The Apollo Group, Inc Cases Analysis
The Apollo Group, Inc is a fro profit private organization that provided education with its headquarters in Phoenix, Arizona. It was started in 1976 by John G. Sperling with an objective of offering educational opportunities for working adults. From Sperling’s perspective, the working adults were being neglected on educational issues; he therefore, opted to start an institution (Phoenix University) through which working adults could advance and/or improve their education while paying the institution for profit purposes. Before 2005, The Apollo Group, Inc offered education for working adults through its four partners; University of Phoenix, Institute for Professional development, The College for Financial Planning Institute and Western International University. Therefore, the purpose of this case study is to explore various factors that enabled the Apollo Group, Inc to transcend into the global market and continued to inspire the organization’s mission, purpose, strategies, and continued commitment to offer education to the working adults.
The Apollo Group, Inc Organizational Goals and Objectives
John Sperling started The Apollo Group, Inc (University of Phoenix (UOP)) with a long-term goal of transforming convectional higher education and short-term goal of making a profit. To achieve both the long-term and short-term goals, Sperling targeted working students aged 18-22 years. In his endeavor deployed local resources where he deployed teachers rather than professors. Less than 5% of the faculty members were employed on a part-time basis. Although Sperling’s long-term goal might sound good, the short-term goals of establishing the UOP seem to contradict it making the goals inconsistent.
Revolutionizing higher education should be based on value addition in terms of accessibility and cost reduction. The mismatch between short-term and long-term goals resulted to indifferences between Sperling and education establishment board. That was because one of the policies of starting universities was to provide quality higher education for free. As a result of such contradiction, the university did not pick 10 years after its establishment. However, as evident in the case study, the UOP management did favorable adjustments that sailed the UOP University through. According to Robinson (2012), Sperling adjusted tuition fee to $18,000 per year, which was 60% of typical private college. Such fees adjustment led to annual revenue growth rate to exceed 30 %.
In an attempt to reduce operation cost, Sperling went further to ensure that the average age of students is 35 who did not require high expenses to keep at school. Among other short-term measures to cut cost which Sperling undertook were holding classes in leased office, and online. The Apollo Group was the first institution to spot the need for education among working class which was then offered online. To ensure that the decisions made compatible with the institutional long-term goals, Sperling integrated views from students unions, sports teams, student societies, stakeholders, and market analysts. However, the online studies were interrupted when the Web debuted leading to lose of revenue.
The External Environment
Research shows that the business environment consists of two components: the general environment that consists of legal, demographic, technological, economical, and socio-cultural among others (Hill & Jones, 2007). The other component is the competitive environment that comprises of rivals, customers and other factors that might affect the organization’s success. The UOP management closely observed that there is not only a need for adult education but also need for a new mode of study, “there are 70 million working adults in this country who do not have a college degree” (Robinson, 2012) said Gallagher, the institution’s market analysist and a stakeholder. Observation shows that Apollo Group follow trends and events in the general environment. As indicated in this case traditional colleges and universities serves the needs of full-time 18t-to 24 year-old students thus limiting educational opportunity for adults. Such loophole is an opportunity for the UOP e-learning program. Such analysis formed the basis of establishing the UOP. That implies that Sperling was monitoring the competitive environment.
Another remark made by Sperling is that there was short-comings in the quality of government-funded education that have led to increasing demand for supplementary training to meet labor market demand. Moreover, Sperling noted the high tuition fee charged by typical learning institutions. The next move made by Sperling was an adjustment of the fee to improve the competitive relative to such force. Taken together such key factors enabled Sperling’s university pick up amidst challenges.
Sperling further realized that his idea to run the organization for profit would go against education policies which could affect the growth of his university (Hill & Jones, 2007). To mitigate the impacts of such contraction, Sperling decided to charge the studies at a lower rate compared to his rivals. Sperling and other stakeholders keenly observed that online education is likely to grow in future, “demographics, and a changing global economy, say it is a need that will only grow” (Robinson, 2012). From this point of view Sperling and his group improved their online studies program targeting half of postsecondary students.
While other universities used impressive digital content, UOP offered online studies through plain-vanilla technology. Unlike its competitors such as government-funded studies, UOP offers the same material via a text-heavy format which can then be accessed via dial-up modems (Robinson, 2012). One of the challenges faced by the UOP is drop out. However, Sperling and his group take advantage of this situation offering hand-holding such as round-the-clock tech support resulting to impressing performance by the students, “65% of its students go on to graduate” (Robinson, 2012). Such impressive performance was due to a number of opportunities.
First and foremost, internet is expected to thrive in academia. According to Robinson (2012) about 90 % of 4,000 major higher learning institutions in the United States offer online classes. Such trend opens more chances for the UOP to offer accredited professions for working adults who want to study. Since the only way for such group of students is online part-time studies, and that they would like to enroll in low-charging institutions, the UOP would remain their strategic institution (Icon Group International, 2000). Moreover, the adult education market projected to reach 6.7 million in 2011. Those combined with the rapidly expanding knowledge-based-economy prepares humble ground for the UOP future growth.
However, the UOP will have to overcome challenges associated with e-learning. The first challenge is quality. Many online students dropout shortly after registering for online studies after they note the level of quality of studies offered. In addition, residents are used to September to mid-December and mid-January to May programs (Hill & Jones, 2007). As a result, the UOP will be forced to align its programs to this short duration. Pertains the quality of education, the UOP should venture in reliable software and hardware while at the same time aligning its services to what other long established universities have been offering. Moreover, e-learning is associated with high incidences of mediocrity. The UOP will have to offer exemplary services for it to grow. Robinson (2012) notes only 30% of proprietary students attend part-time studies; this is a major threat to both private and public institutions. In other words, online learning will never be as good as face-to-face instructions.
The Internal Environment
Overall, a firm’s internal environment comprises of its resources and other value-added capabilities (2012). One of UOP’ strength is the financial background. Mid-2005, the UOP was considered among the top 50 performing companies on Wall Street (Robinson, 2012). The UOP’s revenue reached $ 5 billion with its income exceeding $ 550 million. In 2010, the UOP joined the S&P 500. Such amazing data enables the UOP to offer cheap programs that contributes its competitive advantages. In addition, compared to other universities learning, the UOP is economically more viable. This aspect helps keep the UOP apart in the education industry. The other factor that makes the UOP more competitive is its application process. The application process for proprietary colleges is tedious since it requires talking with people (Robinson, 2012). As a result, making a decision on which course to take can take a month for proprietary colleges. The UOP lets students choose the courses from online and concentrate on one or two courses which take 5-6 weeks (Robinson, 2012). In contrast, there are no visible efforts to reflect the UOP’s accessibility and financial success in the quality of services offered. The institution has not ventured into more reliable web services. As a result, the rate of the dropout has persisted making the UOP outperformed by traditional nonprofit universities which capture 95 % of online enrollment. The Apollo Group should consider reinventing to improve its services such as developing fast web services.
Firm’s Intellectual Assets
Research shows that human capital is the major resource in the knowledge economy. In addition, attracting and training talented workers is strategic challenge for firms. The UOP is said to deploy teachers rather than professors (Hill & Jones, 2007). By so doing the UOP’s students are likely to miss services of experienced professionals and deliver low-quality teaching services. Sperling strategically uses technology to train teachers to attain high professional and then deploy them.
Learning institutions us the competitive advantage of focus and cost leadership as a basis for gaining competitive advantage over their rivals. Combination of these strategies has enabled the UOP arise among best financially performing e-learning institutions. The UOP offers low-cost degree programs thus remaining among financial friendly institutions (Icon Group International, 2000). However, the UOP’s management is reluctant in focusing on its quality of education. The UOP should use its already firmly established financial background to improve its services. The UOP management should build permanent offices and deploy more competent professors. In addition, the managed should consider contracting more competent software developers who would help in delivery of high quality learning resources.
Organizations deploy varied strategies to achieve competitive advantage. Robinson (2012) cited that in most cases, online institutions only offer English courses. In order to diversify various services offered by UOP, other subjects were introduced. This was believed to create synergies among institution’s services. The Apollo Group Inc. formed a joint venture with the Carlyle Group called Apollo Global in 2007 in order to venture into international education services industry (Hill & Jones, 2007). This is one of diversification measure undertaken by the UOP to achieve competitive advantage. Such joint venture operates BBP Holdings in the UK, Western International institution in the China, India, and Netherland among other universities. These strategic alliances remain competitive given threats present in the international market environment.
Studies indicate that foreign market provides both opportunities and potential dangers for organizations looking forward to grow globally (Robinson, 2012). However, this statement did not compel the UOP from pursuing its goal of revolutionizing higher education. The statement from Apollo Group executive portrayed the institution as committed to providing accessible worldwide education for students (Robinson, 2012). Generally, the Apollo Group attracts students who are willing to succeed. To achieve such values, the Apollo Group’s executive offers high-value and relevant academic programs. Given that online studies do not require the same facilities required for face-to-face learning, the UOP made the right choice between cost reduction, and local adaptation to foreign market.
Learning Organization and an Ethical Organization
It is believed that strong leadership is an asset that is required to enhance competitive advantage (Robinson, 2012). The UOP puts this assertion in practice by aligning enrolment and admissions to students’ success. This is achieved by redefining roles and responsibilities, resetting individual objectives, and implementing new compensation structures (Robinson, 2012). Such changes are made in close consultation with stakeholders. In addition, the UOP coordinates with the student’s employers to ensure that the studies are aligned to the skills required in the market. The coordination with employers has led to innovations.
Corporate Entrepreneurship and New Venture Creation
Firms continually seek new growth opportunities and avenues (Robinson, 2012). The Apollo Global Inc. has put in place strategies to expend its education services. These strategies include adding more accredited degree programs and keeping tuition fee as low as possible. The second strategy is putting measures to accommodate working adults from abroad (Hill & Jones, 2007). The third strategy is establishing their e-learning program in every state and every major U.S. metro area. Such measures imply that through entrepreneurial orientations, the Apollo Group Inc. is engaged in an on going process of opportunity recognition which would lead to identification of more.