Midwest Regional Conference

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Mid-west Regional Conference

• Purdue University
• April 26, 2006

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My agenda for the morning

• A brief strategic snapshot of the EMBA
  industry.
• A discussion on several mega trends that seem
  to be present in our competitive responses.
• Commiserate

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MBA for tots? Never too young to learnBy Yu Nan
(chinadaily.com.cn)Updated 2006-04-10 1624
Children's EMBA, an early business
administration program designed for kids aged
three to six, recently appeared in Shanghai with
the fees up to 10,000 yuan (USD2,500), sparking
a public debate, the Beijing Star Daily
reported.The training program, called "genius
baby," includes 12 courses such as mathematics,
English, economics, and natural science, and has
enrolled 1500 children so far. But many of the
children cry throughout classes such as economics
and mass communications as they are too young to
understand them.Ms. Wang, a clerk in the genius
baby training center, said that EMBA has been
carefully designed for children in order to
foster their communication and creative
abilities.But Shanghai mother Vinny posted an
advertisement on a well-known forum in order to
sell the course vouchers she had already
purchased. She told the reporter in an MSN
interview that the courses made her child too
tense and tired.Tian Tian, a five-year old
kindergartener, attended the EMBA everyday, but
"we had to cut into our meal time in order to be
on time for the class," Tian Tian's parents said.
"So we decided to give it up."
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Market and industry trends

• Post 9-11 issues of security and culture
• Ethics, or the lack thereof
• Globalization of the world economy
• Globalization of the educational market
• Time as an even more scarce resource
• A career path impact on residence programs
• The impact of rankings
• Commoditization of the degree
• Corporate cost cutting
• The decline of tuition reimbursement
• Issues with time away

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What does Porter say about rivalry?

• Rivalry among established players increases as
• Players lack differentiation
• Barriers to exit exist
• Few barriers to entry exist
• Demand slows
• Rivals reach similar size and capability
• High fixed costs exist
• Strategic diversity increases with new untested
  players (you never never know what to expect)

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And the threat of new entrants?

• Threat of entrants increases with
• Low client loyalty
• Low switching costs
• Low initial investment
• Few economies of scale
• Fewer ways to differentiate
• No regulatory restriction
• No need for elaborate distribution channels.

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And the threat of substitutes?

• Threat of substitutes increases with
• Aggressive selling
• Ample numbers of substitutes
• Low switching costs
• Options that offer high profitability or lower
  costs.

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What initiatives do these pressures spawn?

• The creation of new delivery formats
• The development of new competitors, or
  competitors with substitute products
• The utilization of new instructional technologies

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New Formats

• Blended delivery programs
• Start in residence - finish on line
• Site plays
• New North American Sites from US players
• International campuses (i.e. Purdue at Hannover)
• Global partner programs
• Internet based
• Online to follow

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Follow on questions

• Blurred differences between formats
• Was there really any difference?
• Is any geographic space safe?
• No.
• Who is the faculty anymore, anyway?
• Adjuncts
• Other campus faculty

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New Competitors

• New international providers
• Europe
• Australia
• Asia
• Latin America?
• Corporate training programs
• Quasi MBAs
• Degrees in functional areas or business of
  science
• On line upstarts

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Follow on questions

• AACSB
• New credibility to international players
• The economic impact of different national cost
  structures
• Is todays lost market corporate client
  tomorrows backward integration play
• Is franchising the correct international
  educational expansion model?
• Harvards positioning in the corporate market
• What about country risk?
• The China question

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New Technologies

• Internet enabled
• We share when we are away now found in work all
  the time
• Online synchronous
• A virtual workplace increasingly the case
• Online asynchronous
• A serial workplace global product RD

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• On April 20th Gov. Jennifer Granholm signed into
  law a measure that requires all Michigan high
  school students to take at least 1 class on line
  to graduate.

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                      Working Wounded Are
Online MBAs Worth It? While They're Not Brand
Names LIke Harvard or Stanford, Some Online
Programs Might Help By BOB ROSNER April 7, 2006
- DEAR WOUNDED I'm thinking about getting my
MBA online. Any advice? ANSWER Your e-mail
reminded me of my mom, who always spoke her mind.
For example, when she felt that her
daughter-in-law was too into designer clothing,
she told a friend that her grandchild's first
word was "Visa." My mom couldn't pass on a
putdown and didn't believe in wasting money on
designer clothing. And these days, I feel the
same way about brand-name MBA programs. Sure,
Harvard and Stanford have cachet, but aside from
those two, I'm not sure if it really matters.
I've listed some questions to ask, below. For
more, check out the "Idiots Guide to Getting Your
MBA Online" by George Lorenzo (Alpha, 2005). What
do you hope to get out of the program? You
wouldn't get a root canal just for the heck of
it. Yet, many people sign up for MBA programs
before they ask themselves some really hard
questions about where their careers are headed.
The clearer your focus, the higher the odds
you'll end up where you want to be. Do you have
an outmoded view of online programs? Technology
is changing everything at work. And to be
effective today, increasingly you've got to
communicate with co-workers you rarely see, work
in virtual teams and conduct effective online
research. Ironically these are all skills that
you'll hone in an online MBA program. Many people
still have a bias against online programs, but as
time goes on they seem better suited to the
actual skills we need to be effective at work
today.
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• M.B.A. Lite -- that's what many corporate
  recruiters call the various alternatives to a
  full-time program. In The Wall Street
  Journal/Harris Interactive survey, recruiters
  viewed all three of the major alternative
  approaches, particularly online programs, as
  inferior to full-time degrees. About 30 of
  recruiters said they don't believe executive
  programs build students' skills nearly as well as
  full-time programs, while slightly more -- 34 --
  found part-time programs much less effective. ...
  In most corporate recruiters' hierarchy, the
  full-time degree would be on top, followed by the
  executive M.B.A., then the part-time program, and
  on the bottom, the online option.
• Executive and part-time M.B.A.s at least get a
  little respect. Online M.B.A.s, however, are
  viewed with extreme skepticismAbout 80 of
  recruiters said these programs aren't as
  effective in developing skills as a full-time
  M.B.A. In fact, nearly 40 of recruiters rated
  them as "not at all effective." ... In the
  Journal survey, recruiters reserved their most
  savage comments for increasingly popular online
  M.B.A. degrees. "Come on," one respondent said.
  "Anyone in the world can do an online M.B.A. It's
  a commodity." Another said he had been asked to
  teach courses in online programs for which he
  felt unqualified, leading him to conclude that
  they are "scams."

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Where are we on the timeline?

• In technology innovation, established players may
  initially ignore the technology.
• Others may seek to discredit the technology, or
  establish legal or professional barriers.
• There may finally come a point when established
  players adopt the technology, giving it a seal
  of approval.

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Questions this transition poses

• Is the technology change sustaining or
  disruptive?
• What will be the source of differentiation in an
  on line world?
• Will on line participants develop the alumni ties
  to which we are accustomed?
• What will scale look like in the on line world?
• What chance do we have when Harvard, Stanford or
  Wharton does it?
• Will this transition have legs, or will a quest
  for connectedness cause issues?

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Wrap up