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BIz Model for Coursera

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These slides use concepts from my (Jeff Funk) course entitled Biz Models for Hi-Tech Products to analyze the business model for Coursera. Coursera offers massive open online courses and thus …

These slides use concepts from my (Jeff Funk) course entitled Biz Models for Hi-Tech Products to analyze the business model for Coursera. Coursera offers massive open online courses and thus challenges the current business models of most universities. It offers these online courses to its students and to the students of other universities. By using courses that have been developed by universities and other organizations and by offering these courses to thousands if not millions of potential customers, Coursera has much lower costs per course and per student than do conventional universities. These slides analyze the challenges for Coursera and the potential solutions in the form of customer selection, value proposition, and method of value capture.

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  • 1. MT5016 BUSINESS MODELS FOR HI-TECH PRODUCTS Roberto De Joya Jr. A0118989E Ryan Michael Gelig A0098535R Zhou Xintao A0098599X Liang Liang A0098464N Jonathan Castillo A0098438M Wong Chee Yeow A0104437M
  • 2. INTRODUCTION SCOPE OF ACTIVITES VALUE PROPOSITION COMPETITOR ANALYSIS CUSTOMER SELECTION VALUE CAPTURE STRATEGIC CONTROL
  • 3. CHANGING TREND IN HIGHER EDUCATION Rising Costs Perception of shrinking financial returns of education Unequal access to employers Unequal access to education
  • 4. RISING COSTS OF HIGHER EDUCATION http://www.bloomberg.com/news/2013-08-26/college-costs-surge-500-in-u-s-since-1985-chart-of-the-day.html http://money.cnn.com/2011/06/13/news/economy/college_tuition_middle_class/
  • 5. Free and paid (for premium services) educational courses offered online and open to anyone The concept started from University of Phoenix’s initiative in 1989 1st MOOC experiment launched in 2008 by Stephen Downes and George Siemens, “Connectivism and Connective Knowledge” Current MOOC providers: Coursera, Udacity, edX, KhanX New York Times declared 2012 as the "Year of the MOOC" MASSIVE OPEN ONLINE COURSES
  • 6. MASSIVE OPEN ONLINE COURSES http://elearninginfographics.com/wp-content/uploads/Are-MOOCs-the-Future-of-Online-Education-Infographic.jpg
  • 7. COURSERA Founded in 2012 by Prof. Daphne Koller and Andrew Ng from Stanford University Raised $65M in funding from Silicon Valley VCs 6.8M registered users Offering 600+ courses 108 partner institutions
  • 8. COURSERA
  • 9. INTRODUCTION SCOPE OF ACTIVITIES VALUE PROPOSITION COMPETITOR ANALYSIS CUSTOMER SELECTION VALUE CAPTURE STRATEGIC CONTROL
  • 10. SCOPE OF ACTIVITIES COURSERA Learning Institutions / Universities Amazon Web Services ACE Publishers Translators Content Delivery X Licensing X Distribution X Screening Services X Marketing X Content Development X Web Storage X Server Infrastructure X Search X Accreditation X Reading Materials X Translations X
  • 11. INTRODUCTION SCOPE OF ACTIVITIES VALUE PROPOSITION COMPETITOR ANALYSIS CUSTOMER SELECTION VALUE CAPTURE STRATEGIC CONTROL
  • 12. Elite Universities, Publishers Students Students Students within a course Peer assessments Free + Paid courses Course content, textbook recommendations Amazon Ad exposure for textbook recommendations Employers Job placement for qualified students List of Qualified Students to Hire Textbooks ACE Credit ACE Credits granted on passing Signature Track and Credit Exam Course Accreditation Non-partner Institutions School Credits License to use platform and certain courses VALUE PROPOSITION VALUE NETWORK
  • 13.  COURSERA will only offer classes/content from the most reputable institutions.  A composition of the members of the Association of American Universities or “top five” universities in countries outside of North America. VALUE PROPOSITION PRESTIGIOUS COURSES
  • 14. Students who have completed the course with Signature Track will receive a Verified Certificate issued by COURSERA and the participating university. VALUE PROPOSITION SIGNATURE TRACK
  • 15.  Verified Certificate proves that they have met the passing criteria of the online courses offered by a university on COURSERA.  It can be used to advance in their careers, gain valuable credentials, or build on what they already know.  People can also list their Verified Certificate on their résumé/CV and include it on social media/career profiles. VALUE PROPOSITION VERIFIED CERTIFICATE
  • 16. Students can earn an ACE CREDIT (American Council on Education’s College Credit) by signing up for an eligible course in the Signature Track. As well as taking an online proctored Credit Recommendation Exam at the end of the course. VALUE PROPOSITION RECOGNITION OF CREDITS
  • 17. COURSERA Career Services - opt-in recruiting service that allows students to find and connect with positions that “match their skills and interests.” VALUE PROPOSITION CAREER ADVANCEMENT
  • 18. INTRODUCTION SCOPE OF ACTIVITIES VALUE PROPOSITION COMPETITOR ANALYSIS CUSTOMER SELECTION VALUE CAPTURE STRATEGIC CONTROL
  • 19. COMPETITOR ANALYSIS https://www.edsurge.com/n/2013-12-22-moocs-in-2013-breaking-down-the-numbers
  • 20. *As of January 2014 COMPETITOR ANALYSIS Organization Status For-profit For-profit Non-profit Funding $65M $21.1M $60M Number of Students 5+ million 1.8 million 1.65 million Number of Courses 532 (Broad range of subjects) 33 (Technical fields) 125 (Broad range of subjects) Number of Languages 5 63+ 1 Pacing Start and end dates No start/end dates (suggested completion time) Start and end dates Verified Certification Virtually verified certificates for $30-100 for 70 courses Virtually and physically proctored exam certificates Physically proctored exam certificates Accreditation 5 courses offered for ACE credit for $90-190; Credit at licensing institutions 5 courses offered for credit at California State University system for $150 Credit at licensing institutions Career Services Limited number of companies Network of 400+ companies None Platform Development Company Company + student contributions Open-source Content Development Outsourced to elite partner institutions Co-developed with instructors Developed by institutions in xConsortium
  • 21. COMPETITOR ANALYSIS
  • 22. INTRODUCTION SCOPE OF ACTIVITIES VALUE PROPOSITION COMPETITOR ANALYSIS CUSTOMER SELECTION VALUE CAPTURE STRATEGIC CONTROL
  • 23. CUSTOMER SELECTION Individuals Companies Learning Institutions / Universities
  • 24. Individuals from around the world Individuals with busy schedulesIndividuals interested in prestigious courses Individuals pursuing particular courses CUSTOMER SELECTION INDIVIDUALS
  • 25. CUSTOMER SELECTION INDIVIDUALS Source: MOOCs @ Edinburgh 2013, 10 May 2013 95 41 33 32 20 12 7 1 LearnNew Things TryOnline Education Togeta certificate Improveone's career Seewhat MOOC'sare Meetnew people Browse Edinburgh's Offering Unsure Aspirations MOTIVATION SURVEY
  • 26. CUSTOMER SELECTION INDIVIDUALS http://mfeldstein.com/the-most-thorough-description-to-date-of-university-experience-with-mooc/ DEMOGRAPHIC SURVEY
  • 27. INTRODUCTION SCOPE OF ACTIVITIES VALUE PROPOSITION COMPETITOR ANALYSIS CUSTOMER SELECTION VALUE CAPTURE STRATEGIC CONTROL
  • 28. VALUE CAPTURE Premium Services Licensing Career Services Merchandise Affiliates Program
  • 29. VALUE CAPTURE VALUE CHAIN Elite Universities, Publishers Students Students Students within a course Peer assessments Free + Paid courses Course content, textbook recommendations % gross revenue from courses Amazon Exposure for textbook recommendations % commission on each book sale Employers Job placement for qualified students List of Qualified Students to Hire money Textbooks money Payment for Signature Track Program ACE Credit ACE Credits granted on passing Signature Track and Credit Exam Evaluation Fee Course Accreditation Non-partner Institutions School Credits Licensing Fees: $3000 + additional fee per student License to use platform and certain courses
  • 30. Signature Track Premium Service USD30-90 per course + USD60-90 for exam VALUE CAPTURE PREMIUM SERVICES Estimated total revenue of USD$1,300,000 in 12 months (25,000 students in the Signature Tracks)
  • 31. Specialization Certificate for a set of courses USD300-500 per certificate VALUE CAPTURE PREMIUM SERVICES
  • 32. VALUE CAPTURE LICENSING Licensing of COURSERA platform and certain courses to non- partner institutions USD3,000 + additional fee per student
  • 33. Affiliates Program with Amazon COURSERA will collect profit from Amazon.com each time students buy recommended textbooks. http://www.timeshighereducation.co.uk/news/coursera-strikes-deal-with-publishers-on-textbooks/2003754.article “The publishers will make relevant chapters from e-textbooks available free of charge, although students who wish to read the books in full, or read them once their course has ended, will have to purchase them.” VALUE CAPTURE AFFILIATES PROGRAM
  • 34. COURSERA Company Gear Earns twice as much money than textbook revenues VALUE CAPTURE MERCHANDISE
  • 35. COURSERA Career Services Companies seeking qualified employees pay a certain fee for introduction, with a share of that revenue going to colleges that offer the course. VALUE CAPTURE CAREER SERVICES
  • 36. INTRODUCTION SCOPE OF ACTIVITIES VALUE PROPOSITION COMPETITOR ANALYSIS CUSTOMER SELECTION VALUE CAPTURE STRATEGIC CONTROL
  • 37.  Signature Track: Obtained certificates can be used as degree credits.  ACE credit: expand to more subjects  College credit: Universities can offer courses that can be counted for college credits  Secure Assessments: Testing centers to prove students have done work themselves  Establish the Gold Standard in Course Certification recognized worldwide (like GMAT, IELTS) by employers and universities  Security: Identity verification technology through keystroke biometrics and webcam  Partnerships:  Job Opportunities STRATEGIC CONTROL COMPLIMENTARY ASSETS
  • 38. STRATEGIC CONTROL BARRIER OF ENTRY  Strengthen and establish exclusive relationships with Elite Institutions  Course videos, tests and presentations are delivered only through: a. COURSERA website; b. Mobile application for iOS, Android, Windows Phone; or c. Limit the usage of course materials within the COURSERA web platform and mobile application.
  • 39.  Corporate learning: COURSERA provide specific courses for companies with charges  ‘Freemium’ model: Charge for courses that students are interested to further pursue after introductory chapters  Company-sponsored courses: give options to employers to bid for Signature Track with the courses they prefer or build customized Track for employers  Charging tuition: Universities can offer tutors for courses  Charging for Proctored Exams: offer proctoring services that connect proctors and students via webcam STRATEGIC CONTROL REVENUE
  • 40. • Develop the COURSERAPad, a cheap tablet device with all the tools pre-installed for learning-on-the-go • Can be used by students from primary to university level • Manufacturing will be outsourced STRATEGIC CONTROL REVENUE
  • 41. COURSERAPad: a color multitouch tablet running COURSERA OS for learning-on-the-go • Software: – OS: customized version of Android – COURSERA Store: similar to iTunes University where users can choose new courses to enroll in. – COURSERA Apps: Pre-installed apps that can help in learning Math, Algebra, Accounting, Physics, etc. • Hardware: – Processor and memory enough to run apps smoothly – Webcam for identity verification in Signature Track – WiFi for internet connectivity – Touchscreen STRATEGIC CONTROL REVENUE
  • 42. STRATEGIC CONTROL BUSINESS MODEL Employers Students Students Students within a course Coursera Peer assessments Freemium or Paid Certified Courses Screen and recommend potential candidates Advertisers Advertising Fees InstaEDU Online Tutor Commission on sales Payment for Signature Track and/or COURSERAPad LinkedIn Student Data (Grades and Certifications) Companies Specialized Courses Exposure for Online Tutor services Exposure for Ads Signature Track students get free access to LinkedIn’s Premium Services Commission on recruited COURSERA students Recruitment and advertising fees Access to talent database and ad space Bid for Signature Track courses based on preferred topic COURSERA Pad Fees for corporate learning Online tutoring Pay discounted rate *In addition to COURSERA’s current business model
  • 43. THE END
  • 44. Revenue for 9 months (ending in Sept. 30, 2013) *numbers in thousands  Business networking website  Number of Users: 277 million, Revenue: $1.52 billion  Alexa global website ranking: 8th APPENDIX
  • 45.  Online tutoring company matching students with online tutors  Founded by 3 Stanford graduates  High quality tutors screened  Subjects cover topics in higher education APPENDIX