Online Education in China English Now Online Education in China

Largest Market for English Education Australia Luxembourg Canada Mexico China Netherlands Denmark Singapore France Spain 1.1 Billion people learning english in the world – 165million are from china. Being proefficient in english is highly correlated to economic status and income. Germany South Africa Ireland United Kingdom Italy United States Japan

Proposal A virtual campus where students can come online to practice English Students will have an opportunity to practice English after school and as part of their daily life. Ideally, we hope our users will develop a habit of communicating with others every day through our virtual campus Tools to do this are freely available which keeps our costs down. Second Life ® We will need $40,000 from you for 40% of our company Gaith

Products and Services English Corner Listening Lab Writing Corner ESL Classes One-on-One tutoring Public Library Movie Theatre Gaith

English Corner (1.2 hours each time) 4 times 3 times 5 times Pricing Structure $30 for each Package Package 1 Package 2 Package 3 Package 4 English Corner (1.2 hours each time) 4 times 3 times 5 times Writing Corner 2 times 10 times Listening Lab No limit  No limit Movie theatre ESL class 750 Yuan ($112) for 12 weeks 24 hours tuition time + one month membership Tutoring 100 Yuan ($15)/hour For example, a 100-hour class in preparation for the CET 4 test from New Oriental will cost 1,560 Yuan ($233) (course searching, 2008). An online audio record of the same course will cost 100 Yuan ($15) (eclass, 2008). An intensive two-week course from English First International Language School (EF) for improving general English communication skills will cost 1,330 Yuan ($199) (Courses, 2008).   Good comparative info. David to do this section.

Marketing Decisions Focus on middle school students that are aiming to get into respectable colleges All students must write a 5 subject exam of which English is a major component Choice: Xi’an in the Shaanxi province Third largest education center in China Chinese government intends to push education from Xi’an to western provinces Shaanxi province has 99 universities/colleges with 666,900 undergraduate students and 58,400 graduate students 2092 junior middle schools with 2,142,200 students and 1,476,300 senior high school students David. Open first office in provincial capital Criteria to consider for location Broadband availability Competition Affordability Educational Influence

Operation Plan Carl

Financial Analysis Startup Costs of $90,000 Expect to make it back within the first year Dividends over the next 4 years are close to $800,000 based on very conservative estimates Very low cost structure Salaries biggest portion of costs Cost of sales very small Fixed Costs include – Hosting Payments, Rent, and Admin Costs Expect to grow into 4 new cities by 2014. Try to capture 1500 subscriptions per city. Criquite how do we calculate it. Sounds maybe too strong for the business. Need backup info. Add another slide with more detail.

Financial Details 2011 2012 2013 2014 Starting Cash Balance 120,000   2011 2012 2013 2014 Starting Cash Balance 120,000 32,825 122,671 168,634 Dividends  0 (75,000) (150,000) (650,000) Cash Out from Existing Operations 164,846 195,963 271,830 Cash from Expanded Operations 693,966 Ending Cash Balance 484,430

Thank You What is Second Life Key Success Factors Comparative Prices Competitive Environment Analysis English Education in China Expense Listings Marketing Strategy – Go to Market Market Strategy Going Forward Risks Thank You Questions?

Comparative Pricing Info Types of English education English education software. (Non – interactive) Online English education (Non-Interactive) Instructor lead class (non-native speaker) Instructor lead class (native speaker) Price/year $10 – 20 $15 – 933 $200 - 400 $700 – 4200

What is Second Life Online virtual world where users can interact with other users using the online version of themselves (avatars) Second Life ® gives users the ability to purchase land and build their own virtual worlds We want to build a virtual campus with the purpose of allowing students to partake English conversation with paid English instructors in Canada. Virtual campuses is not a new idea Harvard Yale University of Ohio Virginia Tech Hong Kong Polytechnic University Gaith

Key Success Factors Instructors Teaching Contents Enhance Technology Interest Teaching Contents Technology Promotion Gaith

Competitive Environment Rivalry Among Existing Competitors: HIGH Bargaining Power of Customers: LOW Threat of Entry: HIGH Gaith Bargaining Power of Suppliers: LOW Threat of Substitutes: High

Chinese English Education In 2001 – English taught in school since grade 3 10 years learning English in school + 2 more years in University English taught as a science i.e. Here is what you need for Toffel, GMAT, etc. Little focus is given to speaking English Do very well on exams Most students lack the ability to have casual English conversations Gaith – keep it short and focus on operation plan and financial plan.

Expense Listings Office Set Up Costs China Office Rent Supplies Marketing Costs Vancouver Office Salaries Marketing Manager - China Vancouver Instructors Vancouver Admin & Tech Support China Admin & Tech Support ESL Teacher Hiring Costs Campus Development Virtual Land Purchase Virtual Land Operating Costs Graphics Designer Learning Content Development Software Licensing Content Development Website Development Website Maintenance Costs Website Hosting Costs

Marketing Strategy Road shows Google Us Universities Carl Set up table in the university Show tables – shows how the product works Universities

Marketing Strategy – Go to Market Phase 1 Network Building Education Bureau Phase 2 Seminars Building networks with teachers Phase 3 Testing the product Recommend to students Carl Contact with universioty or school and give them access to test the product If they are satisfied, they can buy it in the future.

Risks Competitors Copying Us Sales Forecasts depends on marketing plan Chinese Market synergies Ability to retain talented instructors Reliance on 3rd party for software requirements (Linden Labs) A good one to add is that our software is based on a third party.

Financial Analysis