Channel Partners in Educational Supply Chain
Educational Supply Chain in India particularly for the Management education, has seen emergence of Channel Partners. They have received a growing importance in the industry value chain. Thought of writing on the same.
The input stage of the supply chain is the selection of students for the program. This happens through an elaborate admissions mechanism which the management institutes design based on their own selection criteria. The potential students who aspire for the educational institute would have to appear for the appropriate entrance test (& you have multiple of those today). The students would end up with a preparatory course for the test delivered by coaching institutes. The students are advised by the 'mentors' of the institutes for the 'quality' of the educational institute. Based on the advise the students would decide to apply. You already have a channel partner with a large influence on the potential customer existing in the supply chain. The customer 'choices' are majorly determined by the 'advise' the channel partner offers. The Supplier (which in this case is the 'educational' institute) normally didn't care much till the emergence of such channel partners who have a 'huge' influence of the potential customers (in this case the 'aspirant' student) such that the customer subordinated himself to the channel partner.
Once the students have to apply for the educational institute, then comes the issue of multiple institutes & each with its own 'price tag' for the admissions process. It naturally increases the application cost for the aspiring student & as customers one would like to rationalize the cost. This slack in the system has allowed for a new channel partner in the management education supply chain to emerge. These are entities which would collect & collate students who have appeared for various entrance test & create a database. So basically now they posses the 'potential customer' database. The student would be assured that once (s)he pays for the fees of the channel partner, in all probability the student doesn't need to pay additional fee for admission process of each management institute. So the customer gets cost savings which is perceived as value.
The other side of the coin. The management institute suddenly sees a dry up in the applicant numbers. Management of the institute starts wondering how to get applicants. So the 'supply' side starts wondering there is the 'demand' side. Here is where the channel partner would come with the database of the potential customers offering services like venue, hospitality apart from much needed 'applicants' for the management institute. He now would make the institute pay for the services offered. Institute would have little option left as the institute has very less direct applicants. So the channel partner would hold admissions process of multiple management institutes together at one venue. Make the potential students pay for the service & also make the management institute pay for the service. The channel partner makes money on both the transaction!
On top, an existing channel partner like a coaching institute has spare capacity in the leaner months post the exams. These channel partners put the spare capacity to effective use by organizing admissions process for the institute. Obviously the institute has to pay for the services. But that's great for the coaching institute as it has idle capacity which now pays for itself.
The emergence of the channel partners would worry less if it adds value to the supplier & customer of the admissions process. If it biases the choices of the customers or influences the customer while marginalizes the significance of a structured admissions process by the management institutes, then we have the supplier who meets the customer with the channel partner has no ownership either of the process nor the outcome!
The input stage of the supply chain is the selection of students for the program. This happens through an elaborate admissions mechanism which the management institutes design based on their own selection criteria. The potential students who aspire for the educational institute would have to appear for the appropriate entrance test (& you have multiple of those today). The students would end up with a preparatory course for the test delivered by coaching institutes. The students are advised by the 'mentors' of the institutes for the 'quality' of the educational institute. Based on the advise the students would decide to apply. You already have a channel partner with a large influence on the potential customer existing in the supply chain. The customer 'choices' are majorly determined by the 'advise' the channel partner offers. The Supplier (which in this case is the 'educational' institute) normally didn't care much till the emergence of such channel partners who have a 'huge' influence of the potential customers (in this case the 'aspirant' student) such that the customer subordinated himself to the channel partner.
Once the students have to apply for the educational institute, then comes the issue of multiple institutes & each with its own 'price tag' for the admissions process. It naturally increases the application cost for the aspiring student & as customers one would like to rationalize the cost. This slack in the system has allowed for a new channel partner in the management education supply chain to emerge. These are entities which would collect & collate students who have appeared for various entrance test & create a database. So basically now they posses the 'potential customer' database. The student would be assured that once (s)he pays for the fees of the channel partner, in all probability the student doesn't need to pay additional fee for admission process of each management institute. So the customer gets cost savings which is perceived as value.
The other side of the coin. The management institute suddenly sees a dry up in the applicant numbers. Management of the institute starts wondering how to get applicants. So the 'supply' side starts wondering there is the 'demand' side. Here is where the channel partner would come with the database of the potential customers offering services like venue, hospitality apart from much needed 'applicants' for the management institute. He now would make the institute pay for the services offered. Institute would have little option left as the institute has very less direct applicants. So the channel partner would hold admissions process of multiple management institutes together at one venue. Make the potential students pay for the service & also make the management institute pay for the service. The channel partner makes money on both the transaction!
On top, an existing channel partner like a coaching institute has spare capacity in the leaner months post the exams. These channel partners put the spare capacity to effective use by organizing admissions process for the institute. Obviously the institute has to pay for the services. But that's great for the coaching institute as it has idle capacity which now pays for itself.
The emergence of the channel partners would worry less if it adds value to the supplier & customer of the admissions process. If it biases the choices of the customers or influences the customer while marginalizes the significance of a structured admissions process by the management institutes, then we have the supplier who meets the customer with the channel partner has no ownership either of the process nor the outcome!
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