6 Paths for Leading You Education Business to Blue Ocean, Part II

BY Jeff Cobb

Blue Ocean - Looking Across Strategic Groups

In this post I continue my exploration of the “six paths framework,” a tool used within the overall approach of Blue Ocean Strategy to reconstruct market boundaries and help you redefine your business in such a way that competition is effectively eliminated.

In my first post, I considered looking across alternative industries. In this post, I’ll discuss looking across strategic groups. If you would like a convenient PDF with all six parts of this series, just click the button below. Otherwise, read on.

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Strategic Groups

There are existing strategic approaches within nearly every field or industry. Think, for example, of the luxury car market versus the economy car market. Both fall within the same overall industry – automobiles – but sellers pursue very different strategies for serving essentially the same functional need.

What are some of the strategic groupings within the overall market for adult education and development, and what might you learn from them? Kim and Chan write in Blue Ocean Strategy:

Strategic groups can generally be ranked in a rough hierarchical order built on two dimensions: price and performance. Each jump in price tends to bring a corresponding jump in some dimensions of performance. [56]

Within the continuing education and professional development market, I’d argue that there is a lot of focus around the middle of the market, where trade and professional associations, along with community colleges and university and college continuing education programs, compete on moderate price – moderate performance offerings. Viewed in terms of the Value Ramp™ approach that we advocate, most of these organizations focus too much on the middle – they often do not have much to offer at either the low price or high price end of their curves.

The low price end of the curve (the lower left on the Value Ramp) is being disrupted by an influx of free and low cost offerings and by trends like the “massive open online course,” or MOOC, movement. While I think there are clear opportunities there, for purposes of this post I’d like to focus on the high end of the market: the high price – high value area at the top right of the Value Ramp.

The Executive Education Model

A strategic group that I find particularly interesting relative to this area of the curve is executive education. This is a roughly $1 billion market – traditionally housed within university business schools – in which customers (often corporate buyers) typically pay thousands, if not tens of thousands for non-credit, non-degree programs. Executive education offerings may be open enrollment or customized, but in either case, they tend to provide relatively small group, intimate access to top flight experts. The traditional view has been that face-to-face interaction is necessary for the level of learning executive education aims to deliver, and the need for face-to-face interaction with relatively high-priced instructors has driven the cost structure.

But advances in technology, particularly those that are supporting much more dynamic and effective approaches to online collaboration and blended learning are making executive education a market ripe for disruption.  I’d argue, for example, that what TED has done with its place-based conferences is akin to a scaled version of executive education.

TED has created an exclusive event that provides relatively intimate access to well-known experts as well as to a group of forward-thinking peers.  Those interested in the event have to apply to attend and the price tag is several thousand dollars above what you pay for the average conference. It is, however, always sold out because attendees see very high value, relative to cost in the package that TED has put together.  This sort of value/cost innovation is at the very heart of Blue Ocean Strategy. (See additional comments on TED in my Content Pod™ on effective pricing practices from the Leading Learning Symposium.)

Another area in which I have seen potential demand for executive-type education is in the market for continuing professional education (CPE) for accountants. This market tends to be focused on certified public accountants (CPAs), but there is a significant slice of the accounting profession that works in “business and industry” rather than in accounting firms and that does not necessarily even care about maintaining their CPA credentials. Chief financial officers at small-to-mid-sized businesses, in particular, are a group within this business and industry segment that could be ripe for an executive education-type offering. They often operate alone, or with a relatively small staff, and could benefit greatly from expert-guided peer interaction around the issues that are common in corporate accounting and financial management.

What are some of the parallels to these examples in your markets, or how might looking across other strategic groups potentially lead to some breakthroughs? Please comment and share your thoughts.


P.S. – Here are links to all six parts of this series:

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