How has competition changed for business schools? This story from the UCLA Anderson School of Management in Los Angeles may be one indication. The school’s dean, Judy Olian, tells of an Anderson alum who has three sons. “His firs two sons attended Anderson,” she says. “His third son attended Tsinghua University in Beijing.” That third son’s choice shows just how global competition is changing pat-terns of enrollment, Olian says.
“Ten years ago, schools like Tsinghua, London Business School, and INSEAD were outliers in our market. Today, they’re in the mainstream. I imagine in a few years that list will include new schools in Saudi Arabia, the United Arab Emirates, and other Middle Eastern countries,” she says.
Globalization is just one force intensifying the competition among b-school programs. The presence of for-profit providers is growing, online programs are flourishing, an consultancy firms, design schools, and engineering school are beginning to offer their own brands of business training.
To learn more about how business schools are responding to these competitive pressures, BizEd queried participants on AACSB Exchange, AACSB’s online community. Administrators from around the world responded, sharing the challenges they face and the strategies they’ve designed to have maximum impact for minimal cost.
Taking Energy Online
University of Tulsa Collins College of Business United States
Administrators at Collins College have been acutely aware of the competition presented by the proliferation of online programs, says Linda Nichols, associate dean and director of graduate business programs. While the school does not offer a general MBA online, its administrators decided to enter the virtual education market by drawing on one of the university’s signature strengths—a focus on the energy industry.
The school’s online masters in energy business (MEB) degree, launched this fall, involves professors from the business and law schools who specialize in the energy industry, as well as experts from the university’s McDougall School of Petroleum Engineering. The MEB program will be delivered completely online, although students will be required to come to campus for an initial two-day orientation.
The school expected to enroll about 20 students in its first MEB cohort, but the program actually has enrolled more than twice that number. This year’s cohort includes students from Oklahoma, Texas, Wisconsin, Pennsylvania—and even Nigeria.
Energy “is a unique niche that we believe we can fill well,” says Nichols, who specializes in energy accounting and financial reporting. If successful, she adds, the MEB could be a foundation for future online programs.
T.A. Pai Management Institute (TAPMI) Karnataka, India
In India, the market is “very saturated,” with approximately 3,700 business schools, says R.C. Natarajan, director of TAPMI. He explains that India’s higher education system also is very regulated, which leaves self-financed private schools at disadvantage.
But that kind of saturation means that only the strong survive. “Close to 150 schools have file for dissolution with the regulatory authority,” Natarajan says. More-over, new campuses for the government-supported Indian Institutes of Management (IIMs) are opening at a faster rate. “The IIMs are increasing their student intakes,” says Natarajan. “That competitive scenario means that private schools fall below the IIMs in the pecking order of choice among potential students. While a dissolution frenzy has begun at the bottom, the com-petition at the top has become more fierce.TAPMI will remain competitive by highlighting its AACSB accreditation, says Natarajan.
TAPMI and the Indian School of Business are the only schools in India to hold that credential. By stressing that distinction in the media and through its promotions, TAPMI will position itself to forge stronger alliances with Western schools in its management development programs to “make us more visible to executives,” Natarajan says. He believes this strategy also will give the school an edge when it comes to student recruitment and academic partnerships.
UCLA Anderson School of Management Los Angeles, California
UCLA Anderson views models of shared delivery between and among schools as a key strategy to address the industry’s need for more global programs. Most recently, the school entered into shared delivery models for two of its executive MBA programs, the UCLA-NUS Global Executive MBA with the National University of Singapore and the UCLA-UAI Global Executive MBA for the Americas with Universidad Adolfo Ibáñez in Santiago, Chile. Students in both programs attend classes on both campuses, as well as other sites, and receive degrees from both institutions involved in the partnership.
Such partnerships allow schools to design more comprehensive global programs while still playing to their strengths, says dean Judy Olian. “Business students know that they need this kind of program to become future global leaders,” she adds. “We know we have to take the steps to offer it.”
Becoming Learning Consultants
Ashridge Business School Hertfordshire, United Kingdom
Ashridge’s heavy focus on customized executive education means that its main competitors aren’t just other business schools, says Toby Roe, the school’s corporate communications director. “We also face competition from management and HR consultancies, as well as specialist training providers, that are moving into this space.”
In August, Ashridge took its customized approach one step further to strengthen its position against its competitors—it formed a new learning consultancy. Before a program begins, the consultancy—which includes faculty, researchers, and external experts—will provide participants two reports. The first report, which draws on a proprietary metric, predicts how well participants will be able to transfer what they learn in the program to their organizations. The second report offers recommendations for how participants can use their new knowledge to benefit their employers.
The learning consultancy’s other role is to provide post-pro-gram evaluations and feedback to participants, and help them develop cultures of learning within their organizations. The objective, says Roe, is to ensure that Ashridge’s programs meet and exceed participants’ expectations.
Tecnológico de Monterrey EGADE Business School Monterrey and Mexico City, Mexico
European and U.S. schools are recruiting more students and faculty from Latin American and Caribbean countries. They’re also exporting their executive education programs into the region, says Laura Zapata Cantú, director of MBA programs at EGADE Business School. Those trends led EGADE to rethink its outreach efforts and curriculum.
To make the school more visible amidst its competition, EGADE’s marketing department is engaging in an all-out push on social media channels. The marketing department has established a presence on seven social networking sites to reach different audiences, for different reasons. It’s using Twitter and Google+ to grow its influence, Faceboo to build reputation, YouTube to share multimedia, LinkedIn to reach an older and more experienced demographic, Foursquare to engage in location-based marketing, and Pinterest to appeal to audiences on a more visual level. Together, these strategies will help the school establish an online presence, says Cantú.
EGADE also is drawing attention to its focus on corporate social responsibility, she adds. The school highlights research generated by its Center of Economic and Social Value Integration and assigns a variety of MBA field projects related to corporate social responsibilit. For its efforts in this area, the school has earned international recognition, including a spot in Beyond Grey Pinstripes, the Aspen Institute’s ranking of MBA programs according to their emphasis on sustainability and corporate social responsibility.
Establishing a Specialty
Group Sup de Co Montpellier Business School Montpellier, France
In France, business schools are vying to capture different shares of the market, says Didier Jourdan, dean of Montpellier Business School. “Some are international schools with an established presence, some are regional players looking to expand, and some have merged with peers to strengthen their positions,” he says. “Our school has chosen a niche strategy. We’re focusing on managerial innovation to differentiate ourselves.”
The school defines managerial innovation as “practices that help companies sustainably improve performance.” It has integrated this focus by making a number of changes:
- Redesigned courses now include more real-life scenarios and opportunities for student reflection, as well as activities such as simulations, public speaking, and debates to enhance students’ creativity and critical thinking.
- A new apprenticeship program allows master’s-level students to spend one week at school and three weeks working at host companies. That cycle repeats every four weeks throughout the school year. Participating companies pay for students’ tuition and give them time to participate in blended learning activities. Students who do not have an apprenticeship must spend a mandatory year abroad.
- A Pearson e-book with material related to managerial innovation has been created by faculty. Students can access it in French or English, through platforms such as Moodle, Speechi/Alexandra, OpenPortal, and SharePoint.
- A new administrative structure gives managers more autonomy and allows different groups to collaborate more easily.
- New recruitment centers in Thailand, Morocco, Greece, and the Dominican Republic attract a more international student body, and centers in Tunisia and Algeria are planned. To accommodate international students, some course content is delivered in French and English.
- A network of corporate partners connects the school to firms in France, Europe, and the 21 Mediterranean countries. The school is in the process of forming the Mediterranean Schools of Management Consortium, a network of business schools that want to study managerial innovation and contribute to the development of Mediterranean countries. So far, Jourdan is pleased with the school’s niche strategy. He says, “We believe our niche in managerial innovation positions us well as we reach out to national, European, and Mediterranean markets.”
Competition Can Foster Innovation
by Charles R.B. Stowe and Doug Grider
Can traditional business schools compete against proprietary, for-profit institutions Yes! In fact, AACSB-accredited programs must design a strategic response to for-profit providers like Capella University, Kaplan University, the University of Phoenix, and other smaller competitors whose bachelor’s, master’s, or doctoral degrees compete with our traditional programs to attract business students.
Many business educators worry that it will demean our status if we acknowledge for-profits by trying to compete But that’s not the case. If we tailor our response correctly, competing with for-profits will demonstrate our ability to innovate and strengthen public under-standing of our programs. For-profit are only getting better at what they do. Ignoring that reality is not a viable long-term strategy.
Competing Through Creativity
To compete effectively, administrators at traditional schools first must recognize the value of the for-profit model. For-profits pay lower faculty salaries, make minimal investment in physical facilities, and keep administrative overhead costs low. They invest the resulting high cash flows in well-designed, far-reaching marketing efforts.
Compare that to traditional schools, which invest heavily in high-cost real estate. They build expensive “smart classrooms,” dormitories, cafeterias, and facilities that sit empty much of the time. They pay higher salaries to faculty who want to reduce their teaching loads to make time for academic, consulting, volunteering, and administrative obligations.
The advantage seems to rest with the much leaner for-profits, at least from a operational perspective.
Well, for-profits may be leaner, but we still can turn our disadvantages into competitive strengths in a variety of ways:
Recognize student needs. Tuitions at some for-profits are higher than those at some state-supported institutions, and yet many older students choose for-profit programs. Why? Because for-profits send this message to working adults: Earn a degree while you work, build a network, get that job or promotion, and get on with your life. Traditional schools that still rely on full-time residential programs send a different message: Quit your job, forgo a salary, neglect your family, and get on with your life—two years from now.
For-profits also recognize that adult learners often cannot call or visit during business hours, so they arrange face-to-face meetings between 5:00 p.m. and 10:00 p.m. They use call centers to answer phones 24 hours a day. We too must extend the hours of our admissions offices to serve this group. e could even hire and train students looking for part-time employment to answer phones during evening hours.
Rethink our real estate. Traditional schools can rent their classrooms and facilities to other users during off-peak hours. Face-to-face lectures can be technologically connected to online students for a relatively small increase in cost per class. We can transform our high-cost real estate into a revenue generator.
Streamline recruitment. Most for-profits assign one recruiter to handle all phases of enrollment, from admissions to financial aid to course scheduling. Because these recruiters don’t have to run to different offices or fill out redundant forms, they can process student applications more efficiently. Once students enroll, for-profits close the deal before students have a chance to change their minds.
Contrast that with traditional programs that often intimidate applicants with inflexible deadlines and complex financial aid requirements. Is it any wonder working adults often prefer to deal with more efficient alternatives?
Offer flexible intakes. Many for-profits use a cohort system, in which they present students with a schedule of courses from enrollment to graduation. Students often can begin taking their courses immediately. Traditional institutions often are lucky to produce an error-free semester schedule in time for registration, and they often make students wait until the next semester—or academic year—to begin their courses. They would serve working adults better by providing flexible enrollment options not tied to a semester system.
Get creative with marketing. For-profits advertise on the radio, on television and on billboards. However, some administrators at traditional schools—especially those that are publicly funded—balk at spending private funds that way. But they can investigate creative alternatives that can be done on campus. Is there, or could there be, an electronic display that can flash messages? Is it possible to join with advertisers or other academic departments to share the cost of signage that displays communications from both partners?
Schools often brag about serving first generation students, but then fail to invite the parents of these students to attend courses! They could re-evaluate their Web sites to ensure the content is not designed to appeal only to 18- to 24-year-olds. They could send e-mails to students’ parents inviting them to enroll in part-time, adult-friendly programs. Traditional business schools need to make sure they’re mining their extensive databases and using social media to reach the right audiences with the right messages.
The Bricks-and-Mortar Advantage
Even in today’s recessionary market, most publicly held for-profits have actually maintained and increased their profitability, while traditional institutions face budget reductions. That’s unlikely to change unless traditional business schools do more to highlight what they offer that for-profits don’t.
For-profits, for instance, often have greater difficulty attracting and retaining qualified faculty, because they pay less than traditional institutions pay their adjuncts. For-profits can’t offer the beauty of traditional campuses. Few possess the intellectual capital or facilities to offer public workshops, social networking events, or black-tie receptions welcoming new students and their families. They lack close-knit alumni and corporate partner networks, and they don’t have the infrastructure to support interactions that foster a sense of community. The University of Phoenix tries to address this last deficiency by sending a professional magazine with articles about its students’ successes to its stakeholders. However, the memories and stories that traditional universities have to share can certainly compete with that.
We cannot afford to cede the growing pool of adult learners to for-profit providers. Competing with for-profits head-on may be just the incentive we need to reinvigorate our institutions so they can better serve the changing needs of our market.
“You Have to Stand for Something
”These educators are excited about what increased competition means for the industry. Their schools are rethinking their pro-grams and designing new ways to approach business education. Their efforts, they hope, will translate to more innovation, greater efficienc, and quicker responsiveness to market trends.
But even as the market grows more crowded, the old rules of branding will continue to hold, says Olian. If schools want to com-pete, they’ll have to create distinct positions that deliver on their promises. “It’s the old-school answer. You have to be excellent at what you do and distinguish your school from the competition,” she says. “You have to stand for something. You have to show why a student would pick your program over those of your peers.”
The way today’s competitive landscape is shaping up, the market ten years from now is certain to be different from what it is today, Olian adds. In the eyes of many educators, that may be a good thing for everyone in the business education community.
Charles R.B. Stowe is professor of management and entrepreneurship and director of outreach initiatives in the office of the vice president of academic affairs at Lander University in Greenwood, South Carolina. He also is former dean of Lander’s College of Business and Public Affairs. Doug Grider recently retired after returning to serve as interim dean of the College of Business and Public Affairs.