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Explore Learning, a model education business driven by marketing

publication date: Apr 30, 2006
 | 
author/source: R Taylor
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Set up by CEO Bill Mills, Explore is backed by Wittington Investments (owned by the Garfield Weston Foundation), Spectrum Venture Management Fund, Peter Lampl (founder of the Sutton Trust), Peter Ogden (founder of Computer Centre and the Ogden Trust) and Peter Freeman (Cutfield, Freeman and Company).


Explore have an exclusive agreement in the grocery category with Sainsbury’s and so far all of their centres are located within existing Sainsbury’s stores. This is a smart move as it cuts down on overheads and allows Explore to better utilise its capital without having to invest in real estate. It also allows it to focus on crunching the demographics and to select which of the stores best match the target profile of its customers.


Explore’s proposition of providing tuition that focuses on maths, reading, writing and spelling is not new and is in many ways a derivative of what Sylvan Learning centres offer in the US. The core software that students use is SuccessMaker (Pearson) but Explore also has a number of locally produced software products from companies like Longman and Kar2ouche.


While Explore’s offering is essentially an extension of the home tutoring market, it uses an interesting model and one that is likely to be replicated by competitors. Explore are free to set up with other partners in categories outside grocery, however for the moment they seem happy to focus on building their business by sticking closely to Sainsbury’s. When we spoke to their senior management team, they admitted that they were aware that Tesco and other large retailers had been looking at their model. Whilst not saying so explicitly, it certainly sounded like they expected some sort of competitive reaction from Tesco or Asda.


With tutoring being such a huge market, companies like Explore still only account for a tiny fraction of what parents spend. It will be interesting to see which other competitors emerge to compete with Explore, but without a good business model and powerful backers and partners, any challenger will face a significant struggle. Sylvan have already tried the UK market and found it not to their liking. In the US their centres operate under the Educate Inc. brand. Their main EU focus is in Germany where they have 900 centres trading under the Schülerhilfe brand. In the UK Sylvan looked at establishing learning centres but Explore’s exclusive deal with Sainsbury’s and the challenges of the UK market have seen them focus on building their brand in the HE sector where they have a ten-year e-learning deal with the University of Liverpool.


So while Sylvan may still claim to be the international market leader in supplemental education, Explore’s success shows that with a bit of local knowledge a David really can compete with a Goliath.


The opportunity for competitors may be to turn Explore’s model on its head and instead of targeting children and their parents, to target older shoppers who are both time and cash rich.

This growing segment of the population often wants to return to education to pursue interests such as learning languages. Developing a business focusing on this group of affluent consumers may be a smarter strategy than taking on Explore and Sainsbury’s.


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