sector?
The theoretical bases underpinning current strategies of universities (as suggested by relative frequency of occurrence of concepts in strategic plans) are discernible when those strategies are evaluated in light of models and/or frameworks prominent in the literatures of marketing and strategic management. In the following section, a number of these models and/or frameworks – marketing concept, generic strategies, market position strategies, competencies
and capabilities, assets and resources based view of competition, learning organisation, and market orientation - are described briefly. Their relevance to the underpinning of strategies apparent in university plans is discussed.
Since its emergence in the post-World War II business boom, as marketplaces became increasingly crowded with producers serving the same groups of customers (Cincotta et al., 2000, p.11), the marketing concept has underpinned competitive strategy in many of the world‟s leading companies. Listing Coca-Cola, McDonald‟s, Nestle, Mitsubishi, and Woolworths among companies that owe their success to their commitment to marketing principles, Kotler et al. (2004, p.20) defined the marketing concept as the management
philosophy which holds that achieving organisational goals depends on determining the needs and wants of target markets, and delivering the desired satisfactions more effectively than competitors. That Australian public universities are conscious of the value of adherence
to the marketing philosophy is suggested by the relative prominence in strategic plans of concepts such as students, teaching, support, and outcomes (see Tables 3.10, 3.11 & 3.12). Log book extracts provide further support for this contention, as these examples show: The
University will be responsive to industry needs … developing processes and practices that reflect a strong client focus (Charles Darwin University, LBR: Strategic Directions.htm#S1_160); Universities will be increasingly influenced by market judgments
about the relative quality of higher education programs and qualifications (University of
Southern Queensland, LBR: USQ Strategic Plan 2002 – 2004. doc~1.html#S1_32); and, To
compete for funding and students in the international arena we must continually embrace a customer service ethos (University of Adelaide, LBR: StrategicPlan2004-2008.pdf~S1_58).
Proponents of generic strategies as the bases of competitive behaviour, first brought to prominence by Michael E. Porter in 1980 and still influential today, hold that differentiation, low cost, and focus are fundamental in building and maintaining sustainable competitive advantage. The development of superior research facilities and infrastructure by Sandstones (suggested by prominence of concept of facilities in strategic plans of universities in that category, see Table 3.11) give an indication of the adoption by Sandstones of differentiation strategies. Similarly, high priority given to innovation in teaching programs and to establishing close links with industry by Unitechs category (as suggested by the prominence of concepts of innovation and industry in the strategic plans of universities in that category, see Table 3.11) appear to indicate adoption of differentiation strategies. While concepts
suggesting adoption of a low cost strategy are less evident, the log book of at least one university (RMIT University, LBR: RMITU stratplan to 2006.pdf~html#S1_33) provides some evidence of their application: We need to work in ways that … improve the scale of our
operations using low cost delivery models while maintaining a critical focus on quality.
Prominence of the concept of region in strategic plans of James Cook University, University of the Sunshine Coast, and University of Ballarat (see Table 3.12) suggests an adherence to a focus strategy. It seems likely that these universities will rely strongly on their concern for the social, cultural, and economic development of their local regions in their quest to maintain and improve competitive position.
Also suggested by prominence of the concepts of region and community in strategic plans (see Table 3.12) are market position strategies, originally promulgated by Kotler and Singh (1981) but still at the heart of the quest for competitive advantage in classical marketing theory. Proponents of this view believe that there are four market positions - market leader, market challenger, market follower, and market nicher - and that competitive success can be achieved from any of these four positions provided that organisations adopt strategies that are appropriate to them. Prominence of the concept of research in the Sandstones category (see Table 3.12) might suggest adherence to a market leadership strategy, a desire to achieve market superiority and world renown through success in winning competitive research grants. That research is prominent also in strategic plans of universities in Redbricks and Unitechs categories seems to suggest some adherence to market challenger strategies, the quest of universities in these categories to erode the leadership status of Sandstones by winning a greater share of competitive research grants. Market nicher strategies are evident in the determination of smaller universities to build research concentrations in areas in which larger competitors cannot compete. The specialisation of James Cook University in issues of particular relevance to the tropics, and of University of Southern Queensland in distance learning (both referred to above in extracts from log books of these universities) are illustrative examples.
A level of adherence to the competences and capabilities view of competitive advantage (see Prahalad & Hamel, 1990; Stalk, Evans & Shulman, 1992) is also evident in strategic plans of universities. This view holds that market success depends upon identification of unique skills and attributes within organisations, and an on-going investment in them in order to build
stocks of them that competitors cannot match. Pfeffer (1994), for instance, argued that empowerment of people – giving staff more responsibility in decision-making – provided an organisational advantage that was difficult for rivals to counter. Stalk (1988) maintained that the ability of an organisation to be quicker than competitors in developing new products, identifying market trends, and responding to changing customer needs provided a strong competitive edge. Garvin (1986) asserted that quality was a weapon that, if used strategically, provided a strong competitive advantage. That this competencies and capability view has currency in underpinning strategies in universities is intimated by the following extract from the log book of the University of South Australia: [The university will pursue a] distinctive
mix of capabilities required to maintain our institution‟s competitiveness in a global market. Distinctive skills, competences and capabilities include ability to react faster than competitors to changes in market conditions, to produce outcomes of superior quality, to empower people to make decisions, and to form stronger and more productive alliances (LBR: UniSA
SP/UniSA 2010.htm#S1_32).
Barney (1991), Day (1994), Hunt and Morgan (1995), among others, approached the quest for competitive advantage from an assets and resources perspective, arguing that market success depends upon the ability of organisations to leverage tangible resources (physical, financial, human) and/or intangible assets (e.g., location, brands, patents, technological skill) to advantage. That some underpinning of university strategies is based on this view is suggested by log book extracts: We will use location (Canberra-based, single campus) as a strength (Australian National University, LBR: SP/_ANU_to_2005.pdf~1html#S1_77) and UTAS will
be supported by … its unique island setting [and] distinctiveness of Tasmania (University of
Tasmania, LBR: SP/Uni Tas stratplan.pdf~1html#S1_3).
Proponents of a learning organisation view of competition (Baker & Sinkula, 1999; Garvin, 1993; Senge, 1990) maintain that market success is heavily influenced by the ability of organisations, in environments in which change is a constant, to create and acquire knowledge, to retain it internally, to disseminate it successfully, and to use it to achieve competitive advantage. The following extract from the log book of the University of Queensland seems to indicate a degree of adherence to this view: We will … gather and use
information about the quality of teaching and learning and monitor the provision of curriculum and assessment that encourages and reinforces improvements in quality of teaching and learning (LBR: StrategicPlan2005.pdf~1html#S1_14).
Contending that a market orientation was the basis of market success, Kohli & Jaworski (1990), Narver & Slater 1990) and others argued that, to succeed in their competitive endeavours, organisations needed, first, to gain a comprehensive understanding of customers, competitors, technologies and exogenous agencies. Armed with this understanding they then needed to build an organisational culture that creates superior customer value. That thinking of this kind underpins strategy development in at least some universities seems apparent from the following log book extracts: Universities are following the corporate trend to global
marketing … Universities will be increasingly influenced by market judgments about the relative quality of higher education programs and qualifications (University of Southern
Queensland, LBR: USQ Strategic Plan 2002 – 2004.doc~1html#S1_22). (We will) need to
become more responsive to demands for more flexible course structures and delivery options from students with divergent needs and competing work commitments (University of
Melbourne, LBR: UMelb Strategic Plan04.pdf~1html#S1_78).
Q3: Summary of Results
1. Relative prominence of in strategic plans of universities provides an indication of the theoretical underpinning of strategies adopted in response to rapid intensification of competition (see Table 3.12).
2. Strategies adopted by universities in response to rapid intensification of competition appear to be underpinned by models and/or frameworks that include marketing concept, generic strategies, market position strategies, competencies and capabilities, assets and resources based view of competition, learning organisation, and market orientation.
3. Similarities in strategic approach of universities in all categories are apparent (see Table 3.12).
4. Log books generated by Leximancer lend support to these findings.
The significance and implications of these findings are outlined in the Discussion section below.
Discussion
In this section, results of Study 1 are discussed, and their implications for theory and practice examined. Limitations of Study 1 are outlined, and directions for extension of this investigation are provided.
Question 1: What is the current level of concern of universities with rapid intensification of competition in the global higher education sector?
Findings of content analysis of strategic plans fail to provide a definitive answer to this question. However, relative prominence of the concept of competition in strategic plans suggests that levels of concern with intensification of competition in the global higher education sector are, at best, moderate. In aggregated strategic plans of universities, the concept of competition is at position 22 among 100 top-ranked concepts (see Table 3.2). While the concept of competition is at position 14 among 100 top-ranked concepts in strategic plans of Sandstones category universities in aggregation (see Table 3.3), it is not prominent in the plans of universities in other categories, where it ranges from position 48 in New category to position 61 in Gumtrees category (see Tables 3.4 – 3.8). Although competition is ranked in position 6 among concepts in the strategic plan of one university (University of Melbourne), and in position 12 in another (University of Western Sydney), it is ranked no higher than position 30 in the plans of other universities.
Perhaps the most obvious interpretation of these findings is that most universities are not as concerned about rapid intensification of competition in the sector as many commentators (e.g., Brown, 2005; Coaldrake & Steadman, 1998; Davis, 2006a; Marginson & Considine, 2000; Maiden, 2005; Peacock, 2005; AVCC, 2005) believe they are, or should be. However, at least two other interpretations are possible. The first of these is that rapid intensification of competition in the higher education sector is not as serious an issue as many commentators believe. Moodie (2005) provided support for this interpretation. Commenting on a recent offer by the South Australian Government of a subsidy of A$20 million to Carnegie Mellon, a private US university, to establish a campus in Adelaide, he noted:
It expensive … it seems that highly ranked overseas universities are not interested in establishing even a minimal teaching centre in Australia without
substantial subsidies. So contrary to recent speculation, Australian universities do not seem vulnerable to competition from prominent overseas universities establishing branch campuses in Australia (p.34).
However, others disagree. Commentating on the establishment by well-known overseas universities of campuses in the Asian region, most notably in Singapore, Beijing, Hong Kong, and Shanghai, Davis (2005, p.29) argued that: Australia is a logical next step … [It] is a small
market but a wealthy one … the international market may soon deliver local choices.
Gardner (2005) was of the same opinion:
Perhaps because of our small population and relative geographic isolation, Australia has not yet witnessed many international or transnational providers seeking to operate here. However, our proximity to Asia, our stable political system, our standard of living and the potential for immigration based on skills shortages added to government policies actively encouraging the growth of a diverse, private post-secondary education sector all make us an attractive destination for some seeking to invest in for-profit education or set up campuses here (p.5).
The threat from well-established overseas universities, such as that discussed by Moodie (2005), Davis (2005, 2006a) and Gardner (2005), is compounded by a growing presence in the domestic market of a range of alternative providers of higher education - corporate, virtual, and for-profit. According to the Australian Council for Private Education and Training (ACPET, 2004), the largest body representing the private education sector in Australia with approximately 700 members delivering higher education, vocational education and training, as well as English language (ELICOS) programs, the number of students being trained by private providers increased from 23,000 in 1995 to more than 200,000 in 2004 – an increase of over 700% (p.1). In 2005, students in tertiary-level courses offered by thirty-three of these providers, in fields such as divinity, natural therapies, music, hospitality information technology and public safety, were eligible for the same FEE-HELP assistance as that available to students in public universities (DEST, 2005). While Gallagher (2000, p.20) suggested that this increase in numbers of private providers of tertiary education is a good thing, in that the responses of Australian universities to the possible threats and probable
should act to further diversify our system, it is nevertheless surprising that not more attention
is being paid to them in the strategic planning of public universities.
Debate fuelled by release in March 2005 by the Federal Minister for Education of Building
University Diversity: Future Approval and Accreditation Processes for Australian Higher Education, an issues paper intended to stimulate discussion about possible relaxation of
protocols regulating the setting up of universities in Australia, adds yet more weight to the view that even greater prominence of competition in strategic plans was to be expected in strategic plans. The Minister, noting that it is increasingly likely that private institutions,
including those from overseas, will seek to establish higher education operations in Australia, with some providers seeking a marketing edge through access to the title „university‟ (p.2),
asserted that the present requirement under the Protocols for a university to undertake
research and to teach across a breadth of areas of study (p.2) were placing considerable cost
and other barriers to the emergence of new private universities. At the centre of this debate is the question of whether current protocols constrain diversity, and should therefore be relaxed, or whether these protocols protect high quality, and should therefore be retained. Whatever the outcome of this debate, it will have serious implications for Australian universities. While relaxation of protocols might enable existing smaller universities to make more productive use of limited resources by allowing them to focus on their specialties in teaching and/or research, it will undoubtedly mean that an even greater number of rivals will emerge, all seeking high quality students and staff, and all competing for already scarce funding.
However, a third interpretation of findings in regard to Question 1 is possible. This interpretation relates to the nature and purpose of published versions of strategic plans. As observed earlier, the low prominence given to the concept of competition in strategic plans – or, indeed, its total absence from them - does not necessarily mean that universities are not deeply concerned, in reality, with increasing competition. By its very nature, strategic planning is a highly sensitive activity. It would be unreasonable to expect universities to disclose material that would alert competitors to their intended courses of action in documents they make freely available on their Web pages. Thus, published versions of strategic plans of some universities may be intended to serve purely as public relations documents, communicating mission and broad direction to all stakeholders, and engendering support. That said, however, it is difficult to review these findings without concluding that strategic planning is still not being given the attention it deserves; that six of the nine universities in
whose strategic plans the concept of competition is ignored are in one category – Gumtrees – seems to confirm the deficiency, noted by Anderson et al., (1999) in this respect.
In summary, content analysis of strategic plans does not provide a clear answer to Question 1. Manifest results of Study 1 and alternative interpretations of those results indicate that the starting point for further investigation is the following proposition:
P1: Levels of concern of universities with rapid intensification of competition in the global higher education sector are low.
Question 2: How are universities responding, if at all, to rapid intensification of competition in the global higher education sector?
Again, findings of content analysis do not provide a clear answer to this question. However, prominence of students (ranked at position 1 among the 30 most frequently occurring concepts in aggregated strategic plans; see Table 3.10), research (ranked 2), staff (3),
community (4), education (6), teaching (7), learning (8), strategic (9), programs (10), quality
(11), resources (14), services (18), funding (19), outcomes (20), growth (25), region (29), and
world (30) suggest a common concern of universities with enhancement of the following:
student outcomes; student support and satisfaction; teaching and learning; research quality and outcomes; recruitment and retention of high-calibre staff; the quest for additional funding from both public and private sources; involvement with community and region; university growth and development; facilities and infrastructure; internationalisation; and innovative use of existing resources.
The basis for this suggestion is that, in adopting many of the forms of private-sector corporations in their structure and governance, universities appear to have adopted strategies that have brought success to major business enterprises worldwide. For instance, in their determination to create satisfying outcomes for students, and to provide them with outstanding levels of support, universities can be seen to be following the example of successful corporations that believe client satisfaction is the key to success. For example, in its Mission and Values Statement, Avis states: We will lead our industry by defining service
individualized rental experience that ensures customer satisfaction and earns the unwavering loyalty of our customers (www.avis.com, 2005). Woolworths expresses the same idea: Everything we do is driven by a commitment to providing customers with … the best possible service (www.woolworths.com.au, 2005).
In their concern for quality as a strategic weapon in their quest for competitive superiority, too, universities can be seen to be following the example of successful private-sector corporations. Nestle, for instance, claims that: Quality is the cornerstone of our success … It
is the key to our success, today and tomorrow” (www.nestle.com, 2005). McDonald‟s, declared: We care about what you and your family eat. That‟s why we take great pride in the
quality of our food. Since our first restaurant was built, we have purchased quality ingredients from trusted, industry-leading brands … We call it our quality promise
(www.mcdonald‟s.com/usa, 2005). This same concern with quality among leading private- sector corporations was highlighted by Ford Motor Company president, Jim Padilla, in a recent address to employees. Globally, he said, our quality performance and improvement
have not been satisfactory … Our competitors are moving faster than Ford to improve their quality and we need to turn this around now (Mayne, 2005, p.17).
In fostering strong community relations as a strategy, universities can be seen to be doing