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Medium Business Model Innovation Pricing Strategy Enrollment Management

Hooville College

#Education #Higher Education
ProHub Comment

This case requires candidates to compare two tuition models using financial valuation techniques (perpetuity calculations), then expand the analysis to consider qualitative factors like mission alignment, student demographics, and implementation risks. The case progresses from straightforward financial analysis to strategic decision-making, testing both quantitative rigor and business judgment.

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
Hooville College is a liberal arts college that serves approximately 4,000 students from across the United States. It has a reputation for excellent humanities and arts departments (e.g., English or Foreign Language), however with the dual pressures of declining enrollment and increasing tuition expenses in higher education, Hooville’s President is considering implementing an innovative tuition model that she believes would increase enrollment. She has engaged us to help think through the implications of this change.

Clarifying Information

  1. Can you provide more information about the proposed tuition model? Hooville currently charges a flat tuition rate, though the college gives financial aid and some students pay less than this flat rate. The proposed model would eliminate tuition altogether, replacing it with a binding commitment on the part of any Hooville student to pay 5% of their annual income back to Hooville for the entirety of their career, after graduating.
  2. What is Hooville College’s mission? Hooville’s mission is to educate a diverse population of students in order to prepare them for lifelong learning and success in their careers. Their motto is “Inspiring a Life of the Mind.”
  3. Can you give any details about Hooville’s current cost and enrollment? These details will be given later in the case.
  4. What are the objectives/goals of this new tuition model for Hooville College? The goal is to generate an immediate increase in student enrollment and realign the college with its original mission.