STRATEGIC
ANALYSIS OF THE COMPETITIVENESS OF EDUCATIONAL PRODUCTS IN THE MANAGEMENT OF
HIGHER EDUCATION INSTITUTIONS
Iryna
Parasii-Verhunenko
Kyiv
National Economic University by V.Hetman, Ukraine
E-mail: impverh@gmail.com
Inna
Kuznetsova
Odessa
National Economic University, Ukraine
E-mail: innastream27@gmail.com
Hanna
Misko
Odessa
National Economic University, Ukraine
E-mail: annamisko590@gmail.com
Olena
Biriuk
Kyiv
National Economic University by V.Hetman, Ukraine
E-mail: birukkneu@ukr.net
Olena
Zharikova
National
University of Life and Environmental Sciences of Ukraine, Ukraine
E-mail: ele0309@ukr.net
Submission: 8/16/2020
Revision: 8/20/2020
Accept: 9/8/2020
ABSTRACT
The purpose of this article is to develop modern methodological approaches to strategic analysis of the competitiveness of educational products from the standpoint of management of higher education institutions to form a cost management strategy, make fuller use of resource potential and optimize curricula and areas of training professionals. The information base of the study was data on the composition and structure of expenses for preparation of one student, obtained as a result of a survey of 87 institutions of higher education in Ukraine for 2015-2018. Methodical and methodological base for calculating the cost of training one student of higher education institutions was the methodology developed by the State Educational and Scientific Institution “Academy of Financial Management”. Information on the cost of education, the cost of training one student in terms of individual specialties was used on the example of SHEI “Kyiv National Economic University named after Vadym Hetman” and obtained from the official website of the university. As a result of research the technique of the matrix analysis of an estimation of competitiveness of educational products which is based on a combination of indicative values of indicators is offered. It is proposed to carry out such an assessment on the basis of a two-dimensional matrix, and provide an analytical interpretation of the values of each cell of the matrix, which ensures the implementation of evaluation and search functions of strategic management and forms analytical basis for monitoring costs and revenues for the top management of the institution. The results of the study can be used to implement marketing strategies of higher education institutions aimed at realizing their competitive advantages and more effective use of competitive potential.
Keywords: Strategic analysis; Competitiveness; Educational products; Management; Higher education institutions
1.
INTRODUCTION
In modern
conditions, higher education institutions in Ukraine are increasingly acquiring
the characteristics of business companies that accumulate intellectual,
material, physical resources and transform them into the final product -
knowledge, skills and competencies that are formed in graduates. State
educational institutions are responsible to society for the effective use of
state property and the development of aggregate domestic intelligence.
The new
requirements require higher education to develop effective mechanisms for
accelerated adaptation to the economic and educational environment, which is
constantly changing under the influence of external and internal factors,
including labour market needs for new innovative educational products that
determine the competitiveness of educational institutions.
Therefore,
the issues of improving the methods of cost-effectiveness analysis of free
economic management and finding modern tools for assessing the competitiveness
of educational products from the standpoint of higher education and from the
standpoint of higher education management, which underlies the development of
cost management strategy on the basis of optimization of directions of preparation
of specialists taking into account their efficiency.
The use of modern methods of analytical assessment of
the effectiveness of cost management of HEIs (higher education institutions) and the search for reserves
to reduce them is based on the information base of management accounting, which
allows to allocate costs for each structural unit of the institution or a
separate specialty or specialization.
2.
LITERATURE REVIEW
The globalization
of the market of educational services makes new demands on the innovative
development of higher education institutions and improving the quality and
competitiveness of educational products based on strategic management. Given
the specifics of the activities of such economic entities as higher education
institutions, it is necessary to consider the features of strategic analysis
and strategic management, as their mission and strategic goals are
significantly different from other economic entities. Note that this aspect of
scientific research is insufficiently highlited in the economic literature.
The origins
of the theory of competitive advantages are laid in the concept of Porter's value
chain. According to Porter (1980), to achieve competitive advantage and obtain
the desired results in the market, it is necessary: to maintain
low costs (cost-based leadership strategy); to produce products that are better
in quality than the products of competitors, and, preferably, with unique
properties (leadership strategy for product differentiation); concentrate
activities on a specific market (leadership strategy in a narrow specific area
of activity).
In Yershova's
research work (2019), strategic cost management is seen as a necessary
condition for long-term development of economic entities and a high level of
their competitiveness, promotes the efficient use of resources to achieve
competitive advantages.
The
methodological principles of strategic management accounting and cost analysis
of educational institutions are based on the concept of strategic cost
management SCM (Strategic Cost Management) developed by Shank and Govindarajan (1999).
The essence of the proposed approach to cost analysis based on the value chain
is based on the assumption that the costs of higher education institutions are
consumed not by end products (educational and research services) but by its
business processes and functions as major integrators of resource
transformation and results. Based on this, the researchers viewed costs as a
function of strategic decisions and linked the achievement of strategic
competitive advantages with accounting and cost analysis by type of activity, maintaining
low costs (cost-based leadership), while offering more competitive products
compared to major competitors (SHANK; GOVINDARAJAN, 1999).
Recently,
the problems of strategic management of higher education institutions are
increasingly attracting the attention of scientists from around the world.
Thus, Danciu and Strat (2012) using quantitative and qualitative methods of
analysis, investigated the peculiarities of the impact of the external
environment on the development of strategies for the development of higher
education institutions in Romania.
The
problems of strategic management of higher education institutions were considered in the works of Chinese scientists, who
proposed to take into account the specifics
of long-term and medium-term formation of plans based on the differentiation of universities by different levels and types (HU et al.,
2019). According to them, vocational schools and
private educational institutions are more interested in using modern strategic mechanisms for planning their activities aimed at
quality development in order to strengthen
their competitive position.
Spanish scientists (YANEZ et al., 2019) studied the issues of managing
sustainable development of higher education institutions by improving the
strategic planning of universities, standardization of business planning tools
and the use of new communication mechanisms of all stakeholders (employers,
teachers and students). They emphasized the need for comprehensive planning for
the development of all major activities of educational institutions, including
educational, scientific and managerial activities. Similar proposals for improving the strategic planning of higher education institutions were made in the
study of such scientists as Ramisio, Pinto, Gouveia, Costa, Arezes, which
consider the main conditions for their sustainable development to optimize the
organizational structure of educational institutions, continuous monitoring of
communication of all stakeholders and their interests (RAMISIO et al., 2019).
Russian scientists have
proposed a model of strategic management of internal and external risks arising
in the education market to successfully formulate strategic plans for higher
education institutions. In particular, the following risks such as the risks of
reducing the quality of education; risks associated with the inconsistency of
curricula with the principles and objectives of state educational policy;
demographic risks; risks of imbalance in the number and directions of training
of specialists graduated by educational institutions, the needs of the labor
market and society; risks of imperfection of the university management system,
leading to unjustified costs and reduction of their financial stability
(SYREYSHCHIKOVA et al., 2020).
The
impact of strategic planning using the model of total quality management (TQM),
the model of the European Foundation for Quality Management EFQM and the
Balanced Scorecard (BSC) on improving the competitiveness of higher education
institutions and improving their quality is analyzed in the works of such
scholars as Fooladvand, Yarmohammadian and Shahtalebi
(2015).
Also,
the publication of Macedonian scientists is devoted to the problems of
implementing the system of total quality management (TQM) in European higher education
institutions in the context of globalization in order to increase their
competitiveness. These scientists revealed the peculiarities of the
implementation of this system in higher education institutions in Macedonia,
taking into account the specifics of the educational process associated with
the time gap between the incurred costs and the obtained result (TASKOV;
MITREVA, 2015).
Mendoza,
Gallego-Schmid and Azapagic (2019) proved the feasibility of educational
institutions to use the principles of circular economy to create sustainable
benefits of educational processes, more efficient use of internal potential and
increase their competitiveness.
Jackson's research (2019)
is devoted to the problems of balancing digital technologies with the innovative
component of professional training of students of higher education
institutions. He suggested using absorptive
(ambidexterity) strategies as a promising tool for managing strategic change in
higher education institutions.
Indonesian scientists have proposed a
mechanism for using SWOT-analysis to improve their curricula and optimize the
areas of student training in order to improve the strategic management of the development of higher
education institutions. They proved the advantages of this methodological
approach, which allows to identify the strengths and weaknesses of educational
institutions, taking into account the prospects and threats to their
development in the future, focusing on market demand for specialists in
relevant specialties (THAMRIN; PAMUNGKAS, 2017).
Noteworthy are the studies of Turkish
scientists who propose to focus the development strategies of higher education
institutions on the development of mechanisms for managing the quality of
education (ERYILMAZ et al., 2016).
Johnes
and Thanassoulls (2011) investigated the cost structure of UK higher education
institutions for the purpose of strategic cost management and proposed
predictive models of cost savings with increasing number of students based on
the use of parametric regression methods.
The
study of Malaysian scientists substantiates the need to improve (reform) the
accounting system in higher education institutions in order to provide managers
with the necessary information for making strategic decisions. Information
blocks on the formation and management of costs, including organizational and
accounting information are highlited on the example of 11 institutions of
higher education (SHUHIDAN; MASTUKI; NORI, 2015).
Ukrainian
scientists also dealt with the problems of strategic management of higher
education institutions, in particular Dudko (2012), Kindras (2014), Kozak (2011),
Natroshvili (2015), Polianska (2019), Salohubova (2007), Tymoshenko (2019), Chernysh
(2012). In the works of these scientists, key attention is paid to the
management aspect of strategic research and methods of assessing the
competitiveness of educational institutions in terms of demand for certain
specialties in the labour market and taking into account modern social and
economic transformations based on international experience.
The
benefits of using matrix analysis methods to select higher education
development strategies are illustrated in a study by Murashko and Nazarko (2010),
who attempted to adapt the Ansoff Matrix (1970), the Boston Consulting Group (BCG) and McKinsey to the needs of
strategic management of educational institutions at the regional level.
Despite
the growing attention of scientists to this issue, it should be noted that in
these works the assessment of the competitiveness of HEI is carried out mainly
from the standpoint of the needs of external stakeholders and strategic
management of the educational institution as a whole with an emphasis on
improving the quality of the educational process. At the same time, the issues
of methodology of strategic analysis of the competitiveness of individual
educational products from the standpoint
of their effectiveness for the educational institution, which is the basis of
strategic management of their costs are practically remained out of the
attention of scientists.
Given
the deficit of budget funding in Ukraine for higher education services, the
issue of developing a strategy for managing the costs of higher education,
which is aimed not only at reducing them, but at optimizing them in direct
connection with the results, which depends on a number of factors with the
specifics of the activities of higher education institutions. For the
successful implementation and functioning of the strategic management system in
the HEIs requires appropriate accounting and analytical support based on
management accounting, which provides the necessary information to management
to implement the planned strategic objectives.
The purpose of this article is to develop methodological
approaches to the strategic analysis of the competitiveness of educational
products from the standpoint of the leadership of higher educational
institutions for the formation of a cost management strategy, a more complete
use of resource potential and optimization of educational programs and areas of
training.
3.
DATA AND METHODOLOGY
The
information base of the study was empirical data on the composition and
structure of costs for the training of one student, obtained as a result of a
survey of 87 institutions of higher education in Ukraine for 2015-2018.
Methodical and methodological base for calculating the cost of training one
student of higher education institutions was the methodology developed by the
State Educational and Scientific Institution “Academy of Financial Management” (LOVINSKA;
PARASIY-VERHUNENKO; KORYTNYK, 2018). Information on the cost of education, the
cost of training one student in terms of individual specialties was obtained
from the official website of the SHEI “Kyiv National Economic University named
after Vadym Hetman”.
In
the course of the research the method of comparative analysis of income and
expenses for the preparation of one student in different specialties,
coefficient and matrix analysis was used. The advantages of matrix analysis
compared to coefficient analysis are proved, in which the indicators that form
the matrix are not integrated into a single generalizing indicator, which
allows to assess the competitive advantages of individual areas of training, to
display them in detail through the visualization of data in two-dimensional
space about their strengths and weaknesses.
Positioning
the relevant educational service in the relevant segment of the matrix allows
you to determine the type of strategy of the institution in relation to the
development of the most profitable for the institution areas of training and
plan certain strategic goals to optimize costs. Such methodological approach
can be used not only to conduct a comparative analysis of the competitive
advantages of individual specialties within one educational institution, but
also to serve as a methodological basis for analyzing the competitiveness of
different educational institutions that train specialists in similar
specialties.
4.
RESULTS AND DISCUSSIONS
In
modern conditions, the urgency of implementing a cost management system in
higher education institutions of Ukraine on the basis of management accounting
is associated with strengthening the financial independence and responsibility
of educational institutions for their financial condition, which on the one
hand, puts forward additional requirements to management to monitor on the
other hand, gives him some freedom to choose the optimal organizational
structure of the educational institution, aimed at eliminating inefficient
units that do not have a corresponding impact on the scientific and educational
activities of the institution, which minimizes costs. Equally important
strategic goals are to provide a choice of innovative educational products and
programs that would meet the modern needs of the labour market.
Regarding
the management of costs of higher education institutions, the most acceptable
may be the first two areas of competitive advantage in the education market,
which involve the creation of innovative educational products that meet the
demands of domestic and international labour markets with relatively low cost,
which is proposed to base their competitiveness .
The
choice of competitiveness indicators depends on the general understanding of
the essence of the category “competitiveness”. The need to clarify the economic
essence of this category is determined by the fact that its correct
understanding allows to develop methodological approaches to its evaluation and
analysis and to determine the system of evaluation indicators that characterize
it. Each researcher uses his own system of concepts, which is determined by the
versatility of this category, which should be considered on the one hand as a
dynamically evolving process, and on the other – as
part of the economic system represented at different levels, from the micro
level – from a specific product to the world economy at the macro level.
Studying different methodological
approaches to the study of the essence of competitiveness, we should highlight
the position of such scientist as Weissman (2004), who proposes to base the
distribution (classification) of methodological approaches to the study of the
concept of “competitiveness” to put a multilevel object-subject methodological
approach based on the principle of clear distinction between the essence of the
“competitiveness of the subject” of economic relations (enterprise, industry,
country) and the “competitiveness of the object” of these relations (goods,
services). In his view, “the essence of the competitiveness of the subject is
its ability to create and implement advantages that can compete and win in the
market in a certain period of time, and the essence of the competitiveness of
the object is a set of its advantages over other objects” (WEISSMAEN, 2004).
Since the subject of our study is
the competitiveness of educational products, it is necessary to consider in
more detail the essence of this concept and the features of assessing
competitiveness, taking into account the specifics of educational activities.
It should be noted that the level of
competitiveness of products is assessed not only from the point of view of
consumers (buyers), but also from the standpoint of the economic entity
depending on its strategic goals and resource capabilities.
An important area of
strategic analysis of the costs of free economic education, which
generates information for managers on the prospects for the development of
certain specialties is the analysis of the competitiveness of educational
products. It should take into account the main characteristics of the category
“competitiveness”, which include: relative nature, which involves the use of
not absolute but relative indicators; ability to dynamic development; ability
to earn income and use resources efficiently.
An
important issue in developing a methodology for assessing the competitiveness
of educational products is to define a system of strategic measurement, which
means the identification, development, communication, collection and evaluation
of selected performance indicators directly related to the mission of the
organization and achieving its goals.
Different methods can be used to conduct a strategic analysis of the
competitiveness of individual educational products that have become widespread
in academia and in practice. However, the most common of these are coefficient
and matrix analysis (PARASII-VERGHUNENKO, 2007).
The advantage of matrix analysis is that the indicators included in the
matrix are not integrated into a single aggregate indicator, which allows to illustrate
the competitiveness of individual educational products relative to other
HEI-competitive competitors in two-dimensional space. Positioning of the
corresponding educational service in the corresponding segment of a matrix
allows to define type of this or that strategy, to outline certain strategic
purposes. The simplest version of the matrix includes two main indicators that
differ in their values relative to the average value.
The matrix method of
competitiveness assessment was first proposed by the Boston Consulting Group
(BCG) and, despite numerous shortcomings, has become widespread and has
undergone some transformations in relation to key indicators of the matrix:
relative market share - market growth; cost efficiency - the effect of differentiation;
matrix of market attractiveness - competitiveness of the organization; industry
perspective matrix - business competitiveness; matrix of market evolution -
competitive position of business; industry life cycle matrix - relative market
positions (PARASII-VERHUNENKO, 2007).
We
propose to use a simplified model of the matrix “Marcon” in order to make a
strategic choice of the most effective (profitable) priority specialties for
the educational institution, in which the key indicator of the effectiveness of
individual products is the marginal revenue. The main condition for the
possibility of using this methodological approach is the formation of
accounting information on income and expenses in terms of individual
specialties or faculties on the basis of the introduction of management
accounting.
Adaptation
of this matrix to assess the effectiveness of cost management of HEIs in the
context of individual specialties provides a basis for identifying the main key
indicators that determine the effectiveness of cost management in relation to
income or other performance indicators. The level of these indicators, or their
dynamics, form the cells of the matrix, and serve as information on the
development of appropriate strategies of the institution for the development of
priority specialties. Such indicators are proposed to include:
·
expenses per one hryvnia of income (capacity
factor) by specialty (B);
·
total annual marginal income by specialty (M);
·
dynamics of the average annual contingent of
students in a particular specialty (∆Q).
The
cost per hryvnia of income (capacity factor) (B) is calculated as the ratio of
average annual training costs for one student (V) to the cost of one year of
student study in the relevant specialty (Z) according to the following formula:
В =
(1)
It is positive
to reduce the value of this indicator, which characterizes the effectiveness of
the educational product for the educational institution.
Total annual
marginal revenue (M) can be calculated by multiplying the specific margin (M1 -
margin per unit of product), which is defined as the difference between the
cost of one year of study for the relevant specialty (Z) and the cost of
training one student during the year (V) , on the average annual number of
students (Q):
М = (Z – V) ×
Q
(2)
The increase or
decrease in the average annual number of students (dynamics) (∆Q) is
defined as the ratio of the average annual number of students in the current
year (Q1), enrolled in this specialty to the average number of
students last year (Q0).
∆Q = Q1 - Q0
(3)
The assessment of the matrix cell on
this indicator, in contrast to the previous ones, is carried out on a
three-digit scale: reduction of the contingent of students; a slight increase
(up to 10%) and a significant increase in the contingent of students (more than
10%). The choice of such a criterion value is based on the average data on the
dynamics of the contingent of students formed over the past three years in the
studied institution of higher education in various specialties. If the specialty
(specialization) is opened only in the current year, the coding of the value of
this indicator is on the maximum scale.
The
coding of the cells of the matrix will be carried out by three-digit numbering:
·
1 sign - the value of the coefficient
of capacity (1-value less than average; 0 - value greater than average);
·
2 sign - the value of the total
margin (profit), which depends on the marginal income per student and the
average annual number of students studying in the relevant specialty (1 - the
value is higher than the average; 0 - the value is less than the average);
·
3 sign - the value of the growth
rate, or decrease in the average number of students studying in the specialty
(2 - with an increase of more than 10%; 1 - growth of the contingent from 0 to
10%; 0 - reduction of the contingent compared to the previous year).
Since
the positive trend is to reduce the unit cost of educational services, increase
marginal income and positive dynamics of the average annual contingent of
students, depending on the level of these indicators and their combination, the
matrix will have nine cells, each of which must have its own strategy for
developing students (Table 1).
As
noted above, reducing the cost of training one student is not in itself an end
in itself for HEIs, as most of the factors influencing its level depend on the
external environment, including raising the salaries of research and teaching
staff, legislatively raising the minimum wage, raising technical equipment of
the educational process, etc.
Therefore,
a general assessment of the effectiveness of cost management should be carried
out in conjunction with the indicators of income of the educational
institution, which depend on the number of students and the total marginal
income of a particular area of training.
The
number of students is a catalyst for demand for educational services, which in
turn depends on their quality and innovation. Offers of new innovative
educational products that are in demand in the education market are the basic
principles of the strategy of gaining competitive advantage based on business
diversification, developed in the work of such scientist as Grant (2008).
Table 1: Analytical interpretation of matrix cells of competitiveness of
educational products
|
Matrix cell code |
Characteristics of indicators of competitiveness of
educational products |
Strategies of development of directions of preparation of
students |
|
В0М0Q0 |
Specific costs for the
training of one student (capacity factor) is more than the average value of
the HEIs (B0)as a whole; the total margin is less than the average value for
all specialties HEIs (M0); there is a reduction in the average annual number
of students compared to last year. This area of student training is
characterized by high cost, and there is a decline in demand for this
specialty from entrants |
The strategy of the
educational institution should be aimed at reducing the number of students
enrolled in these specialties, as they have high costs, low demand among
applicants, and therefore are characterized by inefficient use of resource
potential of the educational institution and are not a strategic source of
marginal revenue |
|
В0М0Q1 |
Specific costs for the
training of one student (capacity factor) is more than the average value of
the HEIs (B0) as a whole; the total margin is less than the average value for
all specialties of the institution (M0); there is an increase in demand for
this specialty, accompanied by an increase in the average annual number of
students compared to last year to 10%. |
This situation is very rare
and can occur with the introduction of new educational products (opening of
new educational programs), which require additional costs. While maintaining
the demand for this specialty for a certain period of time, management personnel
of HEIs should adjust their pricing policy to increase tuition fees. |
|
В0М0Q2 |
Specific costs for the
training of one student (capacity factor) is more than the average value of
the HEIs (B0) as a whole; the total margin is less than the average value for
all specialties of the institution (M0); there is a significant increase in
demand for this specialty, accompanied by an increase in the average annual
number of students compared to last year by more than 10%. |
The strategy of management
personnel will be similar to the previous one. An alternative may be to
maintain the tuition fee while increasing the total margin in the specialty,
due to an increase in the number of students. |
|
В0М1Q0 |
Specific costs for the
training of one student (capacity factor) is more than the average value of
the HEIs (B0) as a whole; the total margin is greater than the average value
for all specialties HEIs (M0); there is a reduction in the average annual
number of students compared to last year. This area of student training is
characterized by high cost, high margin and there is a decline in demand for
this specialty from entrants. |
The trend is typical for
large faculties and the main competitive advantage is a large overall margin,
which is due to the effect of “scale”. HEIs strategy to support this area of
training should be aimed at adjusting the pricing policy, which is a factor
in increasing the specific margin |
|
В0М1Q1 |
Specific costs for the
training of one student (capacity factor) is more than the average value of
the HEIs (B0) as a whole; the total margin is greater than the average value
for all specialties HEIs (M0); there is an increase in the average annual
number of students compared to last year within 10%. This area of student
training is characterized by high costs, high margins and growing demand for
this specialty from applicants. |
The strategy of the
educational institution in relation to these areas of training should be
aimed at reducing costs while maintaining leadership in increasing the number
of students. An alternative may be to increase the price (tuition fees) which
will not affect the demand for this specialty. |
|
В0М1Q2 |
Specific costs for the
training of one student (capacity factor) is more than the average value of
the HEIs (B0) as a whole; the total margin is higher than the average value
for all specialties HEIs (M1); there is an increase in the average annual
number of students compared to last year within 10%. This area of student
training is characterized by high cost, high margin and a significant
increase in demand for this specialty from entrants. |
This situation can occur at
high unit costs, or low cost of training per student, but while maintaining
high demand for this specialty. The strategy of the educational institution
in these areas of training should be aimed at reducing costs while
maintaining leadership in increasing the number of students and the formation
of pricing strategies taking into account the elasticity of demand for this
specialty with increasing prices (tuition fees). |
|
В1М0Q0 |
Specific cost of training one
student (capacity factor) is less than the average value of the overall HEIs
(B1), which positively characterizes the effectiveness of cost management;
the total margin is less than the average value for all specialties HEIs
(M0); there is a decrease in the average annual number of students compared
to last year (Q0). This area of student training is characterized by
relatively low cost, low margin and reduced demand for this specialty by
entrants. |
When the relative profitability
of the specialty of the position value “price - the cost” of educational
institution should enhance the offensive strategy to promote this educational
product (a more aggressive vocational work), to create favourable conditions
to attract the entry of additional troops. |
|
В1М0Q1 |
Specific cost of training one
student (capacity factor) is less than the average value of the overall HEIs
(B1), which positively characterizes the effectiveness of cost management;
the total margin is less than the average value for all specialties HEIs
(M0); there is an increase in the average annual number of students compared
to last year (Q1) within 10%. |
This area of student training
is characterized by relatively low cost, low margin and increased demand for
this specialty from entrants. This situation occurs very rarely and is
possible when opening new specialties. |
|
В1М0Q2 |
Specific cost of training one
student (capacity factor) is less than the average value of the overall HEIs
(B1), which positively characterizes the effectiveness of cost management;
the total margin is less than the average value for all specialties HEIs
(M0); there is an increase in the average annual number of students compared
to last year (Q1) within 10%. |
This area of student training
is characterized by relatively low cost, low margin and rapid growth in
demand for this specialty from applicants, which is typical for new
specialties in demand in the labour market. |
|
В1М1Q0 |
Specific cost of training one
student (capacity factor) is less than the average value of the HEIs as a
whole; the total margin is higher than the average value for all specialties
HEIs; reducing demand for this specialty |
The profitability of this
specialty is due to low capacity consumption, high margin, which is also a consequence
of the large number of students studying in this area of training, but in the
labour market there is a decrease in demand for it. The marketing strategy of
the educational institution in this case should be aimed at active
advertising of this specialty, intensification of career guidance work and
revision of pricing policy. |
|
В1М1Q1 |
Specific cost of training one
student (capacity factor) is less than the average value of the HEIs as a
whole; the total margin is higher than the average value for all specialties
HEIs; increase in the number of the average annual contingent of students to
10%. |
The specialties that fall
into this center are the most competitive in terms of efficiency, are less
costly and should be preferred in the formation of the strategy of HEIs in
conducting career guidance work; |
|
В1М1Q2 |
Specific cost of training one
student (capacity factor) is less than the average value of the HEIs as a
whole; the total margin is higher than the average value for all specialties
HEIs; increase in the number of the average annual contingent of students
more than 10%. |
The specialties that fall
into this center are the most competitive in terms of efficiency, are less
expensive and should be preferred in the formation of the strategy of HEIs in
conducting career guidance work; |
*Source: Developed by the
authors
It
is advisable to include the following general indicators to develop a strategy
for the development of individual areas of preparation for the matrix: the
ratio of training costs per student to the average annual tuition cost of one
student (capacity factor), total margin, growth rate of average annual number
of students in a particular specialty.
This
approach is especially important for non-governmental (private) higher
education institutions, which can independently set pricing policies, which in
turn depend on market factors.
An
extended version of the matrix is proposed to do this, which includes
a larger number of indicators that characterize the competitiveness of
educational products (Table 2).
Table 2: Initial data for constructing a matrix for assessing the
effectiveness of the cost management strategy in the context of individual
specialties in HEIs “XXX” for 2019
(full-time education)
|
|
Costs per student, UAH |
Cost of 1 year of study, UAH |
Capacity factor |
Average annual contingent, people |
Specific margin (profit), UAH |
Total margin |
Growth rate of students compared to the previous year,% |
|
Economy |
21507 |
23004 |
0,93 |
240 |
1497 |
359280 |
-15 |
|
International economics |
23774 |
24948 |
0,95 |
180 |
1174 |
211320 |
+3 |
|
Political science |
19681 |
19764 |
1,00 |
20 |
82 |
1640 |
+5 |
|
Sociology |
19608 |
19764 |
0,99 |
16 |
156 |
2496 |
+1 |
|
Accounting and Taxation |
21498 |
23004 |
0,93 |
90 |
1506 |
135540 |
-8 |
|
Finance and Banking |
21571 |
24948 |
0,86 |
140 |
3376 |
472640 |
-24 |
|
Management |
19926 |
23004 |
0,87 |
45 |
3078 |
138510 |
-6 |
|
Marketing |
21493 |
23004 |
0,93 |
102 |
1511 |
154122 |
-12 |
|
Entrepreneurship, exchange
trading |
21500 |
23004 |
0,93 |
80 |
1503 |
120240 |
+8 |
|
Law |
23068 |
23112 |
1,00 |
152 |
43 |
6536 |
-20 |
|
Computer science |
21760 |
23004 |
0,95 |
56 |
1243 |
69608 |
+15 |
|
System Analysis |
21821 |
23004 |
0,95 |
30 |
1183 |
35490 |
+9 |
|
Cybersecurity |
21459 |
23004 |
0,93 |
22 |
1544 |
33968 |
+25 |
|
Tourism |
20220 |
23004 |
0,88 |
42 |
2783 |
116886 |
+14 |
|
Public Administration |
21697 |
23004 |
0,94 |
10 |
1307 |
13070 |
+7 |
|
Personnel management |
21169, |
23004 |
0,92 |
60 |
1835 |
110100 |
+18 |
|
Sum |
341759 |
365580 |
14,98 |
1285 |
23820 |
30608700 |
х |
|
Average value |
21360 |
22848 |
0,94 |
80 |
1489 |
119120 |
х |
Source: Compiled by the authors according to the data POLJANSJKA and TYMOSHENKO (2019)
For
example, according to the specialty “Accounting and Taxation” the code takes on
the meaning of B1M1Q0. The value of the efficiency ratio is 0.93 with an
average value of 0.94 (code 1), the value of the indicator “Total margin” -
1386 UAH with an average value of UAH 1.379 (code 1), the value of the
indicator “ontingent growth rate” is minus 8 (code 0). Coding of the cells of
the matrix for different specialties in HEIs “XXX”
are given in Table 3.
Matrix analysis
of the effectiveness of different areas of training of students (specialties)
provides grounds for such conclusions regarding the development strategy of the
educational institution. The most promising new specialties, the demand for
which is actively growing in the labour market are: “cybersecurity” and
“tourism”.
Table 3: Coding of the cells of the matrix for assessing the effectiveness of the cost management strategy for individual specialties in the HEIs “XXX” for 2019
(full-time education)
|
|
Capacity factor |
Total margin (profit), UAH |
Growth rate of students compared to the previous year, % |
|
|
Economy |
1 |
1 |
0 |
|
|
International economics |
0 |
1 |
1 |
|
|
Political science |
0 |
0 |
1 |
|
|
Sociology |
0 |
0 |
1 |
|
|
Accounting and Taxation |
1 |
1 |
0 |
|
|
Finance and Banking |
1 |
1 |
0 |
|
|
Management |
1 |
1 |
0 |
|
|
Marketing |
1 |
1 |
0 |
|
|
Entrepreneurship, Exchange
Trading |
1 |
1 |
1 |
|
|
Law |
0 |
0 |
0 |
|
|
Computer Science |
0 |
0 |
1 |
|
|
System Analysis |
0 |
0 |
1 |
|
|
Cybersecurity |
1 |
0 |
2 |
|
|
Tourism |
1 |
0 |
2 |
|
|
Public Administration |
1 |
0 |
1 |
|
|
Personnel Management |
1 |
0 |
1 |
|
Source: Compiled by the author according to Table 2
The efficiency matrix of different
specialties in HEIs "XXX" is shown in Figure4.
These
specialties fall into the cell of the matrix with the code B1M0Q2, which is
characterized by a low efficiency ratio due to the relatively low unit cost of
training one student and a relatively low total margin, due to the small number
of students enrolled in this specialty.
|
capacity factor Total margin |
11 |
110 Economy; Accounting and taxation; Finance and banking;
Management; Marketing |
111 Entrepreneurship, exchange trade; |
112 - |
|
10 |
100 - |
101 Public administration personnel management; |
102 Cybersecurity Tourism |
|
|
01 |
010 - |
011 International Economics |
012 - |
|
|
00 |
000 Law |
001 Politology Computer Science; System analysis; |
002 |
|
|
код |
0 |
1 |
2 |
|
|
The growth rate of the contingent of students |
||||
Figure 1: Matrix for evaluating the effectiveness of various specialties
in HEIs “XXX” for 2018
Source: Created by the author according to Tables 6 and 7
At
the same time, there is a high growth rate of enrollment of students in this
area of training (25% and 14%, respectively). The strategy of the educational
institution should be aimed at the active promotion of this area of training
through marketing technologies to attract additional students.
A
high level of efficiency is also observed in the specialties that fall into the
cell of the matrix with the code B1M1Q1, which differs from the leading
specialties at a slightly slower growth rate of demand for the specialty. These
specialties include such as: “Personnel management”; “Entrepreneurship,
exchange trade”. The growth rate of enrollment of students in these specialties
is in the range from 0 to 10%. At the same time, there is a high relative to
the average level of margin per student and a low level of efficiency, which
was below average, which indicates the effectiveness of educational obedience
in these specialties. The strategy for the development of these areas of
training should be aimed at strengthening measures to further involve students.
The
traditional directions of preparation of HEIs of an economic direction on
specialties are rather high efficiency: “Economy”; “Accounting and taxation”;
“Finance and banking”; “Management”; “Marketing”, which fall from the cell with
the code B1M1Q0. However, these areas of training have a clear tendency to reduce
the number of students and reduce the average number of contingents. For
example, in the specialty “Economics” the number of students for the study
period decreased by 15%, “Accounting and taxation” - by 8%, “Finance and
banking” - by 24%, “Management” - by 6%, “Marketing” - by 12%. Despite the
large number of students studying in these specialties and exceeding the
average value of the contingent in the institution, there is a clear trend to
reduce the demand for specialists in these specialties in the labour market,
which is reflected in the number of applicants for this specialty as in the
studied institution and in other HEIs of economic orientation. However, these
specialties are characterized by relatively low consumption capacity and high
efficiency.
The
higher education institution should pay special attention to the new specialty
“Public management and administration”, which falls under the code B1M0Q1,
which has a high level of efficiency compared to the average, low overall
margin (due to small enrollment) and growing demand for specialists in this
field. To do this, the HEIs should review the cost of training in this
specialty in the direction of reduction to further attract students.
Specialists
in such specialties as: “International economy”, “Politology”; “Computer
Science”; “System analysis”are in stable demand on the labour market, which
shows an increase in the average annual number of students. However, the cost
of these specialties compared to others is high, which has a negative impact on
the value of “capacity” and “total margin”. These specialties fall into the
cell of the matrix with the code B0M0Q1. Strategic actions of the HEIs in
relation to these specialties based on the analysis of price proposals in the
educational market should be aimed at raising the price for these educational
services.
According
to the data, the list of outsiders includes the specialty “Law”, which is
located in the cell of the matrix with the code B0M0Q0, which is characterized
by high cost of educational services, low margins and reduced demand for this
specialty in the labour market, which reduces the average annual number of
students -20%).
5.
CONCLUSIONS AND RECOMMENDATIONS
When
conducting an analytical substantiation of the development strategy of higher
education institutions as a whole and its individual structural units from the
standpoint of cost management, it is necessary to take into account certain
features of their functioning in the educational market. Firstly, there is an
indirect link between the costs incurred and the performance of the
institution, which does not coincide in time and is not always characterized by
financial performance. Secondly, making decisions to improve the educational
process, which are usually accompanied by increased costs, are carried out at
the lower and middle levels of government without taking into account their
impact on the dynamics of total expenditures of the HEIs, especially in long
term.
Therefore,
proposals for improving the educational process in the lower levels of the
institution should be consistent with the overall budgets of revenues and
expenditures in general for HEIs and not contradict the strategic plans of the
institution and its financial capabilities. Thirdly, the modern format of cost
accounting, planning and the entire financial system of the HEIs are
fund-oriented, which involves controlling the use of resources in terms of
compliance with the targeted use of budget funds, or compliance with estimates,
which is formed by the elements of costs, which complicates the control of
costs at their places of origin and reduces its informativeness in terms of
strategic management.
The proposed
tools of matrix analysis of the effectiveness of different specialties, taking
into account trends in labour market demand can be implemented under the
conditions of introduction of management accounting in HEIs, which allows the
separation of information on income and expenses by individual specialties (or
other centers of responsibility, such as faculties). To form strategies for the
development of higher education institutions, the matrix can be supplemented by
other indicators that characterize the competitiveness of educational products,
in particular, non-financial indicators of the quality of the educational
process. The use of such a methodological approach will not only facilitate a
comparative analysis of the competitive advantages of individual specialties
within one educational institution, but will also serve as a methodological
basis for analyzing the competitiveness of various educational institutions
that train specialists in similar specialties.
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