University of Phoenix enrollment strategy and long-term competitive positioning

¶ … founding in the early 1970s, the University of Phoenix has become not only the most successful for profit educational institution, but numbers millions of graduates to date. Its success has much to do with its commitment to a strong enrollment strategy that treats students ubiquitously and allows them to quickly and efficiently attain degree certifications to progress their academic careers. However, the success of UOP has spurred many competitors to enter the markets since the mid 1980s.

Competitors have sprouted up all around UOP since the 80s to compete with its target market of adult students. Specific niche players such as ITT technical institute has begun to rival it for a specific segment of the population, however, direct competitors are the greatest concern for UOP. Strayer University, which was started in the 80s, has become a powerful rival for students as it has expanded its online selection. Not only is it competing against direct competitors, many different universities have begun their own online university accreditation programs as well as other online options.

As competition increases within this particular arena, a comprehensive strategy plan for UOP enrollment must be devised, a revision of its current model as well as the establishment of its long-term goals will have to be systematically re-examined. The following analysis will comprehensively detail a new vision and long-term strategy plan for UOP to engage its next level of core students and expand its current operations to maintain long-term enrollment growth. The purpose of this following analysis is to detail the vision, mission and values of UOP as it expands in the next generation of students. Not only must UOP change its value-add to compensate for technological and educational requirements, but it also must understand environmental factors that will affect its success.

Company Background

The University of Phoenix or UOP is a for profit educational institution that specializes in adult education. UOP has campuses throughout the United States, Canada, Mexico and Puerto Rico. Since the early 1970s, John Sperling began testing mechanisms and modules to teach adults a strong education system. The focus of his research resulted in an educational process to teach adults in ways that complemented their experience and current professional responsibilities. UOP's concept was simple; to provide an environment where adults could receive the special training and attention they need to be competitive and successful within the college environment. Sperling believed that adult students were often "invisible" on traditional college campuses and treated as second class citizens.

In 1989, UOP became recognized as the first United States university to offer course work online, and as of October 2006, UOP has an estimated 300,000 students enrolled both on campuses and online. UOP is currently regionally accredited based upon their campus location as well as accredited by the Higher Learning Commission and is a member of the North Central Association of Colleges and Schools. UOP over the past decade has increased their degrees from undergraduate certification to graduate level certifications. It currently has a business degree program that is accredited by the Association of Collegiate Business Schools and Programs, or ACBSP. Its bachelor of science in nursing as well as masters in nursing program is both accredited by the CCNE. It also has accredited masters in counseling program and masters in counseling mental health. In general, UOP has grown at an astounding rate with higher enrollment than ever before. Their industry leading online technology as well as campus locations has allowed it to mature at an incredibly fast level.

UOP has three general forms of education programs, ground, online and FlexNet. Their ground program is similar to the traditional college experience and takes place within their college campuses around the country. Classes are normally five to six weeks long and student's factor in classes on a year long basis. Credits are accrued much like a traditional college structure. For the majority of students, classes take place once a week at intervals of up to four hours at a time. UOP uses a unique feature called "learning teams" promotes greater collaboration between classmates and to use the vast experience of adult learners to reinforce many of the classroom lessons that they are being taught.

UOP online program has truly taken off over the past five years, where the majority of their current students come from. The advent of greater online access and broadband specific use has become one of the foundations of the developing UOP expansion plan. Online students attend online classrooms via their web-based UI known as OLS3. Online classes allows students much more flexibility but still has the same requirements as ground level classes, with at least participation online for four days a week at five to six-week intervals. The entire educational curriculum of UOP is structured around the completion of 24 units within 40 weeks of school time, or roughly the same length of time as a traditional four-year college.

The final mechanism that has become less used at UOP is the FlexNet model, which becomes a hybrid between the ground and online model. FlexNet classes are six weeks in length and these students meet both in class as well as online. FlexNet has now become less popular due to the greater access of internet facilities, and as a result is slowly being fazed out of the UOP program.

UOP's enrollment has steadily increased since its inception and it will only grow stronger, as an educational institution it has met with some controversies but seems to have maintained and expanded its lead within the field. The following analysis will further clarify its strategy for the future competitive landscape.

Vision Statement

Within the next five years, University of Phoenix will become an ethical, competitive and academically rigorous provider of adult education on a national and international level. UOP will be known for:

Dedication for ethical treatment of students, employees, and faculty;

tier accredited programs that allow students to pursue greater and broader job opportunities;

Successful and executable programs that promotes "hands on" experience in business and nursing practices nationally recognized and academic rigorous culture that is uniformly recognized by major corporations and national universities.

Mission Statement

Founded in 1976, the University of Phoenix is the nation's largest private, accredited university. UOP has provided a relevant, real world education to adults at campuses throughout the United States, Puerto Rico, Canada and via the internet.

The mission of the University of Phoenix is to "provide access to higher education opportunities that enable students to develop the knowledge and skills necessary to achieve their professional goals, improve the productivity of their organizations, and provide leadership and service to their communities."

Subsidiary goals include facilitating cognitive and affective student learning of knowledge, skills, and values, and to promote use of that knowledge in the student's workplace. Also to use technology to create effective modes and means of instruction that expand access to learning resources and that enhance collaboration and communication for improved student learning.

Values Statement

UOP will follow core values which reflect the academic and institutional heritage of UOP's founder John Sperling. The following list of core values is reflective of the future of the university:

Ethical Consideration: Always focus on providing high ethical standards of service that is in line with department of education standards and the highest standards of ethical behavior for students, staff and faculty.

Culture: providing a strong community, diversity, tolerance and integration across all disciplines of study.

Execution: Providing quality level service that allows students to experience real practical education for their careers and the workplace.

Academic Quality: provision of top tier competitive educational programs across all University curriculums and degree programs.

Environmental Analysis

To understand the strategic steps necessary for UOP to maintain its leadership position, a thorough analysis of its environment must be conducted. The following analysis will look at both internal and external factors that will contribute to their future success.

Internal Environment:

UOP faces many internal challenges in its current enrollment practices and student retention services. Most importantly, their ethics have been called into question as a result of a long string of questionable business methods that increases its enrollment and student retention. According to a 2004 U.S. Department of Education report on the culture of UOP. It explicitly shows that UOP encourages misrepresentation and deception as part of its business strategy. One of the most significant flaws within its current system is their recruitment department. Internal documents reveal that recruiters are taught that income potential for their positions are tied specifically to the number of enrollments that they achieve. As a result, Recruiters face high pressure situations to maximize their enrollment. UOP recruiters use a matrix strategy which supplies numerous factors to determine recruiter compensation. The "matrix sets forth the ratings associated with the number of enrollments, and it is these criteria that supercede all other and actually determine salary" (DOE, 2004). The use of such a system has a devise for circumventing judicial review by the department of education has forced UOP into a position of mass enrollment with unethical behavior. As a result, the majority of recruiters mislead incoming students with false promises that results in unsatisfied customers. Recent DOE review conducted in the summer of 2003 have found that UOP's is not compliant with the Higher Education Act, which makes it illegal for educational institutions like UOP to pay enrollment counselors compensation based solely upon obtaining enrollments. The DOE reports states that the UOP compensation system has cultivates and maintains a corporate culture of defiance of fiduciary duties.

Significant changes to this enrollment strategy must be achieved in order to gain public trust and reorient UOP's current practices. The first step is to change the educational and academic culture at UOP. The majority of UOP's programs, both online and offline has been criticized as severely lacking in both professionalism and academic value. Approximately 95% of UOP faculty is part time, as compared with 47% across all universities. As a result, the majority of the faculty does not have requisite experience or the time to fully engage students in their work. UOP argues that their staff is qualified based upon their requirement that all of their part time faculty must hold a job within their respective field while teaching UOP classes. However, many controversies have come to light to show that underwhelming educational experience at UOP. The Intel Corporation, which had previously sent hundreds of employees through the UOP program, has excluded them as well as 100 other colleges from their tuition reimbursement program because it lacked "top notch accreditation." UOP's curriculum does not meet the rigorous standards that top tier competitors demand from their employees. As a result, their enrollment numbers have not consistently increased because of the lack of quality within their programs. Even worse, their drop out rates and general retention has decreased over the past three years by 11%. All of these changes point to the fact that rigorous academic standards are not being met internally and the direct result is a lower level of academic interest in both enrolling or staying within UOP programs.

In general, the retention and graduation rate for UOP is been abysmal over the past decade. When calculated according to DOE metrics, UOP's overall graduation rate is 16%, one of the lowest on a national level. Campuses in Southern California have as low of a graduation rate as 6%, with its online program graduating only 4% of its total enrollment undergraduates. UOP public relations reports that their actual graduation rate is 59% because of the large population of non-traditional students who enter the university with 24 or more prior college credits. However, either figure represents tremendous problems within their current system.

The above analysis shows a clear trend of unethical and inefficient operational standards for enrollment and academics. It is clear that on an internal level, the environment for enrolling students as well as maintaining its academic standards is low. As a result, academic programs with higher credibility have gained in enrollment and general student support. In order for the University of Phoenix to reposition itself, it must make a strategic change within its enrollment policy and strengthen its core standard of educational enrichment.

External Environment:

The external environment for UOP has grown increasingly hostile over the past decade from both a regulatory and competitive standpoint. While in the 80s and 90s, UOP and the profit educational sector was largely unregulated this has changed significantly since the passage of the Higher Education Act. UOP on a national level is receiving a significant amount of federal scrutiny for its unethical and in many cases, questionably legal fiscal policies. UOP receives more federal student financial aid than any other university within the United States. In 2004 to 2005, it received 1.8 billion dollars in federal student aid. Current investigations have revealed that UOP has wrongfully filed false claims for hundreds of millions of dollars in financial aid. As a result of this law suit and other law suits it has changed the future prospects of UOP. The Department of Education has already settled 9.8 million dollars in claims against UOP for its violation of the Higher Education Act provision that specifically apply to the distributing financial incentives to admission representatives. UOP also has been fined by the U.S. department of labor for its treatment of recruiters in addition to other pending false claims suits against the University for violating Equal Employment Opportunities Commission policies for religious discrimination.

In addition to their current legal and federal level problems, UOP also faces competition from two direct sources, direct for profit educational institutions, and four-year universities which currently are expanding their online accreditation programs. Strayer University is one of UOP's chief competitors in terms of its direct for profit competition. Strayer University was started in the Washington D.C. area as a private for profit educational institution. While much smaller than UOP, it currently has 31,000 students on 47 campuses across the Untied States. Overall Strayer University has increased their enrollment by 16% over the past year, and its online enrollment has increased by 80% since the last year. In the fall of 2001, total enrollment at Strayer University jumped by 14,009 students, as compared with its 12,096 students in 2000. Strayer Online has become extremely popular because of the easy to use user interface and strong academic accreditation. Strayer's focus on education and general academic quality has made it an alternative for those who do not believe in the strength of UOP's program. It has increased its current scope and should potentially challenge UOP for their overall market share within the next few years.

Even more alarming for UOP's future is the expansion of current ground level four-year university programs that are expanding their services online. Traditional public and private schools such as George Mason University and Northern Virginia Community college have new online programs and increased their advertising budget on these initiatives. George Mason for instance is now offering an online MBA and taxation program, they have partnered with major employers to help their employees get advanced degrees. The credibility of these major universities have allowed them to gain a much greater foothold within the adult education arena by taking away reeducation dollars from UOP for major U.S. corporations. Already George Mason has signed Boeing, Hilton Hotels, SBC Communications, Down Corning and PricewaterhouseCoopers to be part of their online accreditation program. Similarly, the Northern Virginia Community College has also taken a step to increasing their online student participation and enrollment by partnering and expanding their course offerings to meet with local area businesses. They have partnered with North Virginian employers on training and workforce development issues to help younger workers attain online college educations. The strengths of these programs will seriously challenge UOP on a regional level. These two universities are only examples of the many traditional four-year universities which are taken the leap to expanding their online programs. Since on a regional level, these colleges will have a much more developed program than UOP as well as greater name recognition, UOP could meet with severe reduction within their market share in the coming years.

Both the internal and external environment analysis shows that UOP must change their foundational strategy in order to meet the challenges of enrollment in the next generation. It is evident from this analysis that UOP has severe ethical and academic considerations to evolve and also change the context of their reputation on a national level. The following will detail long-term goals for UOP to pursue.

Long-Term Objectives

The long-term goal of the University of Phoenix system is to be a very competitive and comprehensive adult education institute that maintains its market share as the leading provider of adult education. Its hope is to maintain both strong regional and national level recognition for its various degree and accreditation problems.

In order to accomplish this goal, UOP must adopt a long-term objective of changing its recruitment process to fit within the framework of proper governance and still strong ethics and discipline for the recruitment management.

Additionally, UOP must institute strong academic regulations and standards that will meet with national level accreditation standards in order to maintain its current academic advantage as well as continue their relationship with the department of education.

Strategic Analysis and Choice

Plan Goals and Implementation

In order to accomplish their long-term goal of becoming a first class educational experience for students and continue its perch as the leader in adult education, UOP must meet several objectives listed below.

Objective one: Reinvent and restructure the enrollment and recruitment process for UOP recruiters and prospective students.

Strategy 1: Analyze current recruitment environment to understand the deficiencies within both work culture and general work practice

Strategy 2: Recreate recruitment process to base majority of compensation upon the achievement of modulated goals rather than individual enrollment metrics.

Strategy 3: Restructure financial incentives to take away "sales" atmosphere within recruitment and to reorient recruiters upon fulfilling the academic needs of incoming students rather than their own enrollment targets.

Objective two: Expand and re-energize regional and national level marketing strategies.

Strategy 1: Conduct a detail research and market analysis to understand regional and national needs of current generation of students

Strategy 2: Create a comprehensive marketing plan that targets regional demographics and national ones through internet and television advertisements.

Strategy 3: Create relationships with major corporations and target local businesses for retraining and worker education programs.

Objective three: Instill and promote ethical behavior based on the department of education and national level codes of ethics.

Strategy 1: Develop and enforce a nation wide honor code for all faculty and administrators to ensure a high level of ethical conduct.

Strategy 2: Promote retraining and less sales-pressure intensive work environments for recruiters, administrators, and faculty.

Objective four: Develop a comprehensive performance measurement system

Strategy 1: Create a performance measurement system that will generate a yearly metric of usable and meaningful data that allows UOP to measure their progress towards achieving both academic and strategic goals.

Objective five: Create greater integration of academic program on all campuses on a national level to ensure uniform educational standards.

Strategy 1: Create an overall standard core curriculum that is rooted within a strong academic foundation and educational process. The purpose of which is to introduce students to intensive work specific experience and education in their chosen area of study

Strategy 2: Use a standardized metric of assessment for all entering and continuing students to help chose and place students within select programs that are tailored to their needs.

Strategy 3: Examine the academic rigor as well as the overall scope of the programs offered and to evaluate student's ability to obtain their degree within the specified time period.

Objective six: Increase retention and graduation rates across all campuses

Strategy 1: Conduct a full and comprehensive analysis of current retention rates to understand the rationale behind current retention and graduation rates

Strategy 2: Develop strong testing metrics and counseling services to promote greater student understanding of their current position. As well as to mentor and help students who are currently in need.

Critical Success Factors

In order to meet the strategic goals and objectives developed in the above report, UOP must engage in a comprehensive strategy for linear improvement through evaluation metrics and constant revision of their overall strategy.

The first critical success factor is to establish a baseline understanding of metric for retention, graduation, and transfer and service utilization in order to understand how to change the ethical standards that are being utilized by UOP. Second, UOP must have a comprehensive enrollment plan that will help them market to separate regional demographics. Finally, UOP must expand their web client and provide constant improvements of their online metric and time table.

Controls and Evaluation

There are three main metrics for control and evaluation of the implementation of UOP strategic plans for future enrollment expansion. These include actual metrics for enrollment, retention, graduation and transfer rates. Enrollment rates over the next five years will tell us the success factor of current marketing efforts to increase visibility and overall recognition from students and corporations of the value-laden academic experience of UOP. The retention rate will provide an accurate control mechanism for recruitment inflation as well as generation assessment of the ethical considerations of the recruitment process as well as understanding the actual academic rigor of the programs at UOP. Graduation targets that are reached will be an evaluation metric of the overall quality of the educational process, and the changing culture towards student centric evaluation models and curriculums. Finally, transfer rates will reveal the level of commitment of UOP students as well as the general success level of students who go on to higher level four-year universities.

Another important metric is the number of regional and national college age population that is enrolled within UOP's academic programs. This percentile measurement will give an accurate evaluation of UOP's overall market share and provide an understanding of both the current growth of UOP as well as the growth potential in the coming years.

The rates of service utilization by eligible students will be an accurate measure of the level of service that is actually being provided to students. It serves as a control mechanism to understand the actual underpinnings of the academic conditions and counseling services that UOP plans to implement in the coming years.

Finally, a general survey of student and corporation satisfaction of UOP's overall services will serve as the final evaluation metric of the success of UOP's overall strategic plan and future consideration of its growth. If this metric shows a positive trend for UOP graduates, then the overall reputation and enrollment of UOP will increase exponentially. Students and corporations are the single best advertisers and advertisements for UOP, because successful students will be able to provide shining examples of the caliber of education and the career possibilities for graduates.

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