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Published on 2014/08/28
The Competitive International Higher Education Marketplace: Identifying Business Strategies to Succeed (Part 2)
Vangelis Tsiligiris | College Principal, MBS College of Crete
This is the conclusion of Dr. Vangelis Tsiligiris’s two-part series exploring the importance of an international business strategy for the modern higher education institution. In the first part, Dr. Tsiligiris outlined the three major forces impacting the competitiveness of today’s higher education marketplace: declining public funding, falling international student mobility and fierce domestic and global competition. In this conclusion, he shares his thoughts on how a robust international business strategy and a nimble approach to the marketplace can help institutions develop the alternate revenue streams central to competing in this space.
Universities have traditionally pursued international activities as a result of individual academic and executive staff members’ links and initiative, in the context of cultural and language links and in pursuit of short-term financial goals.
However, successful international activities require careful planning, dedication of resources and constant re-alignment to conditions of the fast-changing international higher education market.
In the context of an international business strategy, universities should consider their brand recognition across borders and the size of resources available for international activities. Universities that are not recognizable outside their national borders will find it difficult to pursue a global strategy by simply entering an offshore higher education market and basing their strategy on covering the gap in supply. Additionally, the size of available resources to support international activities will be a critical factor for the identification of the appropriate international strategy mode a university will be able to pursue. For example, universities that can’t dedicate substantial resources to support international activities are unlikely to be able to sustain a physical presence in an offshore market.
Also, different target offshore markets will require different responses in relation to the degree of contextualisation of the academic programmes offered. This is because, in offshore markets, different stakeholders (most importantly students and employers) place differing value on academic programs offered by foreign universities. This relative valuation determines the type of transnational education activities and arrangements a university can pursue and whether contextualisation of academic programs will be required.
Universities that have a strong global brand reputation and significant resources at their disposal can pursue a “globalization” or a “multi-domestic globalization” strategy (as outlined in the image above). Setting up branch campuses in offshore markets and collaborating with local universities to deliver double and joint degrees will allow institutions to reach students in their home countries and hedge against the declining outbound student market at an early stage.
On the other hand, universities that lack global reputation and brand recognition outside national borders will need to pursue an “export” or “multi-domestic” strategy. These institutions can enter an offshore higher education market specifically to fill an existing educational supply gap through franchising, validation and online delivery. At a later stage, when the market has reached equilibrium between supply and demand, these institutions can capture part of the market through twinning (partnership) or/and articulation agreements with local providers. When the market reaches the point where contextualization is valued, validation of locally-developed programs and joint ventures with local higher education institutions will become appropriate.
Overall, higher education institutions are facing increased competition and changing market conditions. Universities can use the range of international strategies discussed above to plan their response to the challenges ahead and secure a sustainable future development.
Author Perspective: Administrator
The shift to the online market will greatly expand international opportunities for many institutions that might otherwise get shut out of the market. With strategic partnerships in countries where the institution is hoping to introduce its brand, even mid- or small-sized institutions can have a piece of the international student market.
Interesting series looking at the different ways an institution can enter this emerging market. I would just say this isn’t a path that every institution should pursue. As Tsiligiris shows, there’s a need for on-the-ground connections to make this work, and not every institution has access to that. In addition, there’s increasing competition coming from local institutions abroad that could further cut into the market share for American institutions overseas. Institutions hoping to expand internationally need access to good data and trends analysis to determine if this is the right path for them.
Good series overall, but it would have been good to have had some examples of institutions that are doing this well. I don’t mean institutions with high-profile brands that more or less promote themselves, but examples of smaller institutions that have successfully sustained a physical presence in an offshore market and the strategies they used.
The chart provided – outlining brand recognition vs contextualization — was a really interesting visual to help move forward. I wonder how international participation can help an institution establish its brand, though? I mean, we’re obviously all not Harvard or Yale or UCLA or Berkeley. But wouldn’t establishing a high-quality branch campus in southeast Asia make your brand highly recognizable among students in that area?
Thanks Julie.
Interesting question. I would think of it as a ” the chicken or the egg” case.
I would consider the establishment of an International Branch Campus (IBC) as part of a mature international strategy.
This is because it takes huge amount of financial and other resources to develop and manage an IBC. Also, the existing university reputation influences significantly prospective students’ decision-making.
The experience has shown a number of failed attempts to establish IBC because of the above factors.
An excellent source of furher information about IBC is the Cross-Border Education Research Team (C-BERT) at the State University of New York at Albany, available here: http://www.globalhighered.org/
Ian > good point. This is a great idea for a later version of the paper. Definitely, there are several mid-profile institutions, if we can describe them like this, which have been very successful internationally primarily because of their well-thought international strategy.
Rohit > Indeed, I second your suggestion on the need for good quality data and trend analysis. However, no much of this is available today. Lack of current and comprehensive data in international higher education is a well-known problem.
Bette > Online is promising. However,the success of online ventures, irrespective of the brand of the awarding institution, depends on student perceptions about the value of online higher ed. That perception will vary from country to country and will depend on a number of issues such as: previous education experience, culture, recognition of online in domestic employment market, and many more.
I think partnering with local institutions is always the best way forward, rather than engaging in expensive campus-building boondoggles or trying to market extensively in a new marketplace. By partnering with a campus, you’re guaranteed to grow as that school grows. Additionally, you have a selling point for domestic students; you can offer them the chance to study internationally. And a short term international study course for adults is more viable when you’re working with an official partner school than with a random school.
It’s easy to forget when we’re talking about the international higher ed market that we’re talking about competing with everyone. Not just American schools and local schools. But also schools from the UK, Canada, Australia, India and everywhere else. You gotta bring your A-game if you want to be the best in the world. Too many schools enter this market unprepared and get blown out of the water with no results and huge losses.