The Business economics of On the web Education and learning
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As more and more universities are opening up to the idea of online proposition, it becomes important to raise the question: "Can on the web-education become a profitable and sustainable business? " To resolve this query, allow us to check out the various essential facets of this design which may choose the feasibility and economic sustenance from the e-strategy. Some important variables to be considered are definitely the desire, power to provide, delivery and technology method. Web Address
The demand for the services are abundant as previously discussed therefore may be the option of marketplace athletes who could cater to this developing need. For this reason, the viability from the proposal sits entirely around the issues of successfully providing the services and selecting or instead developing an appropriate enterprise model. It is crucial to assess the subsequent elements to assess the business economics of your thought:
-Digital college vs. standard college (in improvement)
-Selling product compared to. marketing encounter
-Technologies: availability and costs
-Procedure for giving differentiation and quality
-Price evaluation: Preliminary versus. marginal
Virtual School versus. Conventional College
There could be two diverse models of the on the web education and learning: an online on-line product along with an present university or college increasing its standard version to accommodate the web proposition. Both models have distinct economics. A virtual product starts completely from scratch and possesses no previous knowledge of a regular schooling version; it readies curricula possibly on its own or in conjunction with a current educational institution; in addition, it has very low structure expenditures but at the same time no marketing and branding support.
What matters are the quality of content and the process of delivery, although it is relatively easy to start this business. For normal components or programs, this appears to be an effective endeavor as the articles would not really challenging or expensive to produce or disperse. 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 other side are the existing colleges that might be increasing their solutions to e-understanding. These do experience an issue of implementing a business product which might not be compatible with their pre-existing undertaking. There exists a likelihood of cannibalizing their present successful enterprise model. If to be continued simultaneously, need to be targeting reasonably different markets, both models.
This model posseses an benefit across a new online installation with regards to already available articles and present and productive brand name; hence the establishment could cost reasonably limited. The model will not demand huge costs as being the content articles are accessible, and just should be digitized; it is additionally reasonably easier to create requirement for the proposal, driving on the rear of existing traditional version. The institution still needs to work towards differentiating the model, not by the content but by the process of delivery.
Marketing Product compared to. Marketing Encounter
The establishment may possibly plan to sell ten thousand diplomas per year or might such as a number which is much lower (i.e. < 200). The question is whether the institution is attempting to focus on the quality of the education and students 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 environment and experience of a traditional model, an attempt to get the program experience as close to the traditional experience would be considered a good differentiating factor. This experience would not stem from the content of the program as it is easily replicable, but from the content delivery process reaching the end user. 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. According to Lance Secretan, "It took 37 years for TV to reach 50 million homes and it took the web 4 years to do the same." 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.
