performance of a specific area of the

Business.

Medium Risk

Operational performance of the business would be compromised to the extent that revised

planning would be required to overcome difficulties experienced by a specific area of the

business

Very high Risk

Operational performance of a specific area of the business would be severely affected with the

business unable to meet a major portion of its obligations and liabilities.

Extreme Risk

The business would be rendered dysfunctional.

With this plan there are several risks:

Initially the cost of set up needs to be covered. As the process of buying the campuses and bringing the educational partners onboard has not begun we are looking at open ended finance.

The possibility of governments preventing the use of the internet for educational purposes is real. Having the courses approved by the appropriate governmental bodies is paramount. Non approval is not an option.

The product needs to be of good quality. This is paramount.

The product should be accessible by handheld devices, accessible globally.

A world war would render most of these devices unusable. Countries falling out with each other and refusing to allow their citizens access to our product is an ongoing risk.

Our products would be non political in nature. Engineering, Marketing, Sport psychology, Law are not political or religious.

The chances of people losing interest in improving themselves by education are very low.

Competitors:

Other OEMs entering the arena: Near future Low Risk/Medium Log Term High Risk

Technology:

The Likely hood of our partners becoming complacent and dropping their standards should be monitored constantly- Medium risk

The ability to sell online is becoming easier day by day – Negligible Risk

Marketing

Marketing should be done in tandem with Proton/Lotus/ Petronas.

Motorsport events can and should be utilised. Dealerships should advertise us visually.

Our corporate partners should include us in their marketing.

Over time word of mouth should cement our reputation.

Global

Political instability globally affecting our markets – Low Risk our products are non political/religious.

Virtual learning affected by World War – Could affect ability to sell online –Low (I hope)

Global Economic Downturn-Medium Risk- Our products are competitively priced. We offer a good product. We might even have an upturn in sales during a global recession.

Human Resources

Constantly monitor our employees. Professional development of employees should be under constantly review.

Take customer feedback on lecturers seriously.

Complaints –High Risk.

Deal with complaints promptly. Find root cause :-Lecturer/course/student/other and have procedures in place to deal with the problem.

Key staff recruitment and retention:

Good working environment and rewards. People should be proud to work for us. They should rewarded according to their abilities appropriately.

10. Finance

Shortfall of cash:- Presently a problem. Petronas have the financial clout to alleviate this problem.

A law suit: Possible: We have race cars and workshops on our campuses. Health and safety are issues. Legal documents need to be signed by clients when involved in high risk activities.

10. Financial Forecast

10.1. Revenue

One Million students using Phoenix University figures approx £4 billion pounds a year.

One Million students using OU Malaysia fees: Approx £ 1 billion pounds per year.

10.2. Expenses

Presently I have 4 proposed campuses:

Europe:

Hethel Engineering centre in conjunction with Group Lotus campus. Cost negotiable.

Asia

Johor FIA approved circuit:

Cost Unknown.

North America:

Oval Circuit Michigan between AnnArbor and Lansing $350,000 USA

Honda Test facility California $3,000,000+

Variable expenses:

Costs for staff and educational partners/suppliers unknown at present.

Income/Profit Loss

Initially start up costs will be in the millions.

After ten years profits should be in the Billions and profits in the hundreds of millions:

Example : £2 billion revenue. 10% profit margin.

Profit: £200,000,000