Competition and Markets in the Australian Higher Education Sector - Case Study Example

COMPETITIVE AND COMMERCIAL STRATEGY IN A CONSUMER DRIVEN AUSTRALIAN HIGHER EDUCATION Name Institution Course Date Introduction Within the next five years horizon and beyond, the Australian higher education quarter is anticipated to experience significant changes as the Bradley review recommendations are gradually implemented. Bradley predicted that, “the more demand-driven, student-entitlement system will require a greater focus on accreditation, quality assurance, evaluation of standards and use of outcomes measures. Placing more choice in the hands of students requires a different approach to quality assurance and accreditation”, (Bradley et al. 2008, p. 8). One of the major elements of reform agenda is the shift to a demand-driven funding model, implying higher reliance of universities on the power of student choice. This further implies that the sector will increasingly operate like a consumer-driven market, brining in novel demands as risks for higher education institutions. This move to a demand-driven model might trigger growth at a system-wide level, but it will as well lead to considerable rise in competition, with obvious conquerors and losers, (Porter 1979). This paper analyses competition and markets in Australian higher education sector. The paper will analyze the effects of federal policy reforms for growing participation as well as attainment in Australian higher education sector. The paper will also give a short synopsis of the University of Canberra strategic plan and thereafter discuss the implications this strategic plan to this particular university as well as other universities in Australia. Analysis of higher education sector in Australia Since 2012, the Australian universities have been able to register as many students as they would, depending on their own determination of student qualifications or willingness for specific fields of study. This new national policy was meant to create a demand-driven system where higher education system if defined by patterns of student demand as well as by the responsiveness of institutions to these, (Dawkins 1988). The Australian higher education is experiencing speedy and intense changes that are redefining the nature of university administration, redefining educational work practices as well as the delivery of education, (Dearn 2006). The growth in number of the international student marketplace, the shifting demands of mass markets as well as the declining public investment in higher education have formed a diverse playing field to the one that existed three decades ago, (Australian Government 2006). The new management context is “conceived as a managed economy in which competitive markets and market simulacra are nested in a framework of external supervision by government”, (Marginson 2008). Novel public administration strategies adopted by university managers to handle these transformations consist of the use of funding based on economic incentives, product regularity and formats, consumer driven fabrication of education products, competitive grading, performance measurement, and auditing by outside bodies as well as partnering with other types of education, (Marginson 2008). In a highly contestable consumer-driven setting these aspects are liable continue damaging a number of reputations, bring about a wearing down of market share together with profitability; unavoidably leading to streamlining and rationalizing as well as exacerbating existing demands on member of staff and managers. For the majority of higher education institutions, particularly the ones outside the top tier, the risks are higher. If the experiences learnt from the industry deregulation are anything to go by, decades of competitive advantage could be won, or lost, on the grounds of institutions’ strategic readiness, (Dawkins 1988). For institutions to be termed as ready strategically, the need to be able to capitalize on the upside of segment unpredictability in a sustainable way without being over-exposed to negative aspect risks. It is expected that the strategically ready higher education institutions will be in a position to build up thriving and sustainable local as well as global commercial operations; to reinforce research outputs and teaching standards, in addition to developing seamless awards pathways from vocational to higher education. Institutions need to understand that the most significant way of strengthening sustainability is through enhancing brand equity, (Nelson 2002). With these new reforms, strategically ready higher institutions are the ones that are prepared to: Build up a clear and convincing policy that comprises of making tough decisions concerning research fields, schools as well as courses it will establish, retain or eliminate; Do reorganization of old-fashioned structures, administration and accountabilities to form organizational flexibility and support foundation processes as well as systems with it planned direction; Embrace competence based policy to bring about excellence in teaching and research in addition to balancing these with money-making intelligence and risk mitigation; and Evaluate levels of modern-day learning management, (Nelson 2003). Higher education in Australia is becoming a progressively more competitive consumer driven market with the looming deregulation of fees. Universities will be required to rethink about how best they can adapt to the education program restructuring and strengthen the quality and value of degrees they offer to their students, (Nelson 2003). They also need to understand the target market and improve the student experience I order to survive in a consumer-driven system. The following framework can be used by universities to evaluate their performance against the demands of sector restructuring. Strategies that differentiate The universities will be required to develop and put in place convincing and unique policies for elements of the educational business. The universities will need to become accustomed to a deregulated landscape while increasing consumer-centred thinking. They will also need to rethink about how they design their products so as to differentiate and present better value for money to their students, (Wysocki 2010). Their strategies need to capture the fundamental drivers of student choice and how to engage support in a more enhanced way. They should also improve communication with students ad be more responsive as well as easily reached in service delivery. The strategies adopted by universities should be able to take a whole university student lifecycle approach and offer quality educational experience, (Zepke & Leach 2010a). To endure and thrive in the era of augmented competition, universities facing bigger threat of losing market share will require a clearly differentiated market position as well as a robust alignment of the student experience and brand promise, (Zepke & Leach 2005). While the market will continue to be mores of consumer-driven, the existing institutions will require considering techniques and strategies that have been used by consumer marketing industries in the past, for instance, the formation of focused market positions based on the principles of psychographic segmentation, and multi-brand strategies the ca help institutions serve more than one segment without diluting their core brand. Universities and particularly those in higher risk of losing market share may require considering more fundamental reforms, such as mergers and divestment strategies associated with courses, degrees and perhaps research and development (R&D) centres, (Zepke & Leach 2005). Governance that enables The changes has made the environment favourable for new public management approaches exemplified by a focus on value for money, recognition of targets and performance measures, focus on consumers, downsizing, outsourcing and flatter administration structures among others. Financial austerity together with reorganization now should be the major characteristics of the higher education sector, with an emphasis of entrepreneurialism in both research and teaching activities as a means of obtaining resources controlled by government, not-for profit organizations as well as private sector interest groups. High levels of accountability and competition in these sections calls for well-timed decision-making, establishment of highly developed business cases, extensive business-related expertise, efficient performance supervision as well as a single point of answerability, (Becher & Trowler 2001). Leadership that impacts Reliable and commercially intelligent leadership will be a vital performance differentiator in a more competitive and consumer driven education sector. The new era of competition in education sector will require leaders that can think strategically, develop career for academic staff, and inspire a diverse workforce, (Crosling & Heagney 2009). Along these management methodologies, consumer responsiveness will be increasingly significant and measures of learner contentment, retention, engagement as well as graduate outcomes have become key pointers directing university management. Student-centred tactics to delivery of education, homogeny of educational products, improved flexibility in forms of delivery as well as regular program and unit assessment are currently part of the mantra of university leaders, (Cleveland-Ines & Emes 2005; Dearn 2006). University leaders, with perception of students as customers, are pushing academics to be learner-centred as well as consumer-responsive. The university managers need to give more weight on student expectations and levels of expectation. Capabilities that sustain With the increase of deregulation, open and a competitive higher education sector that has less predictability of funding levels, the institutions need to be more competitive and innovative. The government is also demanding that institutions offer quality education by introducing market forces, which means that students will become informed consumers making rational choices of higher education courses and institutions. Thus, the institutions need to come up with plans on how to improve the quality of services they offer while reducing expenditure. For the institutions to reduce their expenses, they will be required to reorganize their operations including the composition of their workforce. The universities will need to be restructured into larger management units in order to cut costs and minimize leadership hierarchies. With the increase of use of technology in higher education sector and availability of international students, the institutions will require to be competitive on a global level (Marginson & Considine 2000). This calls for improvement of services offered and quality of courses offered by the institutions, Furthermore the institutions need to put more emphasis on professional degrees and work ready graduates in order to create competitive advantage and cut costs. To attain this, it is important for higher education institutions to develop a dependable, influential brand identity that provides them with a competitive advantage (Gopalan et al. 2008). The management of these institutions need to think in imaginative ways as to how to become a world class education hub by buying in global class brands, world class academics, and creating world class architectures, as is the case with the University of Canberra (UC). The next paragraph discusses how the University of Canberra has come up with a strategic plan to transform itself into a world class education hub. University of Canberra (UC) Strategic Plan The University of Canberra campus is a fundamental segment of the life of National Capital, with strong relations with the community, government as well as business. The main goal of the management is to open the university to the world as well as bringing the world to the university. For the campus to achieve this, it will require to be focused on innovation ad collaboration. The University has come up with a strategic plan called the ‘Breakthrough’ strategic plan that spans from 2013 to 2017. The plan outlines the measures to be taken to achieve it aim of making the campus a world-ranked university with a population of more than 20,000 students by the year 2018. The campus also intends to create a network of national as well as international partners. The Breakthrough plan outlines three main objectives to be achieved within this period. The first goal is to make sure UC is competitive within Australia via enhanced pleasant appearance to learners nationwide and reinforced course feasibility. The second goal is to establish a really global UC that can succeed in a new period of internationalized tertiary education and research. Finally, the campus intends to attain a global ranking as a young university. Assessment of UC strategic plan, its implication to UC and other universities and recommendations The UC’s strategic plan will bring about several implications for the colleges as well as Australian universities at large. First, in the university opts to pursue an association with an inter-state educational provider, the college will need to have the capacity to respond quickly through the provision of pathways programs. Furthermore UC will require being capable of managing this in a decentralized, multi-located operating environment. The formation of University of Canberra Hospital offers chances to support the campus in the development of allied health qualifications. However, this calls for more of harmonization, thoughtfulness as well as resources. The strategy of UC to open up regional hubs also provides opportunities for the campus to respond with several blended learning modes such as digital and face-to-face UC access as well as diploma programs. The demand-driven funding policy applied to the local students that begun in 2012 will place UC and other universities in a heightened competition among each other. This will put added pressure o the capability of UC to source or increase their population of local students. The move towards digital education removes geographical limitations. This presents a good opportunity for UC to use online mode of teaching and thus increase its population. The Australian education sector in progressively becoming deregulated and uncapped while the government is requiring that universities be compliant with the quality of education they offer. This has placed UC’s as well as other universities’ resources in pressure. Members of staff are gradually being diverted from planning and improving programs to meet compliance demands, (Baldwin & James 2000). This is putting more pressure on staff members and may lead to ambiguity of roles. Lastly, the digital educational offerings may be a plus for now but it will be critical to the longer term viability of the UC College and other universities. For the UC and other Australian universities in general to foster a learning environment of the 21st century, the institutions ought to be positioned in a firm set of assumptions concerning teaching and learning, staff work, premeditated decision making, sustainable fiscal models, as well as stakeholder engagement. The vibrant and demanding environment in which universities are operating in require systemic transformation – transformations that are meaningful and flourishing with an understandable vision for future, extensive partnership and commitment of stakeholders, and strategic planning as well as measurable outcomes, (Aitkin1997). Conclusion The moves towards a demand driven approach will result in battles for market allocations between the existing institutions, exposing incumbents’ economic positions as it was experienced in other industries, like utilities and telecommunications, when they were deregulated. If experience of deregulation in other industries is something to go by, then it is expected that new upcoming institutions will target high value and niche consumer segments. Existing institutions will be required to identify the type of customers they are targeting, their needs and how they prefer to be serviced. The shifting dynamics of higher education in emerging global markets will generate a viable ‘second state’, (where education providers with standards almost similar to those of OECD will offer education at a price much less than the OECD prices), thus diverting volumes from OECD institutions and hence increasing the challenges that Australia is facing in exportation of higher education, (Rühli & Sachs 1997). The existing as well as new entrant institutions will thus need to redefine their market position by becoming consumer-driven in addition to adopting new strategies to maintain value. 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