Pearson

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Company Description

Pearson is a British multinational publishing and education company, headquartered in London, England. Founded in 1844, Pearson has grown to become a world-leading learning company, providing a range of products and services to learners of all ages. Pearson's main products include textbooks, e-books, digital learning platforms, educational assessments, and certification services. Pearson serves learners and educators from more than 70 countries across the globe, including the United States, the United Kingdom, China, and India.

Industry Overview

Pearson operates in the education industry, with a total market size in the US of $1.1 trillion in 2018. The industry employs over 6 million people across the US, with a further 1.1 million people employed internationally. These employees are based across a range of countries, including the US, UK, Canada, China, India, Brazil and Australia. Pearson is one of the leading providers of educational products and services to schools, colleges and universities, including assessment and testing services, curriculum materials, educational technology and professional development services.

Industry Classification

In terms of formal classification, Platform Executive has tagged Pearson as a business operating within the Publishing industry.

Major Products & Services

The main products and/or services commercialised by this business include:

  • Digital and print educational materials
  • Online learning and assessment tools
  • K-12 and higher education textbooks and curriculum
  • Professional and vocational qualifications
  • Language learning and testing services
  • Online tutoring
  • Educational software
  • Corporate training and development materials
  • Digital marketing and advertising solutions
  • IT services and solutions

Table of Contents

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Competitive Landscape

Pearson, a leading education company, operates in a highly competitive environment in the global education industry. It faces competition from various companies that offer similar products and services, such as textbooks, online learning platforms, and educational materials. These competitors range from large multinational corporations to smaller, specialised companies. The market is also saturated with new technology-based start-ups that aim to disrupt the traditional education model. Additionally, Pearson also faces competition from online education platforms and open educational resources, which offer free or low-cost alternatives. The competition is intense, with companies constantly innovating and adapting to meet the ever-changing needs of students and educators.

Key Competitors

We have identified the following organisations as being key competitors:

  • McGraw-Hill Education
  • Houghton Mifflin Harcourt
  • Cengage Learning
  • Scholastic Corporation
  • AMSCO School Publications
  • National Geographic Learning
  • Macmillan Education
  • Educational Development Corporation
  • DK Publishing
  • Discovery Education

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Key Stakeholders

Stakeholders are individuals or groups affected by a business's actions. Understanding their needs helps a business make decisions that benefit all parties.

Internal and external stakeholders include the following:

1. Customers: Schools, universities, individuals, and businesses

2. Partners: Publishers, technology providers, and content creators

3. Employees: Teachers, school administrators, and Pearson staff

4. Investors: Shareholders and venture capitalists

5. Government: Regulators and policymakers

6. Suppliers: Vendors and service providers

7. Competitors: Other educational publishers and technology companies

Customers and Cohorts

The main customers of the organisation include:

  • Educational Institutions
  • Corporate & Government Entities
  • Public Libraries
  • Schools
  • Booksellers & Retailers
  • Home Schoolers
  • Student & Educator Customers
  • Professionals & Specialists
  • International Customers
  • Higher Education Institutions

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Global Reach: Pearson operates in over 70 countries around the world, giving it an enormous competitive advantage in terms of its ability to access new markets and understand the needs of customers in different countries.

Comprehensive Product Range: Pearson offers a wide range of products and services, from educational materials to digital learning tools and services, giving it the ability to serve a variety of customer needs.

Innovation: Pearson is committed to investing in new technologies and products, allowing it to stay ahead of the competition and remain competitive in the market.

Customer Focus: Pearson is focused on providing the best customer experience possible, with an emphasis on customer service and an understanding of customers’ needs and preferences.

Financial Strength: Pearson has a strong balance sheet and is in a strong financial position, allowing it to remain competitive and invest in new opportunities.

Market Trends

Market trends can significantly impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and ultimately affecting the organisation’s ability to remain competitive in the market. Staying ahead of these trends enables businesses to proactively adapt their strategies, mitigate risks, and capitalise on emerging opportunities.

As part of this study, we have identified a number of potential trends that could impact the organisation. These include the following:

Market Trends

Key Performance Indicators

Key Performance Indicators
KPIs (Key Performance Indicators) are important to a business such as Pearson as they help measure progress towards achieving organisational goals and objectives. They provide a useful insight into the performance of different areas of the Pearson business and therefore enable informed decision-making.

KPIs also help to motivate employees towards achieving targets.

Below is a list of Key Performance Indicators we deem relevant to this company:

Brand Strength

Brand strength is more than a logo or name. It reflects a company’s reputation and how it is perceived by customers, investors, and employees. It is built on core values, mission, and a unique selling proposition (USP) that differentiates the business.

Brand strength goes beyond superficial elements and taps into core values, the defined mission, and unique selling proposition (USP) of a company.

Below are key reasons why brand strength matters:

Trust and Credibility: In a market flooded with choices, customers gravitate toward brands they trust. A strong brand signals reliability and quality, fostering customer loyalty. Loyal customers not only make repeat purchases but also advocate for the brand, driving word-of-mouth growth.

Brand Strength Analysis

Differentiation: A strong brand helps a company stand out in competitive markets by clearly communicating its value proposition. It creates a unique identity, establishes a competitive edge, and positions the company as a leader in its industry. For example, Google is synonymous with internet search.

Customer Loyalty: A positive brand experience builds emotional connections, making customers less price-sensitive and willing to pay a premium. Loyal customers generate repeat business and act as brand ambassadors, reducing customer acquisition costs and boosting long-term profitability.

Talent Acquisition and Retention: A strong brand not only attracts top talent but also enhances employee morale and engagement. Employees who identify with a reputable brand are more motivated, productive, and committed, driving better business outcomes.

Benchmarking Brand Strength

Below is a guide as to the scoring mechanism used to gauge the brand strength of this company:

A

The company enjoys an excellent level of brand strength.

  • This score signifies that the company has developed a highly regarded and well-recognised brand.
  • Customers and the wider community perceive the company as trustworthy, reliable, and superior to competitors.
  • The company enjoys a strong connection with customers, who actively engage with and advocate for the brand.
  • The company's brand effectively communicates its unique value proposition.
  • The corporate attracts and retains top talent, and its reputation extends beyond its target market.
B

The company has a good brand strength, indicating that it has a solid and respectable brand presence.

  • Customers generally have positive perceptions of the company.
  • While the company may not be as distinctive or well-known as the top brands, it still differentiates itself from competitors and enjoys a loyal customer base.
  • The brand inspires some level of customer engagement and advocacy.
  • The company attracts top quality employees and maintains a good reputation. People want to work there.
C

The business has an average brand strength, meaning it is neither strong nor weak in the marketplace.

  • Customers perceive the company as ordinary or run-of-the-mill, lacking an emotional connection or distinctiveness.
  • The company faces challenges in standing out among competitors and needs to better communicate its proposition.
  • Decent level of customer satisfaction, but significant there is room for improvement in terms of brand loyalty.
  • The company's reputation is neither a huge positive, or negative.
D

The company's brand is quite weak. Work required to increase its potential.

  • Customers have mixed or negative perception of the company, associating it with average or below-average quality.
  • The business struggles to differentiate itself from its competitors and lacks a compelling value proposition.
  • Customer engagement and brand loyalty may be minimal, requiring some effort to improve the brand experience.
  • The company's reputation may have encountered challenges, poor press, or may not be well-known in the market.
E

The company's brand is weak and fails to resonate with customers and audiences. This needs to be addressed.

  • Customers perceive the company as being too unreliable, lacking in quality, or irrelevant.
  • The company struggles to differentiate itself from competitors, and there is a lack of customer engagement, or loyalty.
  • The company's reputation may be tarnished or negatively perceived, hindering growth efforts.
  • Significant efforts are required to rebuild the corporate brand and establish a more positive image in the market.
F

The company has a severe lack of brand strength. It is a problem that needs addressing with urgency.

  • The company is poorly recognised, and customers have negative perceptions or zero awareness of its offerings.
  • The company fails to communicate its unique value proposition or inspire customer loyalty.
  • The company's reputation may be highly unfavourable, and attracting customers or top talent is challenging.
  • Immediate and extensive actions are likely necessary to revitalise the brand.

Brand Strength Score

Scoring brand strength is subjective because it relies on individual perceptions and interpretations of various factors, such as customer sentiment, market dynamics, and the competitive landscape, which can vary.

Using our scoring methodology, the average score of a business is calculated as being C (average). This differs from the average score of the top 10,000 businesses featured in our coverage. Weighted to that cohort, the average brand strength score increases to a B (good).

The analysis team have noted the following factors impacting its brand strength:

  • Brand is well-known in education, publishing and media markets.
  • Brand is recognised as a long-established and reliable provider of services.
  • Brand is associated with quality and reliability
  • Pearson's products and services are consistently rated highly
  • Pearson has a strong online presence
  • Pearson has received multiple awards for its products and services
  • Pearson has a large and diverse customer base
  • Brand has a strong reputation for innovation
  • Brand Strength Score: A

7Ps Marketing Analysis

The 7Ps of marketing are crucial components of strategic decision making for any organisation in any industry vertical.

Using the 7Ps in competitive analysis provides a holistic view of the marketplace, allowing businesses to refine their strategies, capitalise on competitors' weaknesses, and better meet consumer needs. The 7P's are defined as:

  • Product/Service
  • Price/Fee
  • Place/Access
  • Promotion
  • People
  • Physical Evidence
  • Processes

All these elements together frame an organisation's marketing mix, crucial for creating effective marketing strategies.

This 7P analysis is designed to provide a valuable insight into the business strategies of the company. It can be used to reveal strengths and weaknesses in their marketing mix, offering opportunities to compare and enhance a business.

1. Product/Services: Pearson offers a wide range of products and services, including educational materials, digital learning tools, and online courses. Their products cater to students of all ages and cover a variety of subjects, from K-12 education to higher education and professional development. They also offer services such as tutoring, test preparation, and academic support.

2. Price/Fees: Pearson's pricing strategy is based on the value of their products and services, as well as market demand. They offer competitive pricing for their products, making them accessible to a wide range of customers. Additionally, they offer discounts and promotions to students and educators, making their products more affordable.

3. Place/Access: Pearson's products and services are available globally, both online and in physical stores. They have a strong presence in both traditional and online education markets, making their products easily accessible to students and educators worldwide.

4. Promotion: Pearson uses a multi-faceted approach to promote their products and services. They utilise various marketing channels such as social media, email marketing, and partnerships with schools and institutions. They also employ targeted advertising and sponsor events to reach their target audience.

5. Physical Evidence: Pearson's physical evidence includes their packaging, educational materials, and learning tools. They ensure high-quality materials and technology to enhance the learning experience for their customers.

6. Processes: Pearson has a streamlined process for delivering their products and services. They have an efficient supply chain and utilise technology to make their processes more efficient. They also have a customer service team to address any concerns or issues that may arise.

7. People: Pearson's team consists of highly skilled and knowledgeable professionals in the education industry. They also have a strong network of authors, educators, and subject matter experts who contribute to the development of their products and services. Pearson's focus on hiring and retaining top talent ensures high-quality products and services for their customers.

Potential Products

As part of this study, we have carefully examined and prognosticated a range of new products, services, or innovations that this organisation could potentially develop and introduce to strengthen its market position and respond to emerging industry trends.

Online tutoring services: Pearson could create an online tutoring service for students who are having difficulty with their studies, providing them with one-on-one guidance from experienced tutors.

Online courses: Pearson could create online courses for students to take on a variety of topics, allowing them to learn and develop their skills at their own pace.

Adaptive learning tools: Pearson could create adaptive learning tools that dynamically adjust to a student's individual needs and provide personalised instruction.

Educational gaming: Pearson could create educational games and activities that would help students engage with the material and retain information better.

Professional development services: Pearson could create professional development services to help educators stay up-to-date on the latest trends in education and develop their skills.

Online assessments: Pearson could create online assessments that would help students track their progress and identify areas of improvement.

Educational content: Pearson could create educational content that could be used in classrooms, such as video lessons and interactive activities.

Teacher support services: Pearson could create teacher support services to provide educators with additional resources and guidance.

Potential Synergies

Our proprietary product and portfolio-matching algorithm has identified the following organisations as having strong potential synergies with the company, based on strategic alignment, complementary capabilities, and opportunities for collaboration across markets or domains.

1. Microsoft: Pearson and Microsoft have a long history of collaboration, working together on educational technology initiatives, such as the Microsoft Office 365 Education suite.
2. Apple: Pearson and Apple have partnered on a variety of initiatives, including the launch of the Pearson Digital Learning app for the iPad and the integration of Pearson content into Apple’s iBooks.
3. Google: Pearson and Google have collaborated on a range of initiatives, including the Google Apps for Education suite, which integrates Pearson content into Google Classroom.
4. Amazon: Pearson and Amazon have collaborated on the development of educational technology, such as Amazon Echo for Education, which integrates Pearson content into the Amazon Alexa platform.
5. IBM: Pearson and IBM have partnered to develop the IBM Watson Education platform, which integrates Pearson content into the IBM Watson AI platform.

Porter's Five Forces

Developed by Michael Porter in 1979, Porter’s Five Forces is a model used to analyse industry attractiveness and evaluate competitive environments. It considers five forces:

  • Competitive rivalry
  • Supplier power
  • Buyer power
  • Threat of substitution
  • Threat of new entries

We include this framework because it supports strategic planning, investment decision-making, and long-term competitive positioning across industries by highlighting structural pressures, market threats, and potential profit constraints.

In relation to Pearson, the company scores HIGH in terms of bargaining power of buyers and suppliers, and average in terms of threat of new entrants, threat of substitutes, and intensity of rivalry.

PESTLE Analysis

A PESTLE analysis is used to evaluate external factors affecting an organisation. It examines (1) Political; (2) Economic; (3) Social; (4) Technological; (5) Legal; and (6) Environmental influences. This framework helps businesses identify potential risks and opportunities in the macro-environment, supporting informed decision-making, strategic planning, and long-term sustainability in dynamic markets.

Reasons to use a PESTLE include:

  • Environmental Scanning: PESTLE helps assess external factors, keeping executives aware of key forces
  • Strategic Planning: It identifies opportunities and threats, aiding market alignment and goal-setting
  • Risk Assessment: PESTLE highlights risks, helping businesses develop mitigation strategies
  • Market Insights: It provides insights into trends, behavior, and regulations for better strategy development
  • Business Adaptation: Regular analysis allows businesses to stay competitive by adapting to changes

Below is the PESTLE analysis for this company:

PESTLE Analysis: political, economic, social, technological, legal, environmental

CATWOE Analysis

CATWOE

The CATWOE analysis helps businesses understand stakeholders' perspectives for informed decision-making, covering six elements:

  • Customers: Beneficiaries of the system’s outputs
  • Actors: Those who influence the system’s functionality
  • Transformation: Converting inputs into value-creating outputs
  • World View: The broader context behind the system’s existence
  • Owner: Decision-makers with authority over the system
  • Environment: External factors impacting the system

The CATWOE analysis is most effective when used alongside a SWOT analysis.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Pearson business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

SWOT Analysis: strengths, weaknesses, opportunities, threats

Strengths

The strengths of a company refer to its internal attributes or capabilities that provide it with a competitive advantage.

Below is a list of the key strengths we have identified for the business:

1. Diversified product portfolio: Pearson offers a wide range of products and services, including educational products and services, business information and services, and consumer publishing.

2. Strong global presence: Pearson operates in over 70 countries, giving it a strong global reach.

3. Strong financial position: Pearson has a strong balance sheet and generates significant cash flow, giving it the financial flexibility to invest in growth opportunities.

4. Experienced management team: Pearson's management team has significant experience in the education and publishing industries, providing the company with a deep understanding of the businesses in which it operates.

Opportunities

Opportunities refer to factors that present potential avenues for growth, advantage, or improvement for an organisation.

Below is a list of opportunities we have identified for the business:

1. Utilise digital technologies to create a more personalised learning experience: By leveraging technology such as artificial intelligence and machine learning, Pearson can create a more personalised learning experience for its students. This includes personalised content delivery and assessment, virtual tutoring and adaptive learning pathways.

2. Increase the use of data-driven decision making: Pearson can become more data-driven in its decision making process by collecting, analysing, and leveraging data from its services, products, and customer feedback. This will help identify areas of improvement and drive more effective strategic decisions.

3. Strengthen customer service: Pearson can focus on improving customer service by providing more personalised support and better access to resources. This includes providing more online customer service options, streamlining the customer service process, andutilising customer feedback to identify areas of improvement.

4. Expand into new markets: Pearson can expand its reach by entering new markets. This can include international markets, emerging markets, and other markets where its products and services can be of benefit. It can also explore partnerships and collaborations to further expand its reach.

Weaknesses

The weaknesses refer to factors that hinder a company's performance or competitive advantage.

Below is a list of the weaknesses we have identified for the business:

1. Lack of Focus: Pearson has been trying to be all things to all people, and as a result, has lost focus on its core businesses.

2. Lack of Innovation: Pearson has been slow to innovate, and as a result, its products and services have become outdated.

3. Poor Execution: Pearson has been poor at executing its strategies, and as a result, has been losing market share to its competitors.

4. High Costs: Pearson has been struggling to control its costs, and as a result, its margins have been under pressure.

Threats

The threats to an organisation refer to factors that pose challenges or risks to a company's success.

Below is a list of the threats we have identified for the business:

1. Competition – Pearson faces strong competition from other companies in the education market, such as McGraw-Hill, Houghton Mifflin Harcourt, and Cengage Learning. The competitive landscape is becoming increasingly competitive as new players enter the market and existing players expand their portfolio of products and services.

2. Technological Disruption – Pearson is facing pressure from technological disruptions, such as online learning and open education resources, which are changing the way educational material is delivered and consumed. This disruption has the potential to disrupt Pearson’s business model and reduce their competitive advantage.

3. Regulatory Environment – The regulatory environment is becoming increasingly complex, with new regulations being introduced to protect consumers and ensure quality standards. These regulations could have a significant impact on Pearson’s operations and profitability.

4. Talent Acquisition and Retention – Pearson’s success depends on its ability to attract and retain talented employees. Competing for and retaining top talent is becoming increasingly difficult, especially in the educational market, due to a limited talent pool and high turnover rates.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for Pearson. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Pearson, as well as areas where the company needs to improve its operations or strategy.
Company: Pearson is a global learning company that provides educational materials, technologies, assessments and related services across the secondary, post-secondary and professional markets.

Collaborators: Pearson works closely with a wide range of organisations and institutions, such as universities, schools, educational providers and government bodies, to provide tailored educational solutions.

Customers: Pearson’s customers include students, parents, teachers, lecturers, schools and universities.

Competitors: Pearson’s main competitors are educational publishers, such as McGraw-Hill Education and Houghton Mifflin Harcourt, as well as educational technology companies, such as Blackboard and Coursera.

Content: Pearson provides a range of content and services, such as educational resources, textbooks, e-books, online courses, assessment tools and professional services. Pearson’s content is designed to meet the needs of different customers and to provide an engaging learning experience.
5C Analysis: company, customers, competition, collaboration, climate

MOST Analysis

MOST Analysis: mission, objectives, strategy, tactics

The MOST analysis framework is used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. The MOST analysis helps executives focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles.

  • Mission defines the organisations purpose and core values, providing a clear direction and inspiration for stakeholders
  • Objectives are specific, measurable targets that support the mission; they indicate what the organisation aims to achieve within a defined timeframe
  • Strategy outlines the high-level approach the organisation will undertake to reach its objectives, detailing how resources will be allocated and initiatives prioritised
  • Tactics are the actionable steps and specific plans that implement the strategy, ensuring that all team members understand their roles in achieving objectives

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

The team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism designed to benchmark innovation.

First, we allocate a score of A-E for the industry, based on the key organisations operating within the space; and then score the individual organisation using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Innovation Scorecard

Industry Score:

A The industry is amongst the most innovative; with the leading players all driving the sector forward.
Example industry: PaaS
B The industry and its leading players have a good track record of innovation; and can quickly react to change.
Example industry: Pharmaceutical
C Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate.
Example industry: FMCG
DBusinesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption.
Example industry: Retail Banking
E The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change.
Example industry: Publishing

 

Company Score:

1 The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2 The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3 The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5 The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.
The team at Platform Executive has judged Pearson as having an innovation score of D2.

Appendices

The appendices section of this report contains supplementary information that we deem helpful in providing a more comprehensive understanding of the report.

Methodology

This study on Pearson forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The report is based on information and learning from the following sources:

  • Corporate websites
  • Proprietary research databases
  • SEC Filings
  • Corporate press releases
  • News articles
  • Financial data API's
  • Product-matching algorithm

Further Reading

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Disclaimer

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Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

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