BUSINESS PLAN OF STAR GROUP

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1. Introduction
Star group is educational service center which is projected to commence in 2013 in,
Somalia for the purpose of preparing high school graduates to equip necessary preuniversity courses/ skills to succeed in their system education locally and internationally
as well. The main goal of the business is to provide excellent educational service
delivered by well qualified lectures and trainers who have a great deal of experience in
their fields; it will represent a unique and distinctive educational service. Upon
completion of this program, students will be able to successfully complete their studies in
prestigious universities around the world without having any difficulties regarding the
academic, environment and the culture.

Vision
To become a leading center that produces highly competent students.

Mission
To promote knowledge, skills and capabilities of students through a variety of programs
and global networking.
Objectives:
1. To prepare students to be qualified for prestigious universities.
2. To provide quality and balanced curriculum recognized by well known
universities.
3. To prepare students for international academic placement tests.
4. To create network around the world universities.
5. To provide students and business individuals advice and consultancy.
Programs offered:
Star Group will offer local and overseas programs that include Sciences, Information
technology, and Business studies. The duration of the program will be one year that
consists of three semesters. Each semester is four months, include semester break and
exams. Students who successfully completed this program will be able to study wellranked universities in the country as well as international universities around the world.
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Currently, some Somali students are pursuing their higher education in abroad such as:
Sudan, Egypt, Pakistan, India, Bangladesh, Malaysia, China, Turkey, Ukraine, and
Russia; so that our curriculum will be based on the requirements of those universities as
well as the cultural diversity of those countries.

The details of the programs are as follows:

Sciences
Math
Physics
Chemistry
Biology
IT and web designing
English
Cross-cultural

Arts
English
Business & Math
Accounting
Economics
Arabic Language
IT and web designing
Cross-cultural

Requirements:
1. Secondary school certificate recognized by the ministry of education, and the
senate of the institution
2. Student must at least pass seven subjects from the over-all subjects in the
secondary school.
3. Recommendation letter from the school should be provided upon the application.
4. Four recent photographs (passport size).
5. The student must pass Arabic and English Placement Test.
6. Students must pay $20 for processing the application.

Situation analysis
Star Group is a start up institution that provides educational service; its customers will
come primarily from secondary school students and those who have equivalent
qualifications. Initially, star group will not face much direct competition, so its biggest
challenge will be to convince potential customers to enroll our institution. In order to be
successful in this much needed new service, we need to consider factors that will affect
the whole industry of education. These factors include: external and internal environment.

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External environment factors

Political and legal factors: Like all other institutions, is subject to the rules and
regulations set by the ministry of education. The political and legal environment in the
country supports the educational sector. This will enable us to get approval and license to
operate from the government conveniently.
Social and cultural: is very important element in external environment that affects the
educational system. In the city and the surrounded areas, there is an increase in
population size and urban people are becoming more aware, their life styles are changing.
All these changes will most likely to have positive impact on star group service.
Technological factors: have significant influence in the education industry. Technology
is dynamic. It is changing rapidly; Star group have to adopt technological changes in the
environment to be competitive. There are so many devices that are more efficient to
deliver star group service, these include: visual aids, projects, computes labs and digital
library. Even though, the current internet service providers in the country do not provide
sufficient speed that can be used to develop online data base, it will only have minor
effects to our service.
Economic factor: The overall state of the economy will have large impact on star group
performance. Since our school is private, and that the government dont allocate funds for
us, we have to generate our revenue internally (i.e potential customers), our target is
middle and high income people, this means we have to consider the price we set for our
services, the fees structure will depend on the income of the family, and overall the
economy betterment.
Competitive environment
Threat of New Entrants: If Star group is successful; it will entice others to enter the
market. The entrance of this market is very high because, there are no regulations that can
prevent the new entrants to enter in this industry, and it is also very easy to set up such
this program as it does not need more capital. The only barriers are the economies of
scale, and the network that we are already developed with our partners.

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Threat of Competition and Substitutes: star group is pioneer for this service, one of the
first to market. Therefore, there will not be any direct competitors. But there is a threat
for substitute, some of the institutes are providing similar courses, but their main
objective is to support secondary school students to understand more of the subjects, in
other words, they act like private tutorials. Express Institute, Kasmo, Al-Abadir and
Ramadan are providing science, Arabic and English languages separately. However, our
service is concentrated, integrated in all subjects and a bit more advanced. We will also
help students to choose their university programs, and instilling them cross cultural
values on the selected region in order to avoid cultural shock.
Bargaining Power of Buyers and Suppliers: Since our service is unique and innovative
that was not served in the market, and there is great demand for this program. Tens of
thousands of students finish their secondary school every year; most of them are ready to
pursue their education locally and overseas universities. So, bargaining power of
customers will be low. Similarly, bargaining power of suppliers are also low, the materials
such as text books, stationeries, visual aids, supplies are readily available. Lecturers are
more than willing to contribute their knowledge to the society. Many graduates are
coming from different overseas countries. Therefore, this makes the bargaining power of
suppliers to be lower.
Internal Environment
To be relatively new to the market is little bit tough to adopt and run the new business
successfully. Star groups s success depends on its ability to convince customers to adopt
this new program. Star group will hire qualified and dedicated managers who will always
try their best to minimize costs, this cost reduction will be long-term rather than short
term, in other words, the managers will include cost saving as part of strategic planning.
At the same time, managers will create innovation and quality culture to make the
institution more profitable. The major financial resource of our institution comes from
partners and interested parties, such as shareholders, investors, and community leaders
and all the relative parties of the society who have real interest to do this business.

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Star group values keeping its service current and ensuring that the institution is in a
position to take advantage of any oncoming new technologies. This will ensure that the
institution to be current and update. Star group has operation capabilities that can serve
major city location in the capital city of Mogadishu, following success in this market; star
group will be able to expand the whole country.
Human resource will be the most valuable asset in the institution; the employees will
receive competitive salary, healthy benefits, and stock option as part of their
compensation.

SWOT analysis
Strength
Our service is unique and quite new, and much more different from the competition, no
other institutions have offered this fully integrated program in the country before. We will
have the first mover advantage. Most of our lecturers are well talented educated and
trained abroad.
Weaknesses
The service is new, and the people dont know much about it, so, there is a possibility to
fail in the market. There is a lack of more experience in this industry, as well as
inadequate capital investment for the institution.
Opportunities
The demand of this service is quite high because so many secondary schools are
producing thousands of students who are eager to further their education up to university
level before they go to higher education institution, they need bridging and foundation
programs that cater their needs.
Threats
Possibility of new entrants is very high because there are no significant barriers to this
market. Existing universities may see this opportunity and enter the market, as they have
economic scales and recognized brands.

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Market Research
Placing the roots of the new business in places is a very challenging and this requires
researching and gathering suitable information. The Star group collected secondary data
for the existing service provided by the schools and institutions that allowed it to
investigate whether similar service is being offered to the students or not and the intensity
of the rivalry in the market. Besides, the primary data has been gathered from final
semester of secondary students to show their wildlings and feeling of this newly invented
program, first year of university students both local and overseas were asked the
obstacles they met in their first semester as well as the parents who are really the
backbone for the decision regarding educational learning process. The research was done
through personal and group interviews and then information was analyzed through
qualitative analysis. The result indicated that students have encountered so many
obstacles and hinders which sometime leaded to withdraw students from the universities
or being drop outs. Thus, the research recommends that there is interest and high demand
for these services to established in the city where everybody can come and grasp this
opportunity and be successful students in his journey of studies.

Marketing goals and objectives

The star group goal is to be the best bridging program provider in the country and serve
with quality. The main objectives are to enroll 175 students for the first year. Since the
school has one intake in every year, the second and third year enroll 264 and 300 students
respectively. Attaining the high level of student satisfaction is also our major concern as
well as attracting new students in every intake.

Marketing Strategies
Segmentation
The market for star group service can be easily divided between secondary school
leavers, and those who have equivalent qualification. Secondary school leavers can be
further divided into those who want to go into local universities and those who want to
pursue their education abroad. Similarly, the students who dont get the opportunity to get
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further education promptly who are in need to fill the gap, and the refresh their mind,
these are the students who have been outside of the academic field for quite some time
and want to come back. There is another important segment, which is the business
segment; who would like to travel abroad.
Target Marketing
Star group evaluated all those segments mentioned above, to determine its focus for
initial investment.
The first segment, secondary school leavers who are planning to go to local universities
will need solid foundation programs to succeed and perform well in the tertiary
education. The second segment, are those students who want to further their education
overseas. This is our main focus; it is the segment that makes us unique and a niche
market. These students want more than foundation programs, they want the culture of the
region they are going, and a proper placement, as well as consultation regarding the
programs they want to pursue. Star Group will also target for those who want to come
back to education field, and refresh their memory. The last segment which is the business
segment, Star group will provide them cross-cultural diversity, and consultancy services.
Positioning
Star group will position itself as integrated, concentrated, and instilling cultural values in
the mind of the students, this is different from any other service provided by existing
educational systems. This is known as differentiation strategy, which works best in the
current situation of the country. Star group will also offer quality education, interactive
class-rooms aided by the best facilities in town. Star group will bring international
examination, such as IELTS and TOEFEL to prepare students for international standard
examinations.
Marketing Mix Strategies
Product
Star group is offering pre-university courses and foundational programs. The offering will
include science subjects, such physics and chemistry, and arts such English and Arabic
Languages. One of the most important services star group will provide are cultural
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education, preparing students for international examinations, and giving them strength
based tests to discover their natural talents, this will help students to choose their field of
specialization.
The institution is expected to provide services that meet the highest standards of quality,
inclusiveness, and integrated. Our staff will need to have good knowledge of the services
we are providing, and good delivering skills of the lectures. In order to achieve this, the
management will attract the best and experienced workforce available in the town,
especially those educated and trained in abroad and those who will be able to meet the
standards and expectations.
Price
The pricing decision for star group is made more difficult due to the newness of its
service offering and lack of strong competitors in the market. Initially, penetration pricing
can be effective to gain student trail, expose students to the excellent service quality, and
build customer loyalty for the brand. Once we develop a loyal customer base, some
incremental changes can be taken away from them without major disruption in the
customer base. The general formula for pricing will be traditionally based, covering the
costs with 30% profit margin, which is definitely subject to change depending on market
forces.
Promotion
Promotion process is tightly related to introducing new business. Our promotion strategy
will start with advertising the venture on local TV stations, and then will take next stage
of advertising in local newspapers and by mailing to target customers.
Soft copy brochures are good options. We will send our target market brochures through
e mail which are inexpensive and efficient. This will be done in order to make our target
market aware of our business and our offers.
During the opening ceremony, we will provide discount for the first 50 students who
enrolled our institution. And give them strength based test for free. So that our potential
customers can get idea that what kind of service we are offering.

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These are kind of promotional strategies that we will do at the beginning. We might even
consider doing aggressive promotional strategy before we lunch venture. Our goal is to
make our target customers aware of our services and later we hope that we will gain their
loyalty based on good quality services. So the second stage of the promotional strategy
will be based on word of mouth, which will be assembled among our students and
parents.
However, second stage doesnt mean that we will stop promoting our venture through
means we mentioned above, in contrast we will continue but with lighter intensity. This
intensity can increase from time to time, depending on new offers of our business.
Place
The location of the institution will be attractive; it will be in the city center, more
specifically Bakaro Market which is very close to major bus stations. This is to make the
institution more accessible to our customers.
Financial projection of our marketing plan
Every institution needs resources to start its services or business. The major resources are
coming from the partners of the institutions. That is four of us. Each of the partners will
contribute equal amount of $11,000. The expenses we projected for the first year will be
$51,920. $44,000 will be paid by the partners, and the rest of $7,920 will be borrowed
from the family members (see appendix A). The entire profit will be divided among the
partners, but in case of initial loss, the partners who provided capital will bear the
consequences of loss.
Projected operating expenses for the first three years
In order to start the institution, there will be initial cost that we will incur; these costs will
include advertising, salary of the staffs, rent of the building, and stationery expenses (see
appendix B).
The following table will illustrate operating expenses in the first three years:
Items/descriptions
Salary of the lecturers
9

First Year
($)
$24,000

Second
Year ($)
$33,600

Third Year Total ($)

($)
$43,200
$100,800

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Admin salaries

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$4,800

$4,800

$7,200

16,800

Rent

5,400

5,400

5,400

16,200

Books and stationeries

2,700

1,500

1,600

5,800

Advertisement
Miscellaneous expenses

1,920
1,200

1,550
1,260

1,350
1,350

4,820
3,810

$40,020

$48,110

$60,100

$148,230

Grand total

Projected revenue from the service for the first three years
In contrast of the expense, there is revenue; our main source of the revenue will be the
fees that we charge for our services, such as teaching and training (see appendix C). Not
only we provide training for students but also for business individuals regarding crosscultural diversity. For instance, for those who want to go abroad for business purpose, as
well as providing consultancy to help students discover their strength. Another source of
revenue will be agency that will facilitate students to get applications from selected
universities. We will act like marketers for some major universities; star group will earn
commission from the universities for the service they render.
The following table will illustrate the revenue of Star group for its start up.
Services

First Year

Second Year

Third Year

($)
$3,500
$63,000
$2,900
$950
$1,200
$71,550

($)
$5,240
$95,040
$4,350
$1,900
$2,400
$108,930

($)
$6000
$108,000
$4,350
$3,500
$3,170
$125,020

Application fees
Semester fees
Consultancy and career service
Agency commission
Cultural training services
Grand Total

Total
$14,740
266,040
11,600
6,350
6,770
$305,500

First year profits

The projected expenses and revenue for the first year of operation, we will expect to earn a
normal profit. The details are as follows.
Revenues (fees)
Other revenues (consult)
10

66,500
5,050

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Total Revenues

71.550

Total Expenses

(40,020)

Net income

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31,530

Action Plan
Action

Dec

Jan

Feb

Approval from Ministry of Higher Education

Beginning Campaign of Advertisement through

media
(Local TVs, Local FM Radio, Local Magazines)

Job Announcements, Recruiting Lectures and

Administrative Employees.

Publication brochures, Distribution

Visiting higher education institution

Registration Students/ Trainees

Who
Director, NAJMA
Chief Operating
Officer IDIL

Chief Operating
Officer, FATIMA
Chief Operating
Officer, NAJMA

Director of Public
and External
Relations,
Academic Director,
ZEINABS

Commencement day

Chief Operating
Officer, Najma

Marketing controls and contingency plan

Star group will continually evaluate its marketing efforts to ensure its performance is on track
against stated first year objectives. Star group will monitor its first marketing objective which was
to enroll 175 students for the first semester in year one. If the market mach our plan, we will
increase enrollment by 50% each in second and third years. If they are not met, the market will
have to be surveyed to determine awareness level, and to increase the recruiting by increasing the
frequency of the advertisement. And also the customer satisfaction will be monitored by ongoing
customer satisfaction measurement.

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If star group, s target market does not respond to the service as planned, it would likely to be
easier to change the market to fit the service rather than changing the service to fit the market. For
example, our core business providing bridging programs for students who finished secondary
school, if star group dont get sufficient response from this market, it will focus more it is second
segment which was the business segment, star group will provide them consultant and training
services.

Appendices
Appendix A: Initial investment
Description

Cost

Office equipment &

Machines

$ 2,500

Projectors

$ 2000

Class furniture

$2,640

Computer labs

$4,800

Total

$ 11,900

Appendix B: Projected expenses

First year expenses
Items/descriptions

Sem 1($)

Sem 2 ($)

Sem 3 ($)

Total ($)

Salary of the lecturers

$8000

$8000

$8000

$24,000

Admin salaries

1600

1600

1600

$4,800

Rent

1800

1800

1800

5,400

Books and stationeries

900

900

900

2,700

Advertisement
Miscellaneous expenses

960
400

640
400

320
400

1,920
1,200

Grand total

$13340

$13340

$13340

$40,020

Sem 1($)

Sem 2 ($)

Sem 3 ($)

Total ($)

Second year expenses

Items/descriptions

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Salary of the lecturers

$11,200

$11,200

$11,200

$33,600

Admin salaries

1600

1600

1600

$4,800

Rent

1800

1800

1800

5,400

Books and stationeries

500

500

500

1,500

Advertisement
Miscellaneous expenses

750
420

500
420

300
420

1,550
1,260

Grand total

$16,270

$16,020

$15,820

$48,110

Items/descriptions

Sem 1($)

Sem 2 ($)

Sem 3 ($)

Total ($)

Salary of the lecturers

$14,400

$14,400

$14,400

$43,200

Admin salaries

2400

2400

2400

$7,200

Rent

1800

1800

1800

5,400

Books and stationeries

600

500

500

1,600

Advertisement
Miscellaneous expenses

650
450

400
450

300
450

1,350
1,350

Grand total

$20,300

$19,950

$19,850

$60,100

Third year expenses

Expense calculations for first year.

Description

Cost

Salaries of lecturers

5*($400)=2000/month
4**($2000)=$8000/sem
2*($200)=$400/month
4($400)=$1,600/sem
$450/month
4($450)=$1800/sem
$ 900

Administrative
Rent
Original books
Media advertisement
Brochures

$ 250 for Local TVs

$ 150 for Internet
$160 for Local newspapers
$80

Miscellaneous

$ 400 /sem

Total amount

$ 40,020

*No of lecturers or administrative employee.

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**No of months in the semester.

Appendix C: Revenues
First year revenue
Services

Sem 1 ($)

Sem 2 ($)

Sem 3 ($)

Total

Application fees
Semester fees
Consultancy and career service
Agency commission
Cultural training services
Grand Total

$3500
21000
800
0
300
$25600

$0
21000
950
450
400
$22800

$0
21000
1,150
500
500
23150

$3,500
$63,000
$2,900
$950
$1,200
$71,550

Services

Sem 1 ($)

Sem 2 ($)

Sem 3 ($)

Total

Application fees
Semester fees
Consultancy and career service
Agency commission
Cultural training services
Grand Total

$5,240
31,680
1,350
750
700
$39,720

$0
31,680
1,400
550
750
$34,380

$0
31,680
1,600
600
950
$ 34,830

$5,240
$95,040
$4,350
$1,900
$2,400
$108,930

Services

Sem 1 ($)

Sem 2 ($)

Sem 3 ($)

Total

Application fees
Semester fees
Consultancy and career service
Agency commission
Cultural training services
Grand Total

$6000
36,000
1,350
1000
920
$45,270

$0
36,000
1,400
1200
1,050
$39,650

$0
36,000
1,600
1300
1,200
$ 40,100

$6000
$108,000
$4,350
$3,500
$3,170
$125,020

Second year revenue

Second year revenue

Revenues calculation for the first semester

Description

Cost

Registration fees

175 students ($ 20)= $3,500 once year

Semester fees

4 month ($30/month)= $120/sem/student

Revenues

175 students ($120)= $ 21,000

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Consultancy service+
Commissions
universities++
Training
for
diversity+++

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$2900

from

the $950

cultural $1200

+ Consultancy services are charged per service, and the projected revenue from the service is so
small which is about 2900, this is because of the lack of the expertise in this area, star group will
expect to do 3 services for the whole year, each service will vary depending on the service.
++commission from the universities: the institution will connect specific universities, and will
give brief of our service, then star group will make connection between the students and the
universities, from there star group will get their commission, for the first semester we expect
zero, as this service is new also.
+++training for cross-cultural- this is course is for those students and business individuals who
want to go overseas. Star group will provide students as well as business individuals orientation
programs about the culture of the country they want to go, the cultural training is based on region,
for example Asian region, most Asian countries have similar culture. The projected revenue for
the first year will be $1200.

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