The Market Oriented University

The Market Oriented University

Transforming Higher Education

John A. Davis and Mark A. Farrell

The next decade will be transformative for the higher education sector. Government funding is decreasing. Through their marketing activities universities have created the ‘student consumer.’ The student consumer is prepared to shop around, compare prices and value, and once purchased expects a return on their investment. Disruptive innovations are challenging traditional forms of learning and in many cases are viewed as better alternatives to traditional learning in the classroom. Competition from private educational providers is increasing. Their cost base is lower, and their customer focus is superior. In short, universities around the world are facing a perfect storm. While experts don’t expect the higher education sector to collapse under these challenges, they do believe that for some institutions the future looks bleak. If universities are to avoid closures or mergers, they will need to adopt a market-oriented approach.

Chapter 5: From marketing to market orientation

John A. Davis and Mark A. Farrell

Subjects: business and management, management education, management and universities, marketing, education, management and universities, management education


In this chapter we examine theories of disruptive innovation and take the reader through the development of Clayton Christensen’s theory of disruptive innovation. One of the paradoxes of disruptive innovation is why incumbent firms fail to respond to the competition. To answer this we review the literature and provide several arguments that suggest the higher education sector is vulnerable to a disruptive innovation and/or business model. We provide several examples of business model innovations, from Uber to Ryan Air. Finally, we turn our attention to disruption in education and provide a compelling argument that universities are facing a perfect storm of reduced government funding, demanding students, increasing competition from within the sector, and competition from new providers who are innovative, flexible and market oriented.

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