Developing an International Art School Business Plan

Business Description

This business idea envisions the development of an international art school called Qiao in New York. Qiao is the Chinese language equivalent of “Bridge”. The essence of the school is to provide a forum for educational and artistic exchanges of international students between the United States and China. Qiao will facilitate Chinese students entry to U.S schools at a fee. The company intends to exploit the existing business opportunities created by thousands of students who leave China every year to search for better educational courses in the United States (Chao et al., 2019). In particular, the school will provide learning opportunities for students interested in acquiring English as the second language while also facilitating international students from China keen to advance their artistic skills and knowledge in the United States. In recent years, the United States has recorded tremendous growth in international students. 

The 2015 Open Door report shows that the number of international students seeking higher education grew by 54.8% between 2003 and 2013, from a low of 572,000 in 2003 to 886,000 in 2013 (Chao et al., 2019). However, the most significant growth during this period came from Chinese students. In 2003, the number of Chinese international students was 61 765. In 2013, this number had grown to 274,439, suggesting a massive 344% increase. New York accounted for 10% of the Chinese student population.

Furthermore, data from the U.S. Department of Homeland Security (DHS) shows that China sent more than 370,000 international students to the U.S in 2019. The number accounted for more than 35% of all international students pursuing their education in the country. These statistics indicate the growing business opportunity among Chinese international students. Qiao has the vision of providing a forum for the exchange of students between the two countries, emphasising students with an interest in art and cultural exchange.

External Stakeholder Analysis 

Various stakeholders will impact the development and growth of Qiao International School. The U.S federal government, through the DHS, must authorise the entry of international students into the U.S. Furthermore, certification is a significant aspect before launching the business. The DHS, along with the Exchange Visitor Program (SEVP), must approve the establishment of the school. Besides the federal government, the New York state government must also support and regulate the number of students allowed into the institution. The state government must license the school before it can begin operations. The community will also have input in the development of Qiao. The school will be built within local communities, and their approval or disapproval of the school will affect the decision-making process.

Furthermore, the Chinese international student population will form an integral stakeholder. The type of programs offered at Qiao must always reflect the prevailing interest among the target market. Lastly, the Chinese government will be an external stakeholder in regulating students’ movement from China to the United States.

 Industry Analysis

PESTEL Analysis 

PESTEL analysis is one of the most effective management techniques used to analyse the external business environment. PESTEL is an acronym of various elements that impact the business environment, such as political, economic, and social determinants. The model also covers the technological, environmental, and legal factors that ultimately influence business decisions (Mohammed, 2019). For Qiao to succeed, it must evaluate all these factors and integrate them into the strategic planning process. 

Political Environment 

The political environment will directly impact how Qiao operates. China has played a crucial role in the global political sphere. In particular, political tensions with the U.S have profound implications on business prospects. On the positive side, the two countries have made significant steps in improving diplomatic engagement over the past decade (Zhang et al., 2019). An increasing number of students are willing to travel between the two countries because of the closer political and diplomatic ties (Chao et al., 2019). However, adverse travel advisories by either of the countries are likely to injure the business. Any political decision that limits students’ movement from China to the U.S will have adverse effects on the company. 

 Technological Environment

Technology affects Qiao’s operational activities insignificant ways. Several technology-based applications are available to support the learning of foreign languages. Technological innovations that ease learning English as a second language will be pivotal in promoting Qiao’s commercial and business goals. The U.S and China are the leading developers of artificial intelligence that can be applied to the learning process, entertainment, and leisure (Zhang et al., 2019). These activities interact to influence educational outcomes. Crucially, advancements in technologies have also had adverse effects on many facets of human civilisation (Marcos, 2017). However, art remains one of the few disciplines that integrated technology to enhance artistic skills and artworks.

Economic Environment

The U.S and China represent the two biggest economies in the world. China has made tremendous economic growth in recent years, pulling many of its citizens from poverty to middle-income status (Zhang et al., 2019). The continued economic growth has positive effects on Qiao. More students will have the purchasing power to enrol in international art schools to further their educational dreams. Furthermore, the United States economy has recorded tremendous resilience amid the damaging coronavirus pandemic.

Qiao will take advantage of the stimulus package offered to grow its processes. Interest rates in the U.S have remained low, reducing the cost of borrowing funds to finance business operations. Moreover, the U.S federal government has pledged to financially support small and mid-sized business organisations to rejuvenate economic growth.

Socio-Cultural Environment

The social-cultural environment entails various behavioural and cultural elements that impact business outcomes. The cultural dichotomy between China and the United States will influence Qiao’s commercial engagement. The Chinese and American cultural systems favour and embrace art and artworks. The international art school is likely to enjoy tremendous support between the two cultures. However, in the marketing and governance of the school, care will be given to accommodate different cultural beliefs that permeate the two nations.

The Legal Environment

Qiao will operate in an environment and industry guided by a set of rules and regulations. The institution must uphold quality standards set by the U.S education authorities to remain operational (Zhang et al., 2019). The regulatory agencies review sets of rules that promote fair competition among industry players. These rules and standards will positively affect Qiao as it competes with other industry players. 

 Business Ownership Form

Qiao has a variety of forms of business ownership from which to select. However, the international art school will be registered as a business corporation. A business corporation refers to a legal entity created by an individual in compliance with existing laws to conduct specific business forms to return a profit (Dari-Mattiacci et al., 2017). This form of business ownership will be appropriate for Qiao because it allows the business to continue operating for generations to come. As a separate legal entity, the corporation will be able to transact independently by entering into contractual agreements.  

The business activities are separated from the owners creating a distinction that is vital for objective decision-making. Qiao will enter into various agreements in the course of trading. The legal entity status carries significant benefits. There will be limited personal liability meaning that the company and its shareholders will have a different but specific obligation to each other (Dari-Mattiacci et al., 2017). Similarly, this form of ownership enjoys the comparative ease of transferring ownership from one person to another. The business will also have several ways of accessing capital and may enjoy tax benefits from time to time. 

 Global Strategies

Qiao anticipates expanding its operations beyond the United States. Over time, the corporation will establish a presence in mainland China, Hong Kong, and Taiwan. These international markets share cultural and social ties making them ideal regions to market the business offerings of Qiao (Chao et al., 2019). As a business moulded around Chinese cultural and artistic exchanges, the global market should align with this vision. Hong Kong shares similar economic and cultural ties with China, with citizens of the two regions sharing language, traditions, and political connections. Most importantly, Qiao uses existing students as marketing vehicles to increase its visibility in the target communities (Chao et al., 2019). Furthermore, these regions have recorded solid economic growth becoming attractive investment destinations for Qiao.

International Market Entry Strategies

Partnering 

Partnering is a crucial market entry strategy and almost necessary when expanding to specific overseas markets. This strategy can take various forms beginning with a simple co-marketing arrangement to a more sophisticated approach. Partners enter into a strategic alliance to oversee complex business operations (Rexhepi, 2015). Partnering is especially a vital expansion strategy for Qiao because of the conflicting cultural values between the United States and the global target market. The company may partner with a local education system in the target market and use it to market its services. The local partner will have the advantage of local market knowledge that Qiao can exploit as it establishes its presence in the regions (Dari-Mattiacci et al., 2017). Furthermore, the partner will provide contacts that Qiao might use to grow its customer base.

Buying a Company

Qiao may consider buying an existing company as a strategy for entering the global market. This strategy will be applicable if the identified company has a substantial market share in the target region. The system will overcome direct competition while taking over a significant customer base (Rexhepi, 2015). The strategy will also provide Qiao with the status of a local company gaining the advantage of local market knowledge. 

 Code of Ethics

Code of Ethics for Personnel

• Building trusting relationships and credibility: The success of Qiao depends on the trust, confidence and trust that we earn from shareholders, customers, and employees. Every stakeholder will be expected to demonstrate faithfulness to commitments, uphold integrity and exercise honesty throughout their relationship with the company.
• Respect for individuals: Every human being deserves to work in an environment where they are respected. Qiao is committed to creating a workplace where all stakeholders respect and are respected by others. 
• Upholding quality: Every personnel is expected to provide high-quality services to both internal and external customers. Every effort should be made to ensure that the quality of service is delivered to meet the customer’s expectations.
• Create honest and open communication: Qiao believes in an open-door policy that facilitates exchanging ideas as the basis for effective decision-making. Junior employees have the freedom to raise any issue with any member of the management team regardless of their seniority.
• Upholding the law: Qiao’s commitment to integrity is demonstrated by complying with company rules and regulations and the laws of the land as we do business. Every employee is expected to read and understand directions, regulations, and laws governing their roles. 

Code of Ethics for Conflict of Interest

Qiao takes exception to an employee engaging in acts that are likely to create or imply a conflict of interest. In particular, the following activities are considered a demonstration of conflict of interest and should be avoided:

• They are being employed (including close family members) by a competitor or potential competitor to offer consultancy services or other forms of employment while still employed with Qiao.
• Recruiting or supervising members of your close family or other relatives
• Agreeing to serve as a board member for a commercial organisation without seeking Qiao’s approval
• I am having a substantial interest or owning shares in a contractor, supplier, or competitor.
• Having an undeclared financial or personal interest or having an intent to gain in any of Qiao’s transaction

Code of Ethics for the Use of Company Property

• Company resources, including equipment, material, time, and information, are provided and used only for business purposes.
• Occasional personal use may be allowed in so far as it does not affect job performance.
• All employees are trusted to behave responsibly when using company property to conserve company resources.
• The responsibility of protecting and conserving company resources assigned to departments for use fall on departmental managers
• Fax machines, copiers, and computers will not conduct external businesses or further outside political activities.
• Qiao reserves the right to monitor or review all information and data on company-issued electronic devices, including computers, intranet, and the internet. 

Code of Ethics on Receiving Gifts

• Employees may receive or accept unsolicited gifts, except cash and other forms of money, as long as they align with reasonable marketplace ethical practices. 
• Employees may receive gifts of nominal value such as t-shirts, caps, calendars, and mugs.
• Employees may receive fruit baskets, flowers, and other modest gifts for commemorating special occasions. 
• Employees will not accept compensation, including honoraria from organisations and entities with whom Qiao does not have business relationships. 
• Gifts exceeding $200 may not be accepted unless approval is sought and obtained from the management.

 CSR Position

Qiao is a firm believer in corporate social responsibility. The company believes in the protection of intellectual property rights. It stands opposed to any form of manipulations or intellectual property abuse that denies artists the chance to exploit and benefit from their artistic work. The company is committed to the measurable and meaningful educational program that facilitates the global exchange of cultural values and practices as vehicles for international development, world peace, and connections. The company shall develop the following programs as part of its CSR commitments:

Art for Life Program

This program anticipates creating a fund to support needy but talented children to develop their artistic skills. Identified and selected children will be enrolled at Qiao or other reputable education centres that provide art lessons on music, dance, sculpture, etc., under the full scholarship of the company. The program will be rolled out in the United States with plans to reach global markets. 

Stop the Pirate! Program 

Qiao will establish an anti-piracy program as part of its CSR initiatives. This program will focus on public education regarding the adverse effects of piracy and abuse of intellectual property rights. The campaign will target communities and neighbourhoods with a history of pirating music, imitating artworks, and abusing other forms of intellectual property. The program will use electronic, print, and digital media to challenge the public to protect artistic works as a basis for personal and collective growth.