Apollo Group, Case Study Example

The Apollo group has recorded tremendous success in their initiatives. Their ground breaking  as well as radical ideas and strategies in education development has not only revolutionised they way people think and acquire post secondary education but also enabled many to acquire the education that had previously  only existed in their dreams. The innovative and flexible education structure that is operated by the Apollo group in their institutions has not only seen them spread across the states but also made them the institutions of choice for working students. These bold steps that were taken by Apollo group in establishing these institutions underlines the entrepreneurial skills of the founder John G Sperling. The defining quality of an entrepreneur is the ability to identify opportunities and utilize them and develop them into a business that has good returns on investment (Money matters).

The Apollo group venture into a hitherto neglected field of private education or the for profit education market which was not fully tapped. To achieve this, the group needed to have a good strategic management structure. According to Jones (1999), strategic management is the process through which an organization formulates implements and evaluates decisions that will help the organization to achieve its long-term goals. The process involves tabling the organizations mission, vision and objectives, from these policies and plans designed to achieve these objectives are developed and finally resources are allocated to implement the policies and plans (analiticacorporatestrategy.com). Strategic management is a continuing process which evaluates and controls an organizations business, assesses its competitors and sets strategies to outcompete these competitors. For the group to be able to penetrate thrive and have good prospects for the future, they had to have a good strategy.

In conducting a SWOT analysis, the management was able to figure the effectiveness of the strategy adopted. SWOT analysis, analyses the strengths, weaknesses opportunities and threats in the adopted model. This helps marketers to focus on key issues. In SWOT analysis opportunities and threats represent external factors. Threats include things like price wars with competitors, an upcoming competitor in the same market and competitors with superior access to channels of distribution or even imposed as well as the governing legislation of the education sector. Opportunities could be mergers or strategic alliances, changing market segments to get more profit, a market vacated by incompetent competitor, an international market among others while strengths and weaknesses are internal factors; Strengths are aspects that add value to an organizations product or service .This could be quality processes, location of the business and specialist marketing expertise. A weakness on the other hand could be damaged reputation, lack of marketing expertise, and poor quality goods or services undifferentiated products in relation to competitors among others, (Saloner, G, Shepherd, A and  Podolny, J. 2001). The Apollo group has capitalized on the opportunities for adult education as well as online education to further their interest and widen their coverage in the market.

Market Penetration Strategy

The founder of this very innovative group had to find unique offerings that not only stand out from the crowded but also add quality to the people. To this end they targeted the hitherto untapped market of working adults. This not only ensured that they stick out but also ensured that it was easier for them to manage their institutions since the institution required less resources for extracurricular activities that are required for the conventional institutions. This also combined well with their policy of employing working professionals as their tutors.  This went a long way in assuring the mature students that they were being trained by the professionals with proven practical experience. Since the Universities specifically University of Phoenix (UOP) targeted the mature students, they offered sufficient flexibility to the students and their employers, it became very effective to ensure that people who took  up the courses could afford to pay for them hence generating the revenue they aimed at.

The second strategy that helped the Apollo group and specifically UOP penetrate the market effectively was the use of environmental scanning an aspect of SWOT analysis. The keenness to the changes in the environment is another vital ingredient of effective strategic management. After setting these goals and strategies the strategic management kept reassessing each strategy to see whether it can be successfully implemented or whether it needs replacement to meet changes in technology, a changed economic environment, new competitors, and changes in financial social and political environment (Miller and Dess 1996). This is a key attribute of SWOT analysis. Having realised changing environment, Apollo group started offering online courses which have distinguished them from the other institutions. This has helped them get such a wide following among the people seeking academic development. Phoenix online has therefore led to more variability and availability of the courses especially for since the most of the students are busy and working.

Apollo Inc in the present

Many people have taken up the opportunities presented by these institutions to get the higher education that they could not have accessed previously. The university offers education at more affordable rates as compared to the rates at which the other universities offer their courses. This has served as a major attraction for the students. This is reinforced by the US department of education forecasting the adult education market to be a multibillion dollar industry (Pearce J & Robinson B 2009). The Apollo group being a pioneer in adult education has tapped into this market. The value proposition has however not been affected by the reduced fees. This has seen students join in large numbers. The use of value proposition as selling point on its own is a strategy whose efficacy cannot be ignored.

Phoenix online has done well in the market. This is not ignoring the fact that they are yet to be the clear market leaders in e-learning. However the opportunities they provide for people to pursue their academic interests while still doing their normal jobs has challenged the conventional learning institutions which are founded on the basis of face to face learning sessions. Collaborations with units such as the eArmyU has led to the opening up of new opportunities in the education of the armed forces personnel who have had problems in the past since they could not access such facilities due to their mobile nature. E-learning institutions have faced very stiff challenges since the accreditation has been slow to come by. However this challenged has been overcome slowly through persistence and several of the institutions have attained accreditation.  The progress has been good enough to the extent that 15% of the estimated 600,000 online students in the US are enrolled at Phoenix online this implies that they have the lion’s share of the market. This is due to the entrepreneurial skills that they had of embracing change and defining their strategic fit in the market. For a company to fit into its market through development of proper strategy, then accurate forecasting of the market environment is necessary, (Eliot, Timmerman & Granger 2006). This is what they did appropriately and hence it became their opportunity to break new ground and be the market leaders in e-learning.

The current financial situation implies that Apollo group has done sufficiently well and has recorded steady growth in their financial performance over the years. Their sound management model that lays emphasis on profitability while at the same time not ignoring the essence of quality has seen them grow in leap and bounds. This growth has not been in financials only but also their campuses and learning centres have grown similarly overtime.

Revenue growth (Income)

The growth charts show a steady increase in net revenue for the group over the period of four years. This shows sound management strategies that have seen the share price shoot from the IPO price of $0.76 to a high of $98 in 2006 (Pearce J & Robinson B 2009). This also shows that the management model that has been adopted by the group has instilled investor confidence as well as granting the group the market strength that they so much need for stability. This growth in revenue has not only given them all the financial muscle they need. The group has put the revenue into good use by investing heavily in information technology to enable them run their online courses. As the University of Melbourne President Allan Gilbert put it that e-learning will become the way through which a majority of the human beings get educated to beyond secondary level in this century. In keeping true to their trailblazing culture, Apollo group has invested heavily in technology to ensure the benefit from this development

Numerical Growth

The steady growth in numbers has been in tandem with the growth in revenue. The campuses as well as the learning centres have grown steadily, this is a sign of how well the academic revolution has been embraced in the country and beyond.

The UOP has continued having the bulk of its students as the working group of people who are willing to pay and have their classes in the most convenient conditions and in the most flexible setups as opposed to the regular universities where the programmes are quite strenuous for the working class.

Value proposition of the UOP

UOP has distinctive features that have set it aside and made it a distinctive learning institution. These are as set below.

The future outlook.

Apollo in general and UOP in particular looks forward to more challenging and vibrant market where even the hitherto conservative universities such as Harvard which had equated the move for online education to diluting of the academic atmosphere that is found in the universities have also embraced e-learning . The Apollo group is focusing on expanding the reach of its 13 universities to all the states and eventually to all the metropolitan areas. The UOP has made efforts to get into overseas education and it is viewed as the way into the future. The university is also making all conscious efforts to ensure that they start attending to younger students since their focus previously has been on the working class. The Apollo group has also channelled enough resources in the marketing, the amount of $545 million allocated to direct marketing is a colossal figure though this is expected to reflect in the manner in which the revenue is projected to grow. This gives very bright prospects for the future of UOP in particular and Apollo Inc as a team.

Conclusion.

Strategic management calls for a well structured approach that incorporates analysis, formulation and evaluation that keeps a good focus on the overall fit of the company to the eventual goal. The strategic fit in an organization is guided by the manner in which the organization plans its strategy. By putting in place good communication channels to establish rapport and create identity of to the strategy being adopted. This motivates the staff to support the change strategy that is being adopted by the company in an effort to support the strategy and growth of the organization.

Strategic fit is about employing the models and utilizing the opportunities they present carefully to derive all the possible advantages. The use of a properly structured plan for the effecting of change in such a strategic model is good in ensuring that any problems are anticipated and mitigating measures are taken to ease the impact of such problems.

References

Corporate Strategy. Retrieved 21 August 2009. Available. http://www.analiticacorporatestrategy.com/corporatestrategy.html

Eliot, T, Granger, J & Timmerman, A (2006), Handbook of economic forecasting, Elsevier, Sydney.

Jones, R and Hill, C (1999) Strategic management: An integrated approach, Houghton Mifflin Company, New York.

Miller, A and Dess, G (1996), Strategic management, Mcgraw Hill, London

Money Matters.com. What is an Entrepreneur? Available at http://www.moneymatters101.com/startingabusiness/whatisanentreprenuer.asp Retrieved 21 July 2009.

Pearce, J. A., & Robinson, R. B. (2009). Strategic management (11th ed.). New York: McGraw Hill.

Saloner, G, Shepard, A and Podolny, J. ( 2001) ,.Strategic management, John Willey: Washington.