Case Study of Merit-Trac: A Test in Everyones Life

A Marketing of Service Presentation

Mohammad Imad Shahid Khan | Ansai Sony | Nihal Raj | Siddharth Bhagat

Section A, 2nd Semester, Bachelor of Business Management (2013-2016)

Company Background

Conceived at Airlines Caf by IT Professional Madan Padaki and software entrepreneurs Krishna and Suresh running their venture named First Shot,

which was into financial risk management.

The opportunity was identified accidentally as First Shot was asked by its leading client to develop a software to manage its question bank.

Madan realized that even though this was very different from the financial products that First Shot created, Madan realized that it could add more value to

clients and that it represents a potential business opportunity.

Idea Behind the Service

To provide testing and assessment services to Corporate to help them in recruiting big numbers, which was the emerging need.

Their key activities included test design, paper printing, test administration, and post-test feedback that formed the Value

Proposition.

In the corporate their initial segment group was the IT/ITES and BPO Industry, which gradually expanded to Educational,

Employee assessment and Research domain.

Company Profile

Founded : Bangalore, August 2000

Industry: Information Services

USP: An Assessment-only service Company which avoids any inherent conflict of interest while hiring as they dont pitch

employees. This made them very different than other close rivals

which were in the form of Placement agencies. However, they are

contemplating moving towards the training domain.

Company Profile

Has assessed over 1.5 million candidates for over 150 customers.

Has 450+ full-time employees and over 1000 certified test administrators operating out of offices at all the metro cities in

India, with around 21 state-of-the-art online testing centers in 16

cities, having 1300+ online terminals.

The suite of tests are in over 300 areas spanning Communication skills, General abilities, Domains Skills (Engineering, Accounting,

etc.), delivered in both Online and Offline modes.

BEGINNING OF JOURNEY

In starting they approached 4-5 VCs for the investment but as the concept was new and it was early 2000s when there was an era of dotcom bust.

VCs were focusing on high growth tech based opportunity and they were interested in investing at least US $ 3 Million and there investment was very small.

Due, to this the founding member had to invest $10,000 which covered there initial expenses.

In starting there was many obstacles like there was an implicit competition from Internal department of potential clients and secondly they misunderstood Merit Trac to be a placement agency.

Madan worked from home to reduce expenses.

In addition , they could rely on First Shots technical and administrative resources to get the basics of Merit Trac.

For delivery services like Printing test sheets , Locating test centres , Finding test supervisor they rely on administrative

support from First Shot.

BEGINNING OF JOURNEY

Finding an Angel Investor

Within few months they were able to achieve Four customers :-in which two were blue chip company , a modest office space and a revenue of $10,000

Then ,They again approached many VCs with revised business plan but again no one invested , so they thought if they can change their business with low budget i.e. Smaller amount

around US $ 200,000 250,000 and within two year they will achieve cash break even .

Their experience of last few months have given confidence that sales of US $ 500,000 would be achievable in first year and this could increase to US $ 6 Million by third year

Now they thought to target High Net Worth business man . So they contacted 2 and 3 tier accountancy firms in Bangalore .

By the end of November 2000 they found one agriculturist business man named Mr. Ranganath .

Mr Ranganath was later replaced by HSBC.

Strategies As of Now

Now Merit Trac assesses around 75,000 candidates every month

From April 2006 to March 2007 they tested around 700,000 candidates and have assessed over 1.5 million candidates till

date.

Like ICICI bank and other clients tells that they want their recruiting team to focus on Interviewing and selection part.

Volume Game

Assessment Process

Clients build their Resume bank from a variety of sources.

Merit Tracs Job start from the moment client forward their resumes for initial Screening.

Resumes are screened on the basis of parameter defined by the clients.

Assessement is broadly classified into their own four broad areas.

It content bank has over 60,000 Questions

They charge Rs . 150 per BPO candidates and Rs 600-700 per IT candidates.

Focus and Neutrality

They managed to clock a growth rate of 300 % because they were only focusing on Assessement only corporation and not

on other things like placement company

Challenges

Merit-Tracs focus is on expanding in range of offerings and entering into the Education Domain.

It is in dilemma whether to change its positioning from Assessment-only to Assessment & Training. His dilemma is that

he does not want to initiate something which would add conflict of

interest with the existing line of business and cast doubt on the

neutrality of assessments.

Challenges

At the same time if he does not initiates the Training service he sees a big gap in the overall offerings, if this loop is not complete and a

holistic solution is not provided as demanded by Merit-Tracs stake

holders.

How to complete this loop without affecting the neutrality and focus of Merit-Trac?

Two Options for Merit-Trac

Since the gap which Merit-Trac facing in its endeavor to expand its

presence in Education domain is Strategic Gap. Its dilemma to add

Training as a part of Service can be resolved by offering through two

options:

A Merit-Trac offering along with Assessment. Or

A Joint-Venture with an established player offering the same, separately from Assessment.

What Merit-Trac should do?

As is seen, Merit-Tracs dilemma is to whether or not compromise its initial Positioning of being an Assessment-only enterprise.

This positioning is the reason why key-clients like Wipro, ABB, ICICI Group, Accenture and like, have hired Merit-Tracs service.

Hence, therefore, to enter into the training domain while not compromising their initial positioning, they will have to introduce a

separate entity in the form of Joint Venture.

What Merit-Trac should do?

This Joint Venture will assure the clients that both the offerings are segregated, not compromising their candidates assessment.

Even though they have certification programs of their own like Trac-Skills which provides feedback on industry-readiness to

thousands of University candidates across the country, it is still far

from the Training program which Madan is contemplating to start.

The Joint-Venture would help Madan to get out of that dilemma.

Joint Venture Potential issues

The Partnership has to be with an established player with emphasis only on a combined marketing plan designed to help

both companies reach their goals.

Since Merit-Trac is one of its kind, it would not have much difficulty in obtaining partners however it may face difficulties in

finding the partner who is more flexible with the strategies

undertaken by it.

Joint Venture Potential issues

There might be a potential of disagreement with the partner firm in Merit Tracs Positioning strategy, particularly when it is counted

as major enterprise for Assessment of Candidates.

Differences in elements like Organizational culture, Delivery tactics or the lack of communication between the two Partners can

become major deterrents.

But Why is Joint-Venture still worth all the hassle

Merit-Trac which is currently facing a Strategy Gap, it forming a separate legal entity for training will assure its key-clients that their

Assessment modules are not compromised.

Their initial Differentiation strategy of not becoming another Placement agency will not be compromised.

Although Merit-Trac has a rich Assessment bank, the expertise training, resources and like, needed in offering those services will be

fulfilled by the Partner.

Through this initiative, Merit-Trac will not only be able to expand

its segments from assessing for IT/ITES, BFSI, etc but also create

a foothold in the Education domain without compromising any of

its previous USP strategy all the while retaining its key-clients.