The Company Is In The Education Sector Economics Essay
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Published: Mon, 5 Dec 2016
SEG International Berhad and HELP International Corporation Berhad are the public listed education companies in Malaysia. The purpose of report is to identify the type of market structure of the two companies operate and compare these two company performance based on financial statements. Methods use to analysis the financial statements are profitability, liquidity, stability and investment. The conclusion of the report
SEG International Berhad (SEGI) has 35 years academic experience in higher education sector and it is one of the largest private education companies listed in the Bursa Malaysia. SEGI was founded in 1977 and known as Systematic College before. It serves more than 27500 students in 6 major campuses which distributed in Kota Damansara, Kuala Lumpur, Kuching, Penang, Seri Kembangan and Subang Jaya. SEGI offers various programmes include Architecture & Built Environment, Business and Law, Creative Arts and Design, Education and Social Sciences, Engineering and Technology, Hotel and Tourism, Medicine & Dentistry, Pharmacy and Allied Health Sciences. SEGI has global connections with oversea universities such as University of Southern Queensland from Australia, University of Greenwich, University of Abertay Dundee, Teesside University and so on. Lastly, SEGI Subang Jaya was the one of only three colleges in Malaysia to be awarded the highest 6-star rating in MOHE MyQuest Evaluation. (SEGI, 2013)
HELP International Corporation Berhad (HELP) is an investment holding company and incorporate in 2005. The main business of the company is in the education sector. It has 5 major institutions, HELP University, HELP Academy, HELP College of Arts and Technology, HELP Executive Advanced Training and HELP Training Centre. HELP University is the principal contributor to HELP Group. HELP University founded in 1986 and provide a wide range of courses such as business, economics, humanities, information technology, management and social science. HELP University has partner universities with University of Melbourne, Liverpool John Moores University, Upper Lowa University, Shanghai International Studies University and so on. It has built a brand recognition and good reputation in the market. (HELP, 2013)
Market structure means how the market is organised, based on the number and distribution size of buyers and sellers in the industry for goods and services. Market structure divided into four model, they are perfect competition, monopoly, monopolistic competition and oligopoly. Perfect competition is a market has many buyers and sellers and no single firms can affect the price of goods. Monopoly means a single seller produce goods which there is no substitutes in the market. Monopoly has the power to control the price and supply in the market. Monopolistic is a market situation has a large number of small seller produce similar but not identical goods. Oligopoly is market structure has a few number but large size seller producing differentiated or homogenous product. (Miller, 2009)
SEGI Group and HELP Group are belonging higher education sector. Higher education industry in Malaysia is classified to monopolistic market structure which means there are a large number of small sellers producing close substitute goods. Monopolistic competition is one of the forms of imperfect competition. There are large numbers of firms in monopolistic competition, but not as many as in perfect competition. There are no single firm can affect the market price due to the size of firms are small.
Besides that, firms in monopolistic competition produce differentiated products. The firms in monopolistic competition produce similar but not identical products. For example, SEGI Group and HELP Group are providing education service company, but they are different in some aspect such as facilities, programmes and study route. They may differentiate their products through advertising, brand names, design and packaging.
In monopolistic competition, there is easy entry into the industry. New firms may easy enter the industry without restriction with close substitute products.
Lastly, there are non-price competitions in monopolistic competition. Sellers in monopolistic completion will use various methods to differentiate their product brand and attract buyers to buy their products. For example, SEGI Group and HELP Group will promote their college and university by using different advertisement in order to attract customer enroll courses in their university. (Vengedasalam and Madhaven 2010)
There are many sellers in monopolistic competition, therefore, the degree of competition is higher in the industry. Degree of competition defined as level of rivalry between sellers in order to increase sales and profit. The consequence of high degree of competition is produce good quality goods. Firms will produce best quality goods and services in order to attract consumer to buy their products. For example, SEGI Group employed the experience and professional lecturer and HELP Group provide the comfortable environment and latest technological equipment to students. This is that they try to provide the best services to consumer so that students will register in their university.
Moreover, because of high competition, consumers have more choices between the products. Consumers have more choices to choose the product to satisfy their need. For example, students can choose university based on their needs, because there are many colleges and universities in the higher education sector of Malaysia.
Lastly, sellers will try to reduce price of product or practice non-price competition so as to increase sales volume and profit. Sellers will practice non-price competition such as advertisement, sales promotion, free gift and others in order to attract consumer buy their product among numerous competitors. For example, SEGI Group give tuition fees rebate for first 1000 students register in their college. HELP Group give the free gift to the first 1500 students register in their university. (AmosWeb 2013)
Demand means the ability and willingness to purchase specific quantities of goods during a specific time period at a particular price, ceteris paribus. The law of demand shows that when the price of a goods increase, quantity demanded of the goods will decrease. When the price of a goods decrease, quantity demanded of the goods will increase, ceteris paribus.
Factors that influence the demand level are price of the product. The higher the price of goods, the lower the demand of the goods. For example, the higher the tuition fees of SEGI College, the lower the demand of students register in their college.
Second is change in price of substitutes goods.
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