BUSINESS REPORT

ON BYJU’S RISE AND FALL

Case study

For Account

BY, At

RITU BUNDELA Jagran Lake City University

[email protected] Bhopal

462042
 INTRODUCTION
Byju's, a leading Indian ed-tech company, has experienced rapid growth since its
inception in 2011. The company offers personalized learning programs for students
of all ages, leveraging technology to make education engaging and effective.
However, Byju's has also faced challenges, including allegations of misleading
marketing practices and concerns about the quality of its content.

We going to discuss all the business points which affected Byju’s in this case study.

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 BYJU'S: A JOURNEY OF EDUCATIONAL
EMPOWERMENT
History
Byju's, founded by Byju Raveendran in 2011, has rapidly evolved into one of India's most
prominent educational technology companies. The company's mission is to make learning
engaging, effective, and accessible to students across the globe.

Founder
At the helm of Byju's is a dedicated team of educational experts, technologists, and business
leaders. Byju Raveendran, the CEO and founder, brings a wealth of experience in the education
sector, having previously worked as a CAT tutor. His passion for making learning enjoyable and
impactful has been instrumental in shaping Byju's vision.

Figure 1

Team
Joining Byju in his endeavor is a talented team of educators, content creators, and developers.
These individuals work tirelessly to create innovative and engaging learning experiences that
cater to the diverse needs of students. Byju's team includes subject matter experts from various
fields, ensuring that the content delivered is accurate, relevant, and up-to-date.

As of early 2024, Byju's board of directors consisted of three members:

1. Byju Raveendran: CEO and Co-Founder
2. Divya Gokulnath: Co-Founder
3. Riju Raveendran: Director

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 BIJU'S JOURNEY: FROM RISE TO DECLINE
The Ascent: 2011-2018
Biju's success during this period can be attributed to its innovative business plan, effective Biju's
success during this period can be attributed to its innovative business plan, effective marketing
strategies, sound financial management, and robust HR policies.

• Business Plan:

Biju's business plan centred around providing affordable, high-quality products and
services. They focused on expanding their product line, targeting specific market
segments, and leveraging technology to enhance efficiency. For instance, in the
electronics segment, they introduced budget-friendly smartphones and laptops that
catered to the growing middle-class.

Biju also adopted a customer-centric approach, emphasizing customer satisfaction and

feedback. They conducted regular market research to understand consumer needs and
preferences, and implemented initiatives to improve their customer experience. For
example, they established a dedicated customer care helpline, offered extended
warranties, and provided easy returns and refunds policies.

BUSINESS CANVAS AND BUSINESS MODEL

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 • Finance:

Biju's financial strategy was conservative and focused on sustainable growth. They
carefully managed their cash flow, invested in research and development, and
maintained healthy debt-to-equity ratios. By partnering with strategic investors, they
secured the necessary capital to fuel their expansion.

Biju also implemented robust financial controls and risk management practices to ensure
the financial stability of the company. They conducted regular audits, monitored key
performance indicators, and developed contingency plans to mitigate potential risks.

SUBSCRIPTION PLAN

EXPENSES BREAK DOWN

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 • Marketing:

Biju employed a multi-pronged marketing approach that included traditional advertising,

public relations, and digital marketing. They partnered with influencers, organized
promotional events, and focused on building brand loyalty through customer satisfaction
programs. Their "Biju Badi" campaign, which emphasized affordability and quality,
resonated with their target audience.

Biju also leveraged social media platforms to engage with their customers and build
brand awareness. They created engaging content, participated in online discussions, and
responded promptly to customer queries and complaints. This helped them establish a
strong online presence and connect with a wider audience.

INITIAL MARKETING

Target market Engaging content Customer growth

Kids from pre school to Cat Easy to learn self-pace study Unique’s experience led to
aspirants format and interactive user market domination and
interface growth

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BUSINESS REPORT ON
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 According to an Inc42 report, BYJU's total expenditure stood at Rs 26,100 crore over the
FY16-FY22 time period. Its biggest expenditure was its advertising costs. During the period,
the startup’s total advertising cost stood at Rs 8,029 crore. This is almost 69% of its operating
revenue during the period, which stood at Rs 11,792 crore during the same period.

• HR Policies:

Biju's HR policies emphasized employee development, engagement, and satisfaction. They

offered competitive compensation packages, provided training opportunities, and fostered a
positive work culture. This approach led to a motivated and productive workforce, which was
crucial for their success.

Biju also implemented employee recognition programs, organized team-building activities, and
encouraged employee feedback through surveys and suggestion boxes. This helped create a
sense of belonging and fostered a positive work environment.

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 THE DECLINE: POST-2020
Several factors contributed to Biju's decline after 2020.

• Intense Competition:

The market became increasingly competitive, with new entrants and established players
offering similar products and services at lower prices. Biju struggled to differentiate itself
and maintain its market share.

The rise of e-commerce platforms also posed a significant challenge to Biju. These
platforms offered a wider range of products, convenient shopping experiences, and often
lower prices. Biju faced difficulty in competing with these online marketplaces, especially in
terms of product selection and pricing.

Lack of adaptability in the VUCA world, and market

myopias led Byju’s to make critical mistakes.

• Shift in business model

Initially, Byju's core strength lay in its educational services, but a significant shift occurred
when it started focusing on hardware sales, like tablets and SD cards preloaded with
educational content. This move, while financially lucrative, diluted the brand's essence.

The hardware sales strategy diverted attention from their core educational services and
raised questions about the company's priorities. This shift led to a disconnect with a user
base primarily seeking quality educational content.

Shift from service to product model

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 • Changing Consumer Preferences:

Consumer preferences shifted towards premium brands and personalized experiences.

Biju's focus on affordability and mass appeal became less relevant in this evolving market.

Consumers were also becoming more demanding in terms of product quality, features,
and customer service. Biju's products, while affordable, may not have met the higher
standards expected by consumers.

• Economic Downturn:

The global economic downturn, coupled with domestic challenges, impacted consumer
spending. Biju's sales were affected as consumers reduced their discretionary spending.

The economic downturn also led to increased financial pressures on Biju. The company
faced challenges in managing its cash flow, paying debts, and investing in growth
initiatives.

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 • Acquisition Challenges:

Biju's acquisition strategy, while initially successful, faced challenges. Some acquisitions
did not integrate well with the core business, leading to operational inefficiencies and
financial losses.

The integration process often involved cultural differences, organizational restructuring,

and potential conflicts between the acquired company and the parent company. Biju may
have struggled to overcome these challenges, resulting in suboptimal performance.

Here are some of the key acquisitions, along with their approximate acquisition dates and
general terms of condition:

• Tutor Vista and Erudite (2017): Acquired from Pearson, these online tutoring
platforms expanded Byju's reach to a wider range of subjects and age groups.
• Osmo (2019): This acquisition brought physical and digital learning together, offering a
unique blend of educational games for young children.
• WhiteHat Jr. (2020): Byju's acquired this coding platform to cater to the growing
demand for STEM education.
• Aakash Educational Services Ltd. (2021): This acquisition strengthened Byju's
presence in competitive exams like JEE and NEET.
• Great Learning (2021): This acquisition expanded Byju's offerings to include
professional and higher education courses.
• Epic! (2021): A digital reading platform for young children, this acquisition added to
Byju's library of educational content.
• Toppr (2021): A K-12 learning platform, this acquisition further expanded Byju's reach
in the Indian education market.
• Tynker (2021): Another coding platform, this acquisition complemented Byju's existing
offerings in STEM education.

• Allegations of employees

The company grappled with layoffs, resignations, and declining employee morale. The
layoffs, a direct consequence of financial strain, affected hundreds of employees,
disrupting lives and casting a shadow over the company's culture.

High-profile resignations, including key board members and executives, signaled internal
discord and leadership challenges. These departures and the general uncertainty
surrounding the company's future affected employee morale, potentially impacting
productivity and innovation.

GV Ravi Shankar, Russell Dreisenstock and Vivian Wu. Deloitte, the financial auditor of
the company, also resigned in 2023.
The year 2023 saw thousands of layoffs across all departments in Byju's and constant
payroll interruptions as the company attempted

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 • Allegation on Legal and accounting

1. Byju's valuation started to take a hit in 2023 when the demand for online education
started to subside, especially with more competition in the industry. In April 2023, the
ed-tech firm's struggle began when it came under the scanner of the Enforcement
Directorate (ED), with three of its offices raided under provisions of the Foreign
Exchange Management Act (FEMA).
2. ED slapped a FEMA violation notice on Byju's worth ₹9,362.35 crore. Legal troubles
continued to mount for the ed-tech company after one of its foreign lenders ended up
filing a lawsuit against Byju's in 2023.

3. US-based investment firm Redwood cut a loan of $1.2 billion to Byju's in November
2021, but the ed-tech firm failed to make a quarterly interest payment of ₹330 crore.
After being faced with a lawsuit, Byju's further filed a case against Redwood for
“accelerating its demand” to pay the loan.

4. The loss of trust from auditors, board members, and stakeholders was a significant
blow to Byju. The resignation of their auditor, Deloitte, and the departure of three board
members in 2023, were clear indicators of internal governance issues. These events
hinted at deeper problems within the company's management and operational
transparency, eroding stakeholder confidence.

• Technological Setbacks:
Dependency on technology infrastructure made BYJU'S susceptible to dissatisfaction from
users due to significant technological errors, cybersecurity breaches, or service
interruptions.

• Limited Subject Coverage:

Focusing primarily on fundamental disciplines like physics and math might limit BYJU'S
appeal to a broader audience with diverse educational requirements.

• Negative User Reviews:

The company's reliability and reputation could be adversely affected by negative user
experiences or reviews, potentially leading to a decline in popularity.

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 CONCLUSION
Key Takeaways:

1. Unconventional Teaching Methods: Byju Raveendran’s passion for making complex

concepts easy to understand led him to develop innovative teaching methods, which
were later adapted into the Byju’s learning app.
2. Personalized Learning Journeys: The app creates customized learning paths for
individual students based on their proficiency levels and capabilities, allowing them to
learn at their own pace and style.
3. Rapid Growth: Byju’s has grown 100% year-on-year for the past three years, with a
revenue of Rs 520 crore (US$ 73.00 million) in 2017-18 and a target of tripling revenue
to Rs 1,400 crore (US$ 196.53 million) this financial year.
4. International Expansion: Byju’s has expanded globally, with plans to build a product
for the international market and the K-3 (1st, 2nd, and 3rd grade) segment.
5. Strategic Acquisitions: The company acquired TutorVista and Edurite from Pearson in
2017 to accelerate its international expansion and improve product offerings.
6. Impact on Students: Byju’s has made learning accessible, effective, engaging, and
personalized for millions of students globally, with over 8 million downloads and
4,00,000 annual paid subscribers

Challenges and Opportunities:

1. Expanding to the US Market: Byju’s faces the challenge of entering the highly
competitive US market, where it must adapt to local regulations and preferences while
maintaining its unique teaching approach.
2. Balancing Growth and Quality: As Byju’s expands rapidly, it must balance its growth
with maintaining the quality of its content and services to ensure continued student
engagement and satisfaction.
3. Competitive Landscape: Byju’s operates in a crowded edtech market, requiring the
company to innovate and differentiate itself to remain competitive.

Byju’s case study demonstrates the power of innovative teaching methods, strategic
acquisitions, and rapid expansion in transforming the education sector. As the company
continues to evolve, it will be essential to navigate the challenges of international expansion,
maintain quality, and stay competitive in a rapidly changing market.

Rapid expansion and aggressive marketing strategies may yield short-term gains, but
sustainable growth is key to long-term success. Byju's aggressive push into new markets and
products, often at the expense of quality and ethical considerations, ultimately led to significant
challenges. Sustainable growth strategies, which balance ambition with operational capabilities
and ethical considerations, are essential for enduring success.

To regain its position, Biju will need to adapt to the evolving market, innovate continuously, and
focus on delivering superior customer experiences. They may need to invest in research and
development to develop new products and services, explore new market segments, and
strengthen their online presence. Additionally, they should focus on improving their customer
service, building brand loyalty, and managing their finances effectively.
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 BIBLIOGRAPHY
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conditions-at-edtech-giant/96232234
• https://www.indiatoday.in/technology/news/story/layoff-2023-byju-sacks-1000-employees-
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