Competitive advantage: The effect of market competition on the formation of strategy in small business school higher education

Theodore R. Richardson, University of Pennsylvania

Abstract

A competitive advantage exists when either an organization's product or service offers the same benefits to consumers at a lower cost or exceeds those benefits (Porter, 1980). Well known business schools such as the Wharton School, at the University of Pennsylvania, and the Harvard Business School, have a built-in competitive advantage in that both schools are ranked within the top three of all business schools, have large endowments, and brand names that provide a differential advantage over the competition. Small business schools rarely have separate endowments and are challenged with scarce resources. Therefore, enrollment is important for small business schools to survive in an increasingly competitive higher education market. This dissertation asks the following questions: (1) what is the nature of their planning processes used in the formation of business school strategy and mission; (2) how, if at all, do case study business schools analyze their competitive position in regard to other business schools in their strategy and mission; (3) with decreases in student demand, how are unranked accredited business schools using competitive advantage to find new areas for student growth; (4) in an attempt to gain competitive advantage, have institutions modified their mission or their strategic plan in reaction to external market forces, if so, in what ways do they develop their strategies and competitive advantages? To answer these questions three small business schools were chosen in the upstate region. Due to the sensitivity of the topic all three institutions were granted anonymity. Each school is accredited by AACSB and is not ranked. All three schools are challenged with enrollment declines as well as increasing competition from ranked and for-profit schools in their respective location. The research is qualitative with interviews of presidents, provosts, senior administrators and senior faculty. Interviews are coded using key areas such as competition, markets, marketing, strategy, and curriculum. Strategic plans, mission statements, and historical documents were reviewed. The research shows that even though small schools are aware of their competitors, they do not sufficiently take them into account in seeking to establish competitive advantage. They thus make themselves even more vulnerable to market forces.

Subject Area

Higher education|Business education|Marketing

Recommended Citation

Richardson, Theodore R., "Competitive advantage: The effect of market competition on the formation of strategy in small business school higher education" (2006). Dissertations available from ProQuest. AAI3209972.
https://repository.upenn.edu/dissertations/AAI3209972

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