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
1
Psalm 8
LORD, 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!
Continued Growth
of a College
1. Marketing
1. To know and understand the consumer so well that
the product or service fits the consumer and sells
itself.
2. Growth, expansion, change
1. Where is the customer?
2. What does the customer buy?
2. Innovation
1. Task of endowing human and material resources
with new an greater wealth-producing capacity.
Three Assumptions
A Theory of the Organization
Applied to Colleges
- Peter Drucker
1. Environment of the Organization
1. Society and its Structure
2. Market
3. Customer
4. Technology
2. Specific Mission of the Organization
3. Core Competencies Needed to accomplish the
organization’s mission
Peter Drucker:
Organizational Leadership and Competition
1. Decentralization and simplification.
2. Skepticism of macroeconomic theory.
3. Respect of the Worker.
4. “The Sickness of Government.”
5. The need for "planned abandonment."
6. Taking action without thinking is the cause of every failure.[33]
7. The need for community.
8. The need to manage business by balancing a variety of needs
and goals.
9. A company's primary responsibility is to serve its customers.
10.An organization should execute its business processes.
11.Companies could stand among humankind's noblest
inventions.[38]
History of Proprietary Colleges
DeVry University/Keller Graduate
School
Phoenix University
Bryant and Stratton
ITT Technical Institute
Current Regulations
In Regard to Proprietary Colleges
Department of Education
Proposed Regulations
Congressional Response
Positioning for
Response by the Christian Colleges
Value Chain
Value Chain

A linked set of activities from raw material
to end use product for the customer.
Procurement
R&D
Manufacturing
Marketing
Value chain
Distribution
Service
Customer
Customer Basis
Drive and Mature Pipeline
Choose the value
Customer
Segmentation
Market
Selection/
Focus
Value
Positioning
Provide the value
Product
Service
Develop-
Develop-
ment
ment
Strategic Marketing




Pricing
Communicate the value
Souring
Distribution
Sales
Sales
Marketing
Servicing
Force
Promotion
Tactical Marketing
Peoplesoft
SAP
MRP II
Quicken Books
Advertising
Value Chain
Value System
SUPPLIER
FIRM
CHANNEL
BUYER
VALUE
VALUE
VALUE
VALUE
CHAINS
CHAIN
CHAINS
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.
Sources of Strategic Issues
Most critical external issues
* Competition
* Industry trends
* Market trends
* Other trends and threats
Most salient internal issues
* Financial weaknesses
* Weaknesses, problems
* Labor Costs
Other options worth considering
Alternatives Analysis
Strategic
Issues
Four Specifications of the Organization
- Peter Drucker
1. Assumptions must fit reality.
1. Environment
2. Mission
3. Core competencies
2. Assumptions in all three areas must fit one
another.
3. Theory of the business must be known and
understood throughout the business.
4. Theory of the business must be tested
constantly.
Warning Signs:
Business Can Become Obsolete
- Peter Drucker
1. Organization Can Achieve its Original Objectives
2. Too Rapid Growth
3. Unexpected Success
4. Unexpected Failure
Customer Supply Chain
(Michael Porter)
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound
Logistics
Outbound Marketing
Operations Logistics
& Sales
Service
Sales
Marketing Advertising Force Sales Technical
Force LiteraturePromotion
Management
Admin. Oper.
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
1. Fundamental strategies of business.
2. Must be operational.
3. Must make possible concentration of resources and
efforts.
4. Must be multiple rather than singlular.
5. Needed in all areas in which business survival
depends.
Environmental Changes to
Generate the Future Systematic Search
- Peter Drucker
1. Has anything happened that might establish a pattern
for our industry, our country, our market?
2. Is anything happening in the structure of an industry
that indicates a major change?
3. What do generally approved forecasts assert will likely
happen in 10, 20, or 30 years?
4. Has change already taken place?
Increased Accuracy of Measurement
 Cost, Revenue, Profit, Investment Center



Strategic Business Unit
Critical Success Factors
Core Competencies
An Idea must have:
- Peter Drucker
1. Operational validity
2. Economic validity
3. Aim at Social Reform
4. Test of personal commitment
Five Forces Model (Michael Porter)
Potential
Entrants
Threat of
new
entrants
Bargaining
power of
suppliers
Industry
Competitors
Suppliers
Bargaining power
of buyers
Buyers
Rivalry Among
Existing Firms
Threat of substitute
products or services
Substitutes
What is Strategic Planning?
- Peter Drucker
1. The continuous process of making present risk-taking
decisions systematically with the greatest knowledge
of their futurity.
2. Organizing systematically the efforts needed to carry
out these decisions.
3. Measuring the results of these decisions against the
expectations through organized, systematic feedback.
Critical in Strategic Planning?
- Peter Drucker
1. The systematic and purposeful work on attaining
objectives
2. New and different ways to obtain objectives
1. It is more than a bundle of techniques.
2. It is more than forecasting.
3. It deals with the futurity of present decisions, not with
future decisions.
4. It is an attempt to understand risk, not eliminate it.
Market Segmentation
Environmental Snapshot
Severity of Impact on Company
Positive
Category
Statement of Trend
Economic
The market is expanding with more baby boomers entering retirement.
There seems to be more disposable income for the country as a whole
and more time for golf
Regulatory/
Legislative
Regulatory restrictions are based upon the US Golf Association rules
Demographic
The country is getting older with more people in retirement. These folks
have greater disposable income and more free time. Also people are
living longer.
Attitude/
Lifestyle
Lifestyles are changing in that people have more money to spend and
more time to spend after retirement
SocioCultural
People are becoming more active and playing more sorts like golf
Political/
Legal
No changes
Technological
Technology is making the game more enjoyable by allowing less
experienced golfer achieve better scores
H
M
L Neutral L
Negative
M
H
Key Factors for Strategic Success
• Size
• Establishing
switching costs
• Geographical scope
• Exploiting
knowledge
• Product scope
• Organization structure
Environment
• Technological resources
• Developing
response strategies
• Knowledge resources
• Managing risks
Performance
Firm
Generic Competitive Strategies
Competitive Advantage
Lower Cost
Broad Target
Differentiation
Cost
Leadership
Differentiation
Narrow Target Cost Focus
Focused
Differentiation
Competitive
Scope
Strategic Analysis Model
Situation Analysis
External Review
Industry Analysis
Competitive
Analysis Market
Analysis
Environmental
Analysis
Internal Review
Financial Analysis
Strengths &
Weaknesses
Opportunities &
Threats
1. What is the
current
situation?
Alternatives Analysis
Strategic Issues
Recommendations
Short-Term Plans
Goals & Objectives
Strategic Intent
Programs
Contingencies
Identifying Strategic
Alternatives
Arguing For and
Choosing a
Preferred Strategy
Long-Term Plans
Goals & Objectives
Strategic Intent
Programs
Contingencies
2. Where do we
want to go?
3. How can we
get there?
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
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