IDFP Final Presentation Hua Dan April 2008 INSEAD Team: Xing Zhao Srikrishna Sridhar Murthy Alexandre Munhoz Emily Albert

QuickTime™ and aTIFF (Uncompressed) decompressor

are needed to see this picture.

IDFP Final Presentation

Hua Dan

April 2008

INSEAD Team:

Xing Zhao

Srikrishna Sridhar Murthy

Alexandre Munhoz

Emily Albert



1. Project Background

2. Scope Definition

3. Work Plan

4. Findings

5. Recommendations

Agenda



Hua Dan is a China-based social enterprise that uses the unique power of participation in theatre and other creative arts as a tool for personal and social transformation.

Client: Hua Dan

Hua Dan Mission

Hua Dan enables personal, social and economic empowerment of China’s migrant workers through participation in and leadership of inspirational arts-based projects



Client: Hua Dan

History:

Founded by Hong Kong-born Brit Caroline Watson in Autumn 2004

Hua Dan is headquartered in Beijing

Objective

to deliver inspirational workshops in partnership with community organizations and commercial

enterprises to empower individuals from all classes of society with skills that improve their

employability, social mobility and quality of life

Activities Hua Dan’s Travelling Theatre Troupe Service industry project Big sister, little sister Beansprouts project Train-the-trainer Workshops

NEW Revenue Generation Area Corporate training - using our skills to help companies develop the team-building, leadership

skills and creative potential of their staff to financially sustain our charitable initiatives




2. Scope Definition

3. Work Plan

4. Findings

5. Recommendations

Agenda



ORIGINAL BRIEF

Business and financial planning for the next 1 - 3 years, particularly in relationship to research

and consolidation of Hua Dan’s revenue model and it’s impact on our social change objectives.

IDFP project

REVISED PROJECT OBJECTIVE

To provide Hua Dan with a thorough overview of the market potential and a plan to deliver

Hua Dan training (product offering), focussing on opportunities in Beijing and Guangzhou

over the next three years. The aim of this plan is to assist Hua Dan to move to a revenue

generating model to fund its non-profit activities.

HUA DAN SITUATION ASSESSMENT

Hua Dan is presently funded mostly via donations.

An opportunity has been identified for Hua Dan to generate revenue by

offering their training to corporate either at the executive level or in firm related

factories.

Hua Dan wishes to move into a more sustainable social enterprise company

hybrid model (using income-generating activities to support non-profit work) and

is seeking to set up a China-based WFOE (Wholly Foreign Owned Enterprise) in

the next 6 months.

Hua Dan wants to maintain its focus on assisting migrant workers.



maximize

# migrants

impacted

Funding

Cost Structure

Income derived

from profit

activities

Profitable trainings

Non-profit trainings

Sales

Outside China

Greater China

Beijing and Guangzhou Client

Segmentation

Tax issues

Hua-Danmain goal

How to achieve

the goal?

How does the money come and

from where?

What are the drivers for

income generation?

Projectfocus

Project focus

Hong Kong

Shanghai

Rural areas

Funding cycle

Corporate trainings

Trainings in schools

Individual trainings

Other activities: translating books, etc.

How to finance it?

Pricing

IDFP project

Market Analysis

Recommendation on first steps




2. Scope Definition

3. Work Plan

4. Findings

5. Recommendations

Agenda



Recommendation

Synthesize findings

Conduct research and

analysis

11/01 04/02 24/03 07/04

Activities

Deliverables

Define issue

analysis

Structure problem

& prioritize issues

Define the problem

• Caroline, Kapil and Hans kick off

• Extensively discussions within the group

• More discussions…

• Define clear data we need and sources to be explored

• Researching• Calling clients

and competitors

• Brainstorming with the client

• Site visiting

• Renegotiating deliverables based on analysis conducted

• Team discussions

• More team discussions

• Working on final materials

• Problem Statement

• Swot Analyses• Draft of issue

tree

• Final issue tree and the focus/priority branches

• Work plan for the analysis with weekly milestones

• Insights from discussions

• Data base with all findings and analysis

• Clear understanding of final direction

• Structuring final deliverables

Final product

28/01 11/02 16-17/04P3&P4 break

• Presenting to professors and client

2 w 1 w 1 w 4,5 w 2 w 1,5 w

Hua Dan Work Plan

• Market analysis• Client target and value

proposition• Pricing analysis• Marketing kit• Recommendation on first

steps




2. Scope Definition

3. Work Plan

4. Findings

5. Recommendations

Agenda



Market Review: the Training industry is very fragmented, focused on specific segments and with limited product offering

Product offer• Focus on technical (hard

skills) training• Few but crescent offers in

soft skills given needs for leadership and creativity in the companies

• Current providers of soft skills training focus on management/executive level staff

• Factories demand strong value proposition

Who is the client?• Companies that consume training services

can be segmented into:• State-owned companies• Private local companies• Factories and offices of multinational corporations

How are the clients reached?• Word-of-mouth plays an important role

(networking)• Common practice is to invite managers from

reputable firms to free-of-charge workshops, in order to create flow of information.

• Training department is conservative - there is no incentive for innovative approach. Business managers are easier targets (more willing to take risks)

Market and competition environment• Driven by economic development, demand

for training has increased • Very fragmented industry with no big players• Young market - established players have no

more than 10-15 years of existence• Low barrier to enter: many small and new

firms

Pricing • Pricing variation is huge,

with no major method base

• Low frequency of trainings makes clients less price sensitive

• For value-based products, packaging is important.



Debrief / assessment and follow-up after new opportunities

with client

“In loco” Training

Training Industry has become sophisticated and clients now require specialized deliverables from the providers

Engage within in specific

client needs

Marketing and Sales

“Product” Development

Clients have shown a preference for full offer (hard + soft skills) and for tailored training which address their specific needs (ex. Nike)

Soft skills is a broad discipline and in the long-run might become a commodity: room for specialization

Activities of business training providers

Capability / attribute required for building competitive advantage

• Innovation

• Experienced sales force

• Business networking

• In-depth HR disciplines knowledge (leadership, mentoring, etc.)• Multiple offer (hard and soft skills training)

• Capable Instructors

• Event skills

• In-depth HR disciplines knowledge (leadership, mentoring, etc.)

• Commercial acumen



Market Segmentation: MNCs best match the proposition and product offering of Hua Dan

Factories (blue-collar/ migrant workers)

Offices (senior managers)

Our research indicates a need for soft skills training both for factory and office workers. On top of typical soft skills training which includes leadership, team-building, presentation and communication skills, such firms also look for:

• innovative and effective approaches / techniques in soft skills training

• intercultural skills training, particularly in the relationship between workers (Chinese) and managers (typically foreign)

• focus on enhancing creative thinking skills amongst the employees

• link with Corporate Responsibility activities

• value creation

Hua Dan differentials

Hard Skills:

• language

• technology

Soft Skills Hard Skills:

• regulation

• marketing in China

Companies active in CSR




2. Scope Definition

3. Work Plan

4. Findings

5. Recommendations

Agenda


are needed to see this picture. Our project has resulted in findings in four key areas

MarketingPlanning

TargetsPartnership

Value added



Hua Dan should target clients through three channels, leveraging upon four identified un-meet needs

Hua Dan Connections

• utilise expatriate network

• utilise current contactsbuild a testimonials

base will benefit word-of-

mouth

MNCs in China with strong

CSR Programs

• companies identified

through AmCham initiatives and

CSR Asia

Partnerships

• leverage partner client-base

• reduces need to rapidly build expertise in

marketing/sales in-house

Four Key Areas of Un-Met Needs to Target with Clients

• soft skills• integration (local and expatriate workers)• team outings (Commune)• individual tailored consultations

Marketing

Planning

Partnerhsips Targets



Planning and next steps

Marketing

Plann-ing

TargetsPartnerships

What we achieved:• Focused objective into a short-term achievable project• Transformed ideas/passion into actionable steps• Prioritized areas for action• Identified marketing opportunities

NEXT STEPS

Opportunities for further engagement:• Evaluate partnership options and define selection criteria• Finalize partnership arrangements and structures • Detailed cost analysis and implications for organizational structure• Organizational capacity analysis - staffing requirements• 5-year business plan

Documents

IDFP Final Presentation Hua Dan April 2008 INSEAD Team: Xing Zhao Srikrishna Sridhar Murthy Alexandre Munhoz Emily Albert