Strategy
Expansion
Lucknow has tied up with McGill University of Canada, the Management Development Institute (MDI) has tied-up with 50 foreign institutes across the globe. The ISB has links with Wharton School of Business, Kellogg School of Management and London Business School.
Expansion Mantra Indian institutes are entering new geographies through acquisitions, investments and newer markets, or setting up new campuses on their own. While some like BITS, Amity, ISB, ICFAI and Symbiosis, believe in following the organic route for expansion, others like Manipal have sought to grow inorganically with joint ventures (JVs), affiliations, takeover of existing properties and facilities, or the franchisee model. Manipal University, has expanded geographically through its self-owned campuses within the country, while Sikkim Manipal University has achieved expansion through the franchisee model, with about 550 tie-ups (including more than 20 in Middle East and Africa). The Group has also acquired TutorVista, MeritTrac and U21 Global to enter potentially high growth segments including online education and skilltesting segment. Manipal Education and Medical Group Managing Director and Chief Executive Officer Dr Ranjan R. Pai says, “Our strategy is both organic and inorganic depending on markets. The advantage of inorganic growth is that all licenses and permissions are already in place, so we can hit the ground running.” Manipal considers JVs only for its international ventures because of local regulations (like in Dubai and Malaysia) or to get a better feel of local conditions. “The local partner normally brings in local know-how and helps in expediting the projects,” he adds. “With the acquisitions made in the recent past, the group’s international operations contribute to more than 50 percent of its total revenue,” notes a recent Ernst & Young report, “Emerging Direction in Global Education (EDGE).” Chauhan says that Amity does not prefer JVs because education is a long-term business and partnerships are hardly
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Edu Tech January 2010
1500 universities will be needed in India to achieve a GER of 15 percent by 2015
long-term since the priorities and vision of the partners may change with time. IMI Director C.S. Venkata Ratnam explains that the institute prefers to go alone because the regulatory authorities do not allow a corporate model for raising finance from the market.
Location Specifies Needs The reasons for choosing locations for new campuses are different for different institutions. Many decide on locations through feasibility studies. For instance Amity discovered during a feasibility survey in the North-East, which has a lower GER than the rest of the country, that more than 65 percent of
“The plus point is greater visibility and furthering of our consultancy and executive education efforts across the country” —C.S. Venkata Ratnam Director, International Management Institute (IMI), Delhi
prospective students would enrol for higher education if a reputed university set up a campus there. It also discovered that there was an overwhelming demand for agro-based courses. To cater to this unique requirement, Amity is planning to open a campus offering exclusive agro-based courses there. Before opening a campus in Bhubaneshwar, IMI Delhi had also done a feasibility study which revealed that Orissa, in general, and Bhubaneswar in particular, is emerging as an educational hub. Although there are 19 management schools in the city with Xavier’s Institute of Management (XIM) as the leading institution, the opportunities and need for postgraduate and executive education in a high-quality institution are vast, given the scale of development projects in the pipeline, particularly in infrastructure and mining. Some institutes like IIM Lucknow and IMT are also opening additional campuses to exclusively cater to specific courses like the management development programs (MDPs). While IIM Lucknow has established a campus at Noida to leverage the commercial hub of the national capital region, IMT plans to open a third campus at Ghaziabad to exclusively cater to these courses. The presence of industry in a particular area also encourages institutions to set up a campus. While the industry absorbs students after they graduate, it also solves the chronic faculty shortage problem for the institutes. “Being in the commercial hub, we are able to invite industry experts to our campus to deliver lectures which give us additional mileage,” says Punam Sahgal, dean, IIM Lucknow’s Noida campus. Little wonder, industry hubs including Bangalore and Hyderabad are now hot spots for quality educational institutions as well. Lastly, the initiatives of some state governments to improve educational infrastructure in their respective states has made it easier for the institutes to set shop there. For example, in IMI’s case, the Orissa government allotted 16-acres of land to the institute at a concessionary price and gave speedy clearances. When Andhra Pradesh government’s efforts to