Small Private Universities’ limbo - The vanishing of Educational Middle Market.

According to the document of Mc Kinsey Quarterly, there’s a trend for middle markets and companies to disappear in the next years, increasing the world polarization where the high-end and low-end are the only sectors with sustainable growth.

If we apply the results of that study to the Education field and more precisely to Private Universities with a strong focus on business and (of course) Business Schools, we’ll see there’s a growth in the market for business education but according to the polarization process mentioned before.

With reference to the course prize (Master’s prize), we can distribute the business education companies in three big groups:

Low-end market: Public Universities (around 3.000 €)

Middle market: Small and medium private universities and business schools

(Master studies: around 15.000 €)

High-end market: Big universities or Business Schools (around 50.000 €)

According to McKinsey study, there will be a decrease in next years in the number of students of middle market universities like PFH or other small & medium Business Schools. However, since last years there was an increasing number of students attending to these private universities which is probably due to the world crisis, which has increase the number of people that prefer to keep on studying in order to apply for a better job in the future.

We have to consider this situation as an anomalous situation caused by the crisis, but with a middle term view really scaring for middle universities stakeholders.

¿Is there a solution? Of course it is. Companies and managers think that the strategies and services provided that were successful in the past will be successful in the future.

The maintenance of a high level competing system/company is complex and much more in a field like business schools, where students are the product and the client at the same time.

Being aware of future trends and changes in the educational sector is necessary for the survival of these companies.

The following graph shows the life cycle of a company, doesn’t matter in what field.

The graph shows the trend of:

Comfortable Position - Relax - Decadence

According to the graph, only a deep change on company’s strategy would avoid the disaster. Innovation and market strategic positioning in a high-end or low-end market are the solutions for these almost-dying companies trapped in the middle market.