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Medium Profitability Competitive Response Growth Strategy

MOOC Madness

#Education
ProHub Comment

This case requires candidates to analyze industry trends affecting a traditional university's market position and develop a strategic response to competition from online and alternative education models. The analysis demonstrates how to quantify competitive threats using market share calculations and evaluate capital investments using financial payback metrics.

Estimated Time 26 minutes
Difficulty Medium
Source Darden
10 / 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
Structure Analysis Communication Business Sense Quantitative
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Greg Wilkinson, Dean of a mid-sized university’s business school, must address declining application rates and admission conversions. The case reveals that while the secondary education market is growing overall, 4-year residential universities are losing market share to online universities and MOOCs. The recommended solution is an experiential education program ($3.4MM investment) projected to increase converted admissions by 2%, yielding a financial payback in under 4 years.

Key Insights:

  1. Market growth doesn’t guarantee success—absolute growth in 4-year university applicants masks declining market share (40% to 35%)
  2. Competitive threats from online education require differentiation through unique value propositions (experiential learning, mentorship, real-world networks) that cannot be replicated by online competitors
  3. Capital investment decisions must balance strategic necessity with financial constraints—the 4-year payback requirement ensures financial viability while addressing competitive threats
  4. Revenue models in higher education are constrained by fixed operating costs, making increased enrollment critical to financial sustainability