Heads and Tails choice for UKs Higher Education Sector

I saw all the news in the papers about declining student applications this year via the UCAS report.  This is particularly interesting to me on two counts. 

Firstly at Blairgowrie we have carved out a niche working with HE providers and helping them understand the market that they are in, the challenges faced and creating programmes where they can do something about growth i.e. Get more competitive and commercial. 

Secondly I am currently the hired taxi service for my daughter and take her around a variety of University open days anywhere in the country.

So what does it all mean for things in the news like this?

Well from my perspective it is a real challenge for the total sector.  I believe for the first time they will have to address the value for money conundrum that the boarder business world faces day in day out.

Simply, I am being asked to buy a product for £9,000 per year where I have no guarantees of anything, I am then asked for a further £7,000 per year to supplement this so this product can be used.  That’s just short of £50,000 over 3 years.

So what can I expect from my investment? 

Well the answer is ....no one can tell me other than glib statements which ere fine when the investment was nil, but for investment at these levels one requires something better.  This gets particularly worse if your offspring wants to do something that is not too vocational such as Philosophy. The assumption is that it is harder to get a job to pay for these subjects than say doing something more vocational.

Getting all philosophical for a moment; I am not advocating that that the sole purpose of a university education is to get a job, it’s about lots of other things but the levels of investment required now seem to be pushing it that way, which seems a bit sad really.  The implications being that those high end academic pursuits will now be in the domain of those that can afford to punt the investment whereas those that need to pay it off will focus on getting more vocational qualification.

What are the Choices?

So as numbers go down and decrease further for the pure academic courses, what is left for the University to do?  They have a big fixed cost to maintain (lecturers, faculty etc), They are on a three year cycle so have to wait for the last cohort to go through before they do something therefore for the less popular courses how do they manage ever dwindling student numbers or this tail end? 

After all it’s not like industry where you could argue it’s a loss leader and people will switch to a more expensive option – all courses prices are the same...although I suspect the costs are very different.

Therefore to manage the tail of courses it’s my supposition that strategically Universities have two levers to pull.  They can either drop prices or/and, decrease entry requirements stimulate demand for these tail end courses.

The University Conundrum

Of course each of these tactics come with some strategic baggage as doing this may be harmful to the brand of the Institution by potentially dropping quality which will impact on other course volumes.

So the conundrum for Universities is do they maintain the status quo, actively manage the tail or focus on the higher growth areas? The challenge understands how flexible they are and how much they can change their business model to support this now changing market.

This also is not just an individual institution issue; it goes to the heart of the sector and the way it is structured.  Currently, there has been little change but I suspect, and know through the work we have completed change for some institutions is on the horizon.  However, the Principles need to firstly acknowledge they are now in a market, secondly understand what the needs of their customers (students) are and what they value, thirdly do something about it...both from a business service model and marketing perspective.

So What is the Solution?

The drop in applications will, I suspect, continue and the pressure on Universities will increase become greater and greater until there will be some high profile casualties unless both the industry and Institutions addresses it.

Simply, if there is no plan or active choices then these Institutions will simply wither on the vine, the key components of the plan are the same as anything else one needs to understand:

• Who are the customers & how many (Market & its structure)
• What do they value or what are their priorities (What are the needs)
• How can we create things to address these needs (Develop Products)
• How can we prioritise our activity to meet the needs (Prioritise initiatives)
• What activity do we need to do to execute on this (Plan & action)

 

However, step #1 is to acknowledge the issue and I think for some this is the most difficult step...