The Economics of On the web Training

De BISAWiki

It becomes important to raise the question, as more and more universities are opening up to the idea of online proposition: "Can on the web-education be described as a sustainable and profitable business? " To reply to this query, allow us to check out the different essential areas of this product which could choose the feasibility and economic sustenance in the e-strategy. Some important variables to be considered would be the demand, ability to source, technology and delivery process. Website

The need for the services are plentiful as previously referred to and thus is definitely the accessibility of market place gamers who could meet the needs of this developing require. For this reason, the viability of your task sits entirely on the issues of efficiently supplying the assistance and selecting or rather designing the right business structure. It is important to examine the following factors to evaluate the economics of the concept:

-Internet university vs. traditional university or college (in alteration)

-Offering product vs. marketing expertise

-Technologies: availability and costs

-Procedure for delivering quality and differentiation

-Charge analysis: First compared to. marginal

Virtual University or college versus. Conventional School

There can be two distinct models of an on the web training: an online on the web design and an pre-existing college expanding its standard product to fit the web based undertaking. Equally models have different business economics. An online version starts from scratch and it has no prior knowledge about a conventional education product; it readies curricula possibly itself or in conjunction with a pre-existing academic school; furthermore, it has low structure expenses but simultaneously no branding help.

What matters are the quality of content and the process of delivery, although it is relatively easy to start this business. For normal modules or courses, this appears to be an effective enterprise as the articles would stop being difficult or expensive to produce or spread. However, care needs to be taken to ensure the target segment for the program is carefully identified, as this model is not only competing with traditional models but also with online propositions of existing reputed educational institutions.

On the opposite side are the existing educational institutions that would be increasing their providers to e-discovering. These do encounter a challenge of taking on a business version which may not be appropriate for their present proposal. You will discover a chance of cannibalizing their current profitable enterprise model. If to be continued simultaneously, need to be targeting reasonably different markets, both models.

This model comes with an edge more than a new internet set-up in terms of previously readily available content and pre-existing and productive company; thus the organization could fee limited. The version fails to demand large charges as being the content articles are available, and only needs to be digitized; it is additionally fairly much easier to generate need for the undertaking, driving on the rear of the present traditional model. However, the institution still needs to work towards differentiating the model, not by the content but by the process of delivery.

Selling Product versus. Marketing Experience

The institution might plan to offer 10,000 qualifications annually or might like a number that is lower (i.e. < 200). The question is whether the institution is attempting to focus on the quality of the students and education or is merely happy with building the numbers and playing on cost. Online education does provide an opportunity to reach the masses with very low marginal costs but simultaneously could affect its reputation.

Though it is extremely hard to replicate the experience and environment of a traditional model, an attempt to get the program experience as close to the traditional experience would be considered a good differentiating factor. From the content delivery process reaching the end user, even though this experience would not stem from the content of the program as it is easily replicable. Again, the type of module and the class of customer segment would decide upon the extent of the "experience" required to be instilled in the program.

Technology: Availability and Costs
The complete business idea of online education is dependent on technology. The base of this technology is the internet which is the fastest growing tool in terms of number of users. "It took 37 years for TV to reach 50 million homes and it took the web 4 years to do the same., according to Lance Secretan" Though the base technology (the internet) does not seem to be a constraint, the bandwidth available to support the online education is questionable. Technology such as streaming audio and video requires huge bandwidth which may not be a constraint for institutions but for end users.

In most countries, the internet is at a nascent stage. More importantly the bandwidth to support "virtual reality" is not available. Even in developed countries it would be very expensive to have synchronous and interactive video lectures or sessions.

Though the pace of technological advancements is increasingly fast, and thus the bandwidth problem would soon be resolved, it may still be expensive to have a model that provides a similar learning experience to a traditional model. Therefore, the educational institutions would need to strike a balance between the "experience" and the cost depending on their target market segment(s).

Delivering Quality and Differentiation
In order to differentiate itself from others, it would be essential for an institution to focus on the process of delivering value to the end users. Educational institutions, keeping in mind their target market(s) and the available technology, would have to decide on the extent to which they should replicate or rather extend the strengths and benefits of their existing traditional model, if any, to the online proposition.

Aspects such as how to hold online lectures or how to transfer digitalized case material or even how to structure the program to make it more effective, would need to be evaluated.
If the proposition is to sell the program as a commodity, it would be better to conduct it in an asynchronous fashion, focus on delivering standard requirements, and cut down costs rather than add a new "experience" to it. This excludes premium programs with higher fees. These ones would be targeting people who are willing to pay for the technology needed to get a real experience of learning.

Cost Analysis: Initial vs. Marginal
The costs associated with an online proposition are low when compared to the ones of a traditional model which requires much greater infrastructure. The profits would depend upon the economic rent that could be derived from the services offered. If the institution has sufficiently differentiated itself from its competitors, this economic rent could only be sustained in the long run.

The online model also has very low marginal costs compared to the initial set-up expenses. Unlike a traditional model which is limited by the size of its buildings (physical infrastructure) or the number of its faculty members, the capacity of an online model can be stretched to a great extent. This would help reduce marginal costs until a further increase in users requires significant investments in technology upgrades.