Co-Opetition - Adam M. Brandenburger [15]
The University’s Suppliers
A university’s suppliers are primarily its employees: faculty, staff, and administrators. Since universities are in the business of disseminating information, they are also in the market for ideas. Thus, publishers of academic books and journals and providers of electronic information services (such as Lexis/Nexis and WestLaw) are suppliers to universities, too.
The University’s Competitors
Universities have no shortage of competitors: admissions offices compete with one another for students; faculty across schools compete for government and foundation grant money. Universities even face competition from their own faculty. For example, business school professors often give their own executive-education programs to companies on a freelance basis. That makes them competitors to business schools in the executive-education market.12 Meanwhile, college presidents, along with their development officers, compete for the checkbooks of potential donors. They compete not only with other universities but also with hospitals, museums, and other nonprofits.
On the supply side, universities compete with one another for employees—faculty and administrators, in particular. Sometimes they also have to compete with private enterprise for talent. For example, finance professors Myron Scholes from Stanford and the late Fischer Black from MIT, inventors of the Black-Scholes option pricing model, left academia for Wall Street.
Technology is likely to increase the competition among schools. As videoconferencing becomes better and cheaper, remote classes will grow in importance. The university with the best undergraduate biology course, say, will be able to offer that course to students everywhere. This, in turn, will make universities less reliant on any but the very best faculty.13
The University’s Complementors
Universities, though they compete with one another for students and faculty, are complementors in creating the market for higher education in the first place. High school students are more willing to invest in preparing for college, knowing that there are many schools to choose from. More college students pursue Ph.D.’s, knowing that there are a number of schools that might hire them.
The list of complementors to a university is huge. Kindergarten, elementary, junior high, and high schools complement universities. The better a student’s earlier education, the more he or she will benefit from a college education. By the same token, undergraduate schools in one university and graduate schools in another university complement one another. The better a student’s undergraduate program, the more he or she will gain from a graduate program.
Other complements to a college education are computers and housing. That’s why most universities help their students buy computers and locate off-campus housing. Since schools attract students from all over, perhaps they should also help their students buy air travel—another complement. Working as consultants to Sallie Mae, the largest student loan provider, we’ve been able to put this perspective into practice. Sallie Mae is now helping its students buy complements for less. It has negotiated special student discounts on Northwest flights, MCI phone calls, and some publishers’ textbooks.
Local hotel accommodation is an important complement to business schools offering executive-education programs. Accommodations were a problem for Northwestern’s Kellogg School of Management, since there were few high-quality hotel rooms in Evanston, Illinois. So Kellogg built its own executive-education quarters.
Cultural activities and restaurants make a university more attractive to students. In this respect, schools in New York and Boston, for example, have an edge over those in Palo Alto and Princeton. There are many, many other complementors to universities—24-hour copy shops, coffee shops, pizza and ice cream parlors, and more. These businesses all make a point of locating close to university campuses.
Local employers complement