Question

Discuss low-cost and differentiation strategy? Do you believe some university is is pursuing a low-cost and differentiation strategy? Give examples of how they're achieving the strategy, and what we can do better.

Answer 1

The low cost and differentiation strategy is meant to serve the segments of customer which are out of bound for the company due to higher price of its product and services. The low cost differentiation strategy is aimed to create the "no frill" products / services which address to r needs ( or some of them) of the customers of this segment at least possible price. If a university pursues a low cost strategy, it might cut down on the cost by using methods like using online instruction programs in place of its regular classroom programs, which would enable it to reach thousands of students virtually across the globe and thus cut down on costs. These programs might be designed for the global students who can't afford the fees as well as cost of stay at the campus, and look for cost effective yet high quality education. The university can use economy of scale through higher number of online students and cut down on cost of infrastructure to house the students physically, to bring down the overall cost of education significantly. Other possible modes are introduction of certificate programs which need only a week's stay or even less at the university. These small duration programs can add good value to the working professionals who can't join a full time course, or the students who want a job oriented, value for money course at low cost. Other model can be of delivering the courses through agents and franchisees, but the quality of instruction is one crucial aspect which needs to be looked into seriously, so as to ensure that the courses live up to the reputation of the university.