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Medium Operations Strategic Investment Business Model Analysis

HBS as a Business

#Education #Non-profit
ProHub Comment

This case tests the candidate's ability to think strategically about resource allocation in a non-profit institution by identifying the core driver of the business. The key insight is recognizing that while other revenue streams appear more profitable in isolation, the MBA program is the foundation that enables all other revenue streams through brand equity and alumni networks.

Estimated Time 25 minutes
Difficulty Medium
Source Harvard
10 / 100

You are Dean Clark. A wealthy benefactor has come to you with the news that she will give HBS $100 million. The grant is contingent, however, upon you using the money effectively. You have 1 week to propose to the benefactor where you would use the money before she will finalize the transfer.

How would you, as Dean Clark, propose to use this money?

Clarifying Information

Not provided as a separate section in the document. The case provides context that HBS has 4 major business units: MBA program, Executive Education program, Publishing, and Grants and donations.
Mock Interview
Interviewer

You are Dean Clark. A wealthy benefactor has come to you with the news that she will give HBS $100 million. The grant is contingent, however, upon you using the money effectively. You have 1 week to propose to the benefactor where you would use the money before she will finalize the transfer. How would you, as Dean Clark, propose to use this money?

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
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Dean Clark must allocate $100 million for HBS. Rather than investing in the highest-margin revenue streams (grants, publishing, executive education), the optimal allocation is to strengthen the MBA program because it is the primary driver of HBS’s brand reputation, which in turn enables premium pricing and demand for all other business units.

Key Insights:

  1. In multi-unit businesses, the most profitable unit may not be the strategic priority—the core business that drives brand and reputation often requires the most investment
  2. Indirect effects through brand equity and network effects are as important as direct revenue generation
  3. For non-profits with business models, understanding the causal chain of value creation is essential to effective resource allocation
  4. Alumni networks and student outcomes have multiplier effects on other revenue streams including donations and credibility for publishing