Episode 8: For the Learning Institute: OEM Business

Around the fourth year of Otona no Eikaiwa’s journey in the ESL industry, a remarkable twist awaited them. The school stabilized and gained recognition, inquiries for collaboration and introduction poured in from various learning institutes and English language schools. This was an intriguing development, considering Otona no Eikaiwa’s initial focus on providing English education for seniors.

It became evident that the structural challenges in English education in Japan were creating an opportunity. Japan, despite being a globalized nation, is said to have low English conversation skills worldwide. For many people, English was treated as a subject for entrance exams rather than a practical skill for daily life. While English was taught for six years in compulsory education, English was traditionally focused on grammar and reading comprehension.

The Ministry of Education had recognized the importance of English communication, particularly speaking and listening skills, in both education and exams. However, in the field of education, especially in rural areas, this shift has increased the burden on learning institutes, where teachers struggle with English conversation instruction and parents cannot afford to send their child to an English conversation school in addition to a cram school.

That is when Tanaka-san saw an opening and made an innovative approach as DialogPlus Japan.

“Could English conversation classes be outsourced?” He thought.

He identified the need to assist in the education sector, and, specifically, in cram schools. Rather than providing Otona no Eikaiwa only to seniors, DialogPlus shifted its focus not just towards seniors but identified a unique opportunity within the struggling cram school ecosystem after recognizing that the existing online English conversation schools often had fixed monthly fee systems – a reservation system exclusively for cram schools.

From B to C through Otona’s unique reservation site, DialogPlus has expanded its business domain to B2B business based on partner brands while maintaining Otona’s philosophy of treating each customer with care (OMOTENASHI).

But it did not stop there. DialogPlus became an Original Equipment Manufacturer (OEM) for cram schools which allowed each institution to function as its own school with its own management style. Cram schools also have expanded beyond their physical locations, reaching students online and even expanding their businesses in unexpected ways.

Amidst societal changes and advancements, this development hinted at a potential future for DialogPlus –evolving into a fully contracted outsourcing (BPO) company for online English conversation. This has further strengthened the company's mission of solving various social problems. It was also an opportunity for the company to deepen its knowledge about operating the OEM business.

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Note:

OEM - [Original Equipment Manufacturer]

This term is commonly used in various industries to refer to a company that produces parts or products that are used by another company in its final product. In this case, DialogPlus operates as an OEM for English conversation services by creating a reservation system for cram schools to offer affordable online English lessons to students, allowing each school to operate independently.

B2B- Business 2 Business [business-to-business]

This is an exchange of goods or services between two businesses, like a wholesaler and retailer. Business-to-business (B2B) exchanges typically take place in the supply chain, where one company buys raw materials from another for use in manufacturing.