Testing a Festo Inter-Company Education Centre in Kenya as a Business Idea
Wintersemester 2020 - FESTO Didactic
Festo Didactic is planning on expanding their operations to the East African region, by setting up an inter-company education centre in Kenya. The centre should provide the service of education in the high-tech field to Kenyan manufacturing companies. In the past years, Kenya has shown significant developments and technological progress. It is an opportunity for Festo to enter an underperforming market and to enhance their knowledge about the international usability of their services.
Our goal was to test the business idea of a Festo inter-company training centre in Nairobi, Kenya, in order to find out if the country’s structure is mature for such an investment. We wanted to find out if there is enough potential for such a training centre and then come up with a solution in a way that is desirable, feasible and viable.
In order to test the business idea of an inter-company training centre in Nairobi, Kenya, we followed the lean approach, which is characterised by the constant exchange with the potential customers. Therefore, we have contacted over 1,500 people, including all member companies of the Kenya Association of Manufacturers (KAM) and several industry experts. Subsequently, we conducted 16 interviews. In addition, we supported our findings using secondary research and constantly exchanged with Festo.
Our research indicated severe problems in the Kenyan vocational education system. A study has shown that over 83% of Kenyan companies see a gap between the heavily theoretical education system and the needs of the industry. Our interview partners also confirmed that the obsolete equipment and curricula and an abundance of certificates are only some of the pain points. Therefore, many companies do not offer any further education for their employees, while the companies that can afford it, opt for expensive alternatives, such as paying for training abroad or flying in experts from Europe or Asia.
This is where Festo’s inter-company education centre comes in. Manufacturing companies from all over the country can send their employees to the training centre in Nairobi, to get hands on-training on the latest high-tech machinery and equipment. Accredited by the National Industrial Training Authority, the curriculum will be adapted to the most relevant current and future needs of the Kenyan manufacturing industry, such as mechatronics, electrical engineering, or welding. The courses offered will range from a few days, for companies with acute needs for training in certain technology fields, up to a few years, for companies who want to enable their young employees a dual training, which includes education and working experience simultaneously.
For this business venture, we have calculated an obtainable market value between €15,645,440 and €76,386,294. The Festo Didactics inter-company education centre will generate revenue by offering courses to employees of the manufacturing companies. Companies will be paying per course and per number of employees they want to educate, instalment payment will also be possible. Key activities of the centre include: training the trainers, conducting the training courses, managing the training facility and updating the curriculum of the offered courses when needed. Festo will distribute value to the customers through the educational courses and usage of the Festo LX website.
In conclusion, the Kenyan industry is in need of an inter-company education centre in order to provide further training for employees with state-of-the-art equipment, an up-to-date curriculum and Festo will be able to close this gap between the education system and industry needs.
Festo Didactic SE
Dr. Ute Gebhard
Sophia Maria Habisreutinger
Shtefi Mladenovska, M.Sc.
Caroline Fabian, M.Sc.