Medium-Term Management Plan

Transform and Grow Benesse 2022(FY2018 - FY2022)

The Company has launched a medium-term management plan for the five years beginning in FY2018, Transform and Grow Benesse 2022. As seen in phenomena like Japan’s dwindling birthrate and aging population, educational and entrance-exam reforms, and diversification in learning, the external environment is undergoing great change. Taking as our slogan Transform and Grow, we aim to lead the Benesse Group to further growth in our existing businesses and expansion into new business areas via M&A.

Concept video

From here, to the future.
Benesse (well-being), for everyone.

How we want the Company to be in FY2022

  • A reputation as Japan’s leading company for supporting rich lifestyles
  • Recover status as a top Japanese company that is universally trusted
  • Proud and motivated employees

Numerical targets and roadmap

Summary of the first phase of the medium-term management plan

The Benesse Group will execute strategies for responding to major changes in its operating environment during the medium-term management plan’s first phase, which spans over the first three years from fiscal 2018 to 2020. With a solid grasp of both growth opportunities and risks, the Group as a whole will aim to get earnings back on track and realize growth in the future.

Business environment

Business strategy

Domestic Education (Japan)Grow by capitalizing on reforms of education and college admission systems

FY2020 Targets

Net sales CAGR 7%

  • Leverage the educational and entrance-exam reforms to push ahead with growth strategies in the Shinkenzemi, School & Teacher Support, and Area and Classroom Education businesses
  • Use our collective capabilities to promote the GTEC proficiency tests in the four English skills
Net Sales & Operating Income

Policies and Strategies Going Forward
Shinkenzemi Business

Reaching our target of 3 million enrollees in FY2020

In the Zemi Business Company, we are pushing ahead with growth strategies that involve leveraging the educational and entrance-exam reforms as our most significant business opportunity, and working to make the most of the comprehensive strengths of Benesse. Numerically, our target is to have the combined enrollment of the Shinkenzemi and Kodomo Challenge correspondence courses be 3 million in April 2020. Maintaining a balance between boosting enrollment, on the one hand, and improving profitability through additional reform of our cost structure, on the other hand, we are aiming for greatly improved profitability in FY2020. This will be a challenging target to reach, but we aim to reach the target by accurately meeting the new customer needs that will emerge amid the various changes involved in the reforms, and by creating new value in advance of the competition.

Michiaki Yamamoto
Corporate Executive Vice President,
President of Zemi Business Company

School & Teacher Support Business

Achieving growth by moving quickly to prepare for the educational and entrance-exam reforms

In order for Benesse to prepare for the major change represented by the educational and entrance-exam reforms, the School & Teacher Support Business Company, which is the business company most closely tied to the classroom environment, will have to take the initiative in changing. In that sense, the adoption of the GTEC as one of the private-sector proficiency tests for the four skills in English on the uniform test for university admissions constitutes a very significant turning point. Sales, Planning, Product Creation, and other departments at the Business Company are working together to listen to customers’ views, hone our products and services, and provide learning in new forms (and with new content).

Masaki Yamasaki
Director and Corporate Executive Vice President,
President of School and Teacher Support Business Company

Area and Classroom Education Business

Growing in the region and contributing to education in the region

As customers’ needs and learning styles become more and more diverse, the Area and Classroom Education Business is providing a diverse assortment of products and services, such as cram schools, English schools for children, and English teaching materials for preschoolers, elementary schoolers, and junior high schoolers. The goals of the business are to use these products and services in order to create a model for continued growth on the part of Benesse and contribute to improving the ability of the region to educate. Going forward, we aim to achieve additional growth by building on the strengths of the different categories of content and sharing our knowledge of marketing and other areas.

Kenji Yamakawa
Corporate Executive Vice President,
President of Area and Classroom Education Business Company

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Global Kodomo ChallengeExpand the Kodomo Challenge brand of courses

FY2020 Targets

Net sales CAGR 10%

  • Focus on increasing the competitive edge and the number of enrollees in Kodomo Challenge, both in Japan and abroad (primariliy China)
  • Use global standard products and global alliances to expand
Net Sales & Operating Income

Policies and Strategies Going Forward

Uniting the Japanese market and overseas markets, and boosting competitiveness

The Global Kodomo Challenge Business Company was set up in April 2018 for the purpose of making Kodomo Challenge, a series of correspondence courses for preschoolers that was celebrating its 30th anniversary, grow into a more globally competitive business. Regardless of the country or region, our aim is always for Kodomo Challenge to be a product that children will enjoy, will become absorbed in, and will work on by themselves in accordance with their age and state of development. We aim to adapt the product to different cultures and values by means of painstaking localization, and make Kodomo Challenge into a business that broadens children’s possibilities.

Haruna Okada
Corporate Executive Vice President,
President of Global Kodomo Challenge Company

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Nursing Care and ChildcareEntrench the Group’s leading position in the market by continuing to offer high-quality services

FY2020 Targets

Net sales CAGR 3%

  • Reinforce regional strategy by steadily increasing the number of nursing homes
  • Promote differentiation in service quality by further developing the Benesse Method
Net Sales & Operating Income

Policies and Strategies Going Forward

Differentiating by taking a scientific approach to nursing care and childcare

For the year ended March 2018, Benesse Style Care’s homes achieved a high occupancy rate of 95%, indicating that the business as a whole is solid. Each of the homes uses the Benesse Method—a compilation of practical knowledge gained at our homes—to provide high-quality service, and residents are pleased with the service received. As a result, staff members feel their work to be worthwhile, and this in turn helps increase the occupancy rate. We aim to push ahead with this virtuous cycle so as to achieve steady growth.

Shinya Takiyama
Director and Corporate Executive Vice President,
President of Nursing Care and Childcare Business Company

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BerlitzRestructure operations under the direction of the new CEO

FY2020 Targets

Net sales CAGR 2%

  • Restore business performance by reforming the cost structure and transforming products and business processes
Net Sales & Operating Loss

Policies and Strategies Going Forward

Under a new management team, we will revitalize Berlitz, a company with a 140 year history

Berlitz, which pioneered the industry-leading Berlitz Method* and has continuously maintained a strong brand, in 2018 celebrated 140 years in business. Berlitz’s profits are currently low as a result of delays in undertaking reforms due to management issues, but I believe that every ”issue” that can be improved through effort represents an ”opportunity.” In order to radically rebuild the business, I have brought together a number of individuals with expertise in revitalizing businesses and formed them into a new management team. Drawing on my own knowledge and experience in the education industry and on other resources, we have formulated a revitalization plan that centers on reforming the cost structure and transforming products and business processes, and we are implementing measures such as thoroughgoing cost reduction, product innovation that uses both face-to-face teaching and technology on a conccurrent basis, and transformation of business processes through the use of IT. With these measures, we aim to return to profitability in FY2020 and contribute to the Group’s profitability in FY2022.

* A proprietary method, used around the world for 140 years, in which learners do not use their native language at all, but only the language they are studying; the method enables the learners to understand things spoken in that language without any translation, and to respond in that language.

Curtis Uehlein
CEO, Berlitz Corporation
Served as CEO or COO at an IT consulting firm and at several companies in the field of education, including language companies that compete with Berlitz. With 20 years of experience in the education industry, he was named CEO of Berlitz Corporation in August 2017.

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Other/New Business DomainsCreate new businesses through mergers and acquisitions

Policies and Strategies Going Forward

Using M&As to create a third business pillar

During the five years of the medium-term management plan, to ensure recovery in performance and enable the Benesse Group to grow sustainably into the future, we intend to create a ”third pillar” of business—following on our education business and our nursing care business—by means of mergers and acquisitions.
We are giving consideration to going into new lines of business in health, lifestyle, and other areas, where there would be high affinity with our existing businesses, and the main target of these new lines of business would be working adults and healthy seniors.
The companies that we are looking for as potential M&A targets would have operating margins of 10% or more—as a rough guide—before amortization of goodwill, and the amount that we currently foresee investing would be ¥50–100 billion.

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Enhancing operational resources

Human Capital

  • Train new management leaders to ensure sustainable growth
  • Equip employees with the skills needed for implementing reforms
  • Prepare personnel organizations for implementing human resources strategies

Intellectual Capital

  • Utilize intellectual capital to create new value
  • Upgrade products and services using digital technologies

Social Capital

  • Support community development through Benesse Art Site Naoshima
Our impact in Naoshima
Dialogue with Tadao Ando and Soichiro Fukutake
Benesse Art Site Naoshima has grown in collaboration with residents of several islands in Japan’s Seto Inland Sea, particularly the island of Naoshima. Having been deeply involved in the project, Tadao Ando and Soichiro Fukutake shared their views on the significance of its activities and their hopes for the future.

Last updated : 2018/10/25