8 Chapter II Literature Review II.1. Theoretical Foundation II.1.1. Non-formal Education Business Non-formal learning is often seen as the opposite of the traditional formal educational system (Tudor, 2013). It is typically situated outside the system. These programs are often offered by providers from educational institutions that are not state-recognized but serve as alternatives (Tudor, 2013). Usually, the people attending non-formal education have their own intention and purpose. So, the system and approaches used by the institutions focus on helping students to progress and achieve their goal. Eshach (2007) in his paper distinguished non-formal education from formal and informal education by presenting the key differences as shown in Table II.1 below. Table II.1. Key differences between formal, non-formal, and informal education (Eshach, 2007) Non-formal education units, as mentioned in the National Education System Law (UU Sisdiknas) No. 20 year 2003, Article 26, consist of course institutions, training institutions, study groups, community learning activity centers, religious study groups (majlis taklim), and other similar types of education form. According to Kisworo et al. (2020), non-formal education business perceived to be a promising business opportunity with long-term revenue generating potential and that political factors significantly impact the business environment. It can include changes in government regulations related to curriculum, infrastructure, and the planning and implementation of 9 learning activities. Paul et al. (2010) said that a business analysis can be carried out by doing an external and internal environment analysis. Many organizations face a challenging and evolving external business environment, which contributes to a rise in unpredictability. A framework that can help assess business’s broad environment is PESTEL analysis as it examines the political, economic, sociocultural, technological, environmental, and legal aspects. The internal environment analysis on the other hand, evaluate the actors and strategies from the internal capability of the organization to constantly fit with the environment in which the business operates. Kisworo et al. (2020) in his publication also mentioned that economic changes and society enthusiasm greatly affect the non-formal education business sector. Cost spent on infrastructure for learning activities and the modern learning facilities have been the major driver for both aspects. A research conducted by Syah, Prasetio, and Hutajulu (2024) on an Indonesian EdTech startup, the finding reveals that the cohort-based learning model has many obstacles, including high customer acquisition costs, student dropout rates, and job placement difficulties. To address these problems, the report recommends self-paced learning, leveling course, a job guarantee program, and Study Now Pay Later (SNPL). These then emphasize the need for hybrid and flexible business model to improve sustainability in the non- formal education sector. II.1.2. Scenario Planning Scenario planning is the process of forming scenarios on what the future may hold and how businesses’ environment will evolve overtime in response to that future. More specifically, scenario planning is identifying a distinct set of uncertainties and different possible "realities" that could shape the future of the business (Mariton, 2016). Referring to Schoemaker (1995), scenario planning is a tool for strategic thinking. He said that among the various tools available for strategic planning, scenario planning stands out for its ability to capture a wide range 10 of possibilities in great detail. It is useful to identify early warning signals, evaluate the strengths and weaknesses of competencies, generate better strategic options, considering the uncertainties involved. Scenario planning can also be used to communicate fundamental change and the needs to think globally (Schoemaker, 1995). Over the past three decades, scenario planning has been used in various context and organizations. It has proven highly effective in predicting events such as the oil shocks in the 1970s, the potential impacts of Hurricane Katrina, the 9/11 attack in 2001, and formulating responses to collapses and other emergencies (Chermack, 2011). In their publication, Cordova-Pozo and Rouwette (2023) also discuss the application of scenario planning in a variety of settings to anticipate uncertain futures and address short-term disruptions such as floods, pandemics (e.g., COVID-19), terrorist attacks, and financial crises. It is also used to explore long-term trends like climate change and public health interventions. Not only that, scenario planning has also been increasingly used across various fields such as management, social systems, education, healthcare, and climate adaptation. In transportation, Sunitiyoso et al. (2023) uses a multi- stakeholder scenario planning to develop future scenarios of Jakarta’s urban mobility. In education industry itself, application of scenario planning can be used to examine and explore curriculum development, online learning, educational policy, and lifelong learning as written by Janssen et al.