Council for Christian Colleges and Universities Christian Colleges and Proprietary Schools Friday, March 25, 2011

1. Council for Christian Colleges and Universities Christian Colleges and Proprietary Schools Friday, March 25, 2011 Chief Academic Officers Conference Dr. David L. Anderson Associate Professor Trinity International University

2. 1LORD, our Lord,    how majestic is your name in all the earth!    You have set your glory    in the heavens. 2 Through the praise of children and infants    you have established a stronghold against your enemies,    to silence the foe and the avenger. 3 When I consider your heavens,    the work of your fingers, the moon and the stars,    which you have set in place, 4 what is mankind that you are mindful of them,    human beings that you care for them?[c] 5 You have made them[d] a little lower than the angels[e]   and crowned them[f] with glory and honor. 6 You made them rulers over the works of your hands;    you put everything under their[g] feet: 7 all flocks and herds,    and the animals of the wild, 8 the birds in the sky,    and the fish in the sea,    all that swim the paths of the seas. 9 LORD, our Lord,    how majestic is your name in all the earth! Psalm 8

3. Continued Growth of a College • Marketing • To know and understand the consumer so well that the product or service fits the consumer and sells itself. • Growth, expansion, change • Where is the customer? • What does the customer buy? • Innovation • Task of endowing human and material resources with new an greater wealth-producing capacity.

4. Three Assumptions A Theory of the Organization Applied to Colleges - Peter Drucker • Environment of the Organization • Society and its Structure • Market • Customer • Technology • Specific Mission of the Organization • Core Competencies Needed to accomplish the • organization’s mission

5. Peter Drucker: Organizational Leadership and Competition • Decentralization and simplification. • Skepticism of macroeconomic theory. • Respect of the Worker. • “The Sickness of Government.” • The need for "planned abandonment." • Taking action without thinking is the cause of every failure.[33] • The need for community. • The need to manage business by balancing a variety of needs and goals. • A company's primary responsibility is to serve its customers. • An organization should execute its business processes. • Companies could stand among humankind's noblest inventions.[38]

6. History of Proprietary Colleges DeVry University/Keller Graduate School Phoenix University Bryant and Stratton ITT Technical Institute

7. Current Regulations In Regard to Proprietary Colleges Department of Education Proposed Regulations Congressional Response

8. Positioning for Response by the Christian Colleges

9. Customer Value Chain Value Chain • A linked set of activities from raw material to end use product for the customer. Procurement R&D Manufact- uring Marketing Distribution Service Value chain Customer Basis

10. Drive and Mature Pipeline Peoplesoft SAP MRP II Quicken Books Choose the value Provide the value Communicate the value Customer Segmentation Market Selection/ Focus Value Positioning Product Develop- ment Service Develop- ment Pricing Souring Marketing Distribution Servicing Sales Force Sales Promotion Advertising Strategic Marketing Tactical Marketing

11. Value Chain Value System SUPPLIER VALUE CHAINS FIRM VALUE CHAIN CHANNEL VALUE CHAINS BUYER VALUE CHAINS In the “value system,” the supplier, firm, distributor, and buyer value chains overlap. The supplier’s outbound logistics is the firm’s inbound logistics. The supplier’s outbound logistics is the firm’s inbound logistics, etc.

12. Sources of Strategic Issues Most critical external issues * Competition * Industry trends * Market trends * Other trends and threats Most salient internal issues Strategic * Financial weaknesses Issues * Weaknesses, problems * Labor Costs Other options worth considering Alternatives Analysis

13. Four Specifications of the Organization - Peter Drucker • Assumptions must fit reality. • Environment • Mission • Core competencies • Assumptions in all three areas must fit one another. • Theory of the business must be known and understood throughout the business. • Theory of the business must be tested constantly.

14. Warning Signs: Business Can Become Obsolete - Peter Drucker • Organization Can Achieve its Original Objectives • Too Rapid Growth • Unexpected Success • Unexpected Failure

15. Customer Supply Chain (Michael Porter) Firm Infrastructure Human Resource Management Technology Development Margin Procurement Inbound Logistics Outbound Logistics Marketing & Sales Margin Service Operations Sales Force Admin. Sales Force Oper. Marketing Management Technical Literature Advertising Promotion

16. Business Objectives: What Should our Business Be? Business Objectives are the foundation for designing both the structure of the business and the work of individual units and individual managers. - Peter Drucker • Fundamental strategies of business. • Must be operational. • Must make possible concentration of resources and efforts. • Must be multiple rather than singlular. • Needed in all areas in which business survival depends.

17. Environmental Changes to Generate the Future Systematic Search - Peter Drucker • Has anything happened that might establish a pattern for our industry, our country, our market? • Is anything happening in the structure of an industry that indicates a major change? • What do generally approved forecasts assert will likely happen in 10, 20, or 30 years? • Has change already taken place?

18. Increased Accuracy of Measurement • Cost, Revenue, Profit, Investment Center • Strategic Business Unit • Critical Success Factors • Core Competencies

19. An Idea must have: - Peter Drucker • Operational validity • Economic validity • Aim at Social Reform • Test of personal commitment

20. Five Forces Model (Michael Porter) Threat of new entrants Potential Entrants Bargaining power of suppliers Industry Competitors Bargaining power of buyers Suppliers Buyers Rivalry Among Existing Firms Threat of substitute products or services Substitutes

21. What is Strategic Planning? - Peter Drucker The continuous process of making present risk-taking decisions systematically with the greatest knowledge of their futurity. Organizing systematically the efforts needed to carry out these decisions. Measuring the results of these decisions against the expectations through organized, systematic feedback.

22. Critical in Strategic Planning? - Peter Drucker The systematic and purposeful work on attaining objectives New and different ways to obtain objectives • It is more than a bundle of techniques. • It is more than forecasting. • It deals with the futurity of present decisions, not with future decisions. • It is an attempt to understand risk, not eliminate it.

23. Market Segmentation

24. Environmental Snapshot

25. Key Factors for Strategic Success Management Actions and Strategies Foundation Factors • Size • Geographical scope • Product scope • Organization structure • Technological resources • Knowledge resources • Establishing switching costs • Exploiting knowledge • Developing response strategies • Managing risks Environment Firm Performance

26. Generic Competitive Strategies Competitive Advantage Lower Cost Differentiation Cost Leadership Differen-tiation Broad Target Competitive Scope Focused Differen-tiation Cost Focus Narrow Target

27. Strategic Analysis Model Situation Analysis Recommendations Alternatives Analysis External Review Industry Analysis Competitive Analysis Market Analysis Environmental Analysis Short-Term Plans Goals & ObjectivesStrategic IntentPrograms Contingencies Strategic Issues Identifying Strategic Alternatives Internal Review Financial Analysis Strengths & Weaknesses Opportunities & Threats Long-Term Plans Goals & ObjectivesStrategic Intent Programs Contingencies Arguing For and Choosing a Preferred Strategy 2. Where do wewant to go? 3. How can weget there? 1. What is thecurrent situation?

28. Strategic Alternatives Staying in the same business: • Concentration – Product or market development • Vertical Integration – Forward or backward • Acquisition of or merger with a competitor • Harvest or be acquired • Retrenchment and Turnaround (including Bankruptcy Chapters 11, 13) • Low-cost leadership, differentiation, or focus • Strategic alliances, including joint ventures Exiting the business: • Liquidation Entering another business: • Diversification through acquisition – related or unrelated business • Internal diversification

29. Council for Christian Colleges and Universities Christian Colleges and Proprietary Schools Friday, March 25, 2011 Chief Academic Officers Conference Dr. David L. Anderson Associate Professor Trinity International University