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Do What You Do Best: Competitive Advantage as a Differentiator in Higher Education
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Do What You Do Best: Competitive Advantage as a Differentiator in Higher Education

Focusing on delivering niche programs that institutions have a competitive advantage in is a critical strategy to succeeding in the highly-competitive postsecondary marketplace.


In the field of economics, the term “competitive advantage” means you have the lowest opportunity cost of providing a good or service. Opportunity cost is simply defined as what you give up in order to complete an action.

Competitive advantage should have the same definition in the higher education world. For example, a top engineering school shouldn’t begin a new program in ancient Greek biblical interpretation, especially if the program already exists at a nearby institution. The competitive advantage of the engineering department is to produce high-quality engineers.

In my time in academia, I have experienced a necessary shift in administrators’ logic regarding programs: we can’t be everything to everyone, but we will be the best at what we’re able to provide.

This line of thought leads to an obvious financial question: are we willing to let or encourage students to go to another university? It’s my personal hope that the answer to this question is a resounding yes. If a university practices the idea of competitive advantage, it will recruit students into programs where it provides a marketable value to the students, and redirect prospective students otherwise.

The decision of a university to pursue the creation and delivery of a degree program is driven by financial concerns. For example, a donor might provide a financial incentive to create or renew a program of study at a university, say, an economics program. Now, the university may not have a competitive advantage in economics, if it has the program at all. This doesn’t mean the university should abandon the creation of such a program; however, the university must foster the creation of the program to ensure the competitive advantage does develop. This means developing the program with a clear sense of what nearby institutions — competitors — are doing with their own economics programs to ensure there’s differentiation among them, and ensuring graduates of its program go on to success.

The counter argument is that competitive advantage may never materialize. For example, if a large manufacturing company with a need for engineers relocates near a university, an incentive to create an engineering school becomes available. However, if the university has never had an engineering school, it may waste a lot of time and money attracting engineering faculty and students, and abandon the programs in which it already had a competitive advantage in the process. This doesn’t mean universities should never create new programs or change existing ones, but the point is that care is needed to avoid starving your strengths to feed your weaknesses.

Competitive advantages develop over time due to quality graduates. If universities foster and remain in the fields in which they have a competitive advantage, they will continue to recruit top students and maintain funding at acceptable levels.

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3 Responses to Do What You Do Best: Competitive Advantage as a Differentiator in Higher Education

  1. Charlene L Reply

    2014/04/16 at 10:52 am

    “Starving strengths to feed weaknesses” unfortunately occurs quite frequently in higher education. I think there’s a lot of pressure on institutions in areas where there aren’t a lot of postsecondary options available to be “everything” for students. Unfortunately, these institutions tend to be smaller and underresourced to begin with. They stretch themselves thin when they attempt to offer a full roster of programs when they might be better off offering a few core ones.

  2. Vic Thomas Reply

    2014/04/16 at 2:18 pm

    As institutions begin to focus on their competitive advantage, I believe this creates opportunities for them to consider partnerships with other institutions for shared services or programs. It’s an exciting time ahead for higher education as we seek new ways to be more efficient with our resources while protecting the student experience.

    • Colin Colborn Reply

      2014/04/23 at 3:01 am

      Absolutely agree with what Vic said.
      In order to achieve copetitive advantage goes far beyond the realms of course content and delivery though. Yes it’s a major part but is part of a robust framework from a stable infrastructure in systems and processes with a well defined course being the cherry on the cake.
      Partnerships with other institutions can be very effective but I fear some institutions fear they are losing or diluting their University brand. This is probably more relevant to the older more traditional institutions.

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