Los Angeles, CA (PRWEB) March 23, 2014
Language schooling services have a buyer power score of 4.0 out of 5. According to IBISWorld procurement analyst Aileen Weiss, “the score indicates that buyers maintain high negotiating power over prices”. During the Great Recession, many businesses cut back on international travel and on supplemental language training for their employees. In the recovery period, however, firms were less hesitant to expand into the global market and were once again more likely to seek language schooling services.
Average prices for language schools slowly grew in the three years to 2013. Tuition hikes were not linked to inflation; rather they were impacted by a reduction in government funding, causing schools to increase buyer prices to make up for lost revenue from the government. Additionally, enrollment increased as buyers purchased more courses. Overhead prices were therefore higher to cover the rent for more classroom space and teacher wages, giving schools another reason to raise their prices. “While buyers lost some negotiating power, schools still could not drastically increase prices due to heavy competition in the market,” says Weiss.
In the next three years, language schools will face even greater competition from virtual online options, software programs and tutoring providers. Many schools will offer more online options to remain competitive. Therefore, demand for in-class teacher-led instruction will be lower. Teacher wages will grow more slowly as demand for teachers weakens. Furthermore, as government investment picks up, schools may apply more funding towards overhead costs. The combination of competition and greater funding will allow buyers to negotiate more favorable prices from suppliers. Overall, buyers should select a language school that will provide them with instruction that will most closely match the learning styles of the end user. Buyers must determine whether they want a program that is efficient for its accessibility, scheduling and pricing, or a more effective program to reduce future switching costs, with curriculum that covers the necessary material and with teachers that prove to be valuable resources. Ultimately, the best match will save the buyer money in the future. The top four vendors in the industry are Benesse Corporation, The Washington Post Company, EC English Language Centers and English Language Center.
For more information, visit IBISWorld’s Language Schooling procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld Procurement Report Key Topics
This report is intended to help buyers of language schooling. Language schooling exclusively offers foreign language and second language instruction, including sign language. Services range from intensive training courses for educational and career opportunities to conversational skills for personal development. The schooling includes instructor-led learning in a classroom setting as well as instructor-led training in a live online session. Excluded from this report are translation and interpretation services, software programs and traditional schools (primary, secondary and university level) that offer language courses.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.