Introduction and Factors and Forces that Affect Harvard’s Choice of Strategy
Harvard University was founded in 1636 in the United States, making it the oldest higher education institution in the state. It is located in the cities of Boston and Cambridge, Massachusetts. Each year this institution has an admission of more than 20,000 students, including graduate, professional, and undergraduate candidates. The University has over 360,000 alumni worldwide, and it is committed to excellence in research, teaching, and learning. Additionally, Harvard is devoted to educating leaders across many disciplines who will make a difference in the world. This paper will analyze Harvard’s choice of strategy, essential resources, and its Business-Level strategy.
The internal factors and forces affecting Harvard’s business strategy include the culture, capacity in terms of students and professors, and the available financial resources. Although the definition of the organization’s culture has not yet been agreed upon, it is regarded as the shared norms, core values, principles, rooted behaviors, policies, attitudes, and beliefs (Pisano, 2017). For Harvard, this is a focus on high-quality teaching and research that advances the fields in which the institution offers courses. The University’s culture and the reputation it has is perhaps one of Harvard’s main assets, making it Harvard’s core strength. In terms of student capacity, Harvard has chosen a strategy of a unique and high-quality institution that admits a small percentage of applicants, for example, for the class of 2024, only 4.92% out of over 40,000 applicants were accepted (Fu & Kim, 2020). Hence, Harvard operates as a high-quality educational institution that admits a limited number of students.
Industry Factors and Forces
In the new competitive environment, universities are engaged in various forms of rivalry either for students or their capacity to acquire and utilize scarce resources, mainly human resources such as well-known scientists or opinion leaders who will teach courses at these universities. When using Porter’s Five Forces method, one should examine the new entrants, existing competitors, substitute services, and suppliers suggest that the competition (Pisano, 2017). The threat of new entrants is low since universities such as Harvard attract students mainly because of its history and reputation. The competitors that Harvard has are mostly the Ivy League institutions, the eight Universities, including Harvard that are considered the best higher education facilities, and the competition among these establishments is high.
Next, for a University, a substitutive service is an online education, which is cheaper and can be obtained from home. However, the threat of people using substitution services is low, since after graduating from Harvard, one received a diploma issued by a reputable institution, unlike when finishing an online course. Harvard, however, has offered some of its courses online through the HaravrdX partnership with edX (HaravrdX, no date). Finally, in terms of suppliers, the threat for Harvard is high since there is a limited number of professors that can provide high-quality teaching, and Harvard has to compete for these resources with other universities.
Impacts of Pandemic COVID-19 on Environment Factors and Forces
The pandemic has had a severe effect on Harvard University as its premises were closed, and nations shut their borders in accordance with lockdown measures requirements. However, the institution quickly replaced face-to-face learning with online lectures (HaravrdX, no date). These restrictions impacted examinations and studying and legal and safety status for learners who do not have a United States passport. Another issue is that as any Ivy League university, students choose Harvard for its networking opportunities – they are able to communicate with the best out of the best students in different fields, and online education or lockdown restriction diminish this (Murphy, 2020). Undoubtedly, Harvard University will have to work on its digital learning environment to address the issue of social interaction and help students and tutors maintain adequate communication.
Actions to Keep Harvard’s Competition Alive
Harvard is already offering students to take online classes, and it should continue to invest in making online education platforms as useful as possible in terms of them mimicking the experience of real-life courses. However, not all classes can be taught online since it is unclear how the university can support laboratory classes for biology, chemistry, or engineering majors. One way of addressing this is by limiting the number of students per lab and ensuring that there is enough distance between them during the classes. In this way, Harvard can offer a combination of online and offline courses, maintaining the quality of education it is known for.
Key Resources
Harvard’s main asset is its staff and alumni, who represent the quality of the equation services it provides. According to Guesalaga et al. (2018), resources are the tangible and intangible assets a company uses to implement and develop their strategies. They are classified into three categories: physical, human, and financial. Harvard received financial resources not only from tuition fees students pay but also through fundraisers and donations. For instance, in 2018, this University received approximately $1.4 billion from alumni, non-alumni, foundations, and other organizations in financial support (McCarty, 2019). Moreover, students at Harvard University are encouraged or required to look for external funding for research and projects. Fellowships can offer support for students’ research, language learning, and writing dissertations, among other prerequisites concerning the academic program. Various fellowships are made to finance learners over a long period, while others are for short period grants in specific projects.
There is an ecosystem for fostering entrepreneurship and innovation across the University, contributing to the development of Harvard’s human resources. Scholars receive access to mentors and advisors network, other support, and resources while pursuing their entrepreneurial ventures and innovative ideas. With this resource, they can share their proposals with the worldwide innovation community. The platform helps entrepreneurs explore different paths as they encounter diverse challenges. It aims to help them navigate through difficulties by connecting them with the right resources and individuals, which also provides networking opportunities. Among the various advantages of this platform, the most captivating benefit is building one’s business through a diverse and intentional community of like-minded, generous, and motivated innovators. As a result, Harvard develops the capabilities of its students, who later may become professors, advisors at this University, or provide donations.
Harvard’s library is the university’s core physical resource. This is an academic library ranked to be a world-class level for advancing research and learning by engagement of scholars and students in the sharing and creation of new knowledge. It contains about 19 million volumes, close to 175,000 titles, an estimation of 400 million documents, about 11 million photographs, over 55.5 million stored web pages, and 5.5 terabytes of manuscripts and digital documents (About Harvard library, no date). Their services and resources can be accessed online and support students with their studies and coursework remotely. It provides the Harvard group members with entry to extensive digital and physical resources, online subscriptions, and a lavish array of rare collections of books and manuscripts.
Support by Value Chain and Other Internal Resources
When reviewing the value chain, one can argue that Harvard takes the “raw materials” in the form of knowledge from the books and other resources, combined with the expertise of its educators, and through the teaching, processes provide this knowledge to students. The ‘firm’s structure’ is built to support these activities — Harvard has campuses and spaces to hold classes, libraries, and dormitories for students. In terms of marketing, arguably, this University does not require any specific efforts since its history and reputation, as well as networking opportunities, are the main factors attracting the students. The procurement and human resources elements of the value chain are connected since the core asset of Harvard is its professors. Finally, in terms of technologies, the research activities conducted at Harvard are the main contributors to the value chain.
The activities of the research range are deep and broad at Harvard University. Its scholars perform studies in many different fields and want to grow human knowledge via innovation, insight, and analysis. As a result of a combination of these elements of the value chain, Harvard produces a high-quality service — elite and high-quality education, making the core strategy chosen by this university a differentiation strategy. This unique position is supported by the value chain elements since the resources, services, operations all contribute to Harvard being an excellent education establishment.
COVID-19 Problems
Similarly to other education institutions, COVID-19 resulted in a cash flow challenge for Harvard. For example, this university has lost fees for parking, dining outlet revenue, among other supplementary sales. There have also been unexpected expenses, involving partial repayments on tuition fees and housing to account for students who had to leave the campus. The management restructured its operations rapidly to ensure continuity within this semester. It is supposed that the learners will not resume their studies on campus at the University this fall, and fewer students will apply for studies due to uncertainty. Moreover, it is unclear how the distance learning strategy will impact the quality of the education services Harvard will provide. It is possible that many will be dissatisfied with this experience. Finally, the individuals’ capacity to afford lessons in the prevailing economic situation will be hesitant. Some may choose to stay at home during uncertain times, and therefore the University will face difficulties in enrolling students for the 2020-2021 academic year, which will affect the financial resources and the networking opportunities related to the human resources domain.
Business-Level Strategy Components
In terms of cost leadership, the advantage of employing this strategy is that Harvard gains profit and increases the size of the market. Over the years, the nature of Harvard University remains the same because they offer affordable fees when examining the quality of their services and the potential opportunities one receives after graduating from Harvard. The tuition cost is approximately $19,000 after deducting financial aid or $51,000 without support, comparable to other authoritative universities (Tuitions & cost, no date). This strategy has the disadvantage of not having the resources to provide service innovation. Development and research are seen to be an unbearable expense if costs are low (Pehrsson, 2020). This leads to cutting finances for development and research resulting in lesser new services in the market. However, because Harvard receives financial support, it manages to invest in innovation and research.
The benefit of the differentiation strategy is that it enables the institution to differentiate itself and solve people’s problems or satisfy their needs, thus having happy clients — successful alumni. On the other hand, differentiation has a disadvantage of the management taking it too far, meaning creating services too far out for the mere purpose of offering something different (Pehrsson, 2020). Harvard provides a set of courses that are standard for other universities as well, but its history, reputation, and focus on research provide for an excellent differentiation tool.
Ways of Improving and Sustaining a Competitive Position if COVID-19 Outburst in Future
The main issue with COVID-19 is the need to protect both the students and the faculty from potential exposure to the virus, and the only way to do this is to limit the face to face interactions. It is vital to review the housing policies since it is no longer possible to allow thousands of students to reside in one area. The administration should make changes to the policies of accepting international students, the work and learn from home policy, and address the potential need to stay in quarantine for two weeks for people coming to Harvard from different states. There should also be explicit policies put in place for addressing absenteeism because of illness or taking care of relatives, travel limitations, procedures for visitors to university sites, and protocol for sickness reporting.
Additionally, the institution shall establish a contingency plan for human resources availability to address the potential absentees of professors and assistants in case they get sick to ensure that the learning process for students continues as usual. Thus, steps should be taken to minimize people’s interaction level, such as remote working or dividing shifts to reduce the number of people that are on campus simultaneously.
Reference list
About Harvard library (2020) Web.
Fu, L. and Kim, D. (2020) Harvard college admits 4.92 percent of applicants to class of 2024. Web.
HarvardX. 2020. Web.
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Pisano, G. (2017) ‘Toward a prescriptive theory of dynamic capabilities: connecting strategic choice, learning, and competition.’ Industrial and Corporate Change, 26(5), pp.747-762.
McCarthy, N. (2019) Harvard received $1.4 billion in donations last year [infographic]. Web.
Murphy, M. (2020) COVID-19 and emergency eLearning: consequences of the securitization of higher education for post-pandemic pedagogy. Contemporary Security Policy, pp.1-14.
Pehrsson, A. (ed.) (2020) Competitive International Strategy: key implementation issues. London: Routledge.
Tuition & cost (2020) Web.