B-schools Trends: New Segments, More Competition, Less Differentiation

I was quoted in a recent article in the New York Times “Business Schools: Looking Local for a Global Reach”

“Prospective business school students are starting to look beyond traditional destinations in the West. And those who are originally from the BRIC developing nations — Brazil, Russia, India and China — are increasingly exploring the possibilities at home.

This group already has a name. In a column for University World News last month, one higher education specialist, Rahul Choudaha, called them ‘glocal students,’ or ‘people who have global aspirations, but need to stay local.'”

The article continues that

“The United States remains the top M.B.A. destination for students from BRIC countries. Still, the demand for Western degrees is leveling off, while demand for local programs is showing signs of rising. The number of score reports sent by BRIC citizens to home country programs grew 50 percent between 2007 and 2011.”

While there is a “glocal” segment which is considering to stay within region and move beyond traditional choices in the West, expanding class of High New Worth Individuals in Asia is also driving the growth of wealthy who are willing to pay for an MBA and living experience the West.

In my earlier post, I noted that the number of Americans taking GMAT decreased by 775 in five years however, the number increased by 27,361 among Asians, especially driven by China.

It seems that in the world of international higher education, B-schools are the first to experience real “global” competition where students have increasingly more choices of destinations and newer segments of students with different needs are emerging. Not to mention the competitive threat of models of delivery like online and new formats like one-year MBA. In fact, recently McGraw-Hill Higher Education partnered with Cleveland State University to launch the Mobile Accelerated MBA (MAMBA) program–100% online, one-year MBA, accredited by AACSB.

Students are also questioning the return on investment of MBA program due to perceptions of a bleaker economy and higher cost of education. This is already prompting them to consider alternative destinations or cheaper formats or shorter duration of programs.

The shape of things to come for many B-schools will be more competition and less differentiation–a challenge not easy to overcome.

Dr. Rahul Choudaha