The document discusses strategic challenges facing universities in a competitive environment. It outlines two main challenges: 1) managing supply and demand of students in a market with capped numbers and rising alternative providers, and 2) addressing the perception of students as consumers who evaluate the value of tuition fees. The document also discusses strategic responses by De Montfort University and The University of Northampton to improve student outcomes, experience, and reputation. These responses have led to impacts like increased employability rates and student satisfaction. Future plans include campus redevelopments to continue competing effectively in an increasingly market-driven sector.

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Strategic Challenges in a
Competitive Environment
David Bryan, De Montfort University
Nick Allen, The University of Northampton
AUA Midlands Regional Conference
Wednesday 14 January 2015

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Aims of Today:
• Reflect on the keynote speaker’s presentation;
• Consider how universities are responding to existing
challenges;
• Reflect on your own institution’s strategies, strategic
responses and impacts.

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But first, a bit about us……

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Strategy 101 – The Basics
Why
How
What
Ted Talks
How great leaders inspire action
https://www.ted.com/talks/simon_sinek_how_great_lea
ders_inspire_action

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The benefit of strategic planning
• NPO – the benefit of strategic planning
• Kaplan and Norton – Office of Strategy
Management
• Strategic flexibility utilizing a strategic
framework

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Strategic Planning at DMU
• Theme based strategy (currently)
– Annual integrated planning exercise
– Quarterly review points
– Performance monitoring to Faculty / School
– Supported by central planning team; and
dedicated planning partners in each Faculty.

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Strategic Planning at Northampton
• Single strategy – Raising the Bar
– Underpinning Operational Plans;
– Annual budget and Unit (academic and
professional services) planning process;
– Monitored through key performance indicators
at institutional and School levels.

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Competitive Markets
• Is Higher Education a competitive
market?
– Ability to charge
• Profit
• Limited places / rivalry
• Excludability i.e. no free provision
– Consumers can reject provision
http://economicsonline.co.uk/Competitive_markets/Competitive_mark
ets.html
Accessed 05/01/2015 at 10:53

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Challenge 1 – Supply and Demand
• Can we grow the UK Higher Education market?
– Full time first degree numbers increased by 29% between 2003-
04 and 2011-12, but remained steady in 2012-13 (Student
Number Control)
– Other undergraduates have declined (44% between 2009-10
and 2012-13)
– Postgraduate taught numbers increased 19% from 2007-08 to
2011-12, but have declined 12% in 2012-13.
– Full time postgraduate research numbers increased by 41%
between 2003-04 and 2012-13

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Challenge 1 – Supply and Demand (2)
• Can we grow the UK Higher Education market?
– Has £9000 become the defining factor
• Part time and Other undergraduate fees
• Between 2007-08 and 2012-13. HEIs lost 45% of Other
undergraduate students; FEIs gained 39%.
• For the 223K other undergraduates lost, HEIs gained 222K
degree students.
– Alternative providers
• 29,200 tuition loans issued in 2012-13, 9,800 tuition loans
issued in 2011-12

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Competitive Markets
• Is Higher Education a competitive market?
– Not yet.
– Supplier behaviour is being set by policy, not market
demand.
– However competition is building – 300% growth(?) in
Alternative providers
– What markets should we be in?
http://economicsonline.co.uk/Competitive_markets/Competitive_mark
ets.html
Accessed 05/01/2015 at 10:53

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Challenge 2 – Students as Consumers
• Perception over the relative value of the £9000 tuition fee
– Can a student define a quality product
– Outcomes?
• The rewards of a degree
– £250K boost for females (over lifetime)
– £165K boost for males (over lifetime)
– Higher reward for good honours
• The rewards of Masters (PGT)
– £200K additional over 40 years

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Challenge 2 – Students as Consumers (2)
• Perception over the relative value of the £9000 tuition fee
– Other outcomes
• Graduates are more likely
– to report better health
– to vote / volunteer / engage positively in society
– to not commit a crime
• Or just a more demanding market
– 30-34 year olds with a HE qualification, 51.1%(2013)
and 35.6% (2003)

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Challenge 2 – Students as Consumers (3)
• Perception over the relative value of the £9000 tuition fee
– However the previous outcomes aren’t HEI specific
– What differentiates HEIs?
• What are the tangible immediate benefits and qualities a
student can compare between HEIs?
• League tables - 2007 research showed league tables have no
impact on domestic recruitment.
• NSS

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Competitive Markets
• Is Higher Education a competitive market?
– Do we have informed consumers?
• At a sector level given the benefit of PGT study
• At an institution level
– Do we know what students want?

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Over to you…..
• What do you think are the challenges?
• Are we in a competitive market situation?

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Strategic Responses
• Deliberate increases or decreases in
student population;
• Investments in student experience (staff);
• Campus redevelopments;

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Strategic Responses at DMU
• Investment in student employability
– FrontRunners, Graduate Champions
• Investment in student experience
– #DMUGlobal
– Mile2
• Theme based focus
– Central projects office

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Impact at DMU
• Destination of leavers from HE
– Employability Performance Indicator
• 87.4% (2011-12) to 93.8% (2012-13) FT degree
• Reduced number of corporate projects
– Moving effort to focus on key strategic
projects

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Strategic Responses at Northampton

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Impact at Northampton
• Improved student satisfaction
– 2011: 80%; 2014: 89%
• Top 50 UK University Ranking (Guardian)
• Improved reputation

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Over to you…..
• In groups, what have been your
institution’s strategic responses;
• What has been the impact?
(Be prepared to report back to the group)

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Future Plans at DMU
Fletcher redevelopment

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Future Plans at Northampton

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What are your plans for the future?

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The Future of the Sector (in our view)
• More market driven and student centric
• Fees won’t increase leading to real term
reductions
• Demand will become increasingly unpredictable
• Removing cap will increase competition
• High fixed costs
• International Competition
• Winners and Losers

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More information at www.aua.ac.uk
Email: aua@aua.ac.uk
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