The Southeast Asian Minister of Education Organization (SEAMEO) is an international organization established in 1965. The purpose of SEAMEO is to promote the regional cooperation in education, sciences and culture. Up to now, SEAMEO consists of 11 members countries mostly in Southeast Asia and there are 20 specialist centers regionally. Every center is in charge of different functions and their operation is independent in both financing and governance.
As other sister centers, SEAMEO RETRAC is a non-profit international organization under the umbrella of Vietnam Ministry of Education and Training (MOET). It is established in 1996 and tasked in education management as the main function.
RETRAC Vision: "RETRAC aims to become a leading regional center in field of education management, serving all SEAMEO member countries and enhancing international cooperation and partnership"
RETRAC Mission: "Assist SEAMEO member countries to identify and address issues of educational management by providing such services as research, trainings, consultancy, information dissemination, community service, networking and partnership"
(Source: SEAMEO RETRAC)
Organization Structure :
SEAMEO RETRAC Corporate Governance
Source: SEAMEO RETRAC
RETRAC Governing Board (GB) whose members are the representatives from MOET of SEA countries. The GB has power to determine RETRAC policies for its operation as well as its programs and budget. They also evaluate and review center activities annually. BOD is Vietnamese and is in charge of all fund management and local services to maintain center financial issues.
RETRAC operations are funded by three sources:
SEAMEO's special funds: to support all centers for its non-profit objectives
Vietnamese MOET also give annual fund to RETRAC to conduct it function and partly support its activities.
Self-financial support from RETRAC's activities to generate capital.
RETRAC Revenue Report 2010
Source: SEAMEO RETRAC Statement of Expense and Income FY09/10
Actually, the first two financial sources from SEAMEO Headquarter and from Vietnamese are limited and not enough to cover RETRAC functions. Most of capitals and revenue are generated from our activities as an educational service provider in term of language training courses and consultancy agent for local and regions.
Products and services:
RETRAC have operated in two main business segments.
(1) Education Management Activities which are assigned by SEAMEO and the Vietnamese MOET including
Educational researches and Development
International and join research projectsâ€¦
(2) Language trainings and services
English courses in different programs and levels
Counseling - Oversea study/trainings services
As stated above, RETRAC belongs to non-profit sector. It means that all of its activities aim at non-profit purposes. However, the activities in language trainings and services are quite for profit but anyways they serve for the common non-profit goals. Furthermore, the segment of Educational Management (1) is considered as monopoly because RETRAC's activities in this field mostly assigned by MOET and they are not much affected by other external environments and competitors. So, in this report, I will pay more attention on the language trainings and services (2) as this segment generates most revenue and maintain the operation and welfare for some groups of stakeholders. Deeper analysis on externals factors, market segmentations and competition also focus on educational services as well.
There are two key groups of stakeholders that involve in RETRAC in according with two main fields of operation. These two groups have different expectations in different aspects and they all value to the organization in term of responsibility and profitability.
Regional scale: Educational Management activities
Educators, leaders and administrators in SEAs Countries especial Laos, Cambodia where their education level is not developed and need more training.
Communities also get benefit from RETRAC as it main purposes are the dedication to professional education, human resources development for better life and society.
ïƒ These groups of stakeholders depend on RETRAC's activities and enjoy the organization's contribution and support in providing such kind of training and research.
Governing Boards Members, SEAMEO and MOET has most power in maintain its functions and external and internal funds allocation. More important, they mostly support its operation in term of carrying function and business activities.
Local scale: Language training Program and services
Students/ trainees which known as customers for different English training courses may be the most and important stakeholders and this is the main forces that bring profit in this segment. All of the organization programs have to follow the learners' needs and its expectation on quality, curriculum and teaching innovations. To overseas study services, successful visa and appropriate study pathways will be their concerns of the service.
Teachers/trainers who directly involve the organization business and take part in the successful of its revenue-producers.
Staffs and employees also take important role. In order to develop and engage the loyalty every organization must satisfy its employee expectations in term of benefit and its reward will be their productivity.
Local and overseas Partners
External environment issues in 2011:
Actually, Vietnam is a single Communist Party and ranked as one of the most stable country in term of politics. So, the politics issues are safe and stable to all industries. As other countries, government has great influence on education and many referential polities also applied. Any changes on legislation forms always have big impact on RETRAC operation and financial capacity
Firstly, as a subsidiary unit of Vietnam MOET, RETRAC receives the state-budget for it activities. The amount of money is unfixed totally depends on the revised current ability of the government. In 2010, the state-budget contribute to12% (SEAMEO RETRAC, 2010) of its revenue and partial support its activities in regional scopes. Since 2011, the official Document No.35/BGDT dated on Dec 25, 2010, confirm that RETRAC will be entirely independent and responsible for the financial generation that causes its cost burden.
Secondly, new implementation of personal income tax is also an obstacle for RETRAC. In Vietnam, personal income taxation have just national-wide introduced in late 2008. The suffer rates are different from Vietnamese staff and foreigners. The calculation is unclear and not sufficient for foreign teachers. They may get trouble with work permits regulation for foreigners and it may cause tardiness on tax declaration.
Additionally, RETRAC enjoy tax exemption as the return for non-budgeted governmental unit since early 2011. Consequently, RETRAC is not able to issue "Red-invoice" to clarify partner payment as well as its transaction with other trainees. This cause more inconvenience for pricing and payment of high value training contracts. The confused occurred at RETRAC legal status. It is the only international organization under the governmental unit. Once again, the complexity of RETRAC legal entity may confuse and trouble its partners. Risk of losing training contracts is high because of un-transparency. However, the tax exemption is also the big advantage for RETRAC business.
Regarding the overseas study services, the political issues are in different angles. It much totally depends on the destination countries and their immigration policies. Visa applications usually get stuck on evidence of financial abilities that proved by different ways. The requirement is sometime unclear and number of successful cases limited like quota for export. Besides, the change or election in foreign cabinet may affect immigration policies for Vietnamese also. The national relationships, political situations also impact on this service segment and
GDP Growth & Inflation
SEAMEO RETRAC is operated in education sector which is not much affect by the nation economic than other manufacturing and service industries. Reports of General Statistic Office (GSO) show that Real GDP growth in Vietnam is expected to average 6.6% a year in the forecast period, underpinned by strong growth in consumption, investment and export. Besides, according to the United Nations Conference on Trade and Development, Vietnam is one of the top 10 attractive countries for FDI (Phuong, 2010). The growth rates in GDP and FDI promise for lots of international transaction and world trade business. This obviously leads to the demand on more workers, qualified employees whose foreign language ability used as a tool for workplace.
Source: General Statistic Office of Vietnam, 2011 
However, the average rate of consumer price inflation is now forecast to accelerate to14.3% in 2011 (The Economist Intelligence Unit, 2011) (up from the previous forecast of 12.%). The increasing of inflation may affect the customer behavior on spending and budgets for extra classes in an English language center like SEAMEO RETRAC and it also reduce the remand on overseas study as well. Business and enterprises in other sectors also cut down their budget for annual professional trainings that RETRAC are running such as English for specific purposes or English customizes courses, overseas study field trips.
Currency exchange fluctuation
US exchange rate in Mar 2011 US exchange rate in Feb 2011
Source: Asia Commercial Bank 
There is a fact they, the depreciation of Vietnam dong may cause difficulties and reduce profit in RETRAC balance and payment. US currency is steady increasing year over year. Besides, this exchange rate fluctuate every period of a month. At SEAMEO RETRAC, tuition fee is considered, calculated and quoted in Vietnam dong. Being a non-profit organization, RETRAC try to offer best and affordable rate for learners. However, as other institutions, it has to apply US payment for teachers, trainers especially native ones. So, the fluctuations in US dollars make RETRAC income unstable. The charts above show how the US currency fluctuates in Feb and Mar 2011. There is a point that, we can not collect in US dollar as other competitors don't and customer may disappointed with payment policy.
Since Vietnam joins WTO in 2007 and other regional economic alignment such as APEC, ASIAâ€¦ the need for overseas transaction has sharply increased. English is nowadays used as an international language worldwide and it also a common language for international business. The fact is that, most of enterprises require English proficiency or at least communicative English as one of its recruitment criteria.
Aware of social trend, most of people equipped themselves with English as a tool for their career development. Social needs in communication English and TOEIC for job interview, job application is real and possible for RETRAC to catch up social needs. There are around 120,000 graduate students annually (MOET, 2009), they must be potential learners at every English centers.
Besides, English leaning needs at primary and secondary level also increased. Ho Chi Minh City has around nearly 1 billions students at high school level(Department of Education, 2010). There is a fact that, most of English taught in official classes fail in deep of theory only and can not provide students practical skills in listening and speaking. Furthermore, social opinion also aggressive with heavy and rush curriculum at school that lead to unqualified English skills. So, Vietnamese parents tend to find extra classes for their children. Social point of view prefer studying English is as a way of long-term investment and extremely useful for their future.
Nowadays, more and more people prefer join-programs or international schools rather than local one. The emerging of join-degree programs or international programs may affect overseas study needs and make the decline on RETRAC consultancy segment. However, it takes strong advantage for English training programs as people now has to seek for English proficiency standard such as TOEIC, TOEFL iBT to fulfill the entrance requirements.
The issues of applying technology and visual aids in teaching and learning are highly concerned in 21st century and foreseeable future. The running in using ICT in classes is so popular today. Furthermore, online-training course is a trend and may be a substitute for physical language class. Online-classes with high communicative interaction are not less interesting and are attracting more and more learners. All development of technology draws attention from learner and promise new learning styles. Programs diversify and high quality must be deeply studied so that RETRAC can expand its courses and services outskirts.
The need for language trainings is vast as many supportive external factors state above. However, this industry is also face with competitive environment. Lots of private language schools and English centers established in Ho Chi Minh recently. Besides, there has been no any official accreditation agency for assessment and ranking. As the result, RETRAC market analysis basing on other competitors' equivalent size of:
Infrastructures and facility (number of classrooms and equipments/annexes)
Well-known brand-name and reputation in the market
Similar training program and courses.
Overseas service included
Estimated amount of learners
From above criteria, some of top schools as key competitors are narrowed
VUS (Vietnam USA Society English Center)
VATC (Vietnam American Training Center)
Duong Minh Language School
Outer space Language School
In general, RETRAC is well-known and so popular in Ho Chi Minh City due to its reputation since 2000. Most of RETRAC courses have good quality and get positive feedback from learners. RETRAC can be ranked of top 10 prestigious language schools in HCMC. An estimated statistic on total numbers of students its rank at the 4th after VUS, ILA and Cleverlearn. This amount can be increase more if it capacity is strong enough.
Source: RETRAC Market research 2010
The need for English class is abundant as social requirement. So, the potential customers for RETRAC' courses is always available. However, the competition in tuition free also harsh. Every class at different level has to maintain the number hour of native speaker and the facility must be in good status and well-equipped with modern LCD, air-conditioning, computers and projectorsâ€¦Well manage these types of fixed cost and indirect cost in order to maintain an affordable tuition fee will help RETRAC to take lead in the market.
Tuition fee is classified in different programs and time allocated. The survey below was collected from SEAMEO RETRAC competitors. It is found that RETRAC's rate is much lower than other high-ranking competitors even thought it provide the same hours, the same teaching standard.
Billion Dong / month
Source: SEAMEO Market Research in 2010
Other consideration should be the salary paid for the main labor forces which is teachers, trainers who may compared with supplier. Their contribution in RETRAC business is importants. Unfortunaly, survey show that RETRAC salary is much lower than other center for both Vietnamese and foreigner.
Regarding overseas study, RETRAC is lossing its market to other agencies as it is not focus much on this segment. The appreance of lots of overseas offices devide market in many segmentation. In additional, most of international schools and language school open their own offices servin their studying as the full package. That cause the delince in market share.
RETRAC segmentation is focus on avarge income custumer who are able to pay average 1,000,000 - 1,500,000 dong/month (equivelent to 50-80USD/month) for english learning. All classes carried out in the evening after working time or school time therefore, convenience location is preferrable of customers. They tend to consider both affordable cost and location. So, RETRAC target customer at 5 closeby districts where are downtown city and gather more than 15 schools and univeristy.
Focus much on academic prepation courses
Target at other maket by expand of new annex in Chinese area
Target on contract training for companies, organization with customize courses.
Predeparture course and offer package servies to recover market share in overseas study.
Organization espand to 2011
In connection with other sister to produce oversea training course
One of RETRAC priority is taxation. As announcement from Ministry of Finance, RETRAC belongs to non-profit organization and as an administrative unit of Vietnam Ministry of Education and Training so we enjoy the referential taxation rate.
Business extension in 2011
Extension to courses/ new annex/ upgrade technology
Scenarios- basing on key challenging (300 words)
Annex 2 opened
No adapts with market
Not in-time responses to different learning need in courses ïƒ losse customers
Not widen partners network and
What requirement standard for English in the next three year ?
What is the substitute for TOEFL-iBT?
Learning needs in case English is applied at grade 3
What is standard curriculum if English become an second language in Vietnam?
English is a global tool for eith academic or international trade
Need for English skill for job application increase
Need for English at a tool - kiddy level and adult level
Survey on English need
In nearby district only
Must be in the same scope and level such as VUS, ILA, AUSP, Cleverlearn. Statistic on
numbers of students there at different courses.
Strong the weaknesses of these centers