Globalisation Strategies for Business Schools

Transcription

1 Globalisation Strategies for Business Schools George S. Yip Dean Rotterdam School of Management Erasmus University

2 The World is Not That 2

3 Or this 3

4 The World by Population 4

5 The World by GDP 5

6 What Does Globalization Mean for Business Schools? Sourcing of students Sourcing of faculty Location of programs and campuses New competitors What our customers want Need to take a strategic perspective Need to analyze entire value chain 6

7 This is the World of Our Customers United States: R&D Center Manufacturing Plant Canada: Marketing Subsidiaries United Kingdom: Four Manufacturing Plants Germany: Eight Manufacturing Facilities Corporate Headquarters Russia: Kaliningrad Assembly Plant Switzerland: Manufacturing Plant R&D Center China: Shenyang Joint venture with Brilliance China Automotive Mexico: Marketing Subsidiaries Egypt: Kairo Assembly Plant Thailand: Rayong Assembly Plant Malaysia: Kuala Lumpur Assembly Plant Indonesia: Jakarta Assembly Plant Brazil: Curitiba (Tritec Motors) South Africa: Rosslyn Manufacturing Plant 7

8 The Internationalist HOME BUSINESS 8 Source: José de la Torre, UCLA

9 The Federalist HOLDING COMPANY 9 Source: José de la Torre, UCLA

10 The Global Maximizer Global HQ 10 Source: José de la Torre, UCLA

11 Our Graduates Will have to be Able to Work Anywhere with Anyone 11

12 Why Does Strategy Matter? Effective strategy gets you better performance with fewer resources. 12

13 Why Is Strategy Difficult? If managers were going to do it anyway, you would not need a strategy. 13

14 A General Definition of Strategy A planned, thought-out, perhaps indirect, way of achieving an objective. Typically in contrast to a direct approach that takes the shortest, most costly path. 14

15 Examples of Strategy Example Objective : overtake the market leader in terms of market share Non-strategic approach : outspend in promotion Strategic approach : develop a sequence of multiple moves, some indirect, which in total cost less than the direct approach and has a higher chance of success. 15

16 Types of Strategy Therefore A corporate strategy seeks to achieve corporate objectives. A business strategy seeks to achieve business objectives. A marketing strategy seeks to achieve marketing objectives. Etc. 16

17 Effective Strategies 1. Fits strategies of higher level units 2. Guide decisions and actions for own unit 3. Guide decisions and actions for other, especially, lower units 4. Achieve synergies Danger of strategy disconnects. 17

18 Strategy as Guidance Strategy provides guidance for how operating decisions and actions support strategic objectives. Strategic Objectives e.g., dominate premium end of market Strategy Operating Decisions and Actions e.g., policies for selection of customers e.g., daily treatment of customers 18

19 Business Model as the Base Business Model How a company configures itself to do business and make money. Operational Improvement 19

20 Role of Strategy Business Model Strategy Strategic Objective 20

21 Elements of a Business Model SCOPE Nature of Inputs How Transform Inputs Nature of Outputs Channels Nature of Customers DIFFERENTIATION ORGANIZATION 21

22 Two Primary Uses of Strategy 1. To change (market etc.) position within current business model: Incremental e.g. 10% share Strategy e.g. 15% share 2. To change the business model: Old Business Model Radical Strategy New Business Model 22

23 Top 10 GMAT Testing Countries TY2007 by Citzenship by Testing Location Rank Country Tests-Taken Rank Country Tests-Taken 1 United States 117,321 1 United States 141,726 2 India 21,481 2 India 13,324 3 China 13,048 3 China 7,663 4 Korea 6,811 4 Canada 6,933 5 Canada 6,400 5 Korea 5,459 6 Taiwan 5,218 6 Taiwan 4,187 7 Japan 3,417 7 United Kingdom 3,087 8 Israel 2,855 8 Japan 3,034 9 France 2,420 9 Israel 2, Thailand 2, France 2,246 Source: GMAT Interactive Profile 23

24 Proportion of GMAT Exams Taken, by Citizenship TY2000 TY2007 Middle East & Africa Latin America 5% 5% Middle East & Africa 5% Latin America 3% Asia & Pacific Islands 21% U.S. & Canada 61% Asia & Pacific Islands 27% U.S. & Canada 56% Europe 9% Europe 8% Source: GMAT Interactive Profile 24

25 US Schools Continue to Dominate in Preference Rank TY2002 Country % of all scores sent (a) Rank Country TY2006 % of all scores sent (b) Change from TY2002 (b) - (a) 1 United States 84.73% 1 United States 83.91% -0.82% 2 Canada 4.68% 2 Canada 3.57% -1.11% 3 United Kingdom 2.87% 3 United Kingdom 3.00% 0.13% 4 France 1.63% 4 France 1.72% 0.09% 12 India 0.26% 5 India 1.15% 0.89% 5 Israel 1.04% 6 Israel 1.10% 0.06% 8 Singapore 0.40% 7 Singapore 0.75% 0.35% 7 Spain 0.53% 8 Spain 0.54% 0.01% 6 Hong Kong 0.72% 9 Hong Kong 0.53% -0.19% 9 Australia 0.39% 10 Australia 0.47% 0.08% Source: GMAC World Geographic Trend Report * Based on number of score reports received 25

26 But Non-US Schools Rapidly Improving in Quality In FT Rankings for 2007 (Jan. 2008) 1. Wharton School 2. London Business School 3. Columbia 4. Stanford 5. Harvard 6. INSEAD 7. MIT Sloan 8. Instituto Empresa 9. Chicago 10. Cambridge - Judge 26

27 But Non-US Schools Rapidly Improving in Quality, cont. In FT Rankings for 2007 (Jan. 2008) 11. CEIBS 11. IESE 13. New York Univ. 14. IMD 15. Dartmouth 16. Yale 17. HKUST 18. HEC 19. Oxford Said 20. Indian School of Business 27

28 Globalizing the Business School Business Model SCOPE Nature of Inputs How Transform Inputs Nature of Outputs Channels Nature of Customers DIFFERENTIATION ORGANIZATION

29 Globalizing the Business Model: Inputs What nationalities of students? Paradox of the FT 100% international What mix? Quotas or not? Proportionate to what? Global population Global GDP MBA Employers Other demographics? 29

30 Globalizing the Business Model: Scope (Location) The false analogy with businesses Hard to recreate the production system Campus experience Reluctance of faculty to travel Full duplication very expensive and very rare Much easier for EMBA than MBA Consider local competition Too late for China? 30

31 Globalizing the Business Model: Differentiation The most international school? Claimed by: IMD INSEAD London Business School Rotterdam School of Management Univ. of South Carolina Thunderbird et al. 31

32 What Students Consider When Choosing a Graduate Business School Scaled Score* Quality of the faculty 4.67 School's job placement reputation 4.45 Program accreditation 4.37 Local respect/reputation 4.33 Quality of current students 4.28 Rigor of academic program 4.25 Published ranking 4.26 Successful alumni 4.21 Selectivity of admissions 4.04 Source: Graduate Management Admission Council mba.com Registrants Survey, October 2006 * Numbers shown are scaled mean scores (5=extremely influential; 1=not at all influential) 32

33 Important Criteria for Choosing a Recruiting School % of Recruiters Noting Criteria is Extremely Important or Very Important in Choosing a School at Which to Recruit Quality of the students 98% Past experience at the school Depth of the talent pool 88% 86% Quality of the curriculum Existing relationships at the school 77% 76% School accreditation Retention history of past hires Students willing to relocate Influence of alumni at the company 69% 68% 67% 64% Admissions standards at the school 57% Source: Graduate Management Admission Council Corporate Recruiters Survey, March

34 Recruiter Hiring Criteria for Business School Graduates % of Recruiters Noting Criteria is Extremely Important or Very Important in Selection of Business School Graduates for a Permanent Position Interpersonal skills Leadership attributes Cultural fit with company Proven ability to perform 96% 92% 91% 91% Technical or quantitative skills General business management skills Strong academic success 68% 72% 79% History of increased job responsibility Occupation in prior work experience Reputation of business school 52% 52% 57% Source: Graduate Management Admission Council Corporate Recruiters Survey, March

35 So Does Being International Really Matter? Not the primary differentiator But as added value 35

36 Globalizing the Business Model: How Transform Outputs Real MBA programs need lots of interactive F2F - the European consulting case Technology? Ivey s three screen classroom Internet and Web? Only as supplement Language? 36

37 Globalizing the Business Model: How Transform Outputs, cont. Sourcing Faculty Nationality? Teachers or Researchers? Ladder or Adjuncts? Local or fly in? 37

38 Globalizing the Business Model: Channels Location of First Jobs The school as migration agency Mismatch with employer needs Unhappy graduates Manage expectations Major career services investment From low wage country to high wage country boosts FT ranking 38

39 Globalizing the Business Model: Nature of Customers Changing international needs of: Consulting firms Investment banks Multinational companies Emerging economy companies 39

40 Conclusions Business Schools have to globalize their business models But many ways to do it Pace of change is accelerating 40

41 Rate of Change When the rate of change inside the company is exceeded by the rate of change outside the company, the end is near. Jack Welch CEO, General Electric 41