Developing Sustainable Competitive Advantages for Colleges and Universities

Developing Sustainable Competitive Advantages for Colleges and Universities

presented by

Dr. Robert A. SevierSenior Vice President, Strategy

2 | Competitive Advantage | © STAMATS 2015

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


Michael E. Porter


Understanding Competitive Advantage


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


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


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


Competitive Advantages and Strategic Planning

Three outcomes of the situational analysis: Barriers that will prevent achieving

your vision Opportunities Competitive advantages


Build-upBreakthrough

Steps forward, consistent with Hedgehog Concept

Accumulation of visible results

Flywheel builds momentum

People line up,energized by results

Flywheels


Disappointing Results

No build-up; noaccumulated momentum

Reaction, withoutunderstanding

New direction,program, leader, event, fad, or acquisition

Doom Loop


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?


Key Overlaps

Core Competencies

Marketplace Interest

Competitor Offerings


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


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)


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


Two Broad Sources of Competitive Advantage

Cost Compelling differentiation

Questions: What factors contribute to (low) cost? What factors contribute to compelling differentiation?


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


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


Costco

Apple Jaguar

Michael Kors

What is a premier woman’s brand

Examples of Competitive Advantage


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?


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


Where Do You Fit in the Competitive Landscape?

Market… In This Role You Will…

Leader

Follower

Challenger

Disruptor


Competitive advantages are always validated by the marketplace


Developing Competitive Advantage


Institutional Roadblocks

What institutional habits or culture gets in the way of developing competitive advantages?

What are some options for addressing these issues?


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


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?


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


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


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

Row Vision-Centric Strategic Planning

for Colleges and Universities

http://www.stamats.com/resources/white-papers/

http://www.stamats.com/resources/white-papers/

http://www.stamats.com/innovatorsbookshelf

http://www.stamats.com/innovatorsbookshelf

http://www.stamats.com/resources/white-papers/managing-your-academic-portfolio/



http://www.stamats.com/resources/academic-strategist/

http://www.stamats.com/resources/academic-strategist/

Developing Sustainable Competitive Advantages for Colleges and Universities

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