Delta Force Consulting Board Presentation 06 021

Delta Force Consulting“We make a difference to your bottom line”

Maple University

Faculty of Business

Growth StrategyDavid BradyClaude CaronHeather NicolRoberto Siqueira

June 2, 2008

Delta Force Consulting

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Executive Summary

The Faculty of Business is experiencing declining financial performance and share of an expanding student cohort

It faces strong competition for the best students and is suffering from a lack of market positioning.

It has been mandated by the Board of Governors of Maple University to develop strategies to improve financial performance and achieve sustainable growth

The Faculty has a number of strengths and opportunities that can be used for a new strategy

A number of alternatives have been considered


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Executive Summary We recommend:

Repositioning and rebranding and introduce new programs, building on areas of expertise

Developing new sources of revenue through fundraising and through the creation of a Centre for Research and Consulting

Enhancing its marketing and alumni relations program Pursuing the construction of a new building to support

future growth and support re-branding efforts This strategy will provide a sustainable platform for

future growth and meet the targets set by the Board


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Agenda

Situational Analysis Strategic Alternatives Strategic Recommendations Implementation Plan Financial Projections


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Situational Analysis

Maple UniversityFaculty of Business


Resources•Safe & attractive campus•High ratio of tenured faculty•Research reputation•Capacity issues with facilities•Vacant land Current Strategy

•Provide broad educational experience and conduct research•Focus on needs of students, employers & the community•Maintain lower ratio of student-to-faculty

Mgmt. Preferences•Financial concerns•Wants increased enrolment and new source of revenues•Academic objectives

Organization •Strong in research•Issues with Marketing and Alumni Relations•Tenured faculty cannot be released without their consent

Market Dynamics•Growing number of 20 to 24 years old seeking university education•Growing demand for business programs•Success linked to quality education leading to high paying jobs

Industry•Recruitment mostly from Ontario (92%)•Competitive environment, with two nearest much larger universities offering thriving business programs (one co-op)•Colleges offering bachelor’s degree•Local Tech schools with high placement•Some niches unaddressed by the Faculty

Macro Environment•New Government funding for student aid and for infrastructures•Tuitions increase capped at 4.5% for first-year students•Strong economic growth•Population aged 20 to 24 on the rise

Situational Analysis Internal Scan/External Scan


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Situational Analysis Financial Status

Declining financial performance Revenue has increased slightly

year over year for past 3 years Expenses increased

approximately 2% more than revenues, resulting in expanding deficit

Pressure at university level with 0.2% growth in total liabilities and a significant payment due in 2008 - $4M (current portion of LTD)

Busines School Revenue and Deficit

(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

2004/05 2005/06 2006/07 2007/08

Year

$

Revenue Deficit

000s


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Situational Analysis Market Analysis

SpecializationLow High

Local

National

IT Institute

Oak College

Maple University

University A

University B

Maple U as % of Cda

0.70%0.72%0.74%

0.76%0.78%0.80%0.82%

0.84%0.86%0.88%

2004/05 2005/06 2006/07 2007/08

Maple U as % of Cda

Flat enrolment for past four years at approximately 660 students

Declining share of student market

Positioned as a small, regional player with a low degree of specialization.


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Situation AnalysisSWOT Analysis

Threats

•Highly competitive environment

•Financial decline

Opportunities

•Growing demand for university education

•Alumni outreach, corporate donation andnaming opportunities

•Expertise and reputation in research translates in potential for new programs

•New Government funding programs

Weaknesses

•Lacks a brand identity

•Inadequate facilities will limit growth

•Marketing function and alumni relations

Strengths

•Safe, attractive and centrally located campus

•High published ranking for class size, rate of tenure faculty and student retention

•Strong reputation in research

•Accounting has high success rate for jobs and accounting designation exams


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Situation AnalysisSummary

Faces a decline in financial situation and market position due to: strong competition for students and a lack of market

positioning Has strengths and opportunities that can be used:

Safe and attractive campus, centrally located Good reputation in number of areas Growing youth population seeking university education Untapped demand to support labour market needs In-house expertise in accounting, non-for-profit, marketing

and leading teams Potential to exploit the alumni program, sponsorships and

donations to financially support its future direction Government funding


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Situation AnalysisSummary

The proposed growth strategy should respond to: The need to create a brand and to target a sustainable

niche market: In areas of strengths and expertise such as accounting. Beyond its current local focus.

The need to address the following management and capacity issues: Weak marketing and alumni relations functions. Inadequate facilities and future space constraints.

Shortage of funding to address deficiencies.


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Strategic Alternatives



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Strategic Alternatives

Reposition and Rebrand Increase Enrolment:

Co-Op Education Program Centre for Excellence in Research and Consulting Local Business Seminars Recruitment of International Students

Increase Donations New Business School Building Cost Correction – Eliminate HR Major


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Choice Criteria

Criteria used in determining strategic choices

Profitable by Yr 3 Employability Focused Sustainable Growth Supports Mission and Strategy Tolerable Risk


15

Strategic AlternativesNot Recommended

Offer Local Business Seminars Non-material revenue contribution Competition Distraction to core strategy

Recruitment of international students Highly competitive No material enrolment increase until

2012/13 Necessity of joining accreditation body

(i.e. AACSB)

Cost correction strategy (i.e. Exiting from programs) Decrease in student enrolment High cost of terminations Linkages between HR and other

departments

Profitable by Yr 3 Employability Focused

Sustainable Growth

Supports Mission and Strategy

Tolerable Risk

Yes No No No Yes


Sustainable Growth


Tolerable Risk

Yes No No No No


Sustainable Growth


Tolerable Risk

No No Yes Yes Yes


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Strategic Initiative #1Reposition and Rebrand

Reposition as a niche playerFocus on accounting strength

Broaden geographic to a regional focus.

New program offeringsCMA, CGA and CA Not-for-profit organizations


Sustainable Growth


Tolerable Risk

Yes Yes Yes Yes Yes

Advantages Focus limited resources on strengths

Wider geographic emphasis Specific program focus

Assists with other objectives Focus on educational deliverables

marketable skills, accounting accreditation

Creates a sustainable new position

Disadvantages Cost Issues with the management of the

change Required approvals


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Strategic Initiative #2Co-Op Education Program

Advantages Generates revenue Leverages accounting focus Increases enrolment Consistent with employability focused

education Positive impact on classroom capacity issues Positive impact of the Faculty’s brand Applicable to other departments and faculties

Disadvantages Fee receipts are delayed 3 years Competition – large university/Oak Required approvals Additional staff requirements

Co-op Program Launch in 2009-10 First students placed: 2011-12 Accounting focus Requires 3 new staff


Sustainable Growth


Tolerable Risk

Yes Yes Yes Yes Yes


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Strategic Initiative #2Co-Op Education Program

Enrolment

0

100

200

300

400

500

600

700

800

2009/10 2010/11 2011/12 2012/13 2013/14

Total Enrolment

Accounting Enrolment

Excess/Deficit

-$100

-$50

$-

$50

$100

$150

$200

$250

$300

$350

2009/10 2010/11 2011/12 2012/13 2013/14

Excess/Deficit


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Research Centre Establish centre to support business research

and consulting Requires part time research director

Advantages Enhances Faculty’s reputation Generates revenue in first year Consistent with Senates desire for

academic achievement

Disadvantages Requires coordination with the IPO Upfront setup costs

Strategic Initiative #3Centre for Excellence in Research and Consulting


SustainableGrowth


Tolerable Risk

Yes No Yes Yes Yes

Centre for Excellence in Research and Consulting 000s

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2009/10 2010/11 2011/12 2012/13 2013/14

Revenue

Total Expenses

Excess/Deficit


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Strategic Initiative #4 Increase Donations


Sustainable Growth


Tolerable Risk

Yes Yes Yes Yes Yes

Advantages Important new source of sustainable

revenue Foundation of new capital plan Leverages relationship with Mr. Harding

and other high profile alumni

Disadvantages No history and weak alumni, community

and corporate relations Relies on success of rebranding effort Need to ensure that revenue earned

remains with the Faculty

Develop faculty-specific fundraising effort Hire fundraiser Work with TL Harding Direct mail and cultivation events Target alumni

Donations 000s

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2009/10 2010/11 2011/12 2012/13 2013/14

Total Receipts

Total Expenses

Net Fundraising


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Strategic Initiative #7Cost Correction – Eliminate HR Major

Strategic Initiative #5New Business School Building

Business School Dependent upon success of fundraising efforts Needs to be accommodated in other

buildings until funds available

Advantages Positive impact on image Addresses long term capacity issues Seed funding available from Mr. Harding Additional funding available from the

Province of Ontario

Disadvantages Depends on success of fundraising No desire from the Board of Governors

for additional major capital projects Debt financing and annual maintenance

requirements


Sustainable Growth


Tolerable Risk

Yes No Yes Yes Yes

Enrolment

300

400

500

600

700

800

900

1000

2009/2010 2010/11 2011/12 2012/13 2013/14

Academic Year

Students

Available to Business Required by Business

Capacity Deficit

Building Cost $ 9,200

Furnishings/Computers $ 2,000

Land (market value) $ 1,200

Total $ 12,400


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Recommendation and Implementation Strategy



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Faculty of BusinessRecommendations

Build Brand & Reposition

Alumni Outreach

Fundraising New Building

New Vision - To be one of the top three provincial choices for specialist business education, focused on strength in research and excellence in teaching


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Dean Black Department Heads Key staff:

Expert in leading teams Expert in organizational culture Expert in measuring organizational performance

Faculty of BusinessChange Team


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Strength in Accounting Co-op Program - Director to be hired High employability after graduation

Build on strengths CMA, CGA, CA – Dr. Czerak Non-for-profit – Dr. Nakin

Target market will become broader Driven by Dean and a new dedicated

marketing hire

Maple UniversityRepositioning


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Maple UniversityBranding

SpecializationLow High

Local

National

IT Institute

Oak College

Maple University

University A

University B

Website Print materials Open houses 2014 (50th)

anniversary celebration

True. Strong. Incomparable.


27

Maple University Branding


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Dedicated Fundraising - hire Fundraiser Campaign - Building but also endowment and

scholarships Lead marketing efforts Targets - Corporate, Alumni, Major Gifts Establish ask amounts Work with TL Harding Major Gift Campaign - dinners and follow up Dean will support efforts and gain approvals

Maple UniversityNew Sources of Revenue


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Centre of Excellence for Research and Consulting Strategy to be led by Dr. Montaine, assisted by part-

time director Coordination with Innovation Promotion Office Secure short term space with ultimate location in

new building

Maple UniversityNew Sources of Revenue


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Dedicated facility Accommodates future growth and supports

rebranding Dean to obtain approvals Funding ($12.4 M)

$5.5 M from bank funding $2.0 M from Province’s infrastructure program $2.0 M from Mr. Harding $2.9 M from other donations

Maple UniversityPursue New Building Construction


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Dean to coordinate Government grants - MU Finance Secure bank funding - MU Finance Confirm site Assist in hiring project manager - MU Facilities

Maple UniversityPursue New Building Construction


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Near Term Longer Term

Branding/Positioning

Establish Co-op Program

New Programs

Fundraising

Research Centre

Business Building

Implementation Time Line


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000s 5 Yr Projected Income Statement

2009/10 2010/11 2011/12 2012/13 2013/14

Enrolment Growth 4.6% 7.2% 10.0% 13.1% 16.4%

Total Enrolment 695 713 731 752 774

Revenue

Government Grants $ 5,274 $ 5,407 $ 5,548 $ 5,708 $ 5,870

Domestic/Tuition & Other Fees $ 4,096 $ 4,366 $ 4,660 $ 4,985 $ 5,332

Ancillary Operations (net) $ 67 $ 69 $ 71 $ 73 $ 75

Donations $ 377 $ 1,390 $ 2,403 $ 3,418 $ 3,435

Research $ 611 $ 794 $ 1,032 $ 1,342 $ 1,744

Interest Earned $ 94 $ 101 $ 61 $ 231 $ 481

Total Revenue $10,519 $12,126 $13,775 $15,757 $16,937

Expenses

Academic programs $ 6,255 $ 6,425 $ 6,596 $ 6,787 $ 7,006

Student Services $ 1,338 $ 1,374 $ 1,417 $ 1,465 $ 1,518

Sum of Expense Items $ 673 $ 697 $ 898 $ 999 $ 1,137

Total Expenses $ 8,267 $ 8,496 $ 8,912 $ 9,250 $ 9,661

Excess/(deficiency) $ 2,252 $ 3,631 $ 4,864 $ 6,506 $ 7,276


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Questions?


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Recommendations to be implemented Timeframe Responsible Rebrand the Faculty

Senate/ BoG Approvals Initiate to 6 months

Dean

Brand Develop brand promise Immediate A. Montaine Communicate 6 months Dean

Marketing Website 6 months A. Montaine New Materials 9 months A. Montaine Hire Staff 6 months (wait

for approvals to hire, commence search now)

Dean/A. Montaine

Establish MOU with MU Marketing and Alumni Relations (“MAR”)

Initiate to 12 months

New hire and Dean

Change/add courses NFP course 2 years Nakin supported by

Accounting NFP expert and Marketing recent hire (supported by Czerak/Gupta)

Combined degrees 2 years Czerak Increase Student Enrolment through Co-op

Senate/BofG Approvals Initiate to 4 months

Dean

Hire Staff 9 months Dean Marketing 4 months New hire Curriculum

Develop 12 months Czerak with her expert faculty

Implement 18 to 24 months New staff Consult with other faculties Initiate to 12

months Dean with Management faculty specializing in org culture

Consult with Marketing Alumni Rel. 6 to 12 months New hire and Dean


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Recommendations to be implemented Timeframe Responsible Alumni Outreach and Fundraising


Dean

Hire Staff 6 to 9 months Dean Develop Fundraising Plan including Ask Amounts

9 to 12 months New staff

Marketing 12 to 18 months New staff Engage Mr. Harding 3 months Dean Consult with MAR 6 to 12 months New hire and Dean

Construction of New Building


Dean

Secure Land 6 months (part of approval)

Dean

Secure Mortgage Financing 2 years MU Finance department

Secure Government Grants 2 years Dean, MU Finance department and new staff

Hire Staff (e.g. project manager) 18 months to 2 years

Dean, MU Facilities


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Sustainable Growth Supports Mission and Strategy

Tolerable Risk

Yes No No No No

Strategic InitiativeLocal Business Seminars

Seminar Programs• Targeted at local businesses• Commence with one course• Topics include corporate governance,

organizational performance, not-for-profit and marketing

Advantages Enhances community relations Leverages professors knowledge and

expertise Increases facility utilization Generates revenue

Disadvantages Risk not tolerable Potential competition Distraction to the faculties core strategy Revenue generated is not-material

Local Business Seminars 000s

$(10,000)

$(5,000)

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

2009-10 2010-2011 2011-2012 2012-2013 2013-14

Total Revenue

Total Expenses

Excess/Def


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International Student Recruiting



Tolerable Risk

No No Yes Yes Yes

Strategic Initiative

International Students No incremental increase until 2010/11 Join AACSB for marketing cache Moderate advertising and promotion Recruiter paid on percentage of increase

Advantages Generates revenue Enhances brand reputation and expands

international reputation Sustainable source of revenue

Disadvantages Highly competitive Dependant on success of branding efforts No enrolment increase until 2012/13 Need to join accreditation body (AACSB) Cost and coordination of advertising and

promotion

International Student Enrolment

-200

0

200

400

600

800

1000

2009/10 2010/11 2011/12 2012/13 2013/14

Enrolment

Total Revenue

Total Expenses

Surplus/Deficit


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Strategic Initiative #7

Cost Correction – Eliminate HR Major



Tolerable Risk

Yes No No No Yes


Cost Correction – Eliminate HR Major

Advantages Impact on long run operating costs Consistent with strength

(accounting) based focus

Disadvantages High cost of terminations Decreases enrolment HR department supports other

Faculty departments Abandons this market to local

competitor

Eliminate the Human Resources Major Reduces enrolment by 53 students Requires termination of 2 Professors

Cost Correction - Eliminate HR 000s

($500)

$0

$500

$1,000

$1,500

$2,000

$2,500

2009/10 2010/11 2011/12 2012/13 2013/14

Excess/(Deficit)

Cumulative Excess/(Deficit)


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Choice Criteria


Profitable by Yr 3

Employability Focused

Sustainable Growth


Tolerable Risk

Reposition and Rebrand

Yes Yes Yes Yes Yes

Co-Op Education Program

Yes Yes Yes Yes Yes

Local Business Seminars

Yes No No No No

Centre for Excellence in Research and

Consulting

Yes No Yes Yes Yes

International Student

Recruiting

No No Yes Yes Yes

Increase Donations

Yes Yes Yes Yes Yes

New Business School Building

Yes No Yes Yes Yes

Cost Correction – Eliminate HR

Major

Yes No No No Yes


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New Mission Attracting Ontario’s brightest – students and staff – to

Maple University’s Faculty of Business that excels in business disciplines. We prepare young minds to be successful in today’s job-focused economy.

Faculty of BusinessRecommendations

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