Delta Force Consulting Board Presentation 06 021

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  • 1. Delta Force Consulting “We make a difference to your bottom line” Maple University Faculty of Business Growth Strategy David Brady Claude Caron Heather Nicol Roberto Siqueira June 2, 2008
  • 2. Executive Summary
    • The Faculty of Business is e xperiencing declining financial performance and share of an expanding student cohort
    • It faces strong competition for the best students and is suffering from a lack of market positioning.
    • It has been mandated by the Board of Governors of Maple University to develop strategies to improve financial performance and achieve sustainable growth
    • The Faculty has a number of strengths and opportunities that can be used for a new strategy
    • A number of alternatives have been considered
  • 3. Executive Summary
    • We recommend:
      • Repositioning and rebranding and introduce new programs, building on areas of expertise
      • Developing new sources of revenue through fundraising and through the creation of a Centre for Research and Consulting
      • Enhancing its marketing and alumni relations program
      • Pursuing the construction of a new building to support future growth and support re-branding efforts
    • This strategy will provide a sustainable platform for future growth and meet the targets set by the Board
  • 4. Agenda
    • Situational Analysis
    • Strategic Alternatives
    • Strategic Recommendations
    • Implementation Plan
    • Financial Projections
  • 5.
    • Situational Analysis
    Maple University Faculty of Business
  • 6.
    • Resources
    • Safe & attractive campus
    • High ratio of tenured faculty
    • Research reputation
    • Capacity issues with facilities
    • Vacant land
    • Current Strategy
    • Provide broad educational experience and conduct research
    • Focus on needs of students, employers & the community
    • Maintain lower ratio of student-to-faculty
    • Mgmt. Preferences
    • Financial concerns
    • Wants increased enrolment and new source of revenues
    • Academic objectives
    • Organization
    • Strong in research
    • Issues with Marketing and Alumni Relations
    • Tenured faculty cannot be released without their consent
    • Market Dynamics
    • Growing number of 20 to 24 years old seeking university education
    • Growing demand for business programs
    • Success linked to quality education leading to high paying jobs
    • Industry
    • Recruitment mostly from Ontario (92%)
    • Competitive environment, with two nearest much larger universities offering thriving business programs (one co-op)
    • Colleges offering bachelor’s degree
    • Local Tech schools with high placement
    • Some niches unaddressed by the Faculty
    • Macro Environment
    • New Government funding for student aid and for infrastructures
    • Tuitions increase capped at 4.5% for first-year students
    • Strong economic growth
    • Population aged 20 to 24 on the rise
    Situational Analysis Internal Scan/External Scan
  • 7. Situational Analysis Financial Status
      • Declining financial performance
      • Revenue has increased slightly year over year for past 3 years
      • Expenses increased approximately 2% more than revenues, resulting in expanding deficit
      • Pressure at university level with 0.2% growth in total liabilities and a significant payment due in 2008 - $4M (current portion of LTD)
    000s
  • 8. Situational Analysis Market Analysis
    • Flat enrolment for past four years at approximately 660 students
    • Declining share of student market
    • Positioned as a small, regional player with a low degree of specialization.
    Specialization Low High Local National IT Institute Oak College Maple University University A University B
  • 9. Situation Analysis SWOT Analysis
  • 10. Situation Analysis Summary
    • Faces a decline in financial situation and market position due to:
      • strong competition for students and a lack of market positioning
    • Has strengths and opportunities that can be used:
      • Safe and attractive campus, centrally located
      • Good reputation in number of areas
      • Growing youth population seeking university education
      • Untapped demand to support labour market needs
      • In-house expertise in accounting, non-for-profit, marketing and leading teams
      • Potential to exploit the alumni program, sponsorships and donations to financially support its future direction
      • Government funding
  • 11. Situation Analysis Summary
    • The proposed growth strategy should respond to:
      • The need to create a brand and to target a sustainable niche market:
        • In areas of strengths and expertise such as accounting.
        • Beyond its current local focus.
      • The need to address the following management and capacity issues:
        • Weak marketing and alumni relations functions.
        • Inadequate facilities and future space constraints.
      • Shortage of funding to address deficiencies.
  • 12.
    • Strategic Alternatives
    Maple University Faculty of Business
  • 13. Strategic Alternatives
    • Reposition and Rebrand
    • Increase Enrolment:
      • Co-Op Education Program
      • Centre for Excellence in Research and Consulting
      • Local Business Seminars
      • Recruitment of International Students
    • Increase Donations
    • New Business School Building
    • Cost Correction – Eliminate HR Major
  • 14. Choice Criteria
    • Criteria used in determining strategic choices
    • Profitable by Yr 3
    • Employability Focused
    • Sustainable Growth
    • Supports Mission and Strategy
    • Tolerable Risk
  • 15. Strategic Alternatives Not Recommended
    • Offer Local Business Seminars
      • Non-material revenue contribution
      • Competition
      • Distraction to core strategy
    • Recruitment of international students
      • Highly competitive
      • No material enrolment increase until 2012/13
      • Necessity of joining accreditation body (i.e. AACSB)
    • Cost correction strategy (i.e. Exiting from programs)
      • Decrease in student enrolment
      • High cost of terminations
      • Linkages between HR and other departments
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes No No No Yes Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes No No No No Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk No No Yes Yes Yes
  • 16. Strategic Initiative #1 Reposition and Rebrand
    • Reposition as a niche player
      • Focus on accounting strength
    • Broaden geographic to a regional focus .
    • New program offerings
      • CMA, CGA and CA
      • Not-for-profit organizations
    • Advantages
    • Focus limited resources on strengths
      • Wider geographic emphasis
      • Specific program focus
    • Assists with other objectives
      • Focus on educational deliverables marketable skills, accounting accreditation
    • Creates a sustainable new position
    • Disadvantages
      • Cost
      • Issues with the management of the change
      • Required approvals
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes Yes Yes Yes Yes
  • 17. Strategic Initiative #2 Co-Op Education Program
    • Advantages
    • Generates revenue
    • Leverages accounting focus
    • Increases enrolment
    • Consistent with employability focused education
    • Positive impact on classroom capacity issues
    • Positive impact of the Faculty’s brand
    • Applicable to other departments and faculties
    • Disadvantages
    • Fee receipts are delayed 3 years
    • Competition – large university/Oak
    • Required approvals
    • Additional staff requirements
    • Co-op Program
    • Launch in 2009-10
    • First students placed: 2011-12
    • Accounting focus
    • Requires 3 new staff
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes Yes Yes Yes Yes
  • 18. Strategic Initiative #2 Co-Op Education Program
  • 19. Strategic Initiative #3 Centre for Excellence in Research and Consulting
    • Research Centre
    • Establish centre to support business research and consulting
    • Requires part time research director
    • Advantages
    • Enhances Faculty’s reputation
    • Generates revenue in first year
    • Consistent with Senates desire for academic achievement
    • Disadvantages
    • Requires coordination with the IPO
    • Upfront setup costs
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes No Yes Yes Yes
  • 20. Strategic Initiative #4 Increase Donations
    • Advantages
    • Important new source of sustainable revenue
    • Foundation of new capital plan
    • Leverages relationship with Mr. Harding and other high profile alumni
    • Disadvantages
    • No history and weak alumni, community and corporate relations
    • Relies on success of rebranding effort
    • Need to ensure that revenue earned remains with the Faculty
    • Develop faculty-specific fundraising effort
    • Hire fundraiser
    • Work with TL Harding
    • Direct mail and cultivation events
    • Target alumni
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes Yes Yes Yes Yes
  • 21. Strategic Initiative #7 Cost Correction – Eliminate HR Major Strategic Initiative #5 New Business School Building
    • Business School
    • Dependent upon success of fundraising efforts
    • Needs to be accommodated in other buildings until funds available
    • Advantages
    • Positive impact on image
    • Addresses long term capacity issues
    • Seed funding available from Mr. Harding
    • Additional funding available from the Province of Ontario
    • Disadvantages
    • Depends on success of fundraising
    • No desire from the Board of Governors for additional major capital projects
    • Debt financing and annual maintenance requirements
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes No Yes Yes Yes Building Cost $ 9,200 Furnishings/Computers $ 2,000 Land (market value) $ 1,200 Total $ 12,400
  • 22.
    • Recommendation and Implementation Strategy
    Maple University Faculty of Business
  • 23. Faculty of Business Recommendations New Vision - To be one of the top three provincial choices for specialist business education, focused on strength in research and excellence in teaching Build Brand & Reposition Alumni Outreach Fundraising New Building
  • 24.
    • Dean Black
    • Department Heads
    • Key staff:
      • Expert in leading teams
      • Expert in organizational culture
      • Expert in measuring organizational performance
    Faculty of Business Change Team
  • 25.
    • Strength in Accounting
      • Co-op Program - Director to be hired
      • High employability after graduation
    • Build on strengths
      • CMA, CGA, CA – Dr. Czerak
      • Non-for-profit – Dr. Nakin
    • Target market will become broader
    • Driven by Dean and a new dedicated marketing hire
    Maple University Repositioning
  • 26. Maple University Branding
    • Website
    • Print materials
    • Open houses
    • 2014 (50 th ) anniversary celebration
    • True. Strong. Incomparable.
    Specialization Low High Local National IT Institute Oak College University A University B Maple University
  • 27. Maple University Branding
  • 28.
    • Dedicated Fundraising - hire Fundraiser
      • Campaign - Building but also endowment and scholarships
      • Lead marketing efforts
      • Targets - Corporate, Alumni, Major Gifts
      • Establish ask amounts
      • Work with TL Harding
      • Major Gift Campaign - dinners and follow up
      • Dean will support efforts and gain approvals
    Maple University New Sources of Revenue
  • 29.
    • Centre of Excellence for Research and Consulting
      • Strategy to be led by Dr. Montaine, assisted by part-time director
      • Coordination with Innovation Promotion Office
      • Secure short term space with ultimate location in new building
    Maple University New Sources of Revenue
  • 30.
    • Dedicated facility
    • Accommodates future growth and supports rebranding
    • Dean to obtain approvals
    • Funding ($12.4 M)
      • $5.5 M from bank funding
      • $2.0 M from Province’s infrastructure program
      • $2.0 M from Mr. Harding
      • $2.9 M from other donations
    Maple University Pursue New Building Construction
  • 31.
    • Dean to coordinate
      • Government grants - MU Finance
      • Secure bank funding - MU Finance
      • Confirm site
      • Assist in hiring project manager - MU Facilities
    Maple University Pursue New Building Construction
  • 32. Near Term Longer Term Branding/Positioning Establish Co-op Program New Programs Fundraising Research Centre Business Building Implementation Time Line
  • 33. Maple University Faculty of Business 000s 5 Yr Projected Income Statement 2009/10 2010/11 2011/12 2012/13 2013/14 Enrolment Growth 4.6% 7.2% 10.0% 13.1% 16.4% Total Enrolment 695 713 731 752 774 Revenue           Government Grants $ 5,274 $ 5,407 $ 5,548 $ 5,708 $ 5,870 Domestic/Tuition & Other Fees $ 4,096 $ 4,366 $ 4,660 $ 4,985 $ 5,332 Ancillary Operations (net) $ 67 $ 69 $ 71 $ 73 $ 75 Donations $ 377 $ 1,390 $ 2,403 $ 3,418 $ 3,435 Research $ 611 $ 794 $ 1,032 $ 1,342 $ 1,744 Interest Earned $ 94 $ 101 $ 61 $ 231 $ 481 Total Revenue $10,519 $12,126 $13,775 $15,757 $16,937 Expenses           Academic programs $ 6,255 $ 6,425 $ 6,596 $ 6,787 $ 7,006 Student Services $ 1,338 $ 1,374 $ 1,417 $ 1,465 $ 1,518 Sum of Expense Items $ 673 $ 697 $ 898 $ 999 $ 1,137 Total Expenses $ 8,267 $ 8,496 $ 8,912 $ 9,250 $ 9,661 Excess/(deficiency) $ 2,252 $ 3,631 $ 4,864 $ 6,506 $ 7,276
  • 34. Maple University Faculty of Business
    • Questions?
  • 35. Implementation Time Line
  • 36. Implementation Time Line
  • 37. Strategic Initiative Local Business Seminars
    • Seminar Programs
    • Targeted at local businesses
    • Commence with one course
    • Topics include corporate governance, organizational performance, not-for-profit and marketing
    • Advantages
    • Enhances community relations
    • Leverages professors knowledge and expertise
    • Increases facility utilization
    • Generates revenue
    • Disadvantages
    • Risk not tolerable
    • Potential competition
    • Distraction to the faculties core strategy
    • Revenue generated is not-material
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes No No No No
  • 38. International Student Recruiting Strategic Initiative
    • International Students
    • No incremental increase until 2010/11
    • Join AACSB for marketing cache
    • Moderate advertising and promotion
    • Recruiter paid on percentage of increase
    • Advantages
    • Generates revenue
    • Enhances brand reputation and expands international reputation
    • Sustainable source of revenue
    • Disadvantages
    • Highly competitive
    • Dependant on success of branding efforts
    • No enrolment increase until 2012/13
    • Need to join accreditation body (AACSB)
    • Cost and coordination of advertising and promotion
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk No No Yes Yes Yes
  • 39. Strategic Initiative #7 Cost Correction – Eliminate HR Major Strategic Initiative Cost Correction – Eliminate HR Major
    • Advantages
    • Impact on long run operating costs
    • Consistent with strength (accounting) based focus
    • Disadvantages
    • High cost of terminations
    • Decreases enrolment
    • HR department supports other Faculty departments
    • Abandons this market to local competitor
    • Eliminate the Human Resources Major
    • Reduces enrolment by 53 students
    • Requires termination of 2 Professors
    Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Yes No No No Yes
  • 40. Choice Criteria Strategic Initiative Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk Reposition and Rebrand Yes Yes Yes Yes Yes Co-Op Education Program Yes Yes Yes Yes Yes Local Business Seminars Yes No No No No Centre for Excellence in Research and Consulting Yes No Yes Yes Yes International Student Recruiting No No Yes Yes Yes Increase Donations Yes Yes Yes Yes Yes New Business School Building Yes No Yes Yes Yes Cost Correction – Eliminate HR Major Yes No No No Yes
  • 41.
    • New Mission
      • Attracting Ontario’s brightest – students and staff – to Maple University’s Faculty of Business that excels in business disciplines. We prepare young minds to be successful in today’s job-focused economy.
    Faculty of Business Recommendations