University of Phoenix Overview Business

University of Phoenix Overview

Business Concept

The University of Phoenix is an integral part of the Apollo Group, which also includes the College for Financial Planning Institutes Corporation, Western International University, and Institute for Professional Development. The University of Phoenix University runs over 90 learning centers throughout the United States, and also has the University of Phoenix Online. Apollo Group has decided to define University of Phoenix Online as a separate division for accounting purposes, and to make the division more adept at responding to the quickly changing environment of online learning.

The business concept behind online learning stresses convenience and quality of learning on a 24/7 basis for students who have full-time jobs and many other responsibilities. Distance learning over the Internet is the most rapidly growing area of instruction, and University of Phoenix has been able to capitalize on this trend by offering many degree programs entirely online. What's also critical to the business model of the school is the ability to work with the many educational reimbursement programs companies have for their employees. The relationship University of Phoenix has with the U.S. Department of Defense also provides a consistent source of revenue.

Current situation

Today the University of Phoenix faces several significant factors in the marketplace that need to be harnessed for their advantage. These key factors include the following:

Low Unemployment Rate - This is actually a double-edged sword because when there is a low unemployment rate the time to get courses in to anyone's schedule is difficult, yet when unemployment is high there is high demand for classes yet students lack funding. This is one of the major challenges for University of Phoenix' growth. Having strategies in place for both upturns and downturns in the unemployment rate are critical.

Accreditation standards shift higher - This is happening for many universities today as the presumption that just because a student has been admitted to Harvard, Stanford or an Ivy league school their performance will consistently be above other state schools. Accreditation audits have actually shown this has "softened" the quality of Ivy league educations and as a result there is a push to bring up the standards across all colleges and universities for continued accreditation. Correspondingly, the University of Phoenix has the advantage of accreditation to operate as a global campus, online.

Consolidation of schools and higher competition - As Apollo Group, the founders of the University of Phoenix are acquiring schools and small trade schools, there exists the opportunity for continue rapid expansion into other key curriculum areas.

Key success factors

The following are the most critical success factors today for University of Phoenix:

Consistently attracting qualified students by developing relationships with corporations who offer reimbursement.

This Is critical for the long-term growth of the university, specifically working with larger corporations who offer attractive educational reimbursement programs to their students.

Developing more global opportunities for growth by partnering with other universities in Europe and Asia. University of Phoenix needs to also partner with universities in other regions of the world to extend its reach as well. The cultural differences in online learning in Europe and Asia require local partners to assist with the tailoring of content for needs in these markets.

Stability of 21,000 member faculty. This is also another key attribute to the success of the university, as the learning curve to have instructors teach online is significant. Stabilizing its workforce is critical.

Continually expanding the number of programs offered. This is also critical as it is necessary for the university to expand the total available market it serves.

Financial situation/needs

Today Apollo Group is profitable yet finds itself in the need of the following strategies to sustain its growth:

Strategies to increase net contribution margin. Currently Apollo Group overall and the University of Phoenix have a relative low corporate net contribution margin. Programs for increasing this figure are necessary for the company to finance future growth.

Greater focus on accounting compliance. As of August, 2006 the company has delayed the filing of its 10-Q with the Securities and Exchange Commission due to stock option grants reviews by its board of directors.