What is Strategy?
The classic definition of strategy is a plan of action aimed at achieving a specific objective. Competitive strategy, as defined by Michael Porter in his 1996 Harvard Business Review article, “What is Strategy?,” is not doing something better than your competitor, but doing something different. It is changing the nature of competition away from costly head-to-head battles over existing markets and clientele to creating something different, aligning processes behind it, and therefore changing the rules of the game. For-profit providers have done this very well.
Competitive strategy, then, is about creating something that is unique and valuable in the marketplace. It involves decisions about goals and target markets and then making the tough choices to align resources and operations in pursuit of these goals and not other goals. It also involves defining what an institution will not do, which is one of the most difficult – and important – aspects of competitive strategy.
What is Marketing and Why is it so Strategic?
Peter Drucker once said, "Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs." I realize that some may take issue with characterizing higher education as a business and/or students as customers, but you get the point.
Marketing dovetails with strategy in understanding the overall market and the desires and unmet needs of target audiences. According to the American Marketing Association, “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”
Creating and delivering offerings that have value for customers (i.e., students) and society at large is something universities throughout the world have done for a very long time. However, as competition increases, technology changes how educational offerings are created and consumed and student needs evolve, schools are forced to rethink whether their resources and operations are properly aligned to offer programs that are unique and valuable in the educational marketplace.
Worldwide demand for education is increasing but even in this scenario there will be winners and losers. Schools that insist on doing more of the same – perhaps only better – may find it difficult in the near future.
How Marketing Relates to Strategy
Most people think of marketing as an outwardly facing function focused on creating a positive image for the organization. This is true, but only a small part of the story. True marketing includes a clear idea of what business you are in and who you are trying to serve, what prospective students and employers value, what people (including those internal to the university) believe about the capabilities of your institutions, and how these capabilities can be aligned to satisfy evolving needs.
It begins with research – some internal, some external, some primary, some secondary, some qualitative, and some quantitative. A look at hard data on admissions, enrollment and graduation trends, faculty hiring and promotion, research funding, individual and corporate giving, and student satisfaction data are appropriate places to begin. From there, look more broadly at educational trends and competitor data to see what can be learned about the school’s relative position.
Once some of the baseline data has been collected and analyzed, it’s time for discussion.
What interesting trends come to light? What surprises people? What assumptions no longer hold up? Is this where the school wants to be? What threats appear more prominent now? What opportunities might be attractive for the school to pursue?