■Step ＜9795＞ Company Overview

1. Business content

Since its establishment in 1975, the company has developed a learning school “STEP” for elementary and middle school students and active high school students in Kanagawa prefecture, and has started a new school childcare division “STEP Kids” (elementary school 1st to 4th graders) from 2016. As of the end of 2024/10, there are a total of 166 schools: 145 schools in the elementary and middle school division (of which 25 are “Hi-step” schools that provide high-level instruction), 15 high school students, 1 tutoring department, 4 schools in the school childcare department, and 1 step junior lab. The total number of students also increased year by year along with the establishment of new schools, and as of the end of 2024/10, it is over 0.035 million. The elementary and middle school student division accounts for about 80% of sales, and it boasts a track record of overwhelming other schools in terms of the number of successful students at the top 19 public preparatory schools in the prefecture, and it has a reputation for its high learning guidance ability and steady management.

2. The company's characteristics and strengths

The company's characteristics and strengths can be consolidated into “high-quality learning guidance through professionalization of teachers,” “efficient marketing strategies based on dominant development and word-of-mouth information,” and “high profitability and stability.”

(1) High-quality learning guidance through professional teachers

Based on the idea that “teachers must be learning guidance professionals,” the company made teachers full-time employees, strived for specialization and advanced technology in class content, and built up high academic records with their learning guidance skills as a foundation for growth. Of the total number of 743 teachers as of the end of 2024/10, there are 714 full-time teachers, and in addition, it consists of 21 full-time lecturers (fellows/contract staff) and 8 part-time lecturers (3 of which are native English language instructors), and the full-time employee ratio is 96.1%, which is a teaching system where almost 100% can be called professional teachers. Also, one of the features is that it has established a system where teachers can concentrate on learning guidance without engaging in solicitation activities (telephone solicitation, posting, etc.) to acquire students.

At the company, each teacher strives to improve their skills while regularly holding workshops, etc. based on the basic policy of “not neglecting the study of teaching techniques on a daily basis, facing each student and sincerely working to improve academic ability.” Specifically, in addition to conducting training for newcomers for 4 hours every other week in groups and 2 hours every other week for each individual, regional training is also conducted every other week for 2 hours and a half on Fridays, and follow-up training and study sessions are held every other week for 2 hours on Tuesdays as needed, and efforts are being made to improve teaching ability.

Due to high-quality learning guidance through professionalization of such teachers, the 2024 spring high school entrance examination produced 2,435 successful students at 19 public schools in Kanagawa prefecture, and left a top track record among all schools. Out of the top 19 schools, 16 were at the top in the number of successful students by cram school, and Yokohama Suiran High School, the most difficult school in the prefecture, was also at the top for 2 consecutive years. Also, if you look at the 8 schools*1 designated as priority schools for academic ability improvement in Kanagawa Prefecture, 1,320 people passed, leaving an overwhelming track record, with step students accounting for 50.9% of the total number of successful applicants. In addition to the high quality of study guidance, the ability to analyze and prepare for past entrance exam questions and accurate college entrance guidance have led to high passing performance*2. Major competitors within the prefecture include the Rinkai Seminar and the Shonan Seminar (a subsidiary of Sprix ＜7030＞), etc., but all of them are at less than half of the company's level in terms of the number of successful applicants in the top 19 public schools, and the brand power as a learning cram school aiming for top public schools in the prefecture has become even stronger. Furthermore, even at Tokyo Gakugei University High School (national), which is positioned as the most difficult school for both sexes within the commuting area for “STEP” students, there are 214 people (an increase of 26 compared to the previous year, excluding returning students and going on to college internally. 152 regular successful applicants (accounting for 55.5% of the total number of 274 students) were produced, and according to the company, it seems that it has been the top number of successful students among all schools for 16 consecutive years. Note, the number of successful applicants at the top 19 public schools decreased slightly compared to the previous year, but it is estimated that 2024 had an impact on the fact that the number of students challenging difficult schools was higher than usual. The company has a policy of giving top priority to the wishes of students and parents in exam guidance.

*1 Academic Achievement Improvement Priority Schools: Schools positioned by the Kanagawa Prefectural Board of Education as schools that develop human resources who can play an active role as leaders in Japan and the international community in the prefectural high school reform implementation plan. Eight schools have been selected: Yokohama Suiran, Shonan, Atsugi, Hakuyo, Kawawa, Odawara, Yokohama Midorigaoka, and Tama.

*2 The pass rate is also overwhelming others. For example, while step students were 64.3% at Yokohama Suiran High School, there was a gap of 20% or more between 44.1% and other examinees.

Meanwhile, looking at the high school student division for active high school students, the number of people who passed the university entrance exam in the spring of 2024 was 354 at national and public universities (up 30 from the previous year), 594 at Wasei Sophia University (same increase of 134), and 2,219 at MARCH and Tokyo University of Science (same increase of 227), breaking a record high of 3,167 in total (same 391 increase), and the most difficult number of those who passed the University of Tokyo was also 14 (same 6 increase), hitting a record high for the first time in 2 years. Most of these successful applicants are active public high school students, and their brand power as a cram school where they can pass active duty from public high schools to difficult universities is growing year by year. Previously, most first-year high school students entering the school were step students in the junior high school division, but recently there has been an upward trend in the number of applicants other than step students, and the situation continues where capacity is quickly reached in all grades and all subjects at Yokohama School and recruitment is discontinued.

As a factor that the company continues to leave a high pass record, it is thought that the tutor system functions effectively in addition to its high teaching ability. A tutor is a staff member who receives consultations on high school students' studies, career paths, concerns, etc., and gives accurate advice, such as proposing study plans and rational exam strategies tailored to individuals. In the high school student division, 2 to 9 tutors are assigned to each school building, making them good advisors for students who have anxiety about entrance exams. Also, the company has introduced tutor functions in elementary and middle school buildings since a few years ago, and has increased the number of full-time employee staff called school casts that perform counter work and tutor functions.

(Author: FISCO Visiting Analyst Joe Sato)