Belmont Abbey College: Strategy Formulant in Turbulence Time’s Case Analysis

Piruda Chatvisuta

BUS103

Case Analysis

May 30 , 2018

Word Count: 1386

“Belmont Abbey College: Strategy Formulant in Turbulence Time’s Case Analysis”

According to the “Strategy formulation in Turbulent times” case study by Anderson and Roberto, the higher education industry in 2014 tackled immense three challenges: the cost escalation, lesser demands from consumers, and decline in economic burden. Applying the Porter’s five force’s model for the industry analysis, the analysis results that, the higher education industry in 2014, degree of competition had compressed due to their environments as numerous institutions provoked the contemplation of declining enrollments and abbreviated net revenues. The higher education industry has assorted competitors. Additionally, the incentives of the higher education industry are economical and technological factors, the industry's threat of substitutes are distance and online learning, while students and parents play the role of the buyer. In 2014, observable downturn demand affected the students' control of maintaining a higher bargaining power as more education options are available and as there is a growing competition for the buyer. As of this field, the suppliers are administrations that provide materials and knowledge for the institutions to function. The suppliers had a strong bargaining power since the consumers could face the switching in cost from alternating suppliers and no suitable substitutes. There are “subside in the populace of traditional college-age students in some region,” indicating lower demand-side benefits of scale, and economic instability; displaying the threat of entry. The economy capacity is lessening as government, and a demographic pattern is engrossed in tuition fee and enrollment—deficient in the firmly competitive marketized domain. The case study emphasized significant changes taking places are: 1. The rises of tuition’s costs, room, and board at higher education institutes are approximately four times more than inflation. 2. The concentration of even out off in traditional college-age students affects the institution that is subjected to enduring progress to persist ahead of the cost curve. 3. Growing fraction of anticipated high school graduates focused in less prosperous communities (Anderson& Roberto, 2016). The principal threats are considerably constrained enrollment for district colleges and the university. Several institutions in the USA might nose dive to meet the school’s ongoing economic feasibility. Consequently, this occurrence could cause the industry to suffer a dramatic loss as Professor Clayson Christensen forecasted in 2012 that “As many as half, more than 4,000 universities and colleges in the United States might fail in the next 15 years” (Anderson& Roberto, 2016). Some opportunities are to stabilize many of the institutions' cost and augment the education's revenue streams, as well as, incorporating other systems of educational organizations to be diversified.

 Belmont Abbey College is a Catholic institution – located at North Carolina, United States. The college endorsed their attempt at “assisting its students to become both liberally educated and well-prepared for tasks and responsibilities of professional life” (Anderson & Roberto, 2016). They have differentiated themselves in utilizing a unique curriculum that, collectively, combines both traditional liberal education with major and minor that assist in qualifying students for their future professions. By using Porter’s five force competitive analysis, Belmont Abbey College’s threat of entry is high due to a minimum degree of production, and the adoption of industrial scales by constantly bending the cost curve, such as centralizing efforts and casting out fields comprising an extensive replication of effort. Moreover, Abbey eradicated programs with very little enrollments to significantly diminish instruction costs. The college correspondingly settled a diverse brand identity by differentiating itself as a “Catholic Intellectual School,” which bids liberal with an abundant of minors and majors for students (ibid). Although the substitutes are distance and online education, the numbers are low because of the college's location; Belmont, a small town. The buyer (students) has lots of power since they are vastly informed and the past turnover indications. It is a customer-driven organization since students are extremely knowledgeable and consume the power of switching cost for their profits. The college established “Crusader Success Hub,” precisely for students to acquire the assistance needed; sign that the consumers obtain much control to bargain for their profits. The Belmont Abbey college is in a competitive environment. Moreover, the bargaining power of supplier is also high, because substitutes are unavailable and few suppliers to the buyer. The Belmont Abbey college is situated in the differentiation position, as the Belmont Abbey practices an exclusive product (different curriculum) to a broad-based market. The Belmont Abbey college has differentiated itself successfully, by having the capability to utilized operative promotional marketing, so that the market comprehends the benefits presented by differentiated offerings. As stated by the Ivey case study, Belmont Abbey college has recognized upright guiding principles for a curriculum to restructuring by “1) mission should visibly reflected in the core curriculum and 2) “preparation for career” is the protuberant feature of the undergraduate curriculum” (Anderson & Roberto, 2016). These two principles are powerfully strategic asset to distinguish the college from its competitor. Effectively, enrolments increase two times over the several years from 500 to over 1000 students and the college’s identity has developed visibly by departed from being “invisible” to “recommended college” recommended by “The Newman Guide to Choosing a Catholic College.” The approach used indicated that the Belmont Abbey had differentiated itself magnificently. In the United States, the higher education market growth is appearing to be a slow- rising industry; therefore, the Belmont Abbey situated itself as a college to be cash cows; as the college has a high relative market share position but is competing in a slow- growth industry in 2014.