The Number of Firms Joined the Market of English Centers in Vietnam

Introduction:

Today, English has been recognised as an international language, therefore to keep up with the demand of learning English, language centers have been growing rapidly in Vietnam. This essay gives further insights on the market regarding in it competitive environment, the supply and demand aspect, as well as the effect of this market on social welfare.

Supply side of the market

a) Concentration level of the market

The number of firms joined the market of English centers in Vietnam seems to be huge with hundreds of centers in sizes available. Tiep Thi Gia Dinh Online (2015), a reliable e-magazine for consumers, points out that for this type of market in HCM city there are 490 firms excluding the availability of centers that under the operation of universities as well as firms in other parts of Vietnam. This means the English teaching center market within HCMC in particular and Vietnam in general is extremely competitive many entities. These centers are categorised into 3 classes known as large, medium and small operating businesses. More important, the large sized centers are the dominants in the market that hold more shares than others with higher quality and popularity. VUS is a typical example that has 15 centers within HCM city with about 30000 enrolment rates. Besides VUS, there are some other popular names for big sized centers in Vietnam such as British Council, ACET and Wall Street English that in total occupy a relatively large portion of shares in this market. The medium English centers is represented by the names of AMA, YOLA, Outer Space and so on. Outer Space and YOLA on their sites reveal the number of campuses and enrolment, the combination of two has up to 25 centers among Vietnam but with only about 25,000 students. This shows the smaller ability of holding shares of centers in the middle class in the comparison to those giant players. On the other hand, small firms like Elite or SAS typically made up the majority of this market. As a result, the mass number of minor centera in total occupies a significant amount of shares that overtakes those held by medium sized firms and dilutes the concentration as well, giving the market a low concentration.

b) Product differentiation

In order to set themselves apart from other competitors among the market, every firm has the differentiation for the services they provide. Approximately 3 methods of product differentiation stated by Steve Rankel (n.d.) are applied in the market of English teaching centers namely “product innovation”, “pursue new market niches” and “Guarantee their services”. For product innovation, British Council well-accomplishes the product differentiation by offering quality mobile applications for students’ self learning that are only developed by British Council. On British Council