Business Strategy

Porter's Five Forces

Bargaining Power of Customers (High):Competition in the sector is determined, in part, by the negotiating power that buyers or customers have with the companies that produce the good or service. The analysis of this force must be done in two dimensions, price sensitivity and negotiating power. The main factors in the negotiating power are the customer concentration and purchase volume. Kean University has a high bargaining power of consumers because the students are the buyers since what we want is an excellent educational service at an affordable price. Nowadays, Kean University has a very competitive cost concerning other universities in the same region that is accessible to students of all kinds. This factor makes us an easily accessible university that provides the same services, unique learning experiences, and quality by meeting the same educational standards as other high-cost universities. Additionally, Kean University attracts the attention of students to enroll thanks to its student campaigns, multiple advertising strategies, sport and merit scholarships.

Threat of Substitutions (Moderate to High):The threat of substitutions are the products that perform the same functions of the product under study. The products can be a threat to the sector if they cover the same needs at a lower price, with superior performance or quality. The educational industry can be in direct competition with those of a different identity if the products can replace the other while giving excellent or similar outcomes. The presence of competitive substitute products in price can make customers change products, which could cause a loss in market share. The factors that generally let us know if there is a threat are the availability of substitutes, the relative price between the product offered and the alternative, performance, and quality between the product offered and substitute. The substitutes products, in this case, are other colleges and small institutions In the region; which have a study time of two years or less, and the other Universities that offer a program of five years. A market or segment is not attractive if there are real or potential substitute products. The situation can get complicated if the substitutes are more technologically advanced or can enter at lower prices reducing the profit margins of the industry. For this kind of traditional model, the defense that Kean University owns consists in building entrance barriers around a fortress. This action let the university through the protection afforded by the competitive advantage, get utilities that can be used in research and development; also, to finance a price war in the educational sector or to invest in other business activities referred to the university.

Bargaining Power of Suppliers (Low):It is clear that we need our suppliers and that they also have their negotiating power, especially if the supplier has some characteristics that Kean University values. It would have less impact on suppliers who do not have

differentiated products or services. In that case, we could change providers without too many risks. In the Bargaining power of supply, we measure how easy it is for our suppliers to vary prices, delivery times, payment methods or even change the quality standard. The less vendor base, the less negotiating power we will have. The factors a take into account are, among others: our volume of purchase, the existence of other potential suppliers, the market situation, the level of organization of the suppliers, the relative importance of the product or what it would cost us to change suppliers. Applying this force, as we know, Kean University has security, cleanliness, food, internet, among other suppliers that adapt themselves to the policies that the university has to become fixed suppliers in the long run.

Threat of New Entrants (Low):Entry barriers are understood as any mechanism whereby the expected return of a new incoming competitor in the sector is lower than obtained by competitors already present in the industry. Entry barriers can be grouped around differentiation, government actions, and cost advantages, brand identification, and product difference. The entrance of new competitors to the sector depends on the type and level of barriers to entry. Companies that enter the market, in this case, universities, increase the productive capacity of the sector. In case that there are benefits the above average profits in the sector, it will attract a more significant number of investors, increasing competition and consequently lowering the average profitability of the sector. The number of potential competitors will be conditioned by existing entrance barriers and the retaliation capacity of Kean University.

Rivalry (Moderate to High):The rivalry is the most determinant element of the model of Porter. It is the force or straight with which companies take actions to strengthen their position in the market and thus protect their competitive position at the expense of their rivals. The main factors that contribute most to increase the rivalry among the competitors that Kean University has are concentration, diversity of competitors, high fixed costs, a difference between products, and growth in demand. Kean University has the advantage of competing in a market, where universities in the private and public

sector are very well positioned, numerous and have fixed costs because Kean University will continuously be facing them at a higher level through price wars, aggressive advertising campaigns, promotions and entry of new products.





There is no doubt that Kean University is a profitable investment, as well as being a factor in social progress. As a productive and fiscal investment, it is in itself profitable for the country because it contributes to generating economic activity, income, production, and employment. In addition to training the workforce of the future, higher education is a good investment for States. The activity of these institutions contributes more than other sectors to per capita income, employment, and the gross domestic product (GDP).

Competitive Strategy:

The competitive strategy that Kean Recreation follows is a better service within an industry segment. Kean recreation has a variety of classes offered throughout the week along with their standard fitness center facilities which includes the pool, arena, indoor track, fitness center and weight room. Our company addresses bargaining power and threat of substitutes by providing excellent educational service at an affordable price for the consumers. Bargaining power of suppliers and threats of new entrants are at low threat levels due to the vast majority of suppliers at hand and difficulty of opening a intramural facility exclusively for students. Finally, rivalry is addressed by concentrating on factors such diversification and fixed costs that the University upholds.

Business Process 

Structured Process: Operations

Dynamic Process:

The social media providers that Kean Recreation sponsors are Instagram, Facebook, and Twitter. Kean Recreation uses these providers by informing the current network of users whether there is a intramural class for Kean students or news regarding a power outage. The pages are https://twitter.com/KeanRec, https://www.facebook.com/KeanRec/, and https://www.instagram.com/keanrec/?hl=en.

Value Chain: