Let's explore the market!
Student Connect will be operating in an oligopoly, a market where several firms are currently operating and where profits are being made.
We used Porter’s five forces model to analyse the level of competition in our market.
Threat of entry:
Start-up costs are low (website development costs)
Network is an important element (number of students, businesses in personal network) Competitors could enter the market pretty easily, since there are almost no entry barriers.
Supplier power:
There are many companies in The Netherlands, so not depending on a few large ones. They will supply the platform with projects.
There are many students of academic and applied science universities in The Netherlands, which are potential users of the platform. They will provide the platform with their services and knowledge. Moderate power of suppliers
Buyer power:
Buyers are able to choose from several different employment agencies that offer almost similar services.
Students also have the opportunity to choose different platforms that provide more or less the same services. Moderate power of buyers
Threat of substitutes:
There are several other employment agencies, however they do not specifically focus on project based employment. Moderate threat of substitutes.
Competitive Rivalry
Student Connect is an online two-sided platform that connects students with companies. Companies have the ability to upload projects on the platform, on which students then can apply to. There are many employment agencies that focus on students specifically. Student Connect is different from these agencies, because at Student Connect we aim to focus on projects rather than longer term jobs. For example, instead of hiring a student for 6 months, students will now be hired based on a project that needs to be fulfilled. Studentenwerk and Recruit a Student could be seen as competitors, since they are providing students with part-time jobs. Furthermore, there are several agencies like Allganized, Make My Event, and House Of Kent that provide jobs that are project based. These kind of jobs are usually focused on events where students work as host(ess) or in catering. These jobs do not provide the students with necessary learning experiences and are most of all focused on earning their livelihood. At Student Connect we are focussing on matching students with projects that matches the students’ field of expertise, in this way we will differentiate ourselves from these competitors. Another competitor is Freelancer.nl, who is actually providing the same service as we do, but is focussing on freelancers rather than on students. Furthermore, there are low barriers to entry, it is therefore possible for others to enter this market easily. There are a lot of companies and students in The Netherlands, so the potential market is big. Since there are quite some companies that provide more or less the same service, differentiation will be based on execution, further development of the service and brand reputation.
The competitive rivalry is moderate for now, but might be severe in the future.
Broad industry analysis
Substitutes to ‘student employment agencies’ are regular employment agencies since companies will have the choice to decide if they prefer to hire a student rather than a regular employee. However, these regular agencies will charge higher fees and are less suitable for talent scouting. Also, student employment agencies that are offering part-time jobs, like Studentenwerk and Recruit a Student, are substitutes to our project based employment agency. What differentiates Student Connect from competitors is the focus on project-based assignments that aim to provide the students with experience and knowledge on their specific field of expertise.
Market Attractiveness
Re-segmented market: the market for employment agencies for students is already known. However, we re-segment the market by exclusively offering project based employment. This is expected to be more attractive for companies hiring the students, since they will not have any obligations once the project has been completed. This makes it a very flexible and attractive alternative to the regular time-based employment. In this way, customer needs are expected to be better met.
Market trends
There are 7257 employment agencies in The Netherlands. According to the Rabobank the employment agency branch will grow with 5% in 2016. Rabobank expects the that the employment agency branch will grow further due to the flexibilization of the labour market and the increasing growth of the economy. Next to the growth of the number of temporary employees, the number of temporary contracts and independent contractors are also expected to grow in the coming 3-5 years. Another expected trend in the market is the focus on higher educated employees, since employment for lower educated employees will decrease due to the digitisation and automation. Further, the processes of recruitment are also becoming shorter and efficient due to digitization which has its impact on the industry. Student Connect fits perfectly in the expected trend of the market, because the platform will operate digitally, and focus on higher educated students.
