Sylvan Learning Systems Case Study
The Sylvan case study illustrates the challenges of building value and improving business performance through an acquisition and diversification strategy that did not coincide with the capabilities and competencies that originally built the Sylvan brand. Sylvan was founded by W. Berry Fowler in 1979 and during his six year tenure, Berry developed the franchise business model, training and educational programs, and teaching methodology that provided Sylvan with a competitive advantage in the education industry.1 Berry Fowler built his business strategy through an intimate understanding of customers needs and developed Sylvan’s core competencies around providing supplemental education designed to fill the educational gaps experienced by students. 1 Upon Berry’s departure, Sylvan’s new CEO, Douglas Becker, embarked on a corporate-level strategy of related diversification. However, this strategy did not successfully translate into financial economies between businesses nor did it obtain significant market power through these additional levels of educational diversification.2 To that end, this case study will look more closely at Sylvan’s process of diversification and acquisition strategy, management’s leadership as Sylvan transitioned from their founder and the new course the organization charted to address additional challenges for the new millennium.
W. Berry Fowler founded Sylvan Learning Center with an investment of $14,500 in 1979.1 As a former teacher and through his own experience of receiving tutoring help during college, Fowler hoped to prevent students falling short academically by filling the educational/learning gaps left by students’ primary educational provider.1 During his six year tenure, Fowler built Sylvan’s competitive advantage through its low cost franchise model, educational programs and teaching methodology. Of particular importance to the success of Sylvan Learning Centers (and sustained competitive advantage) was the ability to capitalize on the expertise and resources of local franchise owners (Fowler lacked the capital to expand on his own) and gain maximum benefit from knowledge they diffused throughout the organization.2 Additionally, through a focused strategy of augmenting K-12 educational services offered by the public school system, Sylvan was able to capitalize and to integrate their i...
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...e activities and focus that were critical to the Sylvan’s earlier success (i.e. Sylvan Ventures). That being said, Sylvan’s recent split into two companies to allow better focus and better investment decisions is clearly a gigantic step in the right direction. The goal of this restructuring through down scoping was to reduce Sylvan’s level of diversification, to eliminate unrelated businesses that didn’t serve a strategic purpose, and to help top-level managers refocus on the core business.2 In the case for Laureate, Becker and his top management can solely focus on post-secondary education. For Educate, Inc, Chris Hoehn-Seric and his top-management can solely focus on the K-12 education market. With this focus, Educate, Inc and Laureate should marshal their resources to continue to define and mine opportunities in their respective segments of the fragmented educational market.
References:
1. Ashaye, Cotts, Gray, Perry, “Sylvan Learning Systems”, Sylvan Learning Systems, Inc.
2. Hoskisson, Hitt, Ireland, “Competing for Advantage”, Thomson Learning 2004.
3. Educate, Inc., http://www.educate-inc.com
4. Laureate Education, Inc., http://www.laureate-inc.com
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