developing sustainable competitive advantages for colleges and universities
TRANSCRIPT
Developing Sustainable Competitive Advantages for Colleges and Universities
presented by
Dr. Robert A. SevierSenior Vice President, Strategy
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Strategy■Vision development ■ Strategic planning
Academic Services■Academic program marketability
assessments ■ Identification of new academic
programs■New program marketing
Research and Assessments ■ Tuition price elasticity and brand value
studies■Brand clarification and development■ Image and perception studies■Recruiting and marketing assessments,
plans, and counsel
Stamats is recognized and respected as one of the nation’s higher education thought leaders. Our comprehensive array of innovative products and services has set the standard for pairing insightful, research-based strategic counsel with compelling creative solutions.
Our approach is simple: recognize the unique needs and expectations of each client and draw on more than 60 years of higher education experience for every project we undertake.
At all times, we promise the highest level of professional service and attention to detail in the industry because, in the end, we know our success is measured entirely by the success of our clients.
Stamats Strategic
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Stamats on Your Campus
Stamats has a wide array of presentations and workshops that we conduct on campus for departments, senior leadership teams, and boards
A partial list of sessions includes: Developing a Compelling Institutional Vision What Lies Ahead – a Review of Major Trends and Issues Developing an Integrated Marketing Communication Plan Building a Brand That Matters: The Four Critical Elements of a Successful Brand Strategies to Increase the Marketability of Your Academic Programs
Please contact me for a complete list or to discuss a session for you in greater detail. Thank you, Bob ([email protected])
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Overview
Understanding competitive advantage Developing sources of competitive advantage
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Michael E. Porter
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Understanding Competitive Advantage
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What is Competitive Advantage?
A condition or circumstance that puts an organization in a favorable or superior market position
An advantage gained by offering customers greater value than competitors offer
What compellingly distinguishes you from the competition in the minds of your customers
Something you do/offer that is of value to the marketplace that is not
done/offered by your competitors
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Competitive Advantage: Five Understandings
Clear sense of who your competitors are Clear sense of who your customers are Clear sense of what your customers value Strategic focus
An ability, as an organization, to focus on your competitive advantage and reduce the time and resources you spend on those actions that do not enhance this competitive advantage
Strategic messaging Build your brand message around your competitive advantage
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Why Competitive Advantage Matters
Increases organizational certainty Allows you to focus resources for maximum ROI Adds constancy and predictability to your revenue streams Helps you achieve organizational momentum Reduces unnecessary marketing and recruiting expenditures Helps make your promotional messaging stand up, and stand out Helps you become a magnet for:
Talent Brand alliances Issue-focused investors (donors, foundations)
Similar, in many respects, to Blue Oceans
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Competitive Advantages and Strategic Planning
Three outcomes of the situational analysis: Barriers that will prevent achieving
your vision Opportunities Competitive advantages
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Build-upBreakthrough
Steps forward, consistent with Hedgehog Concept
Accumulation of visible results
Flywheel builds momentum
People line up,energized by results
Flywheels
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Disappointing Results
No build-up; noaccumulated momentum
Reaction, withoutunderstanding
New direction,program, leader, event, fad, or acquisition
Doom Loop
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Distinctive Competencies and Competitive Advantage
Distinctive competency Something you do/offer that you value
Inward focus Competitive advantage
Something you do that your competitors do not that your customers will pay for Outward focus
Questions: What are the differences between the two? Which has a market orientation and which has an institutional
orientation? Ultimately, which is of most value?
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Key Overlaps
Core Competencies
Marketplace Interest
Competitor Offerings
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Necessary Alignments
Competitive advantages must align with your: Mission and vision Organizational culture Budget Operational plans Marketplace interest
Your prospective students and donors must find your competitive advantage compelling, intuitive, and obvious
Mission and vision
Organizational culture
BudgetsOperational plans
Marketplace interests
Five Alignments
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An Effective Competitive Advantage
Flows directly from your mission and vision It is intuitive
Leverages existing assets Is sustainable over time Customers clearly understand its value High barrier to entry (your competitors cannot easily duplicate)
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The Importance of Sustainability
A true competitive advantage is long-term A one-time price cut is not sustainable, but a commitment to
One-Course-At-A-Time is
Sustainable Competitive Advantage
Hard-to-find substitute
High marketplace
demand
Difficult for competitors to
acquire or imitate
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Two Broad Sources of Competitive Advantage
Cost Compelling differentiation
Questions: What factors contribute to (low) cost? What factors contribute to compelling differentiation?
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Twin Faces of Competitive Advantage
Outward facing: Cost (generally means lower) High demand programs Compelling brand
Inward facing: People, process, and structures that
support your outward-facing competitive advantages Leadership Culture Facilities Numerical fluency
Continual process improvement
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Traditional Contributors to Competitive Advantage
People Leadership, talent, culture,
commitment to execution, speed of implementation (hustle), attitude of innovation
Business processes, practices, and efficiencies Scale up, scale down
Customer service Customer intimacy
Resource base Talent, dollars, alumni, Rolodex™
Decision making Numerical fluency, time to decision
Organizational structure Value proposition Programs (curricular, co-, extra-) Niche, only game in town (OGIT),
blue ocean? Facilities Partnerships/strategic alliances What you know about who you know
Database Brand, brand awareness
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Costco
Apple Jaguar
Michael Kors
What is a premier woman’s brand
Examples of Competitive Advantage
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Who Has What Competitive Advantage?
Who Harvard The University of Phoenix The Ohio State University The University of Southern California Notre Dame
Competitive Advantage
Did you notice that it is difficult to identify a competitive advantage without also identifying the competitors?
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Market Position: What’s YOUR Story?
• Strengthened selectivity, improved matriculation
• Enrollment growth across programs• Growth of net tuition revenue and net
tuition per student• Better student retention• Increased percentage of students from
outside the local region or out of state
Positive Indicators
• Weakening of selectivity and/or matriculation
• Declining enrollment• Stagnant or declining net tuition or net
tuition per student• Rapid growth of tuition discount• Unrealistic assessment of peers and
competition
Negative Indicators
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Where Do You Fit in the Competitive Landscape?
Market… In This Role You Will…
Leader
Follower
Challenger
Disruptor
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Competitive advantages are always validated by the marketplace
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Developing Competitive Advantage
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Institutional Roadblocks
What institutional habits or culture gets in the way of developing competitive advantages?
What are some options for addressing these issues?
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Four Steps
1. What are you selling? You’ve got to be very clear on what you are selling
2. Who buys what you sell? Who are your customers? Why do they buy from you? Why do they buy from your competitors?
3. With whom do you really compete? What do they do/offer that you do not? How does their offer compare to yours (from the perspective of your customers)?
Once you are clear on these three determinants, then you can decide what benefit you provide better than the competition to your target market.
4. Build your brand around your competitive advantage. Reinforce your competitive advantages in every message and channel
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Key Questions
Based on data – students Why do full-pay students attend your college? Why do full-pay students not matriculate? With whom do you truly compete for students?
Based on data – donors Why do alumni give? Why do donors who are not alumni give? Why do people only give once? What motivates donors to move up the giving pyramid? With whom do you truly compete for donated dollars?
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Competitive Advantage Array
Competitive Advantage Valued by Donors
Valued by Students
Valued by Others
Item: ______________________________ Cost Compelling Differentiation Item: ______________________________ Cost Compelling Differentiation Item: ______________________________ Cost Compelling Differentiation Item: ______________________________ Cost Compelling Differentiation
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Remember: 1) All sources of competitive advantage must directly
contribute to either cost or compelling differentiation;
2) Your brand should be built around your source of competitive advantage
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Resources
White papers http://www.stamats.com/resources/white-papers/
Innovator’s bookshelf http://www.stamats.com/innovatorsbookshelf
Business plan for new majors http://www.stamats.com/resources/white-papers/managing-your-academic-p
ortfolio/
Academic Strategist http://www.stamats.com/resources/academic-strategist/
Tweet Strategypublishing.com
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for Colleges and Universities