Introduction 6
1. Theoretical background 7
1.1. Internationalization theory 7
1.2. Internationalization strategies 9
1.3 Global EdTech market 12
1.3.1 Global EdTech market overview 12
1.3.2 Russian EdTech market specific 20
2. Study methodology 23
2.1 Case study methodology justification 23
2.2 Data collection process and analysis 24
3. The Algorithmics’s case. Results and discussion 26
3.1 Overview of the Algotithmics 26
3.2 External and internal factors of the Algorithmics internalization 29
3.3 The Algorithmics’s internalization strategy: case of India 3 5
3.4 Discussion on findings 3 9
4. Conclusion 41
4.1. Theoretical implications 41
4.2. Managerial implications 41
4.3 Limitations of the study 42
List of references 43
The global expenditure on education is increasing and this trend is highly likely to continue in coming decades due to world population growth and constantly changing labour market demand. Education is becoming ever more digitized, and hence we can observe the dramatic spread of educational technology solutions, such as gamification, online tutoring or virtual reality. Therefore, the educational technology world industry is growing rapidly and accounts for an increasing share of total education expenditure.
Although the Russian EdTech market is growing even faster, it is only 1% of the world market nowadays and the market is quite a competitive (Interfax Academia, 2020). Therefore, it can be expected that a significant amount of Russian EdTech companies are likely to strive to enter foreign markets.
The goal of the present master thesis is to analysis factors that drives Russian EdTech companies to internalized as well as their internalization strategies.
Currently there are a number of researches of internalization strategies in different industry. However, they do not analyze the Russian EdTech companies. Therefore, the research gap can be formulated as a lack of studies on internalization strategies that take into account specifics of the Russian EdTech companies.
We can formulate two research questions of the study. The first one is what type of internalization strategy is the most appropriate for the Russian EdTech companies. The second one is to determine potential barriers and opportunities.
There are several reasons why this question is relevant. First, as the Russian EdTech market is quite small relatively to the Global one and quite a competitive one, the best idea for many Russian EdTech companies is to internalize. Second, there are country’s strategic advantages. Therefore, the implication from the present work could be suitable for a wide range of EdTech companies of Russia.
To answer the research question following objectives were set:
1. Identify the factors that drives Russian EdTech companies to internalize
2. Identify the competitive advantages of the Russian EdTech companies
3. Identify the choice of internalization and business level strategy of the Algorithmics’s case
The current work contributes primarily to the development of the internalization of the Russian Edtech companies because the majority of them have a similar specifies.
The case of the internalization into the Indian market of the math and programming school called the Algoritmics’s is chosen for single study. The Algoritmics is a successful EdTech company that operates in 55 countries and is awarded by seveal industry prices (ASI, 2021). Therefore, it can be a role model for the other EdTech companies. The Indian market is chosen because it is the third biggest and the fasting developing EdTech market in the World (HolonIQ, 2020). Therefore, there is a possibility to gain a significant share in this market. Moreover, in the current political situation there is no certainty of the future of any Russian companies in developed countries markets.
The literature review demonstrates that there are different internationalization theoretical perspectives of internationalization. Moreover, the foreign market entry modes,its advantages and disadvantages are well described.
However, there is a lack of information about practice cases of internationalization of companies working in the educational technology industry, in particular Russian EdTech companies. For instance, there is only little research on the industry specific characteristicsof internationalization strategies, factors that influence the choice of international strategy,reasons why companies prefer to enter into a particular market, and possible competitive advantages.
The present paper uses quality research approach. This master is exploitative and uses single case study as a research strategy. The object of study is the Russian EdTech company called the Algoritmics and its internalization strategy into India....
The study has some limitations that are related with the single case study methodology. First, there is a possibility that the Algoritmics is outlier and other companies should work in different conditions. Therefore, another companies could have different specific features and advantages that could change the whole their logic of activity. For example, companies working in not math or programming market are less likely to have an opportunity to position their self as Russian brands. Moreover, some companies could not have a goal for huge geographical scaling up, rather they prefer to develop their activity in one or several point abroad. Therefore, in this case the franchising model could not be the most appopriate. Second, the Indian market could also be an outlier.
In addition, the EdTech is a pretty new and rapidly developing industry. Moreover, it requires 41
a number of the technology solutions and the technologies are expected to change very fast. In some cases, such developments could become real game changers that modify the total market informal rules or even a total business paradigm. Therefore, the industry changed very fast and some of implications could lose their relevance with several years or even months.
