Surya Tutoring: Evaluating a growth equity deal in India

Question:

What competition was Surya facing, both at the time and going forward? Could it pre-empt

future entry?

Group 4

Competition (During)

• External

• Other Institutes (Bansal, Resonance, Career Point, Mahesh Tutorials)

• Private / Boarding Schools

• Individual Teacher

• Indirect Competition• 40% CBSE weightage

• Internal

• Teachers of Surya Institute• 70 / 280 IITians

• Ability to replicate business model of Surya

Competition (Going Forward)

• Self

• Low barriers to entry• Increased threat of new competitors (direct)

• Indirect Competitors (SATs, EILTs)

• Lucrative Industry

• 1,50,000 aspirants (and growing)

• Technology • Teleconferencing

• Remote Video Classes

• Equity broker and financial services groups

Pre-empting future entry

• Expansion into major cities (Mumbai, Delhi, Bengaluru, Chennai)

• Stock Options to faculty

• Technology

• Management/Hierarchy

Pre-empting future entry

Besides their efforts, they will not be able to thwart competition fully as all 5 forces (Porter’s) are low.

Hence, the industry is very competitive.