Apollo Group

Apollo Group Inc. was launched in 1976. John Sperling came up with the idea that rather than catering to 18-22 year olds he focused on the neglected market of working adults and he recruited working professionals as teachers rather than tenured professors. The University of Phoenix Online has more than 18,000 faculties, only about 450 are full time. Sperling ran his University to make money, despite the critiques from the education establishment. Sperling faced failure everyday for the first 10 years. From an IPO of $0.76 to a mid 2005 high of $98, Apollo stock had risen and was in the top 50 performing companies on Wall Street and with a net income of $414 million and a price-earnings ratio of 76. 15% of the 600,000 U.S. students earning a degree via the Net are enrolled at Phoenix Online. Phoenix Online gets about 1/3 of the industry's revenue. The online trend has moved to many universities. The University of Maryland there are 63,000 enrolled in online classes. Even the Army is getting in on the action. They have an e-learning program which annually there are more than 10,000 soldiers taking classes and earning degrees online from 24 colleges. The Army enrollment soon grew to 80,000. The Army awarded PWC Consulting a $453 million, five year contract to create an electronic university that allows soldiers to be anywhere and study. Also by cutting turnover, eArmyU could almost pay for itself. The use of internet learning is an increasing business. Nearly 75% of the 4,000 major colleges and universities in the U.S. now offer classes over the internet or use the web to enhance campus classes. Roughly 6 million students take online classes from U.S. higher-ed institutions and students from developing countries are jumping online too. E-learning is an influence in the traditional college class as well. Colleges are using the Web in on-campus classes to augment textbooks and boost communication. Venture capitalists pumped some $5 billion into e-learning companies, and $1 billion was put into companies that have flamed out. Good news for Apollo is that the adult education market is a significant and growing component of the post-secondary education market an it's estimated to be a more than $275 billion industry. Over 40% of all students enrolled in higher education programs are over the age of 24 and the market is expected to increase. Traditional universities were designed for students 18-24. The four subsidiaries of the Apollo Group are: The University of Phoenix-largest private university in the U.S., Institute for Professional Development- provides adult education program development and management consulting services to 23 regionally accredited private colleges, The College for Financial Planning Institutes- one of the leading providers of financial services education for individuals and corporations, Western International University- adapts the Apollo model with younger professionals that seek individualized instruction through campuses in Arizona, and also China, India, and the Netherlands. Strategy: Target working adults and make the program easily accessible to study online and have a low drop out rate. This can be accomplished through these 6 elements. Establish New University of Phoenix campuses and learning centers -New locations are selected based on analysis of various factors including population of working adults in the area, the number of local employers, and the availability of similar programs offered by other institutions. International Expansion -Major growth opportunity. U.S. is the most common destination for international students studying abroad. (cheaper for int'l students) Enhance Existing Educational Programs -current enrollment by college is Undergrad Business 41%, Grad business 18%, Info Systems & Tech. 11%, Social & Behavioral Sciences 8%, General & Professional Studies 8%, Education 7%, Health Sciences and Nursing 6%, Advanced Studies 1%
Improving by... Accredited Degree Programs, Experienced Faculty Resources (professors need a Masters or Doctoral degree and 5 years teaching), Current and Relevant Standardized Programs, Emphasize Input from Employers of UOP Students, Pedagogical Innovations, Small class-size with quality instructor contact, and Offer a Low Cost Advantage Expand educational Programs -UOP added the Master of Business Administration in Health care Management and specializations in Marketing and Human Resources Management to its Master of Business Administration; specializations in Elementary and Secondary Education and Adult Education and Distance Learning to its Master of Counseling. Serve a Broader Student Age Group -54% are women. Age 25 and under is 16.5%, 26-33 is 38%, 34-45 is 34.7%, 46+ is 10.8%. Average age off UOP student is 35. Marketing Aggressively -Apollo group spent $545 million in last fiscal year marketing its academic programs. SWOT S Strengths would be tuition is 10,000 55% of what a private college charges. Save money because there is no lease on any buildings. Small class size, avg. is 12. Round the clock tech support. Credible name and good name recognition. Other competitors have struggled due to lack of accreditation and poor name recognition. Students can study whenever and wherever. Adults can earn a degree faster because of no breaks i.e. x-mas, summer, spring. Adult education market is a $275 billion industry. W Weaknesses would be long established rules make it difficult for online students to get financial aid, many elite universities thinks that online classes dilutes the value of their name, online classes are not personable and can't ask questions, O Opportunities would be online education market has room for growth, beginning to tap the international market, 70 million working adults in America who don't have a college degree, career advancement, blended classes ( 65% online), high school classes are begging to go online. T Threats would be most colleges think it would be impossible to replicate its classroom education online, people associate online classes as a poor mans degree, UOP broke the law and this could have some bad publicity and tarnish the good reputation that they built, www.uopsucks.com Mission: We have focused on making significant changes in two major areas of our business: marketing and retention. Improvements will benefit both students and stockholders in the long run