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Medium Profitability Competitive Response Growth Strategy

MOOC Madness

#Education
ProHub Comment

This case tests the candidate's ability to analyze industry trends, recognize competitive threats, and evaluate financial feasibility of strategic initiatives. The key challenge is recognizing that while the overall market is growing, the residential university's market share is declining due to competition from online and MOOC offerings, requiring a value-add strategy rather than simple cost reduction.

Estimated Time 26 minutes
Difficulty Medium
Source Darden
34 / 100
Our client, Greg Wilkinson, is the Dean of the business school at a mid-sized, four-year university. They are experiencing declining application rates and have brought us in to help determine the reason for the decline and how to bolster converted admissions. He must present to the Board of Visitors on the topic later this week.

Clarifying Information

  1. How is “application rates” defined? How is “converted admissions” defined? Application rate is the number of applicates to the university. Schools like to see this number grow, indicating preference and prestige of the school. Converted admissions is the number of applicants who have been offered admission to the school and accept that offer to attend.
  2. Why does Greg Wilkinson want to pursue this? Schools need tuition dollars of a certain threshold to cover their operating budget, so a decline in quality, interested prospective students (i.e. declining application rates) makes that threshold more difficult to reach.
  3. What is the business model for a university? Universities receive “revenue” mainly through tuition dollars and endowment donations. They have a large set of fixed operating costs to cover, so budgets are typically tight.
  4. What is the current state of the education industry? More information later.
  5. How will Greg measure success? He wants to increase converted admissions to drive tuition dollars.
Mock Interview
Interviewer

Our client, Greg Wilkinson, is the Dean of the business school at a mid-sized, four-year university. They are experiencing declining application rates and have brought us in to help determine the reason for the decline and how to bolster converted admissions. He must present to the Board of Visitors on the topic later this week.

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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Practice this case with AI Mock Interview

A university dean faces declining applications despite growing overall demand for higher education. Analysis reveals that while 4-year residential universities grew in absolute numbers, their market share declined from 40% to 35% as online options (universities and MOOCs) captured 50% of the market by 2020. The candidate must recommend whether to invest $3.4M in an experiential education program that projects a 2% increase in admission conversions with a 4-year payback period.

Key Insights:

  1. Distinguish between absolute growth and market share decline—total applicants grew 25% but residential universities’ share fell 5 percentage points
  2. Identify the competitive threat: online education (online universities + MOOCs) grew from 40% to 50% market share, representing the primary competitive pressure
  3. Evaluate financial viability through payback analysis: $3.4M investment generates $4.0M in cumulative tuition revenue over 4 years, meeting policy requirements
  4. Recognize the strategic imperative: add differentiated value (experiential learning, mentorship, real-world networks) that online competitors cannot replicate rather than compete on cost
  5. Understand university economics: tight fixed cost structures require consistent enrollment and tuition revenue, making application and conversion rate improvements critical to financial sustainability