Internship Report on CG

Kathmandu University School of Management

Internship Report On “Product Concept Development of Knowledge Village for CG|Education andanalysis of Market and Organizational Feasibility of the product in Kathmandu Valley”

As part of the requirement for MBA Programme Internship Programme Code: PWM 703

Internship Employer

Name of the Organization: Chaudhary Group Work Supervisor: Mr. Rajesh Sharma Address: Sanepa, Lalitpur, Nepal.

Interns Kripa Pokharel 11306 Shraddha Bijukchhe 11332

February 7, 2013

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Declaration

We, hereby declare that the project entitled ―Product development of Knowledge Village for CG|Education and analysis of market and organizational feasibility in Kathmandu Valley‖is a result of our ownresearch carried out on behalf of Chaudhary Group, in the year 2012/13. It has not been previously

submitted

to

any

University and is not the reproduction of any other projects.

__________________

____________________

Kripa Pokharel

Shraddha Bijukchhe

11306, MBA Spring 2011

11332, MBA Spring 2011

Kathmandu University School of Management

2

other

Acknowledgements

Firstly, we would like to thank Kathmandu University School of Management for providing us the opportunity to carry out the Management Internship program which has enhanced our knowledge about the corporate world. We would like to express our deepest gratitude to Mr. Sabin Joshi, General Manager – Corporate Planning and Investmentsat Chaudhary Group, for providing us the chance to carry out our internship project at the company for three months. We are highly indebted to Mr. Rajesh Sharma, our work supervisor and Operation head at CG|Education for providing us his continuous guidance and creating a working environment in office despite his busy schedule. Without his help it would have been impossible to complete the project. Our sincere gratitude goes to Mr. Kapil Adhikary, CG Developers, for helping us with the design part and carry out our project smoothly. We are very grateful for our academic supervisor, Mr. Rupesh K. Shrestha, for providing his invaluable insight and time for our project. Without his help this project would not have been possible. Further, we would also like to thank Mr. Sabin Pant. Lastly, we would like to thank all the respondents of our research for their invaluable time.

Kripa Pokharel

Shraddha Bijukchhe

11306, MBA Spring 2011

11332, MBA Spring 2011

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Executive Summary CG|Education is a vertical unit of Chaudhary Group with seven institutions under its umbrella. With the vision to be the best in the education industry, it has affiliation with the best available educational institutions and boards. Further, it is looking for the prospect to expand the education unit by investing 100 crores in the higher education sector. This project was carried out for a new concept called Knowledge Village. This report comprises the product concept development of Chaudhary Group Knowledge Village. A creative and receptive team was involved in developing the concept following the 3 steps process namely idea generation, idea screening and concept development & screening. Numerous ideas were generated and two major criteria were set to screen the idea. The final concept chosen for the project was ―To establish Chaudhary Group Knowledge Village in an area of 45 ropanis in Dhapakhelandrent out to education institutions and learning &training centres‖. In order to find the market feasibility of the developed concept, industry attractiveness and product/service feasibility was tested. The industry analysis includes description of the industry based on the overview of higher education industry in Nepal. The general trend follows an increase in the number of colleges in Nepal showing the industry as attractive. But the Porter‘s five forces model used to analyze the competitiveness of the industry shows otherwise due to the intense competition. Product/service feasibility included concept testing that was carried out through interview along with the survey to analyze the current market and find the future market potential of the product. Most of the respondents appreciated the concept but only 20% were interested to relocate if CGKV is established showing no current market potential. But analysis of the secondary data shows that there is prospect of CGKV in the future. Organizational feasibility was tested through management prowess and non-financial resources. The study shows that CG|Education does not have the sufficient management prowess and nonfinancial resources required to establish CGKV. In summary, the findings from the project suggest that CGKV is not feasible from market and organizational perspective in the present context of Nepal. Where from secondary data analysis, anticipated future market potential seems to be positive for which, recommendations have been provided in the final part of the report accordingly. 4

List of Tables

Table 1: Market size by University affiliations ............................................................................. 60 Table 2: Change in the number of colleges in Nepal ..................................................................... 60 Table 3: Change in the number of colleges in Central Developement Region .............................. 60 Table 4: Enrollement in higher education in Nepal ....................................................................... 61 Table 5: Factors that affected the choice of current location for the institution. ........................... 68

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List of figures

Figure 1: Major products of CG Education ..................................................................................... 8 Figure 2: Product Concept Development ....................................................................................... 24 Figure 3: Market Feasibility........................................................................................................... 25 Figure 4: Organizational Feasibility .............................................................................................. 25 Figure 5: Market size by Universities affiliations .......................................................................... 33 Figure 6: Change in the number of colleges in Nepal.................................................................... 34 Figure 7: Intensity of Competition in higher education industry ................................................... 37 Figure 8: Number of colleges in Central Development Region ..................................................... 42 Figure 9: Enrollment in higher education in Nepal........................................................................ 43 Figure 10: Organizational chart developed for CGKV .................................................................. 44 Figure 11: Rating of cost as a factor .............................................................................................. 68 Figure 12: Rating of transportation as a factor .............................................................................. 69 Figure 13: Rating of distance as a factor........................................................................................ 69 Figure 14: Rating of establishment in the current location as a factor ........................................... 70 Figure 15: Rating of contract with the current landlord as a factor ............................................... 70

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List of Acronyms

KUSOM: Kathmandu University School of Management MBA: Masters of Business Administration CG: Chaudhary Group CGKV: Chaudhary Group Knowledge Village MoE: Ministry of Education FMCG: Fast moving consumer goods R&D: Research and Development DKV: Dubai Knowledge Village KV: Knowledge Village UK: United Kingdom HR: Human Resource UAE: United Arab Emirates KG: Kindergarten PG: Post graduate IT: Information Technology TU: Tribhuvan University PU: Purbanchal University PokU: Pokhara University LBU: Lumbini Bouddha University NSU: Nepal Sanskrit University BPKIHS: B.P. Koirala Institute of Health Sciences MNSU: Medical Science National Academy PCL: Proficiency Certificate Level 7

B.Sc.: Bachelor in Science B.Com.: Bachelor in Commerce B.A.: Bachelor in Arts B.B.A.: Bachelor of Business Administration B.L.: Bachelor of Law B.E.: Bachelor of Engineering M.B.B.S.: Bachelor of Medicine, Bachelor of Surgery M. Sc.: Master in Science M. Com: Masters of Commerce M.A.: Master of Arts M.B.A.: Masters of Business Administration M. Phil.: Master of Philosophy Ph.D.: Doctor of Philosophy REMIT: Research and Education Information Management Section MedIns: Medical Institutions UGC: University Grant Commission IIE: Institute of International Education NCIT: Nepal College of Information Technology KIT: Kathmandu Institute of Technology SCB: Standard Chartered Bank

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Table of contents Contents PART ONE ...........................................................................................................................1 INTRODUCTION ....................................................................................................................... 1 1.1

Back ground ................................................................................................................. 1

1.2

Goals/objectives of Internship ..................................................................................... 2

1.3

Roles/ Jobs performed in the internship ....................................................................... 5

PART TWO ...........................................................................................................................6 INTRODUCTION OF INDUSTRY AND COMPANY ............................................................. 6 2.1 Introduction of Industry and Company .............................................................................. 6 2.2 Organization‘s general and competitive environment ..................................................... 10 PART THREE ..................................................................................................................... 12 PRESENTATION OF MAJOR PROJECT UNDERTAKEN ................................................... 12 3.1 Introduction ...................................................................................................................... 12 3.2 Conceptual Framework .................................................................................................... 17 3.3 Methodology .................................................................................................................... 25 3.4 Presentation and analysis of the project ........................................................................... 28 3.5 Conclusion ....................................................................................................................... 52 3.6 Recommendation ............................................................................................................. 53 PART FOUR ....................................................................................................................... 55 REFLECTION OF THE INTERNSHIP .................................................................................... 55 BIBLIOGRAPHY..................................................................................................................... 57 ANNEXURE ....................................................................................................................... 59

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Part One

INTRODUCTION 1.1 Background As a part of the graduate program under Kathmandu University School of Management (KUSOM) which offers management internship to the students pursuing MBA in the sixth term. The internship is a fourteen week program designed to provide students and opportunity for a meaningful career- related experience in a real organizational setting before they graduate. As students of Business Administration, internship provides an opportunity to find the difference between the college lectures and the real world corporate environment. It brings with it the analytical thinking in the students and a chance to broaden their mind and concepts about the work environment and organizations. It is a chance for the students to mold themselves and make themselves ready for their professional lives. In addition, internship provides the students with the understanding of the work and develops the sense of responsibility and professionalism. Thus, it is a great learning experience. Chaudhary Group (CG) The name itself is a legacy on its own. It is a personification of a tradition enclosed with modern system which can be reflected in its each endeavor. The organization is dedicated towards structuring new ideas alongside the development of the society. With prospect to the nature, the economical and social structure of the country, CG, Chaudhary Mansion has facilitated the ways of life and has been thriving to introduce new products and services consistently according to the requirement and demand of the society. CG percepts the need of the people according to the time and so, has it fabricated novel and workable ideas for different sector. From Agriculture to Education, from Manufacturing to Health Care, from Technology to Entertainment, it has eased and touched life in each way. Moreover, it has been conscious 1

and beginning in fulfilling its responsibility towards the society and helping in bringing positive change in and around. Few of the sectors it holds in the market are Health Care, Investment & Specialty Sector, Processed Food, Agriculture, Educations and Community Development. The organization has strong hold and expertise on various areas and has been providing vivid opportunities. CG conceives a futuristic vision that benefits everyone and helps in the development of the state and the people. Apart from the business activities, CG has been deeply involved in serving the society largely under the community development sector of CG.

1.2 Goals/objectives of Internship Kripa Pokharel Internship plays an important role to groom a student and to support his/her goals on achieving the desired purpose in a student‘s life. It provides the opportunity to work practically and understand the actual work environment. I believe with this internship experience, I would take a step forward towards achieving the career in life. Some of my personal goal such as developing the interpersonal skill, ability to handle the stress, developing professional attitude and behavior, networking and taking the work life and personal life with balance can be achieved through this internship. This personal goal will surely help me on achieving my professional goal. This would be truly great experience to understand how I can develop myself and know my personal strength and weaknesses. I will also have an opportunity to explore my own abilities in adjusting and cooperating with the organization. Above all, I will be acquainted with more knowledge on bringing my skills as a maturity to business level and organizational culture. I will have some idea on developing some managerial skills which will definitely help me on my career prospect. Till now I have been living a student life now I will experience some work which will hopefully teach me a different perspective to know the world

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As an MBA student with a Marketing Major, I was always eager to understand if all the theories related to market, product, place and promotion were applicable in real world. Many of the questions used to hunt me, when I used to learn it in classroom. Things were limited to classroom discussion and some findings. But with this internship experience to be gained, I will start searching answers to the questions. Thus, the internship opportunity provided would be a fruitful journey for me as a marketing student. It will accomplish my objective of working and performing a research based work for a corporate house. The work skills learned and feedback from the supervisor will be developing my skills and knowledge spectrum. I take this opportunity to work as an intern and I am committed to it. I will do my best to attain my personal, academic and professional goals from this internship experience and widen my horizon of knowledge through the internship. Shraddha Bijukchhe The basic goal of an internship, in my opinion is to learn about what actually goes on in the real corporate world and how is it different from the bookish knowledge that we get in colleges. Though we do get simulations and group works that focus on the working of the organizations, there is a vast difference in what we perceive and how they actually work. So, internship is an opportunity for the students to learn by actually working for the organizations. Students get the perspective of how the organizations actually work and also get prepared to enter these organizations once they graduate. At present, the most important thing in my life is my career and my family. There are a lot of things to be learnt and to be done to achieve my career objectives. In addition, my personal goals such as improving the interpersonal skills, ability to work in stress, time management, etc. needs to be achieved along the way to the achievement of my professional goals. The main thing in life is learning. We have to be able to learn from even the smallest events and try to implement in our life so that we can nurture our future. I want to be involved in projects and attain a managerial post later on. As I was interested in Project 3

management and as finance would be an added benefit if I want to be involved in projects, I took these two subjects as my concentration courses. In order to achieve my goal of being involved in projects, I have to be able to gain experience. Learning through books only is not enough to deal with the real life situations. The practical implications are way different than what we learn in our classes. And these internships give us a glimpse of what the real world looks like and how they work. I believe initiation, hard work, punctuality, enthusiasm, knowledge, interpersonal skills, leadership, etc. are the basic requirement for working in projects. And I will do my best to achieve these qualities in this internship. In this professional world, experience counts a lot. Sometimes, its importance goes beyond the qualification and so I want to gain experience in projects so that I will have some idea about how the projects work. In a three months time, we cannot expect to learn everything. So I want to get a view of how the projects work, what the requirements in a project are and what is expected of people who are involved in projects. In addition, I want to develop my personality through this internship. There will be a lot of drilling and through presentations and with the guidelines of the supervisors, I hope I will be able to hone my skills. The interpersonal skills that are needed in the corporate world will be learnt. This will be an added benefit to what we learnt in our classes. The goals that I have wanted to achieve may have many limitations. One of the main factors is time. The internship period is not enough to gain an overall knowledge of any company or any project. It takes a lot of time and hardwork to reach to a level I have expected to achieve and I take this internship as the first step towards my goal. In my opinion, the goal I have intended to achieve is not measurable but can be said to have transitions/ steps which will lead to its achievement. This internship surely provides a platform for me to achieve the goals. And I will try my best to achieve them.

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1.3 Roles/ Jobs performed in the internship In the internship, different jobs were performed as assigned by the supervisor. The jobs performed have been detailed below: A thorough research: As the project was about knowledge village, a thorough research was done. A reference report was read and further research carried out through internet. Details about knowledge village and other educational hub throughout the world were collected and also case studies were read. Visit to British Council and MoE: Since the project is related to education sector, few visits were made to the British Council and Ministry of Education to collect information about the figures and facts about the trend in the education sector. Presentations: Two presentations were made after the proposal was prepared. The meeting was attended by the General Manager, Operations Head, members from Corporate Finance Department and Principal of Chandbagh School. Emails and phone calls: Several mails were sent and phone calls were made to Dubai Knowledge Village, Monarch Institute of Technology and Management and Vidya Knowledge Park to prepare for the possible conference call and site visits. Product concept development: After several meetings with the supervisor and our supervisor, product concept was developed. The concept was developed integrating the intension of CG|Education and brainstorming with the members of CG|Education. Customer survey and interview: An open ended and close ended questionnaire was prepared and survey conducted in the institutions. A concept statement was also prepared and interview taken as a part of concept testing. Preparation of Information memorandum: In order to brief Dubai Knowledge Village, an Information memorandum was prepared which included the details of Chaudhary Group and CG|Education and its investment portfolio. Business plan preparation: As a part of learning process, the interns were assigned with the preparation of the business plan. Three business plans were prepared and submitted to the corporate finance department for further processing.

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Part Two

INTRODUCTION OF INDUSTRY AND COMPANY 2.1 Introduction of Industry and Company Chaudhary Group (CG) is a conglomerate which is a personification of a tradition enclosed with modern system as reflected in its endeavor. With the view to develop the nature, economical and social structure of the country, it is thriving to develop new products and services and meet the demands of the society. The head office of Chaudhary Group is based in Sanepa, Kathmandu, whereas its industries are situated in different parts of the country. Chaudhary group has touched every realm of life from Biotech, Cement, Education, Electronics & White goods, Energy and Infrastructure, Financial Services, FMCG, Hotels & Resorts, Realty to Retail. It‘s a leading conglomerate in Nepal and has contributed in the upliftment of the nation‘s economy. With the belief that education is a cause and consequence of any civilized society and determines a society‘s and nation‘s strength and capabilities, CG aims to build a nation‘s human resources through education. Education Sector is a booming sector with more than 3 trillion worth of market at present. In perspective of this, CG|Education, a vertical of Chaudhary Group has initiated their own home grown educational institutions under the brand name Chandbagh with the affiliation from the best available educational institutions and boards. With the vision to be the best in educational sector in Nepal, it has seven institutions under its umbrella. They are The Chandbagh School, The Chandbagh Pre-School, Delhi Public School- Birgunj, Campion School, Campion Academy, Campion Kathmandu Higher Secondary School, and Campion College. Apart from the regular academic institutions, they also have a vocational training institute in Chaudhary Udyog Gram [CUG].

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2.1.a. Vision and mission of the company

Vision ―We strive to be a global leader in customer value. We recognize and seize opportunities for growth that builds upon our strengths and competencies.‖ With sixty seven years of experience in business, CG has progressed and learnt a lot and realized the importance of customer value for a business. So they want to excel in this perspective and grow in the fields which they believe have utmost opportunity for them. Mission 

Understand consumer insights and meet their needs with safe, effective and world class products.



Enhancing the value we deliver to our customers.



Develop a lasting relationship with our customers.



Recruit, develop, motivate and retain the best talents within the country; recruit if need be from abroad and provide them a challenging and demanding environment.



Become globally competitive.



Become the most admired company in Nepal.

2.1.b Organizational Strategies

The general strategies of Chaudhary Group are as follows: 

Find out the opportunities in different sectors and diversify in national as well as international level.



Training

and

development

programs

of

the

employees

to

ensure

their

competitiveness. 

Expansion in education, food and beverage and hospitality sectors.



Carry out social initiatives as a part of Corporate Social Responsibility and help in national development.



Introduce new products and meet the demands of the customers and facilitate the economic development. 7



Ensure corporate governance.



Product diversification in electronics and become a major competitor in Nepal.



Investing in demanding sectors like cement, hydro, etc.

2.1.c Major products of the company

CG has been involved in many sectors such as health care, investment and specialty sector, processed food, agriculture, education and community development. The specific products under these sectors have been mentioned in Annex 1and the products of CG|Education are:

Figure 1: Major products of CG Education

2.1.d Organizational structure of CG

The organizational structure of Chaudhary Group is presented below in the figure:

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President Managing Director

MD office

ED office

Executive Director General Manager, HR Dept & IT Dept

General Manager Administrative & Legal Dept CFO Corporate Finance

General Manager Internal Audit Dept

General Manager Financial services,Domestic investment and special project division CG Finco P. Ltd, United Remit P. Ltd E-Pay P.Ltd.

United Finance limited DTH telecom and new projects

CG Developr es P.Ltd.

Vice President, Food & Beverage Division CG Foods Nepal P.Ltd.

Other F&B Companies

United Insurance Co. Ltd.

General Manager International Investment Cinnovation Group

Vice President Electronic Division CG Impex P Ltd.

Sungold Brewery P. Ltd.

General Manager/s Running Projects CG Cement, CG Energy & Others

General Manager Educatio n Division

LG Life Style Shoppe Pvt. Ltd & Others

CG Electronics Pvt. Ltd.

Academic Head

Finance Head

Business Development Head

Operation Head

Perfect Blend P. Ltd. 9

CG Manipal School

The Chandhbagh (SLC, CBSE, Preschool

Delhi Public School

CG/Polytech

2.2 Organization’s general and competitive environment No organization can exist in isolation. There are many forces that make an impact on how the organization works. There are two types of environment which are: internal environment and external environment. Internal Environment The internal environment consists of forces such as resources, culture and structure. In the case of Chaudhary Group, the company has adequate physical and financial resources which have enabled the company to establish the core competency in the market. The culture and the structure of the company is designed in such as way that it has maintained the smooth operation of the various units of the company. External Environment The external environment comprises of the societal environment and the task environment. 

Societal environment: It consists of political, economical, socio-cultural and technological forces. The tax policy, interest rate, inflation, exchange rate, economic growth, environmental law, labor law, technological changes, automation, change in demographics, lifestyle, etc. all affects the performance of the Chaudhary Group.



Task environment: It consists of the competitors, government, suppliers, customers, interest groups, stakeholders and the creditors of the company. The task environment in the case of Chaudhary Group is wide and the impact on the company due to these forces is vast.

The competitive environment can be analyzed in terms of Michael Porter‘s five force model. As the company is a conglomerate, the focus of this analysis will be in terms of CG|Education which the main project is based upon. 

Threat of potential entrants: In the education sector, the threat of potential entrant is high. There are many new institutions in the pipelines and this sector is mushrooming

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like any other business in many parts of the country. One of the reasons may be the low barriers to entry and exit. 

Bargaining power of the supplier: The bargaining power of the supplier is low as there are many suppliers providing the similar facilities and the switching cost for the buyers is also low.



Bargaining power of the buyer: Due to the high competition in the education sector, the customers seem to have an advantage as they have low switching cost. Until the company is able to establish itself as a unique brand, the bargaining power of buyer is high.



Intensity of competitive rivalry: The education sector in Nepal is mushrooming like anything and due to this, the competition is high. Moreover, CG|Education ‘s institutions are concentrated in Kathmandu where there are large numbers of institutions providing national and international degrees.



Threat of substitute products: The threat of substitute products is high. It is because there are many established players in the industry and CG|Education has been established as brand for few years only. Moreover, the low switching cost makes this threat high.

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Part Three

PRESENTATION OF MAJOR PROJECT UNDERTAKEN 3.1 Introduction 3.1.1 Introduction of the project The last decade has seen significant changes in all aspects of internationalization but most dramatically in the area of education and research moving across national borders. The most recent developments are education hubs or knowledge village also named as knowledge park, knowledge city etc. The term education hub or learning hub is being used by countries who are trying to build a critical mass of local and foreign actors— including students, education institutions, companies, knowledge industries, science and technology centres—who aims interaction and in some cases colocation, engage in education, training, knowledge production, and innovation initiatives. A knowledge village is a designated region intended to attract foreign investment, retain local students, build a regional reputation by providing access to high-quality education and training for both international and domestic student, and create a knowledge-based economy. An education hub can include different combinations of domestic/international institutions, branch campuses, and foreign partnerships, as well as training and consultancy within the designated region. It is understood that different such educational hub have different objectives, priorities, and take different approaches to developing themselves as a reputed center for higher education excellence, expertise, and economy. The main theme for developing an education hub is to develop a space under which an education excellencies is provided. This is the latest branding

strategy and initiative of companies, educational institution

and the country to compete the education quality inside the country and at international level. For example Dubai Knowledge Village, Bahrain Higher Education City, Kuala Lumpur Education City, Singapore‘s ‗Global Schoolhouse‘, Incheon Free Economic Zone, Education City Qatar, Vidya Knowledge park and Monarch Institute of Technology and Management. 12

Small detail on Dubai Knowledge Village:Dubai Knowledge Village is a Free zone that offers the best selection to Human Resource Development, Executive Search, Consultancy, Training, Personal Development and R&D programs. It is owned by TECOM Investments which is a subsidiary of Dubai Holding, Dubai knowledge village abbreviated as DKV or KV has attracted 15 international universities from Australia, India, Pakistan, Iran, Russia, Belgium, UK, Ireland, and Canada. It is also home to approximately 150 training institutes and learning centres, HR development centres, professional training institutes, R&D organizations, and e-Learning companies. Dubai Knowledge Village offers its partners 100% foreign Ownership. With over 450 business partners, DKV aims to establish itself as both a trusted business partner and a centre of excellence for professional development. It covers an area of 1 million square feet (94 thousand square meters) and is located near the Palm Jumeirah, Mall of the Emirates, Emirates Hills, and Dubai Marina. The Dubai Knowledge Village educational campus consists of 20 conjoined building blocks that accommodate international universities, training institutes, and HR consultants including the University of Wollongong (Australia), The British University in Dubai (United Kingdom), Islamic Azad University (Iran), Mahatma Gandhi University (India), Royal College of Surgeons (Ireland), University of New Brunswick (Canada), UAE University, Heriot Watt University (United States), SAE Institute (Australia), Birla Institute of Technology and Sciences-Pilani (India), BAC Middle East, Budge Recruitment, and Gulf Talentz. In total, it contains over 15 international universities and around 200 educational institutions, in addition to amenities like a food court (Subway, KFC, Krispy Kreme, Starbucks), sports fields, medical services (Welcare Clinic), pharmacy, printing (Sir Speedy), travel services (Diamondlease, Al Rais Travel, Tulip Inn Hotel) and a gym (Shapes Wellness & Spa).

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Need and rationale: Nepal is growing in terms of education sector. Many institutes and colleges have been opened within few years of span. In the past 50 years, there has been a dramatic expansion of education facilities in the country. There are now 49,000 schools (including higher secondary), 1102 colleges, six universities, and two academies of higher studies. Altogether 7.2 million students are enrolled in those schools and colleges who are served by more than 222,000 teachers. CG|Education, a unit of Chaudhary Group, Nepal‘s first multinational company envisions to be the best in educational sector in Nepal. Since its establishment, it has seven institutions under its umbrella and they are The Chandbagh School, The Chandbagh PreSchool, Delhi Public School- Birgunj, Campion School, Campion Academy, Campion Kathmandu Higher Secondary School, and Campion College. Apart from their regular academic institutions, they also have a vocational training institute in Chaudhary Udyog Gram [CUG]. In the period of next five years, CG|Education plans to invest Rs. 100 crores with 25 institutions and around 10,000 students. CG|Education not only initiated their own home grown educational institutions under the brand name ―Chandbagh‖, but have also secured affiliations from the best available educational institutions and boards. With CBSE Board, they have two schools including joint venture partnership with Manipal K-12 (now Pearsons Education Services Pvt. Ltd.), a world renowned educational leader and four educational institutions are operating under this joint venture. They also have a GCE A Level Program which is governed by The Cambridge University. In short, they aim is to cater from KG to PG and become a complete educational solution in Nepal. As stated they are looking for like-minded institutions with the aim to synergize and grow in this sector. They are the in the process of inter acting with a few at the moment. Our studies have shown that there is opportunity in education in Nepal. To uplift and continue the pace of growing prospect of education sector in Nepal, CG|Education is looking for potential opportunities in education sector in Nepal. To be the best name in education in terms of quality, scale and dynamism, CG|Education aims 14

to give quality service involving world class processes, practices, and resources resulting in smart, bright and confident students. CG|Education‘s plans for expansion and diversification are very ambitious. This is achievable and CG|Education aims to establish itself as trusted name in education. Thus, they want to assess the feasibility of Knowledge village in Nepal.

3.1.2 Objectives of the project The main objective of the project is develop a new product concept for CG|Education and to study it‘s market and organizational feasibility. Along with the main objective the general objective of this project are: 

Determine preliminary information of knowledge village.



Developing various concepts for knowledge village as per the recommendation of professionals of Knowledge village.



Selecting out the best concept that match with the strategies and objectives of the company.



Studying the market feasibility of knowledge village in order to identify a potential market for the concept.



Completion of the conceptual market and need assessment.



A rationale of why the product will receive a positive market response or will not receive the positive market response.



To establish criteria for human resource needed for operation of knowledge village.



Finding out the skill, capabilities and experiences of employees in CG|Education department.



To establish a list of financial and non financial requirement such as land, capital, equipments, etc.



To find if the financial and non- financial resource available match with the requirement of Knowledge village.



Recommending if the product concept developed is really feasible in country likeNepal.

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3.1.3 Scope and limitations of project Despite the fact that there are many steps involved in product development, only three steps (idea generation, idea screening and concept development and screening) are consideredin this report as the involvement was only limited to product concept development. Another scope involved in the project is feasibility study of knowledge village concept in Nepal. Market feasibility is the very first step of analyzing the prospect of new business venture. Thus, in accordance to the major and other specific objectives of this project discussed in previous section, the scope of this project is strictly confined to three arenas, industryattractiveness and market timeliness. Another feasibility study involved in the project is organizational feasibility. The two areas that this project will focus on is the availability of skill, experience and capabilities of existing management at CG|Education whether they are sufficient and able to handle the human resource required for knowledge village. Resource sufficiency helps to identify resources to launch the proposed project so with this area of resource management the project will accomplish the resource required. Limitations of the Project There were many limitations when the project was carried out some of the main limitations of the project are 

Lack of Data: As the product being a complete new product to the market, people were unaware of what it actually means and data provided were just the surface data for the product by the unaware customer



Time Constraint: Feasibility study is a quite a researchable topic yet due to the limitation of time, the project is based on the general information provided by the people who were easily available and the secondary data from internet.



Lack of manpower: The project was a macro project yet the manpower was limited. There were experts available and helped by CG but no specific project manager was assigned for the project taken. 16



Stepping Stone: The project was just an initial study for the organization to take the project just ahead.



Skewed Survey Results: The results are based on the personal research that is limited to only internet, few interviews, and survey. With such a macro research activity the search should have been more prioritized to other findings of similar project such as a visit to knowledge village in Dubai by company representative. Also because of product being completely new to the market made it a topic of survey itself so survey was based on the easiness of respondent.

3.2 Conceptual Framework Literature Review Product Development

17

Product development is the creation of products with new or different characteristics that offer new or additional benefits to the customer. It may involve modification of an existing product or formulation of an entirely new product that satisfies a newly defined customer want or market niche(BusinessDictionary.com). In his book, Design for Manufacturability & Concurrent Engineering, Anderson wrote: "For creative product development, start with a creative, open-minded, receptive team that is stimulated by the challenge. The team should be diverse in knowledge as well as cultural and thinking styles. The team should be fired up…. Creativity is enhanced when people really want to invent something…. Do not start creative product development discussing administrative issues…. This will immediately stifle creativity and shift attention to meeting deadlines and budgets."(Anderson, 2004). New product development involves various stages which differ according to the nature of the business and the types of targeted customers. Basically, the stages of new product development are (i) idea generation, (ii) idea screening, (iii) concept generation and screening and (iv) product development. i. Idea generation According to Lazer and Culley, (Lazer & Culley, 1983), in this stage, the company needs to determine which product area is of primary interest to the organization, establish a program to generate product ideas systematically and collect and explore product ideas in an organized matter. Brainstorming gets a group to think of unlimited ways to vary a product. This method‘s purpose is to generate ideas and avoid criticisms. The other method is focus group discussion where eight to twelve people are gathered in a place and a moderator moderates the discussion regarding the ideas. It stimulates insightful comments through group interaction. Before comprehensive evaluation, an idea for a new product must be transformed into a defined concept which states that the product will do (anticipated attributes) and the benefits that are superior to available products (Cravens & Piercy, 2009). Other sources of information can be the customers, suppliers, market research, study of competitors, catalogues and product information (Queensland Government, 2012). ii. Idea Screening 18

Caverns and Piercy (Cravens & Piercy, 2009) suggest that after the generation of the ideas, the ideas are screened to determine its strategic fit in the company or business units. There are two questions to be considered: (1) Is the idea compatible with the organization‘s mission and objective? and (2) Is the product initiative commercially feasible? Compatibility here includes factors such as internal capabilities (development, production and marketing), financial needs and competitive factors while commercial feasibility considers market attractiveness, technical feasibility, financial attractiveness and social and environmental concerns. Basically, screening eliminates the ideas that are not compatible or feasible for the business. iii. Concept development and screening After the initial screening, the product concept needs to be created which is a detailed description of an idea described from the perspective of the customer. It is important to take the idea to the target audience to know what they think and determine the gaps. It is to be ensured that the idea can be designed, manufactured and delivered within the financial resources and time constraints (Queensland Government, 2012). iv. Product development Cravens and Piercy (Cravens & Piercy, 2009) suggested that the development of a new product includes product design, process design, packaging design and decisions to make or outsource various product components and requires continuous interaction among R&D, marketing, operations, and finance. Product design includes the specification of the product which helps to design the final product. It sets the characteristics, features and performance of the service or good that consumers demand and the objective here is to create a good or service with excellent functional utility and sales appeal at an acceptable cost and within a reasonable time (Encyclopedia of management:encyclopedia.com, 2009).

Feasibility study Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of an existing business or proposed venture, opportunities and threats as presented by the environment, the resources required to carry through, and ultimately the prospects for 19

success (T.Aralin, 2011). It answers the question if the company shouldproceed with this business idea. Its role is to serve as a filter, screening out ideas that lack the potential for building a successful business, before an entrepreneur commits the necessary resources to building a business plan (Scarborough & Zimmerer, 2008). The feasibility study should consider both pros and cons and analyze the variety of potential business scenarios.Any venture that goes through the feasibility study should be able to answer two questions which are: 

Will anyone buy the product or service?



Can it make a profit?

These two questions can have anything as the answer but the closest to the questions that addresses the proper feasibility study should include the answers from these perspectives such as opportunity and need, product service description, target market, differentiating factor, competitive analysis, sustainable competitive advantage, risks and profitability, break even and investment required(Lawrence, 2003). There can be many instances where the business idea may seem profitable but may lead to a huge loss to the business resources and investment. This is when the feasibility study comes into play. According to Bowen (2009), there are various types of feasibility study that can be carried out such as technical feasibility, schedule feasibility, economic, cultural, market, organizational, resource feasibility, etc. but this report will be based on market feasibility and organizational feasibility as they are the preliminary study required to know the feasibility of the product/service from the perspective of the customer. Market Feasibility According to Barringer and Ireland (2012), market feasibility is a consideration of the overall appeal of the market for the product or service being planned. A greater depth of market research is required so that a proper knowledge of the market is gained and product viability is known. Conducting market feasibility and marketing research early in the development cycle can provide the ‗reality check‘ on the ideas and help define the product. Generally there are three primary issues planned business should mull over and they are: 20

A. Industry attractiveness:Barringer and Ireland points out that the crucial determinant of fresh venture feasibility is the attractiveness of the industry it chooses. The growth of the industry sometimes determines the venture planning to enter the business.According to(Wolfe, About.com), the industry attractiveness should incorporate the following topics: a. Description of the industry:According to Pamela Hubbell, (Hubbell) an industry analysis is an evaluation of the profitability of an industry. For this, ventures‘ objective is to illustrate the driving forces of competition within an industry. The reason of this analysis is to help management generate and maintain a competitive advantage that allows the company to stand out in the industry. In the description of the industry, things that need to be explained are the size of the market, scope of the product/ service, nature of the market and market structure. b. Industry analysis: According to Porter(2008), the industry‘s structure and the nature of competition within an industry is the result of the interaction of the five forces namely customers, suppliers, potential entrants, substitute products and the existing rivals. If the forces are intense and the competition is high, there is no attractive return to the players of the industry but if the forces are low and competition mild, the industry is profitable. This is given by Porter‘s five forces model which includes the forces such as barriers to entry, threats of substitutes, bargaining power of buyers, bargaining power of suppliers and rivalry among existing competitors(Porter, 2008).

B. Product/ service feasibility:Product/ service feasibility is an assessment of overall appeal of proposed product/service. This is important to make sure product/service is what prospective customers want. The need for this feasibility is to validate the underlying premises of the product/service idea, help developing idea and estimate potential market share. With the product/service feasibility, it is easier to get the product right the first time and avoid obvious flaws in the design with the efficient use of time and resources. a. Concept Testing:According to Sullivan (2010), concept testing needs to be done for testing the product/service feasibility. William in his Journal for Business 21

Research (William, 1982) has described concept testing as the process of using qualitative and quantitative methods to evaluate consumer response to a product idea prior to the introduction of a product to the market. Concept testing is done through five steps such as using concept statement, illustration, solidifying target market profile, usability testing and access the potential for intellectual property (Sullivan, 2010). For the project as this in which product prototype cannot be developed the first three steps can be used. Concept testing can be done through various methods such as survey, interview, focus group, etc. In the concept testing using a concept statement, a preliminary written description of the entire business that includes description of the product or service, target market, benefits of the product or service (value proposition),product/service differentiators, how product/service sold/distributed and description of the founder(s) of the firm are included and customer and technical feedback taken based on their perspective. In case of testing through illustration, a representationof the offering is provided to prospective users to gain feedback about product/service preferences, likelihood of purchase, etc. The illustration can be sketch, website, computer-generated design, etc. b. Market timeliness:Identification of nature of the product and major considerations taken for new venture establishment through important factors like time for new market entrant, opportunity for new market entrant and advantages and disadvantages of first mover. 

Current market analysis: The aim of a market analysis is to wrap up the magnetism of a market and to be acquainted with its growing opportunities and threats as they relay to the strengths and weaknesses of the firm. David A. Aaker outlined the few scope of a market analysis and they are Market size (current and future), Market growth rate, Market profitability, Industry cost structure, Distribution channels, Market trends and Key success factors. (NetMBA Business Knowledge Centre)



Anticipated future market potential:Estimating market potential is significant in marketing management and strategic planning. As Winner (Winner, 22

2004)point out, estimates of market potential provide the foundation for managing marketing management activities such as promotion, advertising, target marketing, and assisting ―the sales manager in developing sales territories, assigning sales people appropriate

to those

territories, and

setting

[sales] quotas‖, as well as establishing sales forecasts. However,

due to the inimitable characteristics of services, particularly the ―perishability‖ component, accurately estimating market potential from which sales forecasts are derived

is

important to

successful

demand

management.

Fluctuation in demand, in turn, has been recognized as one of the most niggling

areas

practitioners

encounter

in managing service

organizations (Zeithaml, 1985). Faulds, Gohmann and Mang(2006) points out the following methodological issues in estimating market potential are: 1) Defining the relevant market: Kotler (2003)indicates, ―A

market

is the

set of all actual and potential buyers of a market offer‖ and the ―potential market is the set of consumers who profess a sufficient level of interest in a market offer‖. And the ―potential market is the set of consumers who profess a sufficient level of interest in a market offer‖. 2) Defining qualification and disqualification factors:In this step, the qualification/disqualification factors are identified that would include or exclude individuals from being represented in the final estimates. Kotler (2003) suggests adjusting the gross market potential estimates to include only

―the

set

of

consumers who have interest, income, access, and

qualification for the particular market. The resulting market estimate is referred to by Kotler(2003) as the ―qualified available market,‖

includes

only individuals or groups of individuals that meet the criteria to qualify as potential consumers for the service offer. 3) Estimating the purchase or usage rate: The third step in the course of action is to estimate the potential purchase or usage rate for the service.

23

(Winner, 2004) recommend that this step ―can be done by taking the average purchasing rate determined by surveys or other research‖. Organizational Feasibility Organizational feasibility analysis helps to determine whether a proposed business has sufficient management expertise, organizational competencies and resource to successfully lunch its business (Barringer & Ireland, 2012). There are two primary issues to consider in this area: A. Management Prowess B. Resource Sufficiency A. Management prowess:Barringer and Ireland (2012) suggest that a proposed business should evaluate the prowess or ability of its management team to satisfy itself that management has the requisite passion and expertise to launch the venture. Those individuals or the team members need to have complementary skills, and talents that help to offset the other team member‘s weaknesses. This can be analyzed by referring to the skills, education qualification and experience of the required position and comparing it with that of the available members. They should have the understanding of the market and drive for the new business. B. Resource sufficiency: According to Barringer and Ireland (2012), this topic pertains to an assessment of whether an entrepreneur has sufficient resources to launch the proposed venture. It focuses on the non-financial resources such as location, technology and infrastructure availability, etc. To test resource sufficiency, a firm should list the 6 to 12 most critical non-financial resources that will be needed to move the business idea forward successfully.

Conceptual framework

Idea generation

Concept development and Screening

Idea Screening

Figure 2: Product Concept Development

24

Product development

Industry Analysis Industry attractiveness A) Description of the industry B) Industry analysis 1. Porters Five Forces Model 1) Barriers to entry, 6) Organizational Feasibility 2) Threats of substitutes, 7) 3) Bargaining power of buyers, 8) 4) Bargaining power of suppliers 9) 5) Rivalry among existing competitors 10)

Market Feasibility for knowledge village

Product/Service Feasibility a) Concept testing b) Market timeliness  Current market analysis  Anticipated future market potential

Figure 3: Market Feasibility Management Prowess  Management team  Professional skills , resumes and background of founders  Developing organizational structures

Organizational Feasibility

Resource Sufficiency  Location Professional Background information of  Technology and infrastructure the founders availability

Figure 4: Organizational Feasibility

3.3 Methodology The method followed in the project is in accordance to the conceptual framework. Product Concept development 25

In the beginning, various internet materials were referred to find out the types of knowledge hubs in various part of the world. In addition, various meetings were conducted and brainstorming was done to come up with several ideas related to knowledge village. No ideas were evaluated at first. Further, internet was used as the secondary resource to find the education system and scenario in Nepal. Then the ideas were screened by considering various factors such as the strategy and objective of CG|Education, resource availability and investment criteria of CG|Education . After screening out the ideas, different concepts were developed for the selected ideas. The detailed description of different type of knowledge village (concept) was prepared. This stage also involved the participation of the professionals such as principal of Chandbagh School, Corporate Investment Manager, Operation head, financial head and corporate finance member. With the suggestion and expertise of these members, the best concept was selected focusing on the design, operation and delivery of the service. Market Feasibility In the market feasibility study, both primary and secondary sources have been used. In order to find the industry attractiveness, mainly secondary source of information has been used. The industry attractiveness is based on the attractiveness of the education sector in Nepal. The study is focused on the higher education sector which includes education from bachelor level to post graduate. The two areas that are covered in the industry attractiveness are the description of the industry and the industry analysis. For this the unit of analysis is the Universities providing education through their constituent and affiliated colleges. The secondary sources used are data and statistics from the MoE, internet articles, newspaper articles, reports from British Council, prior reports, etc. were used. To find the product/service feasibility of Knowledge Village in Kathmandu valley, concept testing and market timeliness was to be assessed as the means to find out the customers‘ response to the concept. For concept testing, a concept statement was prepared which included a preliminary written description of the knowledge village that included description of the product or 26

service, target market, benefits of the product or service (value proposition), product/service differentiators, how product/service sold/distributed and description of the founder(s) of the firm. The feedback was taken from the various customers such as the principals and directors of the institutions through interview. The sample size for interview was 9. For the market timeliness, both primary and secondary sources of information were used. The primary sources included the questionnaire and the secondary sources included documents from MoE and various research articles. A structured, open-ended and closedended questionnaire was prepared and survey conducted in various educational institutions to know the exact intention of those institutions. The sample size for the survey was 20 which included various educational institutions such as bachelor and masters level colleges, bridge course centres and learning centres. Organizational Feasibility For determining the organizational feasibility, secondary sources such as internet articles and the knowledge village websites were used to determine the requirement of the human resources in Knowledge village. In addition, the criteria were made for each post such as skills, experience, qualification and knowledge. Then the CVs of all the human resource available in CG|Education was collected and compared with the requirements and recommendations made as to the additional human resources needed. In addition, the financial and non-financial requirements were determined using secondary sources such as the internet and the expertise of the professionals available in the company. Comparison was made to determine the availability of the resources and recommendations made.

Data analysis The qualitative data obtained through interviews and surveys has been presented as descriptions.

27

The quantitative data obtained through the respondents and the secondary sources such as data and statistics have been analyzed using Microsoft Excel Tools. They have been represented using statistical tools and graphs and tables whichever possible.

3.4 Presentation and analysis of the project 3.4.1 Analytical presentation of the project 3.4.1.1 Product concept development of CGKV: With a view of expansion on education sector, CG has an investment prospect of developing a new concept of product called knowledge village. The entire process of product development was not followed as the product was limited to concept development for knowledge village. A creative and receptive team was guiding the knowledge village concept. So here is a brief discussion on the process of how the product concept design was created.

Steps 1- Idea generation The major priority for CG right now is to utilize its investment in education sector. So, CG approached the new education style as knowledge village. A team was formed for Knowledge Village including the interns. A list of ideas was generated from the team brainstorming. The main idea generated were 1) Knowledge village in an area of 45 ropanies in Dhapakhel area 2) Knowledge Village in an area of 200 ropanies inside Kathmandu valley 3) Knowledge Village located in commercial buildings such as trade tower 4) Knowledge Village outside the valley. 5) Knowledge village in a 160 acre IT Park at Banepa. 6) Knowledge Village divided into two parts, one inside the city with all the short distance courses and one on the outskirts for the other entire academic field.

Step 2- Idea Screening The idea screening process was done on the basis of presentations and meetings, whereby all the team members decided to choose the ideas that fit the strategic motives of 28

CG|Education. The team suggested two ideas that were more feasible according to the strategies of CG|Education which included the two major criteria i)

Target of investing 100crores

ii) Inside Kathmandu valley. Considering these two main criteria the following ideas were screened: i)

Knowledge village in an area of 45 ropanies in Dhapakhel area

ii) Knowledge Village located in commercial buildings such as trade tower The ideas that got eliminated while doing the screening process were: i)

Knowledge Village in an area of 200 ropanies(on lease) inside Kathmandu valley

ii)

Knowledge Village outside the valley.

iii)

Knowledge village in a 160 acre IT Park at Banepa.

iv)

Knowledge Village divided into two parts, one inside the city with all the short distances courses and one on the outskirts for the other entire academic field.

These ideas were eliminated because they were not strategically suitable in many areas as such 200 ropanies of land (on lease) inside Kathmandu valley is not available according to the representative of CG Developer. In addition, CG|Educationis looking for the prospect inside Kathmandu as the market inside the Kathmandu valley is much bigger to target. Besides this, students around the country come to capital city to proceed their further study because of all the facilities and infrastructure being provided with quality.

Step-3 Concept development and screening After screening the suitable ideas for the project to be researched, the final idea was chosen which is ―Knowledge village in an area of 45 ropanies in Dhapakhel area‖. This idea was chosen for the concept development. The other concept of trade tower was eliminated because the idea of CG acting as an agent to trade tower is not acceptable. Further, the product concept was developed and the product concept is as follows: 

A knowledge village will be established with the name ―Chaudhary Group Knowledge Village (CGKV)‖.



An area of 45 ropanies of land will be bought at Dhapakhel. 29



An investment of 100 crores in collaboration with Pearson Education.



The disciplines of study inside the Knowledge village are 1) Management and IT 2) Media and Arts 3) Hospitality Management 4) Learning centres and training institution.



Target of more than 2400 student and 10 educational institutions and other educational consultancies and training houses inside the knowledge village.



There will be 3 blocks of building each having 5 floors where 1 building is assigned for Management and IT courses, 1 for Hotel Management and Arts and 1 for Training Institute.



Each building will occupy approx 30,000-35,000 sq. ft. of land which will be approximately 5-6 ropanies each.



Every floor will have 25-30 rooms of covering approx area 700sq. ft. rooms which in total covers approx 20,000 sq. ft. area.



In every building, class room will cover approx 20,000 sq. ft. rooms and 10,000 sq. ft. free space for lobby, staircase, lifts, and walkways.



Each building will have play ground of 3 basket ball courts of 6,000 sq ft. each and 2 play field of also 6,000 each as infrastructure. (Total req. 30,000sq. ft)



Each block will have 1 canteen in the terrace, so altogether there will be 3 Canteens which will be outsourced.



With a Film Hall Strategy there will be 2 Auditorium altogether with well facilitated meeting room and conference hall.



Security Block which will occupy the space of 1,000 sq. ft.



A huge common library will be made.



24 hour electricity and Internet access



A parking lot of 16,000 sq. ft. will be constructed in the compound.



5 Computer labs and media labs.



A Fit Out department will be there for the space to be accommodated inside knowledge village for the institution.

30

3.4.1.2 Market Feasibility A. Industry attractiveness a. Description of the industry: Overview of Higher Education Industry in Nepal The establishment of Tri-Chandra College in 1918 marked the beginning of modern higher education in Nepal. It was basically a liberal arts college with programs in science, commerce being added later. The progress in higher education remained slow until the dawn of the Democracy in 1951. Academic programs of bachelor‘s degree and above are regarded as higher education in Nepal. After the promulgation of Tribhuvan University (TU) Act in 1959, Tribhuvan University was established in July 1959. By a provision in the law, TU became the only authorized institution to conduct 19 postgraduate classes, award academic and honorary degrees, and grant affiliation to the colleges spread all over Nepal. In 1982, a Royal commission was set up to review the organization of higher education in Nepal which recommended multi-university concept to downsize TU and bring quality improvement in higher education through competition among the universities. It was then new universities came into existence after the second half of 1980s in Nepal. Currently, there are six universities providing higher education in Nepal which are Tribhuvan University (TU), Kathmandu University (KU), Purbanchal University (PU), Pokhara University (PokU), Lumbini Bouddha University (LBU) and Nepal Sanskrit University (NSU). In addition, there are two academic institution equivalent to university granting their own degrees which are B.P. Koirala Institute of Health Sciences (BPKIHS) and Medical Science National Academy (MSNA). Two universities namely Mid-Western University and Far-Western University are currently in the pipeline. In addition, to these universities, there are various institutions offering foreign degrees through foreign institution affiliations. Universities continue to offer bachelors and masters level program through their constituent and affiliated colleges. The programs run by the universities can be divided into three broad categories: general, technical, and professional. General stream of higher 31

education is related to humanities and Sanskrit. Management, law, and education are categorized under the professional stream of education. Programs related to engineering, medicine, agriculture, forestry, and science fall under the technical stream. The universities in Nepal run programs at different levels which are as follows: 1. Bachelor's: All the five universities and BPKIHS have a Bachelor's Level program, in Science (B.Sc.), Commerce (B.Com.), Arts (B.A.) Business Administration (B.B.A.), Education (B.Ed.), Law (B.L.), Engineering (B.E.), and Medicine (M.B.B.S.) of 3 to 4 years course at the under-graduate level. 2. Master's: Master in Science (M.Sc.), Commerce (M.Com.), Arts (M.A.) and Business Administration (M.B.A) constitute graduate-level programs, each of two years duration run by all the universities and academies. NAMS runs courses at only this level. 3. M. Phil. and Ph.D.: - TU, NSU, and KU run these programs in various areas, except the technical ones. There are 32 Nepali colleges offering the foreign degree courses (bachelors, masters and diploma) in fields like management, IT, culinary arts and fashion designing. They are affiliated to 27 foreign universities. The market size by the number of affiliated and constituent colleges of different universities as per the data presented by the Research and Education Information Management Section (REMIT) in 2012 is shown in the graph below with the data presented in table 1 of Annex 2.

32

NSU 2%

PokU 5%

LBU 0%

KU 2%

PU 10%

MedIns 0%

TU 81%

Figure 5: Market size by Universities affiliations Source: Ministry of Education It shows that more than 80% of the colleges in Nepal are under the affiliation of Tribhuvan University followed by Purbanchal University and Kathmandu University. Though the quantity is high of the TU and Purbanchal affiliated colleges, the quality has been an overriding factor which determines the choice of colleges by the students. Some of the universities have created a sort of monopoly in the field of courses by providing the courses through their constituent colleges only while some have created a brand identity which attracts the students to such universities. With the encouragement of the government towards the education sector, much has been achieved but the quality of the education system is yet to be improved. Many of the students are going abroad in the search of better education in addition to the better facilities. The focus of 21 st century has been not only in the education but on the overall development. Hence, the service takers in the field of education are giving more importance to the facilities and infrastructure such as sports, placement, job creation, etc. in addition to the quality of education. Education industry is in a growing trend. Along with the introduction to the various courses offered to the students, the number of the colleges has been increasing. The diagram below shows the increase in the number of colleges through 2007 to 2011 as per the data obtained from the Nepal Education in Figures 2010, 2011 and 2012. (Refer table 2 of annex 2) 33

1200

No. of Colleges, 1102

No. of colleges

1000 800 600 400 200 0 2007

2008

2009

2010

2011

Figure 6: Change in the number of colleges in Nepal Source: Ministry of Education The increase in the number of colleges can be the result of various factors such as growing demand of people for higher education courses and the institutions seeking to grab those opportunities. But only few of the colleges have been able to create the goodwill and brand due to which the students choose the colleges not focusing on the university they are affiliated to.Due to the continuous political and management issues, TU has not been able to maintain its standard as the most preferred university. As the father of all institutions, it has failed to maintain the standard it started with. The other universities like Kathmandu University and Pokhara University are in the trend of making progress. b. Industry analysis/ Competitive force analysis In the higher education industry considering the case of Knowledge Village, there are no direct competitors but the universities in Nepal can be taken as the major players which provide diverse courses through their constituent and affiliated colleges. The comparison can be made in terms of the infrastructures and the layout as well since universities can be taken as an educational hub where diverse courses are offered within the certain area with all the facilities.

34

To measure and analyze the competitiveness in higher education, Porter‘s five forces model is used as following: Threat of new entrant (Barriers to entry): In the higher education sector, the barrier to entry is high considering the universities which make the threat of new entrant low. University Grant Commission (UGC) Nepal advises The Government of Nepal on the establishment of new universities. In addition, it also has the monitoring department who monitors the programs being conducted by different universities in Nepal. This makes the entry into the field difficult due to the various requirements and policies in the education sector. However, the colleges under the affiliation to these universities are growing every year. Further, there are established universities which have been running since the starting of the higher education and have built themselves as a brand which makes it hard for new entrants to enter into the market without competing with them. The huge capital requirement in the universities also keeps the entrants from coming in the scenario. Thus the threat of new entrant is low. Threats of substitutes: The substitutes in the case of higher education can be taken as the Nepalese Universities as well as the foreign universities. The threat of substitutes is high as the students have a wide range of options to choose from in terms of the courses being provided by different universities. The switching cost is also low due to the competition in the pricing of the universities. We can see the growing inclination towards the foreign countries as well as the foreign affiliated colleges in Nepal. The statistics shows the students going abroad with the no objection letter in year 2011 only was 11,912. The annual report on international academic mobility published by the Institute of International Education (IIE) with support from the Bureau of Educational and Cultural Affairs of the United States Department of State states that Nepal ranked 11th among the leading countries of origin of international students in 2011. Thus, we can conclude that there is high threat of substitutes. Bargaining power of buyers: The buyers are the students who are seeking to join higher education. The volume of the students is big as can be referred from the enrollment of the students in the year 2011 which counts to 4,12,540. Though there are six universities providing various stream of courses, the bargaining power of the students depend upon 35

the courses they are choosing. Some of the universities have established themselves as a brand in certain courses and in such cases the bargaining power of buyer is low. On the other hand, in the cases of universities which have not been able to create the brand identity the presence of many substitutes makes the bargaining power of the students high. Thus, the bargaining power of the buyer is medium. Bargaining power of suppliers:The supplier in the case of higher education industry is the faculty. The supply of faculties is low in context of Nepal. There is high demand of experienced faculty in the technical as well as professional courses. In 2011, for 4,12,540 students enrolled, there were only 15,365 faculty (Section, 2012). This makes the ratio 26.85. The teacher/student ratio is very small even according to many third world countries standards. The high demand for the highly skilled professional faculties but limited supply makes the bargaining power of the suppliers high. However, there are many instances where the present faculty members are teaching the courses which are not their course specialization and political influence also plays a role. The salary, financial rewards and the benefits for the faculty is very low when the faculties have less experience. So come of the universities/colleges hire such faculties usually on temporary basis. In such cases, the bargaining power of the supplier is low. Therefore, the bargaining power of the supplier is medium. Rivalry among existing competitors: There is a high competition in the higher education industry in Nepal. The number of universities is in increasing trend. Some universities have been able to create a brand identity due to the differentiation of the courses offered as well as due to the quality management of the universities while other remains way far from the competition. With the continuous growth in the number of colleges, the pricing of the courses are changing and is in decreasing trend as well. The low switching cost for the students is changing the pattern of the fee structures and creating a sort of price based competition among the universities. Therefore, there is high degree of competition among the existing competitors. We can analyze the intensity of the competition in a scale of 1 to 5, 1 being the lowest to 5 being the highest. Thus, we can conclude that the intensity of competition in the higher education industry in Nepal can be inferred in the graph below: 36

Rivalry among existing competitors

5

Bargaining power of buyers

3

Bargaining power of suppliers

3

Threat of substitutes

5

Threat of new entrants

2

Figure 7: Intensity of Competition in higher education industry Thus, we can infer from the above diagram that the aggregate intensity of the forces of competition in the higher education industry is high. With the high competition within the industry and the availability of many substitutes makes the industry less favorable for entry as the new entrants have the difficulty to compete in terms of brand as well as capital investment.

B. Product/Service Feasibility The product/service feasibility deals with the assessment of a proposed product/service so that it is what the customers want. It tries not to push the product to the market but find the perspective of the customers about the product/ service in order to develop the idea as well as to estimate the potential market. For the purpose of finding the feasibility of Knowledge Village in Kathmandu Valley, concept testing was carried out through interview along with the survey to analyze the current market and find the future market potential of the product. a. Concept testing To know the perspective towards the product concept developed, total of nine institutions were visited. The concept was tested by letting them know about the Knowledge Village through a written statement called Concept Statement (Refer to annex 3). Then, the 37

decision makers at those institutions were interviewed. A brief analysis of the interviews is presented below:(Refer to theAnnex 4for the interview questions.) Concept of Knowledge Village and it’s feasibility in context of Nepal: Many of the interviewee had no idea about the concept of Knowledge Village. The concept was entirely new to them. Institutions representative from G3s (CA Academy), K & K College, NCIT, Aryan School of Management, Raffles Educare, Namuna Institute of Technology, Universal and KIT had no idea about knowledge hub or any other such concept whereas the director of Quest International College Mr. Udaya Raj Paudel had some idea on the concept of knowledge village and Knowledge Park. When asked about the feasibility of Knowledge Village in context of Nepal, Mr. Rupak Chalise replied that this concept is feasible provided the rent is cheaper as compared to those in the city area. He clearly mentioned that the offered rate of Rs. 60 per sq.ft is expensive. Also, the factors such as opinion of the teachers and students in terms of the convenience in going to Dhapakhel for study matters to the institution in accepting such concept of knowledge village. Never the less, the facilities such as transportation and hostel could be the value added benefit that they will prefer to see in CGKV. Mr. Sindhu Madhav Dhakal, K&K International College said that the college right now is centrally located at Baneshwor which is an education hub. Despite the fact that the landlord do not provide other facilities for the buildings except the building itself, institution are satisfied with the current location. The price rate of Rs. 60 per sq. ft. including the facility is expensive and the expected price they are willing to pay and think that such knowledge village should have is Rs. 30 to 40 per sq. ft. Factors such as familiarity with locality, already settled, student convenience, teacher convenience, education hub and organizational contract stops them relocate to the knowledge village. Mr. Udaya Raj Paudel, Quest International College said that he has an idea of what knowledge village is. He mentioned that the presented conceptlacked in many areas and should include more facilities such as health club, student loan facility and many other new facilities that grab attention as a new product. Sports areas such as football ground,

38

cricket pitch and swimming pool would be an added benefit. He suggested that emphasis should be given on service orientation rather than profit making. They are using the current location on rent at Rs. 250,000 per month so Rs. 60 per sq. ft. is expensive even though all the facilities are included. He opined that though the concept is feasible in context of Nepal, such concept could lead to the cultureof show off rather than focusing on the quality of education. Also the director stated that big educational institution like Little Angel‘s and Gems are already on the playfield with larger space up to 300 ropanies so the knowledge village should think on the larger scale with differentiated facilities. Mr. Bikash Pokharel, Principal of Aryan School of Management gave a perspective that Dhapakhel is quite a good area in terms of providing learning environment, yet there will be transportation problem for students and teachers. In recent years, Kathmandu being a capital city is an education hub so a lot of students require hostel facilities. Also the adjustment for student in terms of different discipline being on the same roof requires a lot of attempt and experience. Facilities such as lodging to institution staff and a separate R & D unit, a placement cell, etc. should be introduced to as a knowledge village. To summarize, the concept was appreciated by many of the institutions as it‘s a new concept introduced in Nepal. But the idea of relocating to CGKV needed a lot of exercise for the institution as they are already familiar in that locality. Many of them felt that the price quoted for the concept is too expensive even though the price included the package of all the facilities. Interviewees suggested that transportation and hostel facilities is a must inside CGKV as the location is far and there is no public transportation available in such area. b. Market timeliness In order to analyze the market timeliness, survey was conducted by preparing a questionnaire as well as secondary resources were used.

Refer to annex 5 for

questionnaire. i. Current market analysis The higher education in context of Nepal has seen a drastic change from its inception in 1918. The industry has grown out of its cocoon but is still in the 39

process of metamorphosis. Nepal still remains in the list of developing countries but the change in the education sector is note worthy. The number of universities is in the increasing trend with the rapid increase in the number of the affiliated colleges. In the span of 5years, the increment in the number of colleges from 2007 to 2011 is 77.45%. This is a huge increase considering the continuous political difficulties the country is facing.

As the capital city of the country, people from all over the country tend to immigrate to Kathmandu due to the availability of quality education, better infrastructure and facilities, job opportunities, etc. With the inflow of people from various parts of the country, Kathmandu has become an education hub. The population of the city is increasing adding to the added demand for higher education. This has been recognized by the educational institutions as an opportunity for new establishments as well as for growth. There are currently 556 constituent and affiliated colleges in the Central Development region only which is 50.45% of the total number of colleges in Nepal(Nepal Education in Figures, 2012). The growing number of colleges along with the increasing trend in the enrollment in the colleges shows the attractiveness of the market. Most of the institutions in Kathmandu are providing quality education with the objective of all-round development but there are many institutions which occupy rented houses without adequate facilities. They provide minimal facilities with no proper learning environment. They provide little scope for innovation or creative activities. One of the major problems that can be observed currently in the city is the congestion and lack of space. In addition, the rising cost of real estate is also an emerging issue. Education has become one of the sectors facing the problem. With the increasing density of the city, colleges have not been able to find suitable locations where they can facilitate the students with proper infrastructure and better learning environment in Kathmandu valley. In the survey conducted, the major factors that affected the choice of location for the institutions were the cost, land availability and education hub. 16 out of 20 institutions surveyed said that the cost was the most important thing that made 40

them choose the current location. They also mentioned that areas such as Putalisadak, Baneshwor and Manbhawan are the most preferred areas in Kathmandu valley to open a college as they are considered the major education hub. 90% of the respondents were satisfied with the current location of their college though it could be observed clearly that they lacked the facilities and infrastructures. Most of them had rented their current premises and they had problems of expanding as there were no further land for expansion and they had to buy the already established buildings and customize according to the need. They had been adjusting themselves in a few ropanis of land with only a building with classes and administration department. The factors such as infrastructure, facilities and learning environment were ignored by the respondents while making the choice of location. Refer to annex 6. The survey also shows that only 20% of the respondents were interested to relocate if Knowledge Village is established. (Refer to annex 6)This is a low response when it comes to checking the feasibility of a product. When asked to rate the factors that stopped them from coming to knowledge village most of them rated the cost and already established in current location as the major factors (Refer annex 6) The current emerging trend in the market is the establishment of the colleges in the commercial buildings such as Barsha HSS/College and British College. Understanding the lack of space, people have been able to utilize the commercial buildings by renting some of the floors and conducting the classes. Most of the learning centres such as NIEC, Raffles, Alfabeta, etc. are located in the commercial buildings. ii. Anticipated future market potential The target of the CGKV as per the intention of CG|Education are the institutions (already established as well as upcoming) which are looking for the spaces to open up and expand their current institutions in Kathmandu Valley. As a product, Knowledge village will be providing well facilitated classrooms along with libraries, auditoriums, computer labs, parking spaces, electricity, security, sports 41

area, etc. which will be given out on rent. The institutions do not have to take care of the infrastructures as everything will be managed by the company. The main target is the institutions from the field of Management and IT, Media and Arts, Hotel Management, Learning and training centres. To analyze the future potential of the knowledge village, the number of colleges in the central development region, enrollment in the higher education and the surveys were analyzed. There is an increasing trend in the number of colleges in the Central Development Region as can be seen in the following graph. Refer to table 3 of annex2 600

No. of colleges

500

506

556 453

400 300 200 100 0 2009

2010

2011

Figure 8: Number of colleges in Central Development Region Source: Ministry of Education Assuming that this trend will continue, it can be said that the number of colleges will increase in the future as well. As it can be seen that there already exists a problem i.e. lack of space, the increase in the number of colleges can lead to worsening condition. In addition, the population of Kathmandu increased by 60.93% in a decade. The impact of increase in the population also affects the trend of enrollment in higher education in Nepal as shown in the graph below:(Refer to table 4 of Annex 2)

42

450000 400000

No. of students

350000 300000 250000 No. of students

200000 150000 100000 50000 0 2007

2008

2009

2010

2011

Figure 9: Enrollment in higher education in Nepal Source: Ministry of Education All these factors add to the shortage of land availability of Kathmandu. This is sure to impact the need for space in the Kathmandu valley for education. The density of Kathmandu is already high and the continuing increase in the number of population will aggravate the situation. This might increase the demand for land in the future. Institutions might want to relocate to places in the outskirts of Kathmandu and the product such as knowledge village can come into play which provides them with space along with the learning environment and all the facilities without having to take care of them. Thus, it can be inferred that there is a prospect of Knowledge village in the future. 3.4.1.3 Organizational Feasibility For any product or service feasibility, the management team and resource required needs to be determined. So, in order to find the gap between the existing management and required management the organizational feasibility of Knowledge village for CG|Education was carried out.

A. Management Prowess:The management prowess was discussed in a meeting with the existing department of CG|Education to determine the need. With the use of 43

secondary sources through internet, an organizational structure was formed.

The

organizational structure created covered the mixture of human resource requirement of corporate world and universities. The required human resource for the Knowledge village is shown below:

Director

General Manager

Operations

Operation Head Operation head Operation Operation Assistant head head operation Operation Operation head

head

Finance

Human Resource

CFO

Assistant Fin. Officer

Accountant

HR Manager

Assistant HR Manager

Operation

Operation head Maintenance head head ad Operation

Legal Affairs

Corporate lawyer

Fit – Out Dept (Mkt.,Sales and Public relation)

Business development office executive Mkt. Execuitve

Public relation manager

head

Figure 10: Organizational chart developed for CGKV

44

Required Human Resource for CGKV The three criteria considered to determine the management prowess required for Knowledge Village are Skills, Qualification and Experience.

General Manager Skills: Good verbal and written communication skills, team leader, administration skills, able to device long term strategies, firm on the decisions but flexible in needs Education: Master‘s degree preferably in management. Experience: 5 to 7 yrs in management positions in acompany or educational sector.

Operation head Skills: Able to effectively communicate the purpose of the company to management about the daily operations, skills of following and implementing the direction of upper management, good in mathematics and computer, ability to measure staff performance and motivate them, ability to prepare sales projections and expense budget and business planning software. Education: Master degree in any field preferable management Experience: Atleast 3 years of experience in managerial level

Assistant operation head Skills: Excellent computer skills and proficient in excel, word, outlook and access with an excellent communication skills both verbal and written. Knowledge of financial software Education: Bachelor‘s degree in any field Experience: At least 1 year of experience in financial management and education sector.

Maintenance head Skills: Ability to handle more than 15 support staff, understanding of the technical terms, ability to delegate the work Education: 10+2 Experience: At least one year of experience

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Chief Financial Officer Skills: Raising awareness and knowledge of financial management matters, identifying new funding opportunities, the drafting of prospective programmatic budgets and determining cost effectiveness of prospective service delivery, good financial skills to foster and cultivate business opportunities and partnerships and use accounting software. Education: CA or ACCA or Masters with specialization in finance Experience: Minimum 4 yrs of experience

Assistant finance officer Skills: Good financial Knowledge, clarity in reporting financial matters Education: BBA with specialization in finance Experience: 1 to 2 years of experience

Accountant Skills: Accounting skills such as data entry, use of accounting software and computer skill. Education: BBA/ BBS Experience: At least 3 years of experience

HR. Manager Skill: Recruiting and staffing skill, interpersonal skill, critical thinking, complex problem solving, judgment and decision making and time management and developing various training and development packages. Education: MBA with specialization in HR Experience: Minimum 4 years of experience as human resource officer

Assistant HR. Manager Skills: Communication skills, interpersonal skills, patience and calmness, recruiting and staffing skills. Education: BBA Experience: At least two years of experience in HR department 46

Corporate Lawyer Skills: Analytical ability, attention to detail, logical reasoning, persuasiveness, sound judgment, writing ability and time management Education: Bachelor‘s Degree and three years of law school are minimum requirements to work as a corporate lawyer Experience: At least four years of experience

Business Development Officer Skills:Ability to craft strategic sales plan based on PEST of the industry and SWOT of the business unit, adapt to different communication and motivation needs and review strategies developed for a particular prospect and good knowledge of industry to establish credibility. Education: BBA preferably MBA Experience: 2 years experience in any new business development.

Marketing Executive Skills: Excellent verbal and written communication, ability to think outside the box and be creative, effective organizational skills, ability to plan and formulate marketing plans, and skill to implement effective strategies and campaigns for the product/services Education: BBA preferably MBA Experience: 1 to 2 years of experience

Public relation manager Skills: Excellent communication skills, good IT skills, presentation skills, initiative, ability to prioritize and plan effectively, awareness of client relation and media agendas and finally creativity

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Education: A degree in any subject is acceptable, although management, business or media studies, marketing or behavioral sciences. A PR postgraduate qualification can be helpful. Experience: gained within the PR, marketing, fundraising, events promotion or educational related marketing experience of 1 year. Existing management team of Knowledge Village: Currently there are three people involved in CG|Education. Two of them are employees and one is consultant of CG|Education. In order to find the gap between the requirement of knowledge village and the human resource availability at CG|Education, the Curriculum Vitae of the existing employees were analyzed focusing on the skills, experience and education qualification. General Manager and consultant – Corporate Planning and Investments Skills: Leadership skill, Interpersonal Skill, Time management, Co-operation with team Education: Post-Graduate Programme in Management (Analytical Finance, Strategy & Leadership) Bachelors in Business Administration (Marketing) Experience: Independent Consultant for a month at National Skill Development Corporation, Delhi, India 2 years of experience as Assistant trade operation at Standard Chartered Bank (SCB) Nepal Limited 2 years of experience as Founder Investment at R. B. Joshi & Co. Pvt. Limited 2 years of experience as Assistant Vice president- Finance at Spandana Sphoorty Financial Limited 2 years of experience as General Manager at Chaudhary group corporate planning and investment and also the consultant Head of Finance and Accounts Skills: Microsoft application- working knowledge, Excel - Excellent with advanced data analysis tools and Tally – Excellent 48

Education: Chartered Accountant from The Institute of Chartered Accountants of India Masters of Business Studies from Shanker Dev Campus Experience: 3 years experience as Audit Assistant at Sharad Jain & Associates 2 years experience as audit senior at Bakertilly Banskota & company Currently head of the Finance and account since 2012

Operation Head Skills: Computer skills Education: M.A. Experience:Work experience since 2003 in various position on education field such as instructor, teacher and Assistant lecturer

From the analysis above, we can see that the human resource is not sufficient in CG Education. There are many employees required but the existing team will not be sufficient.

B. Resource Sufficiency CGKV is just a proposed concept. The location chosen is Dhapakhel which is in the outskirt of Kathmandu with an area of 45 ropani land. From technological and infrastructural perspective, the resources required to create a facilitated area for the college to administer their service are:   

Fully equipped classrooms A huge common library 24 hour electricity and Internet access



3 Basketball courts and 2 play areas



A parking lot of 16,000 sq. ft.



5 Computer labs



3 Canteens



2 Auditorium 49



24 hr Security Camera

Looking from the perspective of CG|Education, the resources are not sufficient at all. The land has to be bought and all the other infrastructures need to be added in the premises. Therefore, there is a gap between the requirement and the availability of resources.

3.4.2 Major Findings The major findings from the analysis are presented below: 3.4.2.1 Findings from Market Feasibility Industry attractiveness: Higher education industry is in a growing trend. With the increase in the population and the changing perspective of the people towards education, the demand for higher education is also growing. More than 80% of the colleges are affiliated to Tribhuvan University followed by Purbanchal University and Kathmandu University. The major focus these days are the quality of education and all round development. The aggregate intensity of the forces of competition is intense in case of higher education industry. The porters‘ five forces model shows that the industry is highly competitive which makes it unattractive to enter the market as a new entrant. The threat of new entrants is low because of the high capital requirements, brand identity of the existing universities and the formal requirements for the establishment of universities. This shows the industry is attractive. But the high intensity of rivalry within the existing firm and the threat of substitutes make the industry less attractive. Product/service feasibility: The concept testing reveals that the institutions find the concept of knowledge village quite fascinating but they are not quite sure about the relocation. Similarly, the current market timeliness analysis shows that though the scenarios such as growing number of colleges and enrollment in higher education shows a good prospect for knowledge village, the survey shows that the institutes are not yet ready to come to a place such as knowledge village. But the future seems to hold a good prospect as the consequence of the growing population in Kathmandu and inadequate space for expansion. 50

The major factor that affected their interest is the cost as they are currently paying less compared to the offered price of CGKV even though they are settled in the prime location. The other factors such as acquaintance with the location, student and teacher convenience, image of present location as education hub (Baneshwor and Putalisadak) and contract with the landlord impede them from relocating to CGKV. 3.4.2.2 Findings from Organizational Feasibility CGKV requires a lot of efficient human resource and other non financial resources. The analysis done on the organizational feasibility shows an unenthusiastic result as there is only little manpower in education sector of CG in hand. In addition, there is gap in the non-financial resources as well.

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3.5 Conclusion Chaudhary Group has established itself as a renowned name in the market but CG|Education is still in the growing phase in education industry. With the vision of growth, they are looking for the prospect of investing in the education sector. Thus, the concept of Knowledge village was developed for the company and the market and organizational feasibility tested. The concept developed through the project is a commendable one and seems fascinating but the research shows that the concept is not feasible in the present context. The target market i.e. the institutions are not yet ready to move out of their comfort zone and take the risk of relocating from their current location. The factors such as cost and the establishment in the prime location affected their decisions to move out to a place such as CGKV. The culture can be seen as a hidden factor in the context of education in Nepal which affects the location choice of the educational institutions. They basically focus on the areas where reputed institutions are located and try to capture the students who fail to enter to such recognized institutions. In addition, CG currently lacks the human resources as well as the non financial resources needed to open CGKV. So the organizational feasibility as well is negative. But the concept of knowledge village seems to be feasible in the future looking at the growing population of Kathmandu. The education institutions now are already facing the problem of inadequate space and this could be taken as an opportunity by CGKV in the near future.

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3.6 Recommendation The current market analysis shows a negative result but the anticipated market potential shows that there is a prospect of knowledge village for the future. For this reason, CG can make the plans for more detailed study as well as modify the concept presented in this report. This section presents the recommendations for CG to resolve the issues that have been found out through the study. The major issues were the cost and the location whereby institutions clearly denied to pay Rs. 60 per sq. ft. saying that the cost was too high. The institutions were reluctant to relocate to such a distant place where there is no transportation service or lodging facilities. In addition, the other factors are the image of the current location as education hub which provided them with the benefit of spillover effect. To resolve these issues, we recommend the following initiatives: 1. CG should reevaluate the pricing strategy. Almost all of the institutions visited mentioned that the price for CGKV is too expensive relating to the current rent in the city area. The suggested price was around Rs. 30-35 per sq. ft. Some of the institutions were ready to relocate if the pricing was around the suggested level. 2. The current pricing includes all the facilities irrespective of the usage of the facilities by the institution. This raises the question such as ―Why should we pay for the facilities we don‘t even use?‖. To tackle with such issue and attract the customers, negotiable pricing strategy can be designed. The price will be determined based on the facilities chosen by the customers. Further, different packages can be offered at different prices for institutions based on the facilities they use. 3. Transportation facility can be provided to address the problem of distance. To attract the institutions including students from different parts of the country, accommodation facilities such as hostels and staff quarters can be provided. 4. Some of the facilities such as swimming pool, futsal, health club, Research and development unit, placement cell, writing centres, virtual classroom facility, online library, etc. can be added to the proposed concept to increase the value.

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5. CG|Education should focus on bringing in colleges that have reputed affiliations such as KU or other foreign universities. This will help to increase the brand name of CGKV. 6. There is an intense competition in the higher education industry in Nepal. In order to enter the market, CG|Education needs to establish itself as a reputed name in the market. For this, good management is required that gives an institution a reputed framework to establish itself. CGKV must have adequate advisory team for the sustainability of education andits goodwill. 7. CG|Education lacks the human resources required for CGKV. So it needs to develop a recruitment plan according to the organization resources required as analyzed. The recruitment can be internal as well as external. 8. CG|Education should initiate and bring in their existing colleges such as Campion College and Lord Buddha Education Foundation in order to lead by example for other institutions. 9. In order to attract the learning and training centres, CG|Education can build a commercial building in the major area perceived as education hub such as Putalisadak, Baneshwor and Manbhawan and rent to such institutes. As per the analysis, one of the major hindrances for the learning and training institutes is the location which is not convenient to the students and teachers. For this, further research should be carried out to find the need and the perspective of the targeted customers.

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Part Four

REFLECTION OF THE INTERNSHIP Kripa Pokharel I have learned many things from my internship. At the very beginning of my internship I learned how to work and adjust in corporate environment beside family and college atmosphere. As an intern, one of the important factors to be considered is time management which I learned while performing the task assigned within the given time frame. In addition to it, I personally learned how important it is to be friendly and cooperative with the employees. I learned to develop professional manners and cordial relationship with colleagues and supervisor. This internship has helped me to understand how important research and information are while developing any new concept for the market. During my internship tenure I had an opportunity to visit field and perform practical research with candid response of the customer. Meeting with new faces and consulting made my networking strong. This gave me an entire new perspective on how customer should be tackled and what sort of hurdles come while performing research. This obviously helped me on my communication skill and the ability to handle the pressure. During the internship, I had an opportunity to understand what kind professional hazards come in the way of the plans you have considered for the task assigned. Some of the professional hazard I faced were untimely response of customers, insufficient resource for research, and decision for the action to be taken. Thus, I learned how to adjust with the inconvenience yet continue with the willingness and determination at work. I also had an opportunity to enhance my skills on making business plan for real project. This helped me to understand difference of theoretical and real life knowledge. Also the presentations and meetings done on the internship made me more confident to put my views with clarity. On the whole, I perceive that this internship program will be of much help to elevate my poignant skill to carry out text based knowledge along with the real life work environment. I personally feel that the majority of theory that students learn as a part of 55

academic curricula does not commensurate with the preparations to enter the corporate world. Preceding statement seems realistic as I am writing this after experiencing it. Shraddha Bijukchhe I started the internship with the aim to learn as many things as possible. With the limited time for the internship, I was determined to achieve my personal as well as professional goals. As per my interest, I wanted to learn about how the projects are carried out and what the requirements are for projects. In addition, I wanted to improve my skills such as interpersonal skills, ability to work in stress, time management, etc. With the continuous guidance from the internship supervisor and college supervisor, we were able to carry out and complete the project. In the process of carrying out the project, I came to realize that the corporate world differs a lot from what we learned in theories at college. The working environment is a lot different than what I had imagined and continuous hard work and determination is needed to excel in such organization. In my opinion, working as an intern in CG gave me an insight on what is required in order to work in organizations. We are so used to making plans but when we talk about making plans for a real project, I learnt that it is a lot different and difficult. We must consider various constraints that impede our plans. In our project as well, we had not considered such constraints as delay in response, non-response from respondents, conflict in decisions, etc. As the project progressed, we came across such obstacles but the good point is that we learnt to deal with them. I learnt to be patient and optimistic and handle stress well. Moreover, it made me more enthusiastic about my interest to be involved in projects and know that not only a company‘s interest to invest but also the customer acceptance is required to launch a new concept. The project required us to go to the market and conduct survey with the directors and principals of different institutions. This helped me to improve my communication skills and increase my confidence. In addition, the research has helped me to hone my research skills. Further, I learnt to prepare business plan which would be an added benefit for me. All in all, as we all know that learning is a continuous process, this internship has been a great learning experience and I hope to learn further to achieve my goals. 56

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Annexure Annex 1 Products of Chaudhary Group 

Health Care Norvic International Hospital, Norvic Centre for Holistic Treatment Pvt. Ltd. and Midas Day Spa Pvt. Ltd.



Investment & Speciality Sector CG Entertainment Pvt. Ltd., CG SatCom Pvt. Ltd., Flexible Packaging Pvt. Ltd., CG World Remits Pvt. Ltd. and Impact International



Processed Food Instant Meal Pvt. Ltd., Mahalaxmi Maida Mills Pvt. Ltd., Pashupati Biscuits Industries Pvt. Ltd., Pashupati Diet & Foods Pvt. Ltd.



Agriculture CG Seeds and Fertilizers Pvt. Ltd., Chaudhary Biosys (Nepal) Pvt. Ltd., Hetauda Dairy Industries Pvt. Ltd., CG Dairy & Livestock Pvt. Ltd.



Education Chandbagh Pre-School, Chandbagh School, DPS Birgunj, CG-Manipal and Vocational Training Institute



Community Development Asian Initiative for Nutrition Development, Shree Lunkaran Das - Ganga Devi Chaudhary Charity Hospital, Shree Lunkaran Das - Ganga Devi Chaudhary Academy for Art & Literature, CG Foundation

Annex 2 University Percentage Colleges TU

80.40

886

NSU

2.18

24

KU

1.91

21

PU

10.34

114

PokU

4.81

53

LBU

0.09

1

MedIns

0.27

3

Table 1: Market size by University affiliations Source: Ministry of Education

Year

No. of Colleges 2007

621

2008

781

2009

834

2010

982

2011

1102

Table 2: Change in the number of colleges in Nepal Source: Ministry of Education

Year

Number of colleges 2009

453

2010

506

2011

556

Table 3: Change in the number of colleges in Central Developement Region Source: Ministry of Education

Year

No. of students 2007

186452

2008

207680

2009

347577

2010

420728

2011

412540

Table 4: Enrollement in higher education in Nepal Source: Ministry of Education

Annex 3 Concept Statement: Chaudhary Group Knowledge Village (CGKV) 1) Description of the product or service CG|Education as one of the pioneer in education sector has seven institutions under its umbrella. Further, it has been keen in expanding in education sector and wants to invest 100 crore. Thus, they are looking for the prospect to invest in a new project called Knowledge Village. A knowledge village is a learning hub where various academic institutes, training centres and learning centres from various field of study are settled in an area in order to provide complete educational environment to the students. In general a knowledge village consists of a huge space with well facilitated buildings. In addition, ample of parking space, sports area, security system, and internet and electricity facility are also provided. Chaudhary Group Knowledge Village (CGKV) is an approach of CG|Education whereby it follows the similar concept of mall system where different institute, learning centres, training centres is invited to open their educational studies. The proposed location for this area is Dhapakhel with an area of 45 ropanies. The main focus for field of study inside the CGKV at present is 1) Management and IT 2) Media and Arts 3) Hospitality Management 4) Learning centres and training institution with a view to include other field of studies in following years. There will be 3 blocks of building each having 5 floors where 1 building is assigned for management and IT courses, 1 for Hotel Management and Arts and 1 for Training Institute and learning centres. 2) Description of target market: CGKV specifically targets the institutions related to Management and IT, Hotel management, Media and arts and Training and learning centres that are willing to come to Dhapakhel to part their education in a well- facilitated educational environment.

3) Benefits of the product or service (value proposition) CGKV provides affordable, customized, well facilitated educational buildings that give the feeling of complete educational environment. The area consists of three blocks namely the management and IT block, Media and arts and hotel management block and Learning and training centres block. Each block has five floors with 25- 30 classrooms (700 sq ft) in each floor. Each building will have a separate area basketball court and play fields. A canteen is allocated at the top of each block. Two auditoriums with well facilitated meeting room and conference hall will be available. Five computer labs, a hotel management lab and a media room have been planned that can be booked as per need of the institution. A huge common library will be made. There will be 24 hour electricity and Internet access. A parking lot of 16,000 sq. feet will be constructed in the compound. The area will be guarded by 24 hours security. 4) Description of product/service differentiators The area will be fully dedicated to education with the facilities provided and managed by the company itself. As mentioned, all the requirement of colleges such as play area, auditorium, computer labs, library, etc. will be available on booking system and the cost is based on usage. The operational maintenance is to be done by CG itself. 5) Description of how product/service sold/distributed The proposed location for CGKV is Dhapakhel area. There will be a separate department known as a Fit out department which will be dealing with the institute (customer) and allocation of the institute. Thus the distribution will be handled by the Fit Out Department. 6) Description of the founder(s) of the firm CGKV is a product of Chaudhary Group. It will be managed by a vertical unit of CG named CG|Education with a combination of present and new management.

Annex 4 Questions for interview Name of the institute:

Location of the institute:

1) Which of the courses do you offer? 2) Have you thought about diversifying the field of study? 3) Do you own the building or are you on rent? 4) What is the current payment system? 5) What are the facilities available currently? 6) Are you satisfied with where your institution is located? 7) If No: What is the issue with which you are not satisfied? 8) Where do you think is the most preferable location for your institution inside Kathmandu valley (the most favorable place with adequate space and facilities)? 9) How is the parking facility in your institute (enough)? 10) What sports activities are organized by your college? a) Outside college b) Inside college 11) Have you heard about the concept of knowledge hub or any other such concept? 12) Do you think this Concept is feasible in context of Nepal? 13) If the services such as auditorium, library, and food court, cafeteria, sports area, computer labs, media labs, parking, 24 hour electricity and security, etc. are available inside the same area/space. Will you be willing to come in such hub ( Knowledge Village ) 14) What type of payment system do you prefer? a) Profit sharing b) Rent system 15) Price per sq. ft. is Rs 60 for CGKV. How do you find the cost charged for the area? 16) Are you willing to pay Rs. 60 per sq. ft in such knowledge village? 17) What should be the approximate range of cost for such knowledge hub in your opinion?

18) What value added benefits are you looking in such learning hub in order relocate the exit sting institute to new area as such Dhapakhel? 19) What are the major factors that stop you to come to such knowledge village from the existing place?

Annex 5 Questionnaire Dear Respondent The information you will provide in this survey will contribute in the feasibility study conducted by the students of Kathmandu University School of Management for academic purpose. We cordially request you for your honest responses. Your response will be highly valued and kept confidential. Name of the institution: Location: 1. What were the factors that affected your decision to choose the current location for your institution? Tick as many as you want.  Cost  Education hub  Land availability  Facilities and infrastructure  Learning environment  Others, please specify…………………………………….. 2. Are you satisfied with the current location?  Yes

 No

3. If No, what are the things you are not satisfied with? __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ 4. Would you be interested to relocate to a knowledge village?  Yes  No If yes, answer question 5, else answer 6. 5. What are the facilities would you look for if you are thinking of relocating? __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________

6. Rate the factors which stop you from coming to knowledge village from 1 to 5, 1 being the least important to 5 being the most important. 1 Cost Transportation Distance Already established in current location Contract with current landlord

2

3

4

5

Annex 6 Analysis of the Questionnaire Factors

Count

Cost

16

Education hub

10

Land availability

11

Facilities and infrastructure

5

Learning environment

6

Others

2

Table 5: Factors that affected the choice of current location for the institution. Factors that stop the institution from coming to Knowledge Village

Cost 14 No. of response

12 10 8 6 4 2 0 1

2

3 Rating

Figure 11: Rating of cost as a factor

4

5

Transportation 7 No. of responses

6 5 4 3 2 1 0 1

2

3

4

5

4

5

Rating

Figure 12: Rating of transportation as a factor

Distance 7 No. of responses

6 5 4 3 2 1 0 1

2

3 Rating

Figure 13: Rating of distance as a factor

Already established in current location No. of responses

12 10 8 6 4 2 0 1

2

3

4

5

Rating

Figure 14: Rating of establishment in the current location as a factor

No. of responses

Contract with the current landlord 9 8 7 6 5 4 3 2 1 0 1

2

3

4

Rating

Figure 15: Rating of contract with the current landlord as a factor

5

Annex 7 Minute of group team meeting Following are the minutes of the meetings where important decisions were made. First Meeting Date: October 1, 2012 Venue: Rapti Hall Time: 2:30 Attendee 1. Kripa Pokharel 2. Shraddha Bijukchhe 3. Raisha Shakya 4. Sabin Joshi 5. Bhusan Gurung 6. Rajesh Sharma 7. James Sapkota 8. Prabina Agendas 

Delivering the idea on Knowledge Village

Major discussion   

Concept of knowledge Village Discussion on how the research will be carried out. Discussion on methodology and process for pursuing the project

Decisions   

Conduct detailed research First draft proposal to be made Online journals and marketing books will be listed and reviewed for marketing channel member performance framework.

Signature:

Signature:

Name: Kripa Pokharel

Name: Shraddha Bijukchhe

Second Meeting Date: October 21, 2012 Venue: Rapti Hall Time: 3:30 Attendee 1. Kripa Pokharel 2. Shraddha Bijukchhe 3. Raisha Shakya 4. Sabin Joshi 5. Rajesh Sharma Agendas  

Presentation of the proposal Feedback on the proposal

Major discussion  

Feedback on the presentation and the research to be carried on the project Ideas for CGKV concept was generated

Decisions  

Contact Dubai Knowledge village and other knowledge village through phone calls Criteria for CGKV created

Signature:

Signature:

Name: Kripa Pokharel

Name: Shraddha Bijukchhe

Third Meeting Date: January 6, 2012 Venue: Rapti Hall Time: 3:30 Attendee 1. 2. 3. 4. 5.

Kripa Pokharel Shraddha Bijukchhe Raisha Shakya Sabin Joshi Bhusan Gurung

Agendas  

Finalization about survey questionnaire Finalization about interview questionnaire

Major discussion  

Idea screening and concept development Send an email and IM to Dubai knowledge Village

Decisions 

The report to be presented on time

Signature:

Signature:

Name: Kripa Pokharel

Name: Shraddha Bijukchhe

Annex 8 Contribution Certificate

Name of students

Roll No.

Contribution in %

11306

50

11332

50

Kripa Pokharel

Shraddha Bijukchhe Total

100

We certify that we have signed this certificate without any pressure and in the presence of all team members.

Name of the student Kripa Pokharel

Signature: February 7, 2013

Name of the student Shraddha Bijukchhe

Signature:

Date: February 7, 2013