The Educational Ecosystem AnalysisThreat of Substitution Threat of New Entrants

Power of BuyersPower of Suppliers

Industry Competitiveness

• Blended learning solutions • New Age open education

providers. Khan Academy, Coursera , EdX

• Wikis & web based resources Schools creating own content

• New service providers –Managing employability/Career advice

• Fast moving tech players can scale rapidly

• Hardware suppliers integrating content to provide complete solutions

• Commoditized print products lead to low margins, forcing players to innovate

• High funding inflow allowing rapid scaling

• Innovative add-ons to traditional products have become the norm

• Scarcity of high quality teachers & content creators

• Technology professionals with understanding of pedagogy hard to find

• Schools/Distributors have a wide choice of publishers .

• Largely price sensitive market• Digital products lead to easier

direct access to consumers

8 April 2023 2

Commoditization of publishing Power changing to distributor and Author -K 12

Go up the Value chain

Analyse the value chain

Books Schools Fees

Teachers /Teacher Training/Teaching pedagogy

development

Assessment

supports

Break up of student fee

Value chain – goimg up the value chain- lets us partner and give the school all that it wants content, assement, teacher training so that we can create content that is

measurable - “Vertical integration “ -- Later we manage a school “ May it is horizontal integration

We need to be able to incubate ventures that help us very quickly diversify and build alternate revenue Streams by JV’s , acquisitions and new incubations

Managing School • Infrastructure Heavy• Long gestation

Technology based personalized learning

solution• Fast Innovation• Direct access to

consumers

Print Books

• Distribution, warehousing & production capabilities

• Legacy products

Content

Impact of Technology on Education- Opportunity to create disruptive offerings

Infra-structure

Open Source Learning

Distance Learning Pedagogy

Cheaper Access Devices

Conferencing

Machine Learning

EBooks

Adaptive Online Assessments

Digital Learning Pedagogy

Future Classroom

Confidential6

Students With Tablet PC’s in 1:1 SettingTeachers have interactive whiteboardEverybody collaborates via Tablet PC

Learning happens 24/7

The Classroom Officially Has No Walls……

Capability To Interact With Digital Content and Activities Classroom in an App!

What makes the present book ready for a disruption – A learning solution

Strictly Private & Confidential. India Proposal

• Digital impact creates opportunity and challenges to Macmillan. Emergence of technology companies, digital aggregators in the value chain

• Emergence of standards in terms of reader formats, and sticky ness of user inertia

• Customized courses can be build and electronically distributed .Creating a need for digital distribution, royalty management

• Content can be consumed in a digital format

• Comprehension of content after consumption can be measured and hence an immediate feed back is available

• Content can take more forms , be interactive and engaging – Video, Audio, games etc

• Video based lectures or synchronous lectures can be created and beamed across countries

• Content can be packaged and distributed in more customized ways with ease.

Business Impact

Impact of digital on educational content

Need for innovationNeed to Innovate

• School Textbook business (even with minor digital add-ons) becoming commoditized

• Higher Education growth without injecting strong titles almost impossible

• While Macmillan is at a very early stage of technological innovation, the industry itself is innovating fast.

More Books

Digital content authoring tool/SCP

Assessments: UNSW JV & PrepU

Homework Solutions: Sapling

Engineering Courses: New Market

Macmillan Academics

MOOC Add-ons

Opportunities First priorities

Learning Management System

• Necessary innovation to sustain textbook business and further build on into other services

Employability !Help students get aware of the job

market !Help students reach out for

internships and Jobs !Help employers reach out to

fresher's Train and assess fresh graduates to

make them aware of the job fitment

Employability

This is some thing we will need to analyze to see fitment to market, capability in the team.

As we don’t have a back list and an adoption market –this will be positioned as a disruptive product !

OpportunitiesIn

nova

tion

Capability Building

Internal External

Incremental

Sustaining

Disruptive

Partnerships & Joint Ventures

MOOCAdd-ons

Homework Solutions

Assessments

Digital Content & Platform

More Books

Macmillan Academics

Engineering Courses

??? Size of bubble proportional to dollar value

What Now….

The Vision: Learning Cloud

Content Assessment

New Age Pedagogy

Personalized learning solution – providing a blended learning platform to schools

Where is the hidden Value lying and why we are in the best position to create a learning platform….

Content available freely

Think about it:10 M books sold

Millions of students

Thousands of Teachers

What if we could capture these Millions of interactions to make our content richer??

The Products-to-Solutions Transformation: Business Model Innovation

Valued Customer

Product: EBook Solution: Learning Cloud

• Almost all customers • Segment Focus

Value Proposition

• “Better” products with service • End-to-end solutions that reduce customer costs and risks or increase revenues

Valu

e N

etw

ork

R&D

• New technology focus• Stand-alone products• Proprietary products

• Customer problem focus• Modular products• Open, standards-based

Operations• In-house manufacturing of products• Limited supply chain complexity

• Partner with best providers & be product agnostic• Many independent partners requiring high coordination

Service • Cost center, bundled free with products • Profit center, unbundled from products

Marketing• Cost-plus product pricing• Product sales & Volume based

commissions• Salesperson as order taker • Geographical coverage

• Value -based pricing• Multiyear service contracts, service-based

commissions• Salesperson as consultant• Industry ExpertsDistribution

• Products sold through many channels • Become a value-added reseller (VAR)