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Case Presentation MAPLE UNIVERSITY. Agenda  Executive Summary  Mission Statement  External Analysis  SWOT  Financial Analysis  Strategic Alternatives.

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Presentation on theme: "Case Presentation MAPLE UNIVERSITY. Agenda  Executive Summary  Mission Statement  External Analysis  SWOT  Financial Analysis  Strategic Alternatives."— Presentation transcript:

1 Case Presentation MAPLE UNIVERSITY

2 Agenda  Executive Summary  Mission Statement  External Analysis  SWOT  Financial Analysis  Strategic Alternatives  Recommendation  Implementation  Operational Issues  Action Plan  Value Creation  Conclusion

3 Executive Summary MU is a small Canadian university in Central Ontario Focus on quality teaching and post-grad employability Less attention given to research Despite nation-wide growth, MU has experienced operating deficits and declining enrolment Four strategic alternatives available to the Faculty of Business 1) Create a business research and consulting centre 2) Initiate a co-operative education business program 3) Establish a not-for-profit undergraduate program 4) Offer business education seminars

4 Executive Summary (continued) Recommendations Initiate a co-operative education business program Create a business research and consulting centre Operational issues addressed Facility size/growth constraints Alumni donations International student enrolment Intra-university competition between faculties Results Enrolment increase of over 20% in the first five years Operating surpluses after the second year

5 Implied Mission Statement To provide innovative yet fundamentally sound undergraduate and graduate business education, as well as related applied research that serves the needs of students, employers, and the community.

6 External Analysis  Enrolment is driven primarily by the youth cohort  Intense competition within the industry (LINK)  Full-time enrolment increasing, due to labour market demand for university education (LINK)  International student enrolment increasing rapidly (LINK)  Business Management programs rising in popularity

7 External Analysis Competitor Strengths and Weaknesses (MAKE INTO VISUAL AND LINK)

8 International Student Enrolment (use for LINK) 1/5 th of international students studied Business and Management in 2004

9 Canadian Labour Market Trends (LINK)

10 Key Industry Success Factors 1. Well-educated, experienced and dedicated professors 2. An atmosphere suitable for learning - Acceptable student/teacher ratio - Access to adequate facilities & resources 3. Progressive programs that give students a competitive advantage in applying for lucrative, full-time employment 4.Research which benefits society and the community

11 SWOT Strengths Low student : faculty ratio Experienced professors across departments Strong Accounting program Safe, well-maintained campus Weaknesses Enrolment is declining Current facilities are inadequate International student enrolment is below average Inability to retain and attract talented faculty members Lack of intra-university cooperation among faculties Alumni relations deteriorating Opportunities Business programs showing largest increases among Canadian undergrad programs Number of international students expected to grow rapidly Increased demand for university education in the labour market Business investment in university research continues to increase Threats  Increased competition for international students  Competition boasting higher job placement rates  Thriving business programs at neighbouring institutions

12 Current Value Curve

13 Current Financial Analysis Operating deficit of $2.8 million in 2007/2008 academic year Student enrolment down 4% over the past 4 years (282 students) Costs increasing, leading to significant losses Industry Profitability Benchmark

14 Current Financial Analysis Debt Service Benchmark Liquidity Benchmark

15 Strategic Alternatives  Alt 1: Create a Centre for Excellence in Business Research and Consulting  Alt 2: Offer a Co-Operative Education Business Program  Alt 3: Offer a Not-for-profit Undergraduate Program  Alt 4: Offer Business Education Seminars

16 Board Mandate 1) Increase overall enrolment by 15 percent over 5 years 1 faculty member and 1.5 staff members may be added for every 40 additional students. 2) Ensure that each new program or initiative should generate a small operating surplus by the end of its third year. 3) Develop alternate revenue sources so that tuition increases can be held to 4 percent per year. 4) Focus on meeting increasing demands, on the part of students and employers, for employability-based education. 5) Develop initiatives that have long-term sustainability for MU.

17 Alt 1: Create a Centre for Excellence in Business Research and Consulting Pros Cons Alternative revenue source Attracts professors who want to do top-quality research Enhances MU’s reputation Meets the Board’s faculty hiring restriction Positive NPV of $1.1M and operating surplus achieved by end of first year Increased demand for externally funded research Professors may neglect teaching duties Senate wants to preserve academic integrity and not compromise high-quality education Faculty Union is against “commercialization” of MU Will not likely meet Board mandate requirements for student growth

18 Alt 2: Offer a Co-Operative Education Business Program Pros Cons Increases student enrolment by 4- 7% per year MU’s job placement rate for its business graduates would increase Positive NPV of $1.7M, exceeds Board’s profitability requirements MU builds strong relationships with corporations Employers can take advantage of $1K Ontario Co-Op Tax Credit Student-to-faculty ratio will increase Strong competition in terms of co-op programs Location of university is a distance from large metropolitan areas and corporate offices Space constraints by September 2012 due to the increased number of students

19 Alt 3: Offer a Not-for-profit Undergraduate Program Pros Cons Faculty expertise already in-house (Dr. Anita Nakin) Little cost and effort to develop program Distinct, niche program Program delivers a positive NPV of $1.3M and is cash flow positive after the first year of operations Relying on expertise of single faculty member approaching retirement Increase in marketing costs ($25K+ annually) Does not meet the Board’s student growth mandate

20 Alt 4: Offer Business Education Seminars Pros Cons Provides alternative revenue source Positive NPV of $154K meets Board’s profitability mandate HR professors have considerable expertise in the area of leading teams and organizational culture Strong demand for HR-type seminars Enhances relationships with businesses Takes focus away from serving current students Competition locally and from universities located in large municipalities. Could cannibalize part-time enrolment Does not address Board’s mandate to increase student enrolment

21 Recommendation It is recommended that the Faculty of Business at MU implement the following two strategic alternatives: 1)Co-Operative Education Business Program 2)Centre for Excellence in Business Research and Consulting Decision Criteria

22 Adherence to Board Mandate Enrolment growth Staffing Restrictions

23 Adherence to Board Mandate Operating Surplus by Year 3

24 Strategy Map Create a team environment Co-Op management database IPO Information System Establish relationships with businesses (employment opportunities for Co-Op, corporate funding for research) Research programs to attract and retain talent Student Focus Progressive programs Renowned and dedicated professors Atmosphere suitable for learning Increase tuition revenue via Co-Op business program and international students Increase donations and research funding

25 Revised Mission Statement The Faculty of Business at Maple University exists to serve its students and prepare them for their professional careers by providing knowledgeable and renowned staff, state-of-the-art facilities, and a curriculum geared towards employability-based education.

26 Implementation Risk Mitigation (Co-Op) Agreement Between Senate and Board Risk: Tension has existed between the Senate and the Board as academic goals have conflicted with budget constraints Mitigant: Approval should be sought before November 2008, to allow as much time as possible for unexpected delays and questions surrounding the program. Competitive Risks Risk: Nine other Ontario universities with Business Co-Op programs Mitigant: Information booklets provided to potential employers, introducing and outlining the new Co-Op program Mitigant: Director should take an active role in building relationships with potential employers

27 Implementation Risk Mitigation (Co-Op continued) Operational Execution Risk Co-Ordination with Companies Risk: May take time for Co-Op program to establish a reputation in the business community Mitigant: Prompt hiring of Co-Op director and admin staff will ensure early planning and co-ordination of program (establish program scope, potential employers, establish contacts)

28 Implementation Risk Mitigation (Research) Agreement Between Senate and Board Risk: Senate may view Research centre as a hindrance to academic integrity Mitigant: It must be communicated that the Research centre will help attract top-quality professors, that will in turn improve the learning environment for students Competitive Risks Risk: All universities have research capabilities, creating intense competition for research funding Mitigant: Promote past successes in research to attract corporate funding

29 Implementation Risk Mitigation (Research continued) Operational Execution Risk Risk: Faculty Union is against “commercialization” of MU’s research Mitigant: Policies that ensure top researchers selected for course releases should also have excellent teaching performance

30 Implementation Change Management Co-Operative Education Program Appoint HR professor with considerable expertise in leading teams to position of Co-Op Director The director will develop and facilitate the integration plan, which includes: communication, program planning, marketing, and staff support. Centre for Excellence in Business Research and Consulting Co-ordination between Director of Research and VP of Research to integrate new research operations with Innovation Promotion Office (IPO) Dean of Business needs to ensure that professors are able to devote sufficient time to courses not released to part-time lecturers

31 Organizational Structure

32 Operational Issues Facilities Space constraints – can accommodate only 1,700 FTE students (will run out of room in 2012/2013) Classrooms are not suited to the discussion format used in most business courses and there are no small rooms for group projects Facility Growth Constraints

33 Operational Issues Facilities (continued) Recommendation: Build the Harding School of Business Financing

34 Operational Issues International Students Currently MU is well below the national average of international student enrolment (0.5% of current enrolment vs national average of 7.0%) Recommendation A strong advertising campaign would help communicate MU’s commitment to international students Lower TOEFL entrance requirements to national average Provide support groups for new international students

35 Operational Issues Faculty Staffing Difficulty attracting and retaining high-profile professors due to MU’s location, size, and lower emphasis on research compared to teaching Recommendation New Centre for Excellence in Business Research and Consulting mitigates this issue by providing a more attractive environment for faculty Quality of Work MU’s focus on excellence in teaching is compromised by existing policies that protect tenured professors despite poor teaching performance Recommendation Process of becoming tenured professor should be revised to have an equal emphasis on research and teaching

36 Operational Issues Intra-University Competition Between Faculties Lack of co-operation between faculties due to conflicting goals Faculties competing for limited funding dollars Recommendation Create a “stakeholder” balanced scorecard; a framework for decision making and evaluation that considers various stakeholder groups

37 Stakeholder Balanced Scorecard

38 Operational Issues Marketing and Alumni Department Alumni Relations have been deteriorating Recommendation Utilize university data on past students’ program of study, and tailor fundraising accordingly Increase number of alumni functions to create a sense of belonging and care for the school

39 Revised Value Curve

40 Strategic Action Plan Co-Operative Education Program

41 Strategic Action Plan Centre for Excellence in Business Research and Consulting

42 Operational Action Plan

43 Operational Action Plan (cont’d)

44 Value Creation

45 Conclusion MU has experienced operating deficits and declining enrolment despite industry growth Below average placement rates Limited reputation and prestige Resolve these issues with: Co-Operative Education Business Program Centre for Excellence in Business Research and Consulting To ensure these initiatives are successful, effective promotion is key Communicate value to students and businesses Results Greater than 20% increase in student enrolment for the Faculty of Business in the first five years Stronger reputation Sustainable growth

46 Thank You.

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