Between Collaboration and Merger: Expanding Alliance Strategies in Higher Education

November 2015
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As the higher education landscape grows increasingly complex, uncertain and dynamic, a more nuanced and creative approach to strategic alliances is needed.

Summary

Drawing on the strategic alliance literature, this report considers the range of alliance arrangements, motivations, benefits and success factors for higher education institutions. The authors identify a “sweet spot” for strategic system alliances and joint ventures that can provide essential economies of scope and scale, and enable core business model changes — both academic and administrative.

Key Insights
Rather than “going it alone,” collective competition through constellations of ally institutions can help higher education institutions address their increasingly complex, uncertain and dynamic industry and operating environments.
Institutions need to consider more assertive and intentional forms of collaboration and alliances, building upon the successes of geography-based consortia but avoiding the complications and limitations of mergers.
Economies of scale and scope, which are critical to improved competitiveness but elude many institutions, are most likely realized through strategically selected multilateral, complementary or supplementary alliances.
To enhance their understanding of the continuum of options and key variables, institutional leaders must be educated on collective competition and alliance strategies, including the benefits and motivations of strategic alliances and joint ventures.
Effective alliances must capitalize on multiple design criteria, including substantial core business model changes; cost-savings, efficiencies and integration; expanded capabilities that drive growth and revenues; and a model of joint control.
An essential ingredient of competition-altering, strategic alliances is the creation of shared utilities, joint platforms and capabilities that sustainability-challenged institutions cannot achieve alone.
Methodology

The authors apply lessons learned from partnerships outside higher education and present a practitioner’s point of view on ways to enhance institutional competitiveness and financial sustainability. Together, they offer rigorous analysis and specific criteria for designing alliances.