Barrier to entry

New entrants in the industry will bring the new potential choices for the customer and create pressure
on the price, cost and profitability of the organisation.
Capital Requirement: Any new entrant in Ed-tech industry will need high capital to have a strong
financial and building technology for online education platform and to provide sustainable service to
its users. Byju’s current capital base is $ 929 Mn. Which highest among the Ed-tech start-ups.
Economies of Scale: A very strong barrier to new entrants is to achieve economies of scale, because
all the existing players in the industry operates at high economies of scale. New entrants will need
some time to achieve it. With the high scale of operations, Byju’s able to grow at the rate 100% from
past 3 years in terms of revenue with increased base of customers.
Product Differentiation: The yet another barrier to entry for new entrants are product differentiation
to reach its users. Byju’ designed different products to reach its users, like High quality audio-visual
learning, covering entire syllabus within time period, ask a doubt feature, etc.
Access to channels of Distribution: Access to channels of distribution of products are equal for all the
players in the market. The important mode of distributions is through mobile app, online through
browsers, social media, television adds, etc., the access of which are easy and non-restricted.
Customer Loyalty to the established brands: A strong brand loyalty among the customers will be built
by delivering on company’s core promise and quality. This is bit difficult for the new entrants as it will
take lot more time to build the trust in the minds of the customers and make them loyal to the
company. Byju has created a strong brand image in the minds of customers through huge investments
in television advertisements, researches and by delivering the products as per the expectation of
customers.

Threat of Substitutes
There are always different alternative products available for the products and services offered in the
market. The substitutes may be direct or indirect. The direct substitutes are the similar products and
services offered by various players and indirect substitutes are different category of product that can
replace ed-tech product. The below points are considered to see the effects of threat from substitutes
Availability of Close Substitutes: The Ed-tech industry has got many close substitutes available in the
market. Which forces these companies to create strong brand value and product designs which will
create a loyal customer base to compete with the close substitute products.
Switching Cost: The switching cost for direct ed-tech substitutes are not much. Hence, the threat of
customers moving to other alternative solutions are high. But the switching cost of indirect substitutes
are relatively high, because switching will be considered as additional cost
Substitute’s Price Value: The price value offered by the direct substitutes are more or less same across
the products in the category. But the price value offered by indirect substitutes / alternatives are not
similar and vary across geographies. The price value of substitutes are also depends on the customer
tastes and perception.

Byju’s focus on providing high quality products and services consistently. Maintaining the strong
consumer relationships, through integrated strategic marketing to form an emotional connect and
loyal customer base. Built the strong brand to attract the customers
Rivalry among Competitors
Rivalry among the Competitors is an important factor in making any strategic decision. All the actions
of the company will be dependent on the reactions of the competitors.
No. of Competitors: There are more than 4000 Edtech companies present in India. Out of which 15 to
20 only are in the mainstream competition.
Industry Growth: The EdTech industry is at its boom in India. According to the 2016 KPMG report the
EdTech industry in India was worth $247 Mn and could reach $1.96 Bn by 2021, which is second largest
market for e-learning after US. The opportunity for growth is huge for EdTech companies in India. The
scope of ed-tech companies is not only limited to study materials, they are treated as career shaping
tool as well.
Fixed Cost: There is huge investment in fixed cost for development of customised learning apps,
animated videos, games, stories, upgrading the contents based on changes in syllabus and
requirements of the users. Without having a strong capital base it is very difficult for these companies
to offer differentiated and customised learning app.

Byju’s need to capture higher market share through creating a strong brand value to have loyal
customers with high psychological switching cost, do continuous research for offering differentiated
high-quality products for young kids to college students, develop products for all the segment of e-
learners.

Bargaining Power of Buyers

Bargaining power of buyers indicates that, the capability of Customers to create pressure on the
business organisations to get the high-quality products of their choice at affordable prices with
exceptional customer service.
Number of Buyers: The number of
Availability of Substitutes:
Switching Cost:

Bargaining Power of Suppliers

Bargaining power of buyers indicates that, the capability of Customers to create pressure on the
business organisations to get the high-quality products of their choice at affordable prices with
exceptional customer service.
Number of Suppliers: The number of
Availability of Substitutes:
Switching Cost:
Industry’s Importance to Suppliers