Page 6 - Phase 3 - Embedding entrepreneurial actions into school plans

Distinctive competencies of strategic planning

Distinctive competencies of strategic planning

As we have discussed in previous phases, schools need to attend to parental expectations
to ensure their student intake for their survival and growth. In such contexts, schools need to
develop their competitive advantages, i.e. school-specific strengths over its rivals. This allows

a school to differentiate its service and achieve substantially lower costs than its rivals and thus
gain competitive advantages.

The distinctive competencies of a school include two elements: resources and capabilities.
Resources refer to financial, physical, social/human, technological, and organisational factors.
It can be either tangible (e.g. facilities, capital, etc.) or intangible (e.g. brand name, teaching
experience, the expertise of teachers, etc.). On the other hand, Capabilities refer to a school's skills
for coordinating its resources and putting these into productive practice

According to Hills and Jones (2007), the distinctive competencies of a school can go in

two directions: differentiation and cost-leadership. Cost-leadership refers to achieving
differentiation by lowering costs and/or prices of the products and services, while differentiation
focuses on differentiating a school by other strategies, e.g. providing services with excellent
quality or innovative products, although the cost and selling price could go high.

To put this theory into context with schools in Hong Kong, the school strategies can be
categorised into four types. Most schools tend to offer low-priced products. The strategy

of schools offering products to a small group of customers is called focused cost-leadership
strategy, while those schools offering low-priced products, yet catering to a vast majority of
customers, are using cost-leadership strategy. Schools offering unique/distinctive products
are implementing focused differentiation strategy; while those schools offering unique/distinctive
products to many kinds of customers are using differentiation strategy.

Offers low-priced products
Offers product to only one group of customers Cost-leadership Strategy Cost-leadership Strategy Offers products to many kinds of customers

Focused

Focused
Differentiation Strategy
Differentiation Strategy

03 Offers unique/distinctive products