TAE40116 Certificate IV Training Assessment Package – ASQA Review Submission

Submission for TAE40116 Training Package Review

 

Written by Andrew Smith; submitted 3 April 2018

Introduction

There has been much discussion amongst training practitioners about the updated TAE Training Package.  One of the main issues has been the perception that it has been designed for quality administration and assessment while neglecting quality of actual training delivery and learning.

ASQA Australian Skills Quality Authority Certificate IV Training and Assessment TAE40116 Review

TAE40116 Certificate IV in Training and Assessment – ASQA Review (Image copyright ASQA)

This has been experienced by the writer currently upgrading BSZ to TAE via a registered training organisation (RTO) by distance learning; PO Box with ‘assessors’ and ‘trainers’ based offshore.  Further, the delivery is based upon basic pedagogy of presentation of content, regurgitation of content according to instructions while seemingly unable to offer explanations or insight for trainees, especially delivery and learning skills based upon andragogy.

 

What is the TAE Training Package?

 

Description

 

This qualification reflects the roles of individuals delivering training and assessment services in the vocational education and training (VET) sector.

This qualification (or the skill sets derived from units of competency within it) is also suitable preparation for those engaged in the delivery of training and assessment of competence in a workplace context, as a component of a structured VET program.

The volume of learning of a Certificate IV in Training and Assessment is typically six months to two years. (Department of Education & Training 2018).

At face value the TAE40116 appears to be a relevant and practical qualification for vocational education and training to deliver accredited training packages, assure quality with a focus upon assessment.  However, there have been many criticisms of the package from practitioners, industry and other stakeholders, why?

Issues with TAE Training Package and Delivery

 

According to the Resources Training Council

 

It has become a qualification for the training industry, not industry that trains. They do not understand workplaces where training and more importantly the outcomes (assessment) must be fit for purpose to achieve what VET is all about.  VET should be about producing safe, proficient (productive) workers and providing an opportunity for learning to be built on as people move along their chosen career path (Munro 2017).

 

From an experienced VET training practitioner

 

To improve assessment practices of RTOs and improve skills and knowledge of trainers and assessors we need to:

  • Update our regulatory framework and move to a real outcome-based regulation, where relevant industry stakeholders have a say in the registration/re-registration process
  • Support the National Regulator in building the required capabilities to assess compliance in a diverse and complex environment
  • Ensure the National Regulator provides an even-playing-field to RTOs
  • Identify the different issues within the assessment system, and consequently identify gaps in current workforce skills (in all AQF levels not only entry level) and update the TAE training package accordingly (Castillo 2016).

 

Research criticisms have included: one size fits all approach whether novice trainer or an already well experienced and/or qualified trainer or teacher, trainer assessor expertise or skills, questions over subsequent assessment outcomes, lack of depth related to training and learning delivery, no clear development pathway and the skill outcomes from the TAE for practitioners to deliver (Clayton 2009).

The focus of criticism has been directed at sub-optimal education and training pedagogy (learning theory for children and young adults or novices) of both the TAE and practitioners for quality delivery, learning and trainee assessment outcomes.  These revolved round, preparedness of trainers to train, opportunity to learn content knowledge, delivery quality, learning the practice of good teaching or training, learning from experts, then more about planning and assessment (Ibid.)

The latter issue of assessment has been raised within sectors whether validation between providers, or simply better understanding of assessment by practitioners (Halliday-Wynes & Misko 2013)

Further, expert input often hints at what is lacking by focusing upon learning theory or ‘pedagogy’ for children and youth, as opposed to ‘andragogy’ for youth and adults.  The latter would be exemplified by self-directed learning or training, responsibility, experience, motivation to learn and preference for real tasks and problem solving (Educators’ Technology 2013); supported by well skilled trainers.

 

Training Delivery and Learning Quality

 

However, delivery of some TAEs has more to do with education and training or ‘pedagogy’ influence from two generations ago manifested in trainer or teacher directed, or top down.  This assumes trainees have no relevant knowledge or practical input to offer, focus upon systems, processes and assessment round any given package, but not delivery i.e. developing quality training and learning skills.  Additionally, very content driven for good reason, however, it is presented or instructed (not elicited) then regurgitated or replicated for satisfying requirements for assessment, then assumed optimal for the workplace?

The significant size of the VET sector requires standard packages, systems, processes and assessment to be compliant and manageable.  However, the risk is that system quality may be based upon indirect top down paper-based systems and processes of (quality) compliance that are reactive when issues emerge, if discovered.  For example, sub-optimal training and learning, versus proactive measures through more intrusive evaluation of actual training delivery quality or bottom up informing.

Quality maybe improved by intrusive quality assessment through mystery shopping on any given TAE course, dynamic (publicised opportunities) for feedback from trainees and clients, evaluation of specific programs and trainers or evidence of dynamic quality evaluation of skills versus merely possessing a TAE qualification or ‘ticket’.

 

References:

 

Castillo, A 2016, Newly endorsed Certificate IV in Training and Assessment – Same Issues, LinkedIn Pulse, viewed 22 March 2018, < https://www.linkedin.com/pulse/newly-endorsed-certificate-iv-training-assessment-amaro-castillo/ >

 

Clayton, B 2009, Practitioner experiences and expectations with the Certificate IV in Training and Assessment (TAA40104): A discussion of the issues, NCVER Melbourne, viewed 22 March 2018, < https://www.ncver.edu.au/__data/assets/file/0023/4658/nr08504r.pdf >

 

Department of Education & Training 2018, MySkills: Certificate IV in Training and Assessment, viewed 22 March 2018, < https://www.myskills.gov.au/courses/details?Code=TAE40116 >

 

Educators’ Technology 2013, AWESOME CHART ON “PEDAGOGY VS ANDRAGOGY”, viewed 1 April 2018, < http://www.educatorstechnology.com/2013/05/awesome-chart-on-pedagogy-vs-andragogy.html >

 

Halliday-Wynes, S & Misko, J 2013, Assessment issues in VET: minimising the level of risk, NCVER, viewed 22 March 2018, < http://www.cmd.act.gov.au/__data/assets/pdf_file/0015/801600/AssessmentIssuesInVET_MinimisingTheLevelOfRisk.pdf >

 

Munro, J 2017, The TAE debacle – a resources sector view, Resources Training Council, viewed 31 January 2018, < http://www.resourcestraining.org.au/news/the-tae-debacle/ >

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Soft or Work Skills Development of Students for Employment

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Soft or Work Skill Development

We often hear talk about generic work skills, soft skills or digital related, but what are they and why are they important?

Hard skills may shortlist you for a job interview, but soft skills will have you selected, and may include the following which could also be described as personal attributes or selection criteria:

 

Communication, Organization, Teamwork, Punctuality, Critical Thinking, Social Skills, Creativity, Interpersonal Communication, Adaptability and Friendliness (Berger 2016).

 

According to Harvard Business Review article ‘DEVELOPING EMPLOYEES: The Soft Skills of Great Digital Organizations’:

 

Smart organizations have recognized that introducing new technology into the workplace isn’t about hardware or software: it’s about wetware, also known as human beings. If you want to be the kind of nimble business that can make the most of successive waves of tech innovation, you need human beings who can adapt to change. That means equipping each person in your enterprise with the skills and mindset that will help them successfully adapt whenever you introduce new tools like Slack, Basecamp, or even Google Drive into your workplace. But what exactly are these digital skills? They may be more familiar and low-tech than you think (Samuel 2016).

 

These could include goal focus, collaboration, communication, learning, troubleshooting and enjoyment.

 

Another view from traditional work of soft skills would designate planning workload, communication, reports, presentations, collecting/using information, note taking, data literacy, projects, ethics, problem solving, decision making, team work, meetings, negotiation, stress management and reviewing one’s own personal skills and development (Bingham and Drew 1999).

 

How does one develop these soft or work skills for work, community and life?

 

According to Open Colleges Australia the following tips are needed to teach students soft skills:

30 Tips to Teach Soft Skills

  1. Give students authentic choices about how they’re going to learn and be assessed.
  2. Provide a learning environment where trust, initiative, and taking risks are encouraged.
  3. Hold all students to the same high standards.
  4. Model perseverance by not giving up on students.
  5. Support students by helping them find their own way.
  6. Demonstrate alternate paths to content mastery.
  7. Teach to the whole person (not just the “student”).
  8. Treat your students as mature individuals, even when they aren’t following instructions.
  9. Talk about tailoring communication styles for different audiences.
  10. 1Build students’ interpersonal skills through an environment of humility and respect.
  11. Help students practise taking on different roles in different situations.
  12. Differentiate opportunities for personal growth and opportunities for team growth.
  13. Cultivate a sense of responsibility through meaningful and unique contribution.
  14. Assign group exercises that give people the opportunity to speak, listen, write, organise, and lead.
  15. Assess learning through interactive evaluations that demand real-world demonstrations of learning.
  16. Challenge students’ reactions to new obstacles and situations.
  17. Emphasise that the same solution doesn’t necessarily work every time, even in the same situation.
  18. Incorporate exercises in delayed gratification in order to build persistence and grit.
  19. Start grading students on how well they listen to their peers.
  20. Discuss the importance of social-emotional intelligence in the real world.
  21. Design opportunities for students to build and demonstrate resilience.
  22. Make learning a personal experience, highlighting the way education shapes personality.
  23. Create opportunities for students to innovate, both on their own and in groups.
  24. Draw attention to the differences between online and in-person social etiquette.
  25. Reward students who are willing to admit they’re wrong.
  26. Recognise students who are committed to communicating ideas to others.
  27. Hold brainstorm sessions in which students list the possible uses for various soft skills.
  28. Help build motivation through principles of self-reliance (read: Emerson, Thoreau).
  29. Keep an open ear and encourage students to develop new thoughts and ideas they may have.
  30. Develop learning ability through greater awareness of individual learning processes (Briggs 2015).

 

Teaching, training or tutoring approaches to learning need to be centred upon student centred andragogy for adults not teacher centred pedagogy for children, see related article blog FLIPPED Model – Pedagogy or Andragogy in Higher Education Teaching Learning.

 

 

References:

 

Berger, G 2016, Data Reveals The Most In-demand Soft Skills Among Candidates, LinkedIn Talent Blog, 30 August, viewed 30 March 2018, < https://business.linkedin.com/talent-solutions/blog/trends-and-research/2016/most-indemand-soft-skills >

 

Bingham, R & Drew, S 1999, Key Work Skills, 1st edn, Gower Publishing Ltd., Aldershot.

 

Briggs, S 2015, 30 Tips to Cultivate Soft Skills in Your Students, Inform Ed – Open Colleges, 1 May, viewed 30 March 2018, < https://www.opencolleges.edu.au/informed/features/30-ways-to-cultivate-soft-skills-in-your-students >

 

Samuel, A 2016, ‘DEVELOPING EMPLOYEES: The Soft Skills of Great Digital Organizations’, Harvard Business Review, 5 February, viewed 21 March 2018,
< https://hbr.org/2016/02/the-soft-skills-of-great-digital-organizations >

Technology in Higher Education – Innovation Policy – Skills – Digital Literacy

Following is an article by Rogoff in Project Syndicate on the adoption, or not, of technology in universities and higher education whether MOOCS, flipped learning model, online or e-learning etc.

From Project Syndicate:

When Will Tech Disrupt Higher Education?

Feb 5, 2018 KENNETH ROGOFF

Universities pride themselves on producing creative ideas that disrupt the rest of society, yet higher-education teaching techniques continue to evolve at a glacial pace. Given education’s centrality to raising productivity, shouldn’t efforts to reinvigorate today’s sclerotic Western economies focus on how to reinvent higher education?

CAMBRIDGE – In the early 1990s, at the dawn of the Internet era, an explosion in academic productivity seemed to be around the corner. But the corner never appeared. Instead, teaching techniques at colleges and universities, which pride themselves on spewing out creative ideas that disrupt the rest of society, have continued to evolve at a glacial pace.

Sure, PowerPoint presentations have displaced chalkboards, enrolments in “massive open online courses” often exceed 100,000 (though the number of engaged students tends to be much smaller), and “flipped classrooms” replace homework with watching taped lectures, while class time is spent discussing homework exercises. But, given education’s centrality to raising productivity, shouldn’t efforts to reinvigorate today’s sclerotic Western economies focus on how to reinvent higher education?…

…Universities and colleges are pivotal to the future of our societies. But, given impressive and ongoing advances in technology and artificial intelligence, it is hard to see how they can continue playing this role without reinventing themselves over the next two decades. Education innovation will disrupt academic employment, but the benefits to jobs everywhere else could be enormous. If there were more disruption within the ivory tower, economies just might become more resilient to disruption outside it.

 

Issues for higher education may emanate from teaching and/or learning tradition or habits, physical size and complexity e.g. silos, self-perception of being leaders not followers, older generations lacking digital literacy making strategic decisions, interests of permanent versus temporary personnel, slow moving and long communication lines both top down vertical, and lateral.

 

Tradition versus Innovation?

 

One could argue that traditional university lectures, religious preaching and political propagation have centred round expert or influencer communicating physically to non-experts in familiar formats that have not been challenged since the time of Gutenberg, duplicator and photocopiers?

 

Further, underlying issue is may be existing personnel, hence processes and systems, preclude taking on new digital technology (optimally) as observed in other sectors due to perceived disruption or lack of encouragement, or even discouragement.

 

Digital or e-Marketing and Communications

 

Marketing and communications in international education was a case in point whereby strategy informed by faculty attendance at international events was replicated in ‘international marketing’ with focus upon events including professional development and networking opportunities, versus marketing grounded in enrolled students on campus (customer journey, relationship management, satisfaction, testimonials, peer influence and word of mouth).

 

Digital or e-marketing arrived by early noughties but at best was used by universities etc. for international marketing as modest ‘budget allocation’ through traditional advertising and promotional channels. Described by some technophobes as something for the domestic ‘web marketing team’ when in fact digital behaviour upends traditional channels requiring bottom up analysis and strategy development, plus KPIs and ROI.

 

Architecture of Higher Education and Policy

 

Another concern with the focus now upon effective, efficient or economic education delivery and digital technology is the specialisation and/or atomisation of those working in all levels of education versus well rounded professionals with skills of content, teaching, learning, design, delivery, assessment, evaluation, administration and technology.

 

Rather than expecting or commissioning sub-contractors to consult with subject matter experts (SMEs), doing ‘instructional design’ (possibly lacking knowledge pedagogy and andragogy), narrow evaluation e.g. of course design only, using doctorate qualified temporary instructors for blended learning or flipped model but lacking skills of teaching; why not multi-skilled educators delivering based upon customer or student learning needs?

FLIPPED Model – Pedagogy or Andragogy in Higher Education Teaching Learning

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FLIPPED Teaching and Learning Model in Higher Education

 

Introduction

 

Nowadays in higher education there is much talk of MOOCS (Massive Open Online Courses), e-learning, blended learning and the ‘FLIPPED’ (Flexible Environments, Learning Culture, Intentional Content, Professional Educators, Progressive Activities, Engaging Experiences, and Diversified Platforms) classroom; what does it mean, what are the issues and solutions?

 

Brief Literature Review

 

One of the first issues to be apparent is that ‘FLIPPED learning’ is under utilised and even when utilised, there maybe sub-optimal delivery for good teaching and learning outcomes (Chen et al., 2014).  Conversely, whether a fee-paying program, compulsory K12 or a MOOC, FLIPPED learning can dramatically increase access (Hazlett, 2014).

 

Flipped classroom is also a benefit to both teaching and learning, with students being exposed to subject content online and participate in active lessons; moving away from teacher directed pedagogy to student centred learning or andragogy (especially important for transition of youth to adulthood).  The benefits are exemplified by less homework issues, question and answer, deeper exploration and those away with illness can keep up.  For teachers it means supporting students in application, reusable, easier individual student attention and more transparency for parents (Mihai, 2016).

 

Another view includes the following benefits: more student control, student centred, content more accessible for students or parents, and more efficient.  However, this is tempered by disadvantages of digital divide or illiteracy, requires significant preparation and front-end input, not good for test preparation and increased screen time (Acedo, 2013).

 

Other related concerns including potential side lining of teachers and their related skills, online content and instructional design can be boring versus active and interesting lessons, excusing bad pedagogy, internet access issues (e.g. Australia has internet speed and bandwidth issues comparing with less developed nations), assuring online content e.g. videos are watched, online content and instructional design can be very time consuming (November & Mull, 2012).

 

What are the issues for FLIPPED model in adult vocation or higher education teaching and learning?

 

The obvious issue is that when developed for K12 it is based upon pedagogic learning theories for children and youth, supported by teachers with strong background in theory and application of teaching, learning, assessment and technology.  However, this may not translate well to adult education, vocational or higher education requiring skills of applying andragogy i.e. matching adult learning styles with instructors, trainers, teachers or lecturers lacking the same education background.

 

What are the differences between pedagogy and andragogy in teaching and learning?

 

Firstly, what do adults bring to learning and how do they learn optimally as identified by Malcolm Knowles?  Knowles identified six principles including internal motivation and self-direction, life experience and knowledge, goal oriented, relevancy, practical and need for respect.  Contrasted with pedagogy in the following table:

 

Andragogy versus Pedagogy in FLIPPED Model for Higher Education

Andragogy versus Pedagogy for the FLIPPED Model in Higher Education

(Education Technology & Mobile Learning, 2018)

 

Reflection on issues and solutions for FLIPPED Model in Higher Education

 

One has experienced online blinded learning in higher education i.e. online MBA with webinars, CPD (Continuing Professional Development) via e-learning platform and vocational training certificate via distance learning and recorded webinars as ‘add-ons’, not well integrated.

 

Issues encountered included lack of teaching, learning, assessment and technology skills in instructional design, lesson planning, delivery of interesting lessons, developing and testing activity resources, creating opportunities for interactivity, involving all students (not just strong or dominant), using existing or old lecture slides for content, technology breakdowns with no disaster plan, not using or updating discussion forums and relying too much on ‘presenting’ versus teaching.

 

Solutions could include CPD like ‘train the trainer’ or in Australia the TAE40116 Certificate IV Trainer & Assessor, however many are not suitable for adult learners whether young or old.  In more diverse international cohorts where English is not the first language, adapt using the Cambridge CELTA (Certificate to Teach English Language to Adults) framework (applied qualification studied full time intensively four weeks including practice and observations).

 

The latter is especially well designed to include all learning theories including pedagogy and importantly andragogy, for student centred communication interaction.  It is based on the PPP model (Presentation, Practice and Production), when applied well is active, interesting, with clear learning outcomes and multi levelled hidden curriculum, in addition to communication skills, when pitched at advanced or proficiency level students (UCLES, 2018).

 

Nowadays with empowered and fee paying adult learners, top down directed teaching and learning of subject matter may neither be accepted nor acceptable?

 

Reference List

 

Acedo, M. (2013) 10 Pros and Cons of a Flipped Classroom. Available at: https://www.teachthought.com/learning/10-pros-cons-flipped-classroom/  (Accessed on: 27 January 2018).

 

Chen, Y; Wang, Y; Kinshuk & Chen, N. (2014) Is FLIP enough? Or should we use the FLIPPED model instead? Computers & Education. 79 pp. 16-27. Available at: https://www.sciencedirect.com/science/article/pii/S0360131514001559

 

Education Technology & Mobile Learning (2018) Awesome Chart on “Pedagogy versus Andragogy”.  Available at: https://www.educatorstechnology.com/2013/05/awesome-chart-on-pedagogy-vs-andragogy.html (Accessed on: 28 January 2018).

 

Hazlett, C. (2014) Parallel Sessions: MOOC meets Flipped Classroom. Available at: https://blog.edx.org/parallel-sessions-mooc-meets-flipped (Accessed on: 27 January 2018).

 

Mihai, L. (2016) Blended Learning: 8 Flipped Classroom Benefits for Students and Teachers. Available at: https://elearningindustry.com/8-flipped-classroom-benefits-students-teachers (Accessed on: 27 January 2018).

 

November, A. & Mull, B. (2012) Flipped Learning: A Response to Five Common Criticisms. Available at: http://web.uvic.ca/~gtreloar/Articles/Technology/flipped-learning-a-response-to-five-common-criticisms.pdf (Accessed on: 27 January 2018).

 

UCLES (2018) Cambridge English Teaching Framework. Available at: http://www.cambridgeenglish.org/teaching-english/cambridge-english-teaching-framework/ (Accessed on: 27 January 2018).

 

Business Simulation Exemplar – Cochlear Hearing Implants

Business Simulation – Competitive Environment

in Taiwan for Cochlear

 

Cochlear can enter this market fully not just on cost leadership and differentiation, but also help shape the industry in a relatively high income nation, already with an existing presence in the region, though minimal in Taiwan.  Following is, according to Porter’s five forces (Porter,1985), an overview of new competition, product substitution, buyer power, supplier power and existing competition aspects of the competitive environment for Cochlear.

 

Of the companies or potential competitors previously mentioned, they all could threaten with high levels of capital access, new product development potential, partnerships or acquisitions and close cultural ties with Taiwan, i.e. both the PRC China and Japanese companies.

On the other hand, Australia and Cochlear do have a profile in the region with quite a good product brand for quality, innovation and relationships with broad stakeholders.  This is complemented further by the Taiwan government having a broad biotechnology policy which could create opportunities for in country presence, research, cooperation or joint ventures (Biotech & Pharmaceutical Industries Program Office, 2016).

 

However, there is direct competition from Chinese private company Nurotron, with the single product the Venus Cochlear Implant System, with R&D in California and manufacturing in China (Nurotron, 2016).  Nurotron recently won one of the largest orders from the Chinese state to provide their budget or lower cost product through a state tender system, in which Cochlear was also competing (Bennett & Giancola, 2015).

 

Cochlear can lead on cost, product differentiation and quality without competition in the short and medium term, via their product suite which includes Cochlear Implants – Nucleus 6 System, Baha Bone Conduction Implant and further suite of Cochlear Acoustic Implants.

 

Due to the uniqueness and differentiation of products, for now, Cochlear has a significant advantage over potential new market entrants and existing providers, if they decided to enter the market, i.e. budget segment in Taiwan, with Cochlear still premium for performance segment.

 

While Nurotron etc. and Cochlear are competitors, including in China, Cochlear has had a near monopoly on high quality bionic hearing products, translating into continued high prices through most global markets. However, e.g. Nurotron is a clear threat for ‘product substitution’ in the budget market growing organically on population demographics of the Chinese mainland, potentially replicable elsewhere through cross subsidisation, partnership or acquisition (Bloomberg, 2013).

 

Cochlear may have to monitor over the short medium term signals from potential new market entrants, competitive products or substitutes and large players with access to capital able to undercut the market if and when they enter.  When the market has signalled a move to more competition and maturity, Cochlear will need to consider options to keep costs down, retain sufficient market share and profitability, with continued innovation e.g. joint ventures with local or other competition on budget products?

 

Ideally Cochlear will compete on differentiation through continued investment in innovation in the short to medium term rather than competing on cost with technically inferior products.

 

What strategies would you recommend?

 

If not competing on price or cost in a new market, but through investment in technical innovation according to the five forces (Porter, 1985), both new competition and potential product substitution needs to be monitored by Cochlear’s marketing with existing limited presence e.g. new entrants, potential innovations and market demand.  Further, as experienced in CompXM simulation environment the following elements of buyer power, supplier power and existing competition, can be leveraged at the expense of an incumbent or new entrant like Cochlear.

 

In short, a large competitor with global presence could potentially enter Taiwan with high performance products, moderate pricing and high customer satisfaction impacting Cochlear’s market share, sales and profitability.  Cochlear also needs to be wary of similar or related threat of product substitution by continuing to invest in innovation, for superior quality products, keeping a ‘step ahead’.

 

Cochlear will need to be aware of issues discussed previously, with focus upon the value chain (IMA Institute of Management Accountants, 1996), and if competition does emerge, value chain may need to be leveraged further to maintain market share and profitability, with focus upon the product life cycle (Klepper, 1996).  This would include marketing division and Cochlear’s networks remaining informed of Taiwan market, including ongoing feedback from direct and indirect customers, especially the need for improvements based upon customer satisfaction and forecasting of demand.

 

This also leads onto leveraging production and finance well where the former needs ongoing investment to increase automation and possibly increased plant capacity to lower costs, in a potentially more competitive price environment.  If this is to be achieved sales and profitability need to be maintained; in future outsourcing, joint ventures or purchases could be considered to ameliorate any long term rise in costs that may impact profitability.

 

There may need to be assumptions made e.g. move towards a mature and stable market with competition in future, medium or long term, however ageing population and longevity could maintain growth (Biotech & Pharmaceutical Industries Program Office, 2016).  Assuming innovation continues, financial focus will become more important, especially keeping costs within bounds that allow profitability and continuing to attract investment.  Cochlear may have to consider contingencies or alternatives if e.g. new competition enters, maturing market with slower growth and downward price pressure, may require production alternatives whether elsewhere or contracting out.

 

Summary of Strengths and Weaknesses

 

Cochlear’s strengths are high innovation, strong health medical research with global links, unique products, very good product differentiation, trusted brand, regional and global footprint, with limited presence in Taiwan.  Further importance is human capital, expert personnel with strong ethnic connection to proposed new market, experience of new market entry and higher education or research links.

 

However, regarding potential weaknesses, there is little previous direct experience of Taiwan, risk of focusing upon costs versus investing in innovation to maintain share price, securing and maintaining intellectual property rights, high expectations after much global and regional success; not forgetting the impact of silo mentality on divisions, plus potential cross cultural issues amongst personnel.  The latter aspect is important, whether R&D, marketing, production, finance or management with predominantly ‘Anglo-Celtic or ‘white Australian’ whilst divisions would no doubt include Australians of Chinese heritage from old Cantonese, through Singaporean, Malaysian and PRC China, plus Taiwanese.

 

Competitive Strategy through Porter’s Five Forces

 

For now, and in the short term, Cochlear can develop competitive strategy (Porter, 1985) based upon differentiation through a suite of innovative products being updated or introduced, and presently produced in both Australia and Sweden.  While Cochlear has a dominant global market share, high direct and indirect customer awareness with growth and innovative products, premium pricing should be possible in Taiwan as a middle income nation (Biotech & Pharmaceutical Industries Program Office, 2016).

 

Due to proximity of Taiwan and nature of the products, production and shipping costs may not be a very significant issue (with high automation levels), but this will probably change in future as Taiwan and other markets mature with more competition thus potentially slower growth (possibly offset by ageing population).  Australia, as happens now, would be the obvious choice for maintaining R&D and production base being same region, time zone, short air freight times and very strong human relationships whether social, research or business.  Further, if needed, Sweden can be a backup for supply, or leveraging contract manufacturing and health medical research expertise in Asia for outsourcing e.g. Singapore, Malaysia or Taiwan itself via subsidiaries or research institutes.

 

Market research and ongoing market intelligence will be essential for signals and information about actual and potential competitors or new entrants, while organic use of existing relationships and systems should allow monitoring of the situation, both quantitative and qualitative market research.  The importance of good forecasting cannot be ignored as any mismatch between actual and forecast demand can lead to either missed market opportunities or increased costs, especially if forced to outsource.  Conversely excess inventory should be avoided, although excess could be potentially transferred to other regions.  Cochlear’s existing limited presence in Taiwan bionic hearing devices could be leveraged to support ongoing market research and intelligence for expansion.

 

If and when new competition does emerge a risk would be product substitution, especially in budget sector where lower cost competitors could leverage their advantage, e.g. PRC China, on state tenders and contracts.  This may require more focus upon continuing innovation for premium priced niche products in tandem with cost cutting on budget, or co-operation with potential partners on budget production, whether joint venture or licensing.

 

With any new competition which generally has a global presence too allowing cross-subsidisation, there may be indirect pressure through buyers having other choices, both budget and performance, with potentially lower prices impacting profitability.  Again Cochlear may need to consider other options whether partnerships, licensing or other production options, to lower costs thus addressing both buyer and other supplier power.

 

Supplier power of both competitors and Cochlear can be minimised for the former and utilised by the latter.  Simple fact is that Cochlear is continually investing in R&D, innovation and new product releases with high awareness, commensurate reputation for quality, proximity to Taiwan and perception of Australia as a benign or friendly trading partner versus potential competitors or existing competition elsewhere from larger sometimes dominant nations i.e. PRC China, USA and Japan.

 

Focus upon the Value Chain

 

The important value chain process includes R&D, marketing, production and finance (IMA, 1996), along with elements of the product life cycle.  Again, these include earlier ease of entry, product choices and product development which then becomes slower with maturity, fewer product or competitor exits, less innovation and more focus upon production costs and retaining market share (Klepper, 1996).

 

R&D requires retention of strong links and investment into related research: in-house, education institutions and research centres, both Australia and target market(s), continually.  Again, this must include maintenance and leveraging of existing and new human capital through social, research and business links between Australia, Taiwan and region especially via Taiwan’s biotechnology strategy for R&D and investment (Biotech & Pharmaceutical Industries Program Office, 2016).

 

Marketing focus should be upon matching customer, intermediary and supplier needs, retail, corporate and state, complemented by dynamic, valid and reliable market research with more accurate forecasting. A significant element of marketing between Australia and the region, including Taiwan, are the perceptions of Australia e.g. innovation, quality, trust, proximity, awareness and ‘big face’ i.e. increased value of premium international products versus budget.  Again, Cochlear can use its very limited but existing client presence in Taiwan to ensure valid and reliable market research, especially qualitative for market intelligence.

 

Production needs higher automation required to keep costs down, avoidance of excess inventory, focus upon actual vs potential demand for better forecasting, adaptability and flexibility.  Presently Australian based production, due to products being highly sophisticated digital electronics, is done on campus at Macquarie University Sydney, accessing R&D, expertise and highly skilled operators.  If there are production issues based upon capacity and cost, other Asian subsidiaries could assist with outsourcing via science or research hubs such as Singapore, and Taiwan itself (Ibid.).

 

Finance strategy would be maintenance of a strong balance sheet helped by global market share and income, ensure financial KPIs are at optimal level and do not decline.  Cochlear has a proven reputation amongst international investment analysts for good management, strategy, increasing sales, profits, share price and dividend growth; with investment in R&D and innovation.  Investment and financing issues for local biotechnology companies has been highlighted in Taiwan which may create a niche for the likes of Cochlear to enter.  While looking to the future capacity and costs, more use could be made of production near or around existing Asian subsidiaries to take advantage of future regional growth, and Africa.

 

If Cochlear can focus on new market opportunities via these aforementioned strategies and with an added emphasis upon human capital, Taiwan can be both a new and significant long term market for bionic hearing implants.

Conclusion

 

The CAPSIM Global DNA and Comp-XM business simulations are practical virtual tools for development of inter-dependent company personnel in R&D, marketing, production and finance divisions; in addition to application of scenario planning, strategy and KPI feedback for main regional competitive markets.

 

In the first simulation Chester in Global DNA was a global niche differentiator for performance products in home market the Americas, in addition to Europe and Asia Pacific; resulting in a leading market position yet without dominating markets.  The simulation allowed focus upon KPIs including profitability, ability to raise capital, asset utilisation, forecasting, inventory management, customer satisfaction and competition; highlighting the inter-play between these and other variables.

 

Meanwhile the Comp-XM lower growth environment via Andrew’s was similar with two main products Able for budget and Acre for performance with strategy of lowering costs, higher automation, future organic growth, customer satisfaction and increased value.

 

Both simulations required focus upon customer satisfaction or buying criteria including price, age, ideal position and service life, with at least two products to cover both budget and performance; in addition to incremental changes or updates.  Comp-XM emphasised the need for cost control e.g. increased investment in automation, and addressing customer satisfaction through continued investment in R&D and product updates.

 

The Comp-XM market environment suggested need for higher specifications for both budget and performance, without increasing prices significantly, and in some cases decreasing prices to maintain or defend market share.  This was confirmed by unexpected events due to competition either entering and dominating market by lower prices, and conversely superior performance or technical specifications.  Final results were mixed due to the latter events, particularly sub-optimal finances, inaccurate forecasting of demand and meeting increased demands of customer satisfaction.

 

For Cochlear the simulations highlighted need for real world competitive strategy through understanding markets and competition to create profitability.  Importantly meeting or exceeding customer satisfaction requirements is essential through focusing upon and leveraging all divisions in the value chain.  The stress should be upon the product lifecycle exemplified by continued investment in R&D and innovation to keep abreast or ahead of the competition, without needing to even dominate the market to be profitable.

 

Cochlear can enter or expand significantly the Taiwanese market successfully by strategy addressing all the key elements of perpetual R&D along with marketing and market research, with commensurate adaptability in production, have sound finances to both control costs and attract further investment.  Like simulations are an opportunity to have divisional personnel experiment together on strategy and other divisions, it also suggests the need to have human resource strategies attracting personnel competent in key skills sets, both technical and soft.

 

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