Misaligned market assessment and cost management : Case of U21Global

A recent story on U21Global highlights the challenges of executing a vision which has arrived ahead of its time.

U21 had a very unique positioning of leveraging the power of university consortium and technology to build a global online university. However, it seems to have missed on two important aspects--market readiness and cost management. For example, its biggest target markets like India and China are still not ready for online programs which are expensive, although they are ready for cheaper programs that add "credentialing" aspect to their profile.

As pointed out in this article, price of brick-and-mortar courses in China was US$2,000 as compared to US$7,000 for U21.

Likewise, in India, Symbiosis Centre for Distance Learning (SCDL), started right around the same time as U21, claims to enroll more than 200,000 students and charges around US$500 for similar programs. Thus, while on the revenue side, U21 has limitations on the tuition pricing. On the cost side, U21 has heavy expenses associated with international administrators and faculty members. This has resulted in inefficient administration of the venture.

Online education model works on scalability and not selectivity. And the scalability in markets like India exists with the price conscious mass segment. With the transfer of controlling stake to Manipal Education, cost structures could be better balanced with the market needs in China and India.

At other level, U21 needs to expand its outreach by partnering with institutions in different segments. For example, U21's partnership with IGNOU to offer joint Postgraduate Programme in Information Technology Management would enable it to leverage IGNOU's large student base (total enrollment of 2million students) and established credentials in a price-sensitive mass segment. The program is priced at $3,750 and accepted 112 students for its first intake in Sept'09. For global online universities considering to enter Indian market this reaffirms the pricing challenges in Indian market.

posted by:
Rahul Choudaha, PhD
New York
http://www.dreducation.com/

Three Things an Entrepreneur Needs to Thrive in a Mobile World

Will online education create entrepreneurs for America?

Entrepreneur Magazine says that there are six things an entrepreneur needs to make his or her business move. I agree with three of them, and I think that those three speak to the rules that high school students already practice, or are aware of, in this mobile technology world.

They are:

1. Spend money on technology as an investment--not as a cost.
2. Social media is no joke.
3. Mobile technology can boost productivity.

Here's how they play out in a story from Arizona. Almost 27,500 high school students a year use online education, according to the report at KTAR.com.

Students are given an opportunity to split up their time and re-organize their schedules into unconventional parcels of productivity. There may be a future for these kids as entrepreneurs. All an entrepreneur needs is technology, a weird schedule and room to grow.

Four years into it, the Tucson Unified School District program has about 600 students signed up for online learning.

Stuart Baker, TUSD's principal of distance learning, said students likely will experience some form of online learning in postsecondary education, so early exposure is helpful.

``Virtual education is the wave of the future. It's exploding everywhere, and it's being looked to as a real way to deliver education quickly and efficiently to kids all over the world,'' he said. ``I don't know what form it will take ultimately, but it's not going away.''

Seventeen-year-old Ronquillo sees no downside to the choice she made in her sophomore year to go wholly online. It allows her to work full time, and while she initially was wary of computers, she now considers herself solidly technologically literate.

Image courtesy of Darton College site

More Arizona Students "Attend" School on the Web

How do these entrepreneurial rules work in high school?

1. Spending money on your education gives you the feeling that you have put time and yourself into something that is going to make you better in the end. That's always a good ROI.

2. Social media, as any high schooler can tell you, teaches you the value of communicating. Without communicating, we can't learn. And business is about learning.

3. If I am mobile, I can work, when I want to, and how I want to. I focus on the things that bring me enjoyment while I do them. If I can do that at my aunt's house, or at three in the morning, while I listen to the Cure, then that's what I am going to do.

The world looks different when you are allowed to work differently.

Capella University Sees Revenue and Student Enrollment Rise

Capella CEO Steve Shank

The rise of internet use in America from the late 90s to the present day has meant more people are using the Internet for learning. The trend is set to continue. It has meant great things for Steven Shank, CEO of Capella Education, which runs Capella University, an online degree institution.

Minneapolis-based Capella University, which operates under its parent company, Capella Education Co., continues to see its enrollment increase -- along with its revenue and operating earnings. Capella, which focuses primarily on adult students seeking advanced degrees, has seen its enrollment and revenue grow by 20 to 25 percent per year in recent years.

But online growth in China, Vietnam, Singapore, India and many other countries in Asia outpaces American growth and there are also many more people who could potentially use Internet products and services in the Eastern Hemisphere.

As a thought exercise, would it be useful to think what online universities in the United States could be doing to expand their operations in partnerships with governments and commercial institutions in Asia?

The online growth is staggering there, as more fiber to the home and last-mile digital connections pair up consumers with not only Internet access, but multitudes of digital cable and interactive cable offerings.

For now Capella is concentrating on offering the staff of Fortune 500 companies classes through incentive structures at their companies. This is a brilliant move, because in an economic downturn most people will not want to leave their job, but they would be willing to pay more to educate themselves and boost their chances for promotions.

Story about Capella University, courtesy of the Minneapolis Star-Tribune.