Over the past several years, the English-language, foreign-degree-granting MBA program market has grown, but slowly – about 5% per year. One interesting feature of the market growth is that the strongest upticks occur in the years when new players have jumped in: more than 10% in 2004, when the USC-Jiao Tong GEMBA program arrived, about 15% when Maryland’s Smith School opened in Shanghai in 2005, and more than 20% in 2007 when the Tsinghua-INSEAD (TIEMBA) program launched in Beijing.
Nearly all the programs suffered enrollment declines in 2009, following the global economic downturn, with two programs in Shanghai losing nearly 50% year-on-year. Aggregate enrollment in 2009 fell nearly 10% from the peak recent year of 2007. Overall enrollment in 2010 stabilized, with many programs reporting increases.
Why only “stabilized” if most programs reported increases? Because two programs suffered major enrollment declines in 2010, and one program withdrew entirely. What divides those that thrive from the three that failed to?
The poster child for recovery is the Olin-Fudan program in Shanghai. Its enrollment declined from 62 in 2008 to 37 in 2009 (GEMBA in Shanghai was the other program to suffer such a major decline in enrollment), down in large part to its relatively high exposure to a specific market sub-sector hit especially hard by the downturn. But Olin-Fudan recovered smartly in 2010, enrolling a class of 55 (up nearly 50%) while not just maintaining but improving quality metrics. People working in the sector widely see Olin-Fudan’s strategy, leadership and execution as being among the strongest in the country; the program’s market-leading recovery in 2010 points not to any aggregate market forces, but to its internal strength, as explanation.
Like Olin-Fudan, the TIEMBA in Beijing, a dual-degree program offered by Tsinghua and INSEAD, regained its 2008 enrollment figure, but going the other way. TIEMBA became a dramatic outlier in 2009, enrolling 51 students, nearly 50% above its 2008 enrollment of 35, in a year when everyone else was down. In 2010, it dropped back down to 33 (a figure that curiously does not yet appear on TIEMBA’s official site, only on Tsinghua’s own site).
TIEMBA declined to comment on this phenomenon, but those same “people working in the sector” that I cite above widely feel that TIEMBA “packed” its 2009 enrollment with an influx of students from INSEAD’s Singapore campus. INSEAD apparently declined to extend the favor again in 2010. Given its tuition of US$80,000, TIEMBA is probably breaking even at best with a class of 33, and the partners are no doubt grumbling at one another.
The Sauder IMBA program, on the Shanghai Jiao Tong campus, also suffered a substantial decline in 2010 enrollment. Through the middle of the last decade, it was plodding along with cohorts of 20 or so. The program hired a talented recruiting manager at the end of 2006, who led a revitalized recruiting process. Its cohort size rose to 30 in 2007, then to 35 in 2008. In 2009 it suffered like everyone else, falling to 27 students. But in 2010, enrollment declined again, to 21 students. The explanation? The program lost the recruiting manager in the summer of 2009, and it was unable to either replace her with someone equally as talented, or compensate internally by having others adopt improved recruiting processes and management. At tuition of US$30,000, this program has surely returned to red ink, and the partners are joining TIEMBA’s in grumbling.
The third contrarian is the University of Maryland’s Smith School EMBA, which withdrew from the market entirely in early 2010, following yet another year of dismal recruiting results. The program had been suffering for years from enrollment levels that weren’t enough to cover costs. People working in the sector widely saw that the Smith program was never able to define a strategically viable position in the market, and that it had ongoing leadership and execution troubles as well. The final straw seems to have been a regulatory problem, but I see this as a symptom rather than a cause of its troubles.
We may conclude two things:
– Any individual program’s success or failure is down primarily to the quality of its leadership, strategy and execution. When you see thriving programs, congratulate the leaders. When you see suffering programs, suggest that they apply some of what they teach their MBA students about strategy, leadership and execution to their own operations.