Business Decision Models

0-11430000QUEEN’S SCHOOL OF BUSINESSProject ReportAssessment of MBA Class expansion opportunity MBAS861Team 412 ,[object Object]

Muneet Bhatia_________________

Ornila Rahman_________________

Peter Szaflarski_________________

Pranab Pandey_________________

Vishal Sajnani_________________Contents TOC quot;
1-3quot;
Contents PAGEREF _Toc304788716 2Executive Summary PAGEREF _Toc304788717 3Introduction PAGEREF _Toc304788718 4Industry Analysis PAGEREF _Toc304788719 4Challenges posed by the industry PAGEREF _Toc304788720 4Scope of Modeling PAGEREF _Toc304788721 5Components of Model PAGEREF _Toc304788722 6Assumptions PAGEREF _Toc304788723 6Considerations PAGEREF _Toc304788724 6Data Collection PAGEREF _Toc304788725 7Model description PAGEREF _Toc304788726 7Modeling outcome PAGEREF _Toc304788727 9Business impact PAGEREF _Toc304788728 9Analysis PAGEREF _Toc304788729 10Advantages and Benefits PAGEREF _Toc304788730 10Disadvantages and Limitations PAGEREF _Toc304788731 10Conclusion PAGEREF _Toc304788732 11Future work PAGEREF _Toc304788733 11Appendix PAGEREF _Toc304788734 12 Executive Summary With the expansion of Goodes Hall, there is an opportunity to expand the class size of the MBA program and hence increase the profit. MBA office recognizes this opportunity and has requested T-412 Consulting LLP to study the scope of the opportunity and propose the recommendations to the office. T- 412 have conducted an extensive research on the management education industry in North America and recognize various challenges while considering the opportunity at hand. The team has also conducted interviews of various stake holders in the process: Marketing Manager, current MBA and commerce students and alumni of the school. While this exercise was done to gain an understanding of thought processes of these important stake holders, we have built a mathematical model to gain an insight in to the tangible gains from this opportunity as well. This way, the team has taken both quantitative and qualitative factors in account while analyzing the situation and coming up with final recommendations. The team has figured out from the model that over a period of next ten years, the class size of 270 will maximize the monetary gains. But at the same time, we have also realized that Queen’s MBA is a preferred choice for a large number of stake holders due to its smaller class size as compared to most of the competitor schools in North America. Hence, by increasing the class size from 120 to 270 in one step, we may run the risk of losing its unique competitive advantage. The prospective applicants who consider Queen’s as their first choice due to its personalized and integrated learning environment might not look at Queen’s the same way they do today. Considering these factors, we recommend to the MBA program office to take a more cautious and incremental approach to the status quo. The MBA program office can look at increasing the class size by 10-15% every 2-3 years. This way, the program will slowly adapt to the increased class size while not compromising on the experience of the students. This approach will also provide ample time to the school to slowly create awareness about this change in the prospective MBA applicant community through its strategic marketing campaigns. Introduction According to a report published by the Graduate Management Admission Council (GMAC)--a global non-profit education organization-there has been a marked increase in demand for a MBA education in recent years. While the demand for MBAs in the North America is on the rise, it’s exploding at unprecedented levels in many emerging markets around the world. The hottest markets are: India, where employer demand for MBAs was up 43% last year; Brazil, where demand jumped by 25%; the United Arab Emirates, up 22%; Russia, up 22%, and China, where employer demand for the MBA degree shot up 19%. For highly ranked consulting firms like McKinsey & Company and innovative companies such as the search-engine giant Google, MBA graduating classes are optimal places to find new professional staff. This trend is starting to be felt far outside the consulting realm, as companies in a range of industries such as telecommunications, finance, manufacturing, etc., are looking at MBA graduates and experience as a necessary requirement or a highly helpful determinant when examining candidates to join the management team. As more and more corporations are becoming global, demand of experienced and high quality management talent is expected to grow in the future. Global integration is real and it is not going to stop. Industry Analysis For the purposes of this assignment, Queen’s University is in the “MBA business school” industry; more specifically, it is a business school that offers a Master of Business Administration degree. Typical industry analyses do not work for this model since there are suppliers per se and the consumer does not purchase a tangible product. Still, there are many aspects that can be explored within the industry. Challenges posed by the industry Though Queen’s has somewhat of a first mover advantage (since it is the first business school in Canada), it faces competition from older schools outside of Canada and new innovative programs everywhere in the world. The Queen’s MBA is not a low-cost producer, since there are many programs that are significantly less expensive. Queen’s instead targets a niche market (those students who are interested in moving to Canada, willing to pay more for the Queen’s experience, the team-based environment, the Queen’s reputation etc.), so there is difficulty in expanding the class since there may not be enough number of the right kind of students available, and if they are available they may already have found one of Queen’s many competitors. In additional to this, new entrants are offering MBA degrees at lower cost and sometimes online via distance learning. If the goal of our target consumer is simply to get a degree then the new entrants offer the same thing for lesser cost and attracting these students to Queen’s seems unlikely. Also, substitutes, such as the Master of Global Management and other non-MBA business degrees, are becoming a popular alternative to the pricey MBA. All of the industry challenges mentioned above give prospective students more bargaining power for price while also giving them alternatives other than a Queen’s MBA. These challenges have to be considered when deciding to increase the MBA class size but fall outside of the scope of the model. Scope of Modeling We have chosen to use a probabilistic simulation model for this problem. Some of the limitations of the model have been mentioned in the previous section and others will be covered in later sections. for now we will explore why we chose to use this type of model. We chose to make this a probabilistic model because we realize that there is a certain amount of randomness in creating a class of a certain size. The Queen’s MBA program currently has a target class size of 120, and to achieve this target size the program administration currently have a policy of accepting more than 120 students in anticipation of a certain proportion rejecting the offer. Since the exact number of rejected offers is essentially random, the class size is likely to be different from the target class size; we have incorporated this aspect into our model with a binomial distribution offer rejection probabilities based on information from the program office. Another probabilistic aspect is the effect of placement rate, scholarships and marketing tactics on the prospective applicants. The admissions team uses all of these aspects to try to gain as large an applicant pool as possible which, in turn, allows the Queen’s MBA to choose the best possible candidates. The reliability of these tactics is modeled with a normal distribution with a standard deviation that is 10% of the prediction based on numbers from the previous years. The last probabilistic element of the model is the job placement rate. Queen’s has a track record of success when it comes to job placement, but it is dependent on acceptance offer percentage of students that apply to the program. If Queen’s does not get a large enough applicant pool, then it will have to give a larger percentage of acceptances and allow some candidates into the program that, under ordinary circumstances, would not be admitted into the program. This aspect is approximated by the “transformation function”, which takes the percentage of applicants who are given offers and transforms it into a predicted placement rate. The actual number of students placed is modeled as a binomial random variable with n = the class size and p = the predicted placement rate, therefore the actual placement rate is the actual number of students placed divided by the class size. The advantage of the simulation is that we can take into account some level of randomness while still gaining some insight into the future about our decision. The model also allows us to adjust the level of randomness by changing the standard deviation and the desired acceptance offer ratio relative to the expected placement rate. A probabilistic simulation model most accurately describes what would happen as a result of a class size expansion decision. Components of Model Assumptions While developing the model, we had to make a number of assumptions. In some cases data was not available where as in other cases, some data was available on public forums or was obtained from Queen’s MBA office. Following are the assumptions made in the model: ,[object Object]

Reputation: through BusinessWeek ranking, word of mouth publicity, prominent alumni presence in the industry etc.

Awareness: through online marketing campaigns, MBA fairs and information sessions, visits to school, scholarships etc.

Number of applications to admission offer ratio 6:1.

Placement rate for current year should be around 90% to achieve desired quality of applicants for the next year class. We have linked the placement rate to the quality of the students in our model. Higher the placement rate, higher would be the quality of applicants for next year class.

Offers accepted = Class size, we have ignored the candidates who accept the offer and then don’t show up on the registration day.

Business Decision Models

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (19)

Similaire à Business Decision Models

Similaire à Business Decision Models (20)

Dernier

Dernier (20)

Business Decision Models