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8/12/2019 MBA Task Force Presentation to Fuqua Managers
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Challenges and Opportunities of a
Changing MBA Market
Based on the report by Bob Garda, Melanie Kahn, Kevin McCarl
May 2, 2005
Managers at Fuqua Retreat – August 9, 2005
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MBA Task Force 2005 2
Fuqua daytime applications have also fallen off…
…Volume appears to be driven by GDP and mean salary
trends at the top 22 business schools…
Fuqua Applications - Model Versus Actual
3,557
2,190 2,149
1,500
2,000
2,500
3,000
3,500
4,000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
A p p l i c a t i o
n s
Actual
Forecast
(1990-
2004)
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MBA Task Force 2005 3
After a run-up in applications to Fuqua in the 1990s,
applications from all regions have fallen sharply…
Application TrendsFuqua Applicants by Region of Origin
902 828 7921,003
784 825
192210
195
157
116 116
300210 235
199
126 99
12192 102
106
86 92
1,8361,842
2,064 1,730
1,2741,016
1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
Year
A p p l i c a t i o n s
US
ROW
Latin
America
Europe
Asia
Source: Fuqua Admissions Data
3,351
2,386
3,195
3,388
3,182
2,148
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MBA Task Force 2005 4
Trends in MBA Applications
Top 22 Programs
16.6 16.9 16.2 17.2 16.9 16.8 17.3 17.3
57.259.063.8
82.6 80.2 79.7 93.8
65.0
0.0%
5.3%6.7% 6.5% 9.0%
7.0%
2.5%
7.4%
-
20.0
40.0
60.0
80.0
100.0
120.0
1990 1992 1994 1996 1998 2000 2002 2004
Year
A p p l i c a t i o n s ( 0 0 0 ' s )
-14%
-10%
-6%
-2%
2%
6%
10%
U S D $ ( T r i l l i o
n s )
FT Enrollment FT Apps GDP Growth Source: BusinessWeek Rankings
Applications fall from new height after 2002 Top 22
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MBA Task Force 2005 5
Worldwide GMATs have fallen off, suggesting declining
interest in business school…
Source: GMAC Profile of GMAT Candidates 1998-99 to 2003-04
GMATs taken by academic year
US v non-US citizens
98.9 101 106.9124.4 119.2 113.7 112.2
69.2 74.987.7
108.9102
88.3 86.5
0
50
100
150
200
250
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
projected
G M
A T s ( i n 0 0 0 s )
non-US
US
168.1 175.8
194.6
233.3221.2
202.0
…Vocal critics Pfeffer, Mintzberg, Tyson & Andrews, and Bennis &O’Toole have written articles highly critical of the MBA…
198.7
• “No one should be allowed out of a conventional MBA program without having a skull and crossbones stamped firmly
on his or her forehead, over the words „Warning: NOT prepared to manage!‟” – Mintzberg
• Business schools “stand accused of being too market driven, pandering to the ratings, failing to ask important
questions, and…losing claims of professionalization as they "dumb down" the content of courses, inflate grades to
keep students happy, and pursue curricular fads.” – Pfeffer
• “By allowing the scientific-research model to drive out all others, busienss schools are institutionaliing their own
irrelevance.” – Bennis/O‟Toole
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MBA Task Force 2005 6
From Forbes, September 5, 2005
• For the 90 full-time programs that completed a survey,only 3 saw an increase in applications last year (HEC,University of Alabama, and the University ofConnecticut) and there was an average decline of 33%between 2002 and last year.
• Schools like Tuck, Kellogg, and Harvard saw better than30% drops in applications.
• Last year, 42% of applicants were accepted across theschools in the survey.
• Top schools like Harvard are trying different strategies toincrease applications. Harvard this year accepted 20undergrads straight from school compared to 5 theprevious year.
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Student Source for US MBA Programs
22.2 23.6 26.4 33.0
71.3 73.578.6
91.0
7.012.1
20.0
9.2
11.3
16.2
16.2
5.3
9.0
9.0
6.7
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
1 9 9 4 E S T
1 9 9 6
1 9 9 8
2 0 0 0
2 0 0 1
2 0 0 2
2 0 0 3
2 0 0 4
2 0 0 5
2 0 0 6
2 0 0 7
2 0 0 8
2 0 0 9
2 0 1 0 E S T
Year
D e g r e e s ( 0 0 0 s
)
Int'l PT
Int'l FT
ForProfit
Domestic PT
Domestic FT
Source: US News Rankings, AACSB, GMAC data, Estimated
108
142
131
169
Given recent trends, the US MBA market will probably grow slowly…
…International student growth will probably be hit hardest…
Underlying reasons for slowgrowth in domestic market
• Slowing economic growth
• Falling MBA salaries
• Poor image of US business
• For-Profit siphoning off part-time students due to costand convenience
• Negative articles by Pfeffer,Mintzberg, and Tyson
• Price & ROI
Underlying reasons for nointernational growth
• Growth in number of top-flight international schools
• Popularity of 15-18 monthprograms
• Price versus int‟l MBA
• Tighter US work visarestrictions
• Stringent entry restrictions
• Heavy marketing by English
speaking internationalschoolsKey assumptions: Domestic student growth at GDP or 3% per yearInternational student growth at zero
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School
US Rank
2006
US Rank
2001
Enroll
2006
Accept
2006
Enroll
2001
Accept
2001 Enroll Accept
Carnegie Mellon 17 19 194 28% 219 31% -11% 3%
Indiana 27 20 225 33% 281 35% -20% 2%
Yale 15 16 234 26% 216 24% 8% -2%
Emory 18 21 177 37% 179 35% -1% -2%
Harvard 1 1 893 14% 887 12% 1% -2%
Stanford 2 1 377 10% 366 7% 3% -3%
Columbia 9 6 598 15% 628 11% -5% -4%
Haas 6 10 248 17% 245 12% 1% -5%Stern 13 14 378 22% 418 17% -10% -5%
Sloan 4 4 393 21% 357 15% 10% -6%
Kellogg 4 5 527 22% 599 16% -12% -6%
Wharton 2 3 820 22% 773 13% 6% -9%
UCLA 11 11 328 25% 329 14% 0% -11%
Chicago 8 6 544 29% 504 18% 8% -11%
USC 26 22 269 37% 286 24% -6% -13%
Tuck 6 11 252 27% 189 13% 33% -14%
Michigan 10 9 439 36% 431 20% 2% -16%Cornell 15 15 272 36% 297 19% -8% -17%
Darden 14 11 315 38% 242 19% 30% -19%
Kenan-Flagler 21 18 271 47% 261 27% 4% -20%
Texas 18 16 353 43% 371 22% -5% -21%
Fuqua 11 8 403 38% 332 15% 22% -23%
Mean 387 28% 382 19% 2% -9%
Fuqua has seen the largest drop in student selectivity…
…Since enrollment has remained relatively constant, the
drop in acceptance rate is largely due to the fall-off in
applications…
Source: US News Rankings – please note US News rankings year leads publication by one year (i.e. 2006 rankings were published in April of 2005).Class enrollment estimate comes from dividing total student body size by 2.
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Fuqua has also seen a significant decrease in
yield…
School
BW Rank
2004
BW Rank
2000 BW Rank Apps 2004
Accept
2004 Yield 2004 Apps 2000
Accept
2000 Yield 2000 Apps Accept Yield
Michigan 6 6 - 2,068 35% 61% 3,923 21% 53% -47% 14% 8%
Tuck 10 16 6 1,695 25% 59% 2,849 14% 52% -41% 11% 7%
Harvard 5 3 (2) 7,139 13% 87% 8,124 13% 82% -12% 0% 5%
Columbia 8 7 (1) 4,871 15% 71% 5,637 12% 69% -14% 3% 2%
Chicago 2 10 8 3,492 23% 60% 3,271 25% 59% 7% -2% 1%
Stern 13 13 - 3,403 22% 48% 3,910 22% 50% -13% 0% -2%
UCLA 14 12 (2) 2,941 25% 45% 4,564 15% 48% -36% 10% -3%
USC 27 24 (3) 1,693 36% 44% 2,485 27% 47% -32% 9% -3%Indiana 18 20 2 1,221 33% 48% 1,818 32% 51% -33% 1% -3%
Stanford 4 11 7 4,697 10% 78% 5,431 8% 82% -14% 2% -4%
Kellogg 1 2 1 4,299 23% 57% 5,802 18% 61% -26% 5% -4%
Wharton 3 1 (2) 5,622 16% 68% 7,428 14% 73% -24% 2% -5%
Cornell 7 8 1 1,826 36% 47% 2,305 25% 52% -21% 11% -5%
Kenan-Flagler 16 15 (1) 1,500 47% 40% 2,601 22% 46% -42% 25% -6%
Emory 20 28 8 1,083 37% 39% 1,144 34% 45% -5% 3% -6%
Yale 22 19 (3) 1,998 25% 42% 2,446 17% 48% -18% 8% -6%
Sloan 9 4 (5) 2,728 20% 66% 2,859 17% 73% -5% 3% -7%
Fuqua 11 5 (6) 2,389 37% 45% 3,439 19% 54% -31% 18% -9%
Haas 17 18 1 2,858 17% 47% 3,109 14% 56% -8% 3% -9%
Darden 12 9 (3) 2,110 38% 39% 2,510 19% 52% -16% 19% -13%
Carnegie Mellon 15 14 (1) 1,194 28% 45% 1,265 31% 61% -6% -3% -16%
Texas 19 17 (2) 1,647 43% 45% 2,753 25% 61% -40% 18% -16%
Mean 2,840 27% 54% 3,622 20% 58% -22% 7% -4%
Source: Business Week Rankings – the most recent yield data available comes from BusinessWeek‟s 2004 rankings.
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Summary of Market Situation
• After a run-up in applications to Fuqua in the
1990s, applications from all regions have fallensharply through 2005.
• Worldwide GMATs have dropped, signaling adeclining interest in the MBA.
• Given recent trends, the US MBA market shouldexhibit slow growth
– International student growth will probably behit hardest, largely due to many overseas
schools considered to be on par with those inthe US.
– The one exception in the near term may beincreased applications from Asia.
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It may no longer be enough to be very good.
Fuqua may need to be (and be seen as)better than our competitors.
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8/12/2019 MBA Task Force Presentation to Fuqua Managers
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School
US Rank
2006
US Rank
2003 US Rank
Peer
Rank
Recruit
Rank
Accept
Rank
GMAT
Rank
GPA
Rank
Salary
Rank
Employment
Rank
Employment
+3 Rank
Model
Rank
Haas 6 10 4 (1) 1 - 4 3 3 15 18 7
UCLA 11 15 4 2 - (1) 3 (1) 7 7 3 2
Emory 18 22 4 (1) 1 4 4 11 - 2 (10) 1
Tuck 6 9 3 - (1) (1) 2 2 - (2) 10 1
Harvard 1 2 1 1 - - (1) 1 1 7 (6) 1
Wharton 2 3 1 1 - (1) 2 1 - 7 1 -
Kellogg 4 5 1 (2) 3 1 (3) 1 6 7 10 2
Cornell 15 16 1 - 4 1 - (4) (3) (3) (5) -
Carnegie Mellon 17 18 1 - 1 7 6 5 (1) (8) 8 3
Sloan 4 4 - (2) - 4 (8) (3) (1) 12 8 (1)
Michigan 10 10 - 1 - (2) 1 (1) (3) 6 4 2
Stern 13 13 - 2 (3) 6 2 2 5 9 6 1
Texas 18 18 - (1) 1 - (5) - (3) (7) 4 -
Stanford 2 1 (1) - - - (1) (2) (1) (9) 1 (1)
Columbia 9 8 (1) (1) (2) - (1) 2 (2) (2) (2) (2)
Chicago 8 6 (2) - - 6 (6) 9 1 (3) (5) 2
Yale 15 13 (2) - 4 3 1 (1) (2) (13) (19) (6)
Darden 14 10 (4) - 3 (11) (3) (7) (1) (17) (14) (4) Kenan-Flagler 21 17 (4) 2 (4) (7) (4) (2) (1) 7 7 (1)
Fuqua 11 6 (5) (1) (2) (7) 4 - (6) (8) (3) (6)
USC 26 20 (6) 3 (4) 3 2 2 - (3) (18) (1)
Indiana 27 21 (6) (1) (2) 2 (1) (3) 1 (4) - -
Weight 25% 15% 1% 16% 8% 14% 7% 14%
In US News , Fuqua dropped from #5 to #11 over a 3-year
period due to its precipitous drop in relative salary and
employment after graduation statistics…
Source: US News Rankings – please note US News rankings year leads publication by one year (i.e. 2006 rankings were published in April of 2005)
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School
BW Rank
2004
BW Rank
2000 BW Rank
Corprate
Rank
Graduate
Rank
Intellectual
Rank
Cumulative
ScoreChicago 2 10 8 3 19 (7) 9.2
Emory 20 28 8 7 6 13 7.2
Stanford 4 11 7 5 14 - 8.6
Tuck 10 16 6 6 6 5 5.9
Indiana 18 20 2 2 2 (7) 1.1
Kellogg 1 2 1 (1) (1) (5) (1.4)
Cornell 7 8 1 2 - (1) 0.8
Haas 17 18 1 3 1 15 3.3
Michigan 6 6 - 2 (4) (3) (1.2) Stern 13 13 - 1 2 (2) 1.2
Columbia 8 7 (1) (1) 2 2 0.7
Carnegie Mellon 15 14 (1) (1) (6) 11 (2.1)
Kenan-Flagler 16 15 (1) (1) (6) 13 (1.9)
Wharton 3 1 (2) (4) - 2 (1.6)
Harvard 5 3 (2) 1 (7) 6 (2.1)
UCLA 14 12 (2) (8) (4) 9 (4.5)
Texas 19 17 (2) (5) (1) (6) (3.3)
Darden 12 9 (3) (4) (5) (18) (5.9) Yale 22 19 (3) (5) 1 (12) (3.0)
USC 27 24 (3) (4) (4) (1) (3.7)
Sloan 9 4 (5) (7) 3 - (1.8)
Fuqua 11 5 (6) (4) (2) (9) (3.6)
Weight 45% 45% 10%
From 2000 to 2004, Fuqua lost ground in the BusinessWeek
rankings due to poor corporate, graduate, and peer rankings…
Source: BusinessWeek Rankings – weightings are 45% on corporate, 45% on graduate, 10% on intellectual capital
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An analysis of BusinessWeek rankings in 2004 indicates
Fuqua has many strengths from which to build…
Category BW Ranking –
Top 30
Recent Initiatives
Student quality (i.e. GMAT) 2
Responsiveness of faculty & administration 7
Intellectual capital 10* Dean‟s push for publications
Facilities - New buildings
Faculty numbers - Almost 100 faculty
…But needs to shore up perceived weaknesses… Teaching quality (core) 28 Teaching changes in core
Value of investment 22
Career management center 21-24 CMC management changes
Network and connections 24 New alumni director
International business 23
Selectivity 18
Teaching quality (electives) 15 Teaching changes
Ethics 14
Yield 14 PhD CRM project
* #1 in 2000 BW rankings, highlighted rows are included in the graduate survey
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With employment figures and corporate scores figuring so
strongly into rankings, the CMC today appears to be pushing
Fuqua in the right direction…
# Companies Recruiting at Fuqua
91 9474 82 81 90
117
70
42 33 3850
0
30
60
90
120
150
180
210
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Source: Fuqua CMC
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Total companies with any on-campus recruiting activity* 161 208 164 116 115 119 140
New since previous year - 117 70 42 33 38 50
Returning since previous year - 91 94 74 82 81 90
Lost since previous year - 69 114 90 34 34 29
Note: *Companies performed at least one recruiting activity on campus (SIP, FY interviews, SY interviews)
New
208
164
116 115 119
140
Returning
Perennial Recruiters
…Recruiters’ interest in Fuqua is on the rebound since the
early 2000s recession lows…
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Initiatives to Consider – 1 (as proposed by Garda
et al.)
• Boost marketing effort across all Fuqua programs to
increase pool of qualified applicants and to improve yield• Create an alliance of top business schools to promote
the value of the MBA degree
• Focus on the growth sector of the MBA market: EMBA
• Develop sector-specific curriculum to address popularstudent interests, as Fuqua has done with HSM and asother peer schools have done to varying degrees
• Develop joint programs with top international schools asother top US schools have already done with top-tier
international schools• Launch an accelerated 15-18 month MBA program as
many international schools and some top US schoolshave done
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Initiatives to Consider – 2 (as proposed by Garda
et al.)
• Raise the academic bar for students andrecognize individual achievement
• Improve placement
• Enhance integration of international students• Improve faculty research productivity
• Use the BOV more effectively