The situation is common. Your college is contemplating a new online program and you want to know how competitive it might be. Or, your college needs to evaluate how well its online programs compare with those of peer institutions, or with those of colleges in its region, or with those of institutions with which it competes for students. These are all questions about assessing a college's competitive advantage. Put another way, how can planners help institutions understand and improve their competitive position? The answer lies in using the Internet to find important information. During the late 1990s and thereafter, every higher education institution went online to create a Web site that would promote its offerings, describe what makes it distinctive, and put major services at students' fingertips. This is called the institution's "virtual face": the Web-based face it has intentionally created to impress, recruit, and serve its students.
How can planners help institutions understand and improve their competitive position?
While that virtual face is accessible to anyone, it can be particularly helpful for planners who want to evaluate how competitive an institution or program is compared to other institutions or programs. This article outlines a method for planners to use when investigating their own or other institutions to assess competitive advantage.
Competitive advantage. While the concept of "competitive advantage" may not be well known in higher education, it can be valuable for assessing areas in which institutions compete for students or other resources (e.g., state appropriations, grant funding, press coverage). In the business world, competitive advantage results from either a cost advantage or a differentiation advantage (Porter 1998). A cost advantage occurs when a college can offer the same benefits as its competitors but at a lower cost. A differentiation advantage occurs when a college can offer greater benefits than its competitors. In the world of competitive online education, for instance, competitive advantage may result from a cost advantage (offering a similar program at a lower cost) or from a differentiation advantage (offering better education or services at the same cost). In online education, advantages may also include greater flexibility or convenience of coursework.
Meyer (2004) explored the possible influence of competition on program quality, but it is difficult to assess the impact of competition other than by monitoring how students "vote with their feet" This is certainly useful, but it does not detail the reasons why students choose one online program over another. Competitive advantage also has a role in achieving financial sustainability for online programs (Meyer, Bruwelheide, and Poulin 2009), although this concept begs for a method to determine whether a program or college has such an advantage or not. In their study, Meyer, Bruwelheide, and Poulin used the expertise of directors of online learning to identify possible areas that lead to a competitive advantage in online education, but this is a field that is clearly open for other researchers to explore.
Sources of information. Clearly, there are many ways to evaluate one's institution against others. U.S. News & World Report (USN&WR) produces rankings and publishes guides to the "best college" by region, Carnegie type, and discipline using data on incoming students, faculty, and institutions. One advantage of the USN&WR rankings is that they are provided by a third party, although some claim that ranking gains are manipulated by institutions themselves (Ehrenberg 2002). Another advantage of the USN&WR rankings is that they allow colleges to see other institutions' data and to adjust their own practices accordingly. For example, USN&WR includes data on the average score of incoming freshmen on standardized tests. A college may look at these data and decide to adjust its recruiting practices or its cutoff score for admissions. …