Gilkey Center for Executive Education

Jillian Shepard Seaton

Agenda

• Background & Vision • External Analysis• Internal Analysis• Strategy

– Marketing– Critical Risks

• Conclusion

Vision: to enrich business education at the University of Montana, acknowledging the powerful impact of mentors and role models on professional and personal achievements.

Why Executive Education?

• 5% Annual Growth– $3.6 M Average Gross Revenue

• Low risk opportunity: Gilkey Center building as venue

• Expansion of UM/SoBA brand

• Creation of regional footprint

Scheurer, B. (2016, May 3). UNICON State of the Industry. Retrieved from http://uniconexed.org/2015/2015_UNICON_Industry_Survey_Release.docx

SWOT Analysis

Strengths● Montana outdoor culture● Alumni network

● New building● Low cost programs

● Experienced & multidisciplinary data analytics staff

Weaknesses● Geographically far from big cities● Mid-tier university● Lack of brand awareness outside of

Missoula

Opportunities● Experiential Executive

Education● Executive Education industry is

booming● Very few EE startups:

Older players in industry losing credibility as being “out of touch and bureaucratic”

Threats● Ivy league competitors

● Internal corporate training / professional consulting a sophisticated $70 B industry.

● Regional competitors

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Why SoBA?

Deloitte US | Human Capital. Global Human Capital Trends 2016. (2016). Retrieved May 9, 2016, from http://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html

Supplier Power: Supplier Power is Moderate primarily due to suppliers’ product

differentiation, rivals information and ability to backwards integrate

Buyer Power:Buyer Power is HIGH primarily due to low switching costs, high amount of

information available and high ability to backwards integrate

Threat of Entry:

Threat of Entry is HIGH primarily due to low costs of capital, high network effects, and moderate product differentiation

Threat of Substitutes:

Threat of Substitutes is Moderate primarily due to moderate levels of product differentiation and relative

prices

Industry Rivalry:

Industry Rivalry is Low due to the highly dispersed nature of the industry, low exit barriers

and low strategic stakes

Overall Industry Attractiveness:Overall, this is a Moderately attractive industry – High Threat of Entry and High Buyer

Power decrease the industry’s attractiveness while Moderate Supplier Power, Moderate Threat of Substitutes and Low Industry Rivalry increase the Industry’s profitability.

Why Missoula?

Why? Missoula!

Industry Rivalry:Industry Rivalry is Low

due to the highly dispersed nature of the

industry and low strategic stakes

Overall, this is a Moderately attractive industry High Threat of Entry and High Buyer Power decrease the industry’s attractiveness while

Moderate Supplier Power, Moderate Threat of Substitutes and Low Industry Rivalry increase the Industry’s profitability.

Competitor Analysis - Regional

$1,890 per day5 daysLeadership

$400 per day8 daysProject Management

$612 per day14 daysBanking

$872 per day9 daysGaming

$550 per day1 dayLeadership

$883 per day10 daysManagementOutdoor Element

$723 per day19 daysUtilities

$400 per day5 daysBig DataOutdoor Element

UM

Disadvantages of General Programs

• Participants cannot fully relate to others in a different industry

• Faculty may not be aware of the exact audience of a particular program

• Programs cannot address issues specific to certain industries

• It can be challenging for participants to adapt and apply learning objectives to their respective position and industry

Rogers, S. and Duening, T. (2013) "Vertical Market Strategy: The Case of an Executive Education Startup in a Medium-Sized Business School," Journal of Executive Education: Vol. 12: Iss. 1, Article 2.

Product Offering

• Yearly overarching topic based on market demand and UM Strengths• Multiple yearly offerings focused on industry verticals

– Year 1: Data Analytics focus– Years 2+: Modified based on industry feedback / trends

• Adding 3 additional offering per year• Adaptable, flexible offerings due to Just-in-Time Programming and

tailored value proposition.Year One: Data Analytics

January February March

AprilMining

May JuneReal Estate

JulyAgriculture

AugustFinance

September

October November December

Product Development

Ries, E. (2011). The lean startup: how today’s entrepreneurs use continuous innovation to create radically successful businesses (1st ed). New York: Crown Business.

● Less risky startup venture● Experimentation vs. elaborate planning● Customer feedback over intuition● Iterative design

Competitive Advantage

Why Big Data?

“One thing that is exciting, as an alum and a big fan of Missoula and the University of Montana, we are right at the cusp of this becoming an academic discipline.

There is a real opportunity for UM to create a path in an area of expertise that famous business schools like Harvard are lagging.”

-Dr. John Chandler

Erickson, D. (2014, October 21). Former Microsoft data analytics expert to teach at UM. Missoulian. Retrieved from http://missoulian.com/news/state-and-regional/former-microsoft-data-analytics-expert-to-teach-at-um/article_dc6128b8-f963-567c-a99e-785855e1393e.html

Market Analysis

• Market analysis broken down into four specific industries:– Mining/Oil– Agriculture– Real Estate– Finance (Small/Medium Banks)

• U.S. Census and Bureau of Labor Statistic to identify largest industries within

the region• Focused on specific addressable market needs that are currently unmet by

competitors• Market analysis based on industry standards and conservative assumptions

Total Market Size assuming 5% executive level employees:30,632

Target Market Sectors

● Mining / Oil● Agriculture● Real Estate● Finance (Small/Medium Banks)

Why Mining / Oil?

● Geography● Opportunity● Need● 2014 Bain Report:

○ “Analytic advantages could help oil and gas companies improve production by 6% to 8%”

○ Indicated only 4% of industry currently uses data analytics to full potential● Big Data Analytics in Mining Summit

○ “We’ve seen value immediately. The world is talking about big data and how you use it.” — Sam Walsh, CEO, Rio Tinto

BAIN_BRIEF_Big_Data_analytics_in_oil_and_gas.pdf. (n.d.). Retrieved from http://www.bain.com/Images/BAIN_BRIEF_Big_Data_analytics_in_oil_and_gas.pdf

Big Data Analytics in Mining Summit. (n.d.). Retrieved May 9, 2016, from http://www.bigdatainmining.com/

Why Agriculture?

● Geography● Opportunity● Need

“How Farmers are Harvesting Big Data”● Average use of

fertilizer was 25-30 percent less

● Yields were 10-15 percent higher.

Broughton, J. (2015, July 6). How Farmers Are Harvesting Big Data. Retrieved May 9, 2016, from http://www.inc.com/jenna-broughton/how-farmers-are-harvesting-big-data.html

Why Real Estate?

● Agents have potential to see revenues rise, costs drop and market share increase

● Presenting a “whole consumer”

● Who buys & who sells what, when, where, why and how

Ward, M. (2015, August 4). How Big Data is Transforming Real Estate. Retrieved May 6, 2016, from http://www.cnbc.com/2015/08/04/how-big-data-is-transforming-real-estate.html

Why Small Banks?

● Geography● Opportunity● Need

2015 American Banker:

“Data Analytics is the Great Equalizer”

-Bryan Yurcan

Why Small Banks Should Be Thinking About Big Data. (n.d.). Retrieved May 9, 2016, from http://www.americanbanker.com/news/bank-technology/why-small-banks-should-be-thinking-about-big-data-1077955-1.html

Marketing & Advertising Strategy

Corporate Outreach● Direct B2B Corporate Calling Effort● Partnership with local companies on series of

programs

Targeted Digital● LinkedIn Ads● Google Adword campaigns● Website and SEO

Email● Organic lists● Alumni databases● Associations

Nurture Existing● Personal email campaigns● Newsletter campaigns● Calls and outreach (feedback)

Sales Strategy

Target Sector Employees by State

Bureau of Labor Statistics data

Target Segment Identification

Max Seminar Capacity = 60Break-Even = 5

Critical Risks• Damage to UM brand

– Establish immediate legitimacy by addressing critical industry needs

• Inability to find qualified instructors for year one– Leverage UM Business Analytics program– Leverage UM alumni network

• Failing to attract sufficient customers from outside of Montana– Montana alone is not sufficient for long term success– Mitigated by establishing reputation as value added / ROI-

centric program– If we can’t attract .252% of the 5% of Mining customers, we

shouldn’t be in business

ConclusionThe Gilkey Center for Executive Education will:

• Provide world class education

• Meet industry needs

• Differentiate itself from the competition

• Improve the UM brand by providing ROI for industry customers

• Improve overall UM profitability

Citations

BAIN_BRIEF_Big_Data_analytics_in_oil_and_gas.pdf. (n.d.). Retrieved from http://www.bain.com/Images/BAIN_BRIEF_Big_Data_analytics_in_oil_and_gas.pdf Big Data Analytics in Mining Summit. (n.d.). Retrieved May 9, 2016, from http://www.bigdatainmining.com/ BLS. (2016). “Employment, Hours, and Earnings from the Current Employment Statistics Survey (State & Metro Area) Home Page.”. Web. 9 May 2016 Bradshaw, D. (2015, May 17). New market entrants create competition for business schools. Financial Times. Retrieved from http://www.ft.com/intl/cms/s/2/896cfdc4-f016-11e4-ab73-00144feab7de.html#axzz3e5g28KNN Broughton, J. (2015, July 6). How Farmers Are Harvesting Big Data. Retrieved May 9, 2016, from http://www.inc.com/jenna-broughton/how-farmers-are-harvesting-big-data.html Brown, S. M., Garnjost, P., & Heilmann, S. (2011). Problem-based Learning Leadership Development Program in a Multi-National Company. Journal of Executive Education, 10(1), 1–17. Business, R. H. S. S. of. (n.d.). Executive Education Growth Triples Industry Pace at UMD Smith School. Retrieved April 27, 2016, from http://www.prnewswire.com/news-releases/executive-education-growth-triples-industry-pace-at-umd-smith-school-300028527.html Deloitte US | Human Capital. Global Human Capital Trends 2016. (2016). Retrieved May 9, 2016, from http://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html

Citations

FDIC (n.d.). Community Banking by the Numbers Retrieved from https://www.fdic.gov/news/conferences/communitybanking/community_banking_by_the_numbers_clean.pdf Kennedy, D. Xerri, T., & Tonj, C. (2015). CMED 2015 Benchmarking & Industry Trends Survey. Executive Education Industry Registered a CAGR of 17% in the Last 5 years: Ken Research. (2015, November 6). Retrieved April 27, 2016, from https://www.linkedin.com/pulse/executive-education-industry-registered-cagr-17-last-5-namit-goel

FOSMOE, M. (2013, April 11). Open for business. South Bend Tribune (Indiana), p. C1.UNICON. (n.d.). Future Trends. Retrieved from http://uniconexed.org/2016/research/Future_Trends-Revised_Final_Report_Executive_Core-August-Jan.12.2016-v2.pdf Gilkey Center for Executive Education :: Green Building Information Gateway. (n.d.). Retrieved May 9, 2016, from http://www.gbig.org/activities/leed-1000002173 Gordon, A. (n.d.). Executive Education Looks At Its Future And Shudders. Retrieved April 19, 2016, from http://www.forbes.com/sites/adamgordon/2013/05/09/executive-education-looks-at-its-future-and-shudders/ Klicki, B. R. (2015, June 27). Academic leaders: Executive education in “transformation.” Chicago Daily Herald, p. 1. Lamb, D. (2013). Recommended Practices for New Corporate Learning Leaders. Journal of Executive Education, 12(1), 13–17. Lockhart, J. C. (2013). Executive Education: Can it Be Too Good? Journal of Executive Education, 12(1), 18–29.

CitationsManning, C. A., Waldman, M. R., Lindsey, W. E., Newberg, A. B., & Cotter-Lockard, D. (2012). Personal Inner Values: A Key to Effective Face-To-Face Business Communication. Journal of Executive Education, 11(1), 37–65. McGoldrick, K. (2016, May). Building a Center of Excellence in Executive Education for the Global Century. McNay, W. R. (2010). Executive Education for a New Reality: The Stakeholder Theory Comes of Age. Journal of Executive Education, 9(1), 1–16. McNay, W. R. (2012). A Re-Interpretation of Leadership Aligns Human Capital and Business Objectives. Journal of Executive Education, 11(1), 79–95. MOOCs in 2015: Breaking Down the Numbers (EdSurge News). (2015, December 28). Retrieved April 27, 2016, from https://www.edsurge.com/news/2015-12-28-moocs-in-2015-breaking-down-the-numbers New Business Models for Executive Education: Partnering for Impact. (n.d.). Retrieved April 19, 2016, from https://www.efmd.org/index.php/blog/view/217-new-business-models-for-executive-education-partnering-for-impact OES. (2015)“May 2015 OES National Industry-Specific Occupational Employment and Wage Estimates.”. Web. 9 May 2016 Petit, F. (2012). Deadly Diseases or Innovative Practices: How Deming Would View Today’s Executive MBA Sector. Journal of Executive Education, 11(1), 67–78. Ries, E. (2011). The lean startup: how today’s entrepreneurs use continuous innovation to create radically successful businesses (1st ed). New York: Crown Business.

Citations

Roebuck, D. B., & Smith, D. N. (2011). Wisdom from Executive Female Leaders: What Can Organizations, Executive Education Programs, and Graduate Students Learn? Journal of Executive Education, 10(1), 43–73. Rogers, S. and Duening, T. (2013) "Vertical Market Strategy: The Case of an Executive Education Startup in a Medium-Sized Business School," Journal of Executive Education: Vol. 12: Iss. 1, Article 2. Available at: h p://digitalcommons.kennesaw.edu/jee/vol12/iss1/2 Rose, K. J., & Stiefer, T. W. (2013). Advisory Councils in Executive Education: Insights from Practice. Journal of Executive Education, 12(1), 1–12. Scheurer, B. (2016, May 3). UNICON State of the Industry. Retrieved from http://uniconexed.org/2015/2015_UNICON_Industry_Survey_Release.docx SISGeographyWIKI - Farming in the USA. (n.d.). Retrieved May 9, 2016, from http://sisgeographywiki.wikispaces.com/Farming%20in%20the%20USA To Be a Better Leader, Lead Like a Guide | The European Business Review. (n.d.). Retrieved from http://www.europeanbusinessreview.com/?p=6371 Uniconexed.org - “Are American business schools headed For a GM-like catastrophe?” John Byrne, Fortune Magazine, August 17, 2015. (n.d.). Retrieved April 27, 2016, from http://uniconexed.org/en/in-the-news-nav-link.html?id=541 Uniconexed.org - Chief Learning Officer Special Executive Education Edition, Kellye Whitney, February 22, 2016. (n.d.). Retrieved April 27, 2016, from http://uniconexed.org/en/in-the-news-nav-link.html?id=568

Citations

Uniconexed.org - The Problem With Executive Education, Bravetta Hassell, Chief Learning Officer, February 22, 2016. (n.d.). Retrieved April 27, 2016, from http://uniconexed.org/en/in-the-news-nav-link.html?id=567 Valle, M., & O’Mara, K. J. (2012). Targeted Instruction for Executive Education: Classifying Participants to Enhance Program Delivery. Journal of Executive Education, 11(1), 1–13.

Why Small Banks Should Be Thinking About Big Data. (n.d.). Retrieved May 9, 2016, from http://www.americanbanker.com/news/bank-technology/why-small-banks-should-be-thinking-about-big-data-1077955-1.html Wynne, K. J., & Parker, J. M. (2013). A Survey of Team Teaching Effectiveness in Executive Graduate Business Programs. Journal of Executive Education, 12(1), 30–38.

APPENDIX

Value Chain

Firm Infrastructure: University of Montana support. Operational, administrative expenses, salary, capital assets all covered by university.

Human Resource Management: Experience executive education director, strong UM brand recognition, longstanding university

Technology Development: Potential for online development, CRM software, technology awareness, IT support staff

Procurement: Private Donors, customized courses, open enrollment seminars, luncheons, private speakers

Inbound Logistics: Faculty resources, alumni relations, community relations, industry contacts

Marketing & Sales: Website, Griz Nation Brand, corporate outreach, SEM, SEO, online ads, network push, social media, events

Service: Executive Education, tangible benefit, tailored curriculum

Outbound Logistics: Customized content, industry specific courses, experiential learning

External Analysis

Industry Facts• $3.6 M average gross revenue• 5% annual growth

Industry TrendsExternal Trends

Supplier Power (Overall - MODERATE)

Price Sensitivity● Cost of product relative to total cost: Low – Quick breakeven

point for most programs● Suppliers’ Product Differentiation: Medium – Speakers have

wide variety of experiences and educational background● Competition between rivals: High – Plentiful amount of

speakers and available

Bargaining Power● Size and concentration of rivals relative to producers: Low –

Individual speakers typically represent themselves● Rivals’ switching costs: Low – EE programs can switch easily● Rivals’ information: Medium – Published EE speaker rates● Rivals’ ability to backward integrate: Medium – EE programs

can leverage resident faculty but without the same gravitas as industry speakers

Buyer Power (Overall - HIGH)

Price Sensitivity● Cost of product relative to total cost: Medium – High cost for

individual buyer and small businesses, low for large corporations

● Product Differentiation: High – Many various programs tailored to various goals and focus areas

● Competition between buyers: High – Many EE programs and alternatives to choose from

Bargaining Power● Size and concentration of buyers relative to producers: Low –

Many customers, from small and large businesses to individuals

● Buyers’ switching costs: Low – Minimal switching costs● Buyers’ information: High – Easily available information online● Buyers’ ability to backward integrate: High – Many

corporations offer internal EE programs

Threat of Entry (Overall - HIGH)● Economies of scale: High - Larger EE programs

can leverage larger events for lower variable costs (lodging / lunch / materials)

● Network effects: High – Existing Alumni base can quickly be leveraged into EE speaker network

● Absolute cost advantages: High – Larger EE programs can leverage parent University to subsidize costs

● Capital requirements: Low – Primary costs are speaker fees and a facility

● Product differentiation: Medium – Low for generic Leadership courses. High for specialized industry content

● Access to distribution channels: Medium - Established EE programs have an established customer base but new programs can leverage alumni network

● Government and legal barriers: Low – No real barriers

● Retaliation by incumbents: Low – Retailation unlikely

Threat of Substitutes (Overall - MODERATE)● Switching costs: Low – industry can easily

switch to other EE programs or other alternatives

● Product Differentiation: Medium – Low for generic Leadership courses. High for specialized industry content. Various retreats or adventures present also

● Relative Prices and performance of substitutes: Medium – EE offers higher prices than some adventure retreats but more prestigious events

Industry Rivalry - (Overall - Low)● Concentration (L) – Highly dispersed

industry wiith many EE programs● Strategic Stakes (L) – EE represent

relatively low percentage of University revenues

● Product Differentiation (M) – Various focus areas allows for differentiation by industry

● Capacity increments (L) – Relatively easy to scale up more programs per year

● Exit Barriers (L) – Low capital requirements and infrastrcture

● Industry Growth (M) – Moderate industry growth rates