The education sector in any nation runs a lot of programs. These programs market the institutions by attracting new students. The programs also promote the sharing of interaction among different students and scholars. However, in order for these programs to be run efficiently, some expenses have to be incurred (Nelson & Winter, 2004). Therefore, the institutions of higher learning need to design a business model that will ensure that these programs are run in a cost effective manner (Teixeira, 2004). This paper will therefore, highlight the snapshot of the Australian Higher Education, and then discuss the business model suitable for the higher education. The paper will propose a business model that helps in building educational excellence and strength of the higher education institutions.

Research Snapshot

The research snapshot to be discussed on in this case refers to the series that the Australian Research and Analysis Unit develops to offer stakeholders and other interested parties in the country or community with summary updates on the current developments and activities in national or domestic research and education data. The production of snapshots takes place on regular basis following the release of relevant data. The purpose of the Australian Higher Education is therefore, to offer research data that is most current and make the same data available in the public (Organisation for Economic Co-operation and Development, 2000). Consequently, the Australian Higher Education has release some snapshots bearing different thematic titles in the past few months. Economically, the undergraduate enrollment based on socioeconomic status is of high significance. Consequently, the data from the Australian Higher Education reveals that18.7% of total applications in February 2013 were applicants whose backgrounds were of low socioeconomic status. On the other hand, the applicants from medium socioeconomic backgrounds constituted 49.0% while the applicants from high socioeconomic status backgrounds made up 30.4%. if represented in relation to their proportion or share in the total population, applications from high and low socioeconomic status applicants would each represent or constitute twenty five percent of the pool of applications. On the other hand, the applications from medium socioeconomic status applicants will constitute the remaining 50.0%. In 2013, the data reveals that applications from applicants from low socioeconomic status backgrounds have revealed the largest increase, which is 1.3% compared with applications from applicants from medium socioeconomic status backgrounds, which is 0.4% as well as applications from high socioeconomic status backgrounds, which is 0.3%.

The graph below illustrates the offer rates by socioeconomic status, February 2012 and February 2013

Research summary

In terms of comparison between Australian higher education and that of other OECD, the analysis of indigenous and non-indigenous status is going to be made. The indigenous applicants, which constitute the Torres Strait Islander and Aboriginal make up 3499 applications nationally. This number represents one point three percent of all applications. On the other hand, the number of applications from indigenous applications is 2659 nationally. The following graph shows the offer rates by indigenous status, February 2012 and February 2013

Research summary 1

The business model

In this case, the business model should have the capacity of accomplishing a number of things. First, it should be defined as a business strategy with the capacity of managing the available resources in an effective manner (Ninnes & Hellstén, 2005). Through this the model will ensure that there is continued vitality and health of the higher institutions of learning for many generations to come. The model should be in a way that the university community focuses on the maximization of the value of education in the Australia, especially as shown by career outcomes and student learning success (OECD, 2013).

If the government continues to invest in the improvement of university, it will develop new programs that can be said to be market-responsive academic programs. Such programs will enable the higher education institutions to meet the needs of not only the current students but also the future students (Kim, et al., 1996). The institutions of higher education must therefore, be committed to being financially affordable and accessible to diverse student base through pursuit and adoption of financial aid strategies and integrated tuition pricing coupled with efficient and vigilant management of financial resources (Forest & Altbach, 2006). Generation of enough revenue for strategic objectives and operations is a move that will enable the higher education to continue developing the operational, financial and physical capabilities that can support its academic excellence (Norton, 2012).

Among the objectives in the economic model is the sustenance of the financial vitality. This can be achieved by accomplishing a number of things. Among these, is the maintenance of affordability of higher education, the focus on enrollment strategies and the fueling of targeted, strategic growth and ensuring that there is achievement of continued competitiveness in which the graduate and undergraduate enrollment goals are balanced (Krugman, 1998). Such graduate and undergraduate goals include the net revenue outcomes, affordability, diversity and quality. The other strategic moves by the higher education is that of developing new programs that are market-responsive, the offering of new modes of delivery while increasing the flexibility of program and course offerings, the pursuance of a business model that is agile enough to ensure that the net tuition revenue grows over the duration of the program, offer enough resources that can aid in maintenance of financial strength and strategic investments (Daly & Lewis, 2010).

The model should also ensure that the necessary levels of institutional financial support are funded while ensuring continued mission and desired student profile. At the same time, the model will ensure that strategic aid programs are developed for targeted professional and graduate populations. In addition, the institutions of higher learning have to continue developing philanthropic aid for new initiatives, ongoing operations and endowment growth (O’Connor & Faille, 2000). The adherence to the principles of financial discipline and sustainable growth is also another important move in this business model. A number of principles of financial discipline and sustainable growth have to be followed. First, is the maintenance of the sustainable and high growth in the net tuition revenue (Palmer, 2012).

Analysis of the lower costs for domestic students

Lowering the costs of domestic students in Australia will translate to the increase in the enrolment of the domestic students in the Australian institutions of higher learning. Therefore, this paper will access such a move by comparing the impact on international and domestic students based on their financial impact on institutions of higher learning (Levine, 2006). The argument in this case is that by increasing the enrollment of domestic students, it means that the enrollment of international students will be compromised since both students will share the same learning resources. Research has discussed the negative and positive consequences of high international students in Australia. Among the benefits of international students is the internationalization of educational environments (Norton, 2012).

However, in terms of cost, international students increase the costs incurred by the institutions since they have higher demand for institutional services like the medical services. The international students are said to go through more problems as compared with the domestic students. This forces them to use the health services more often (Amaral, Jones & Karseth, 2003). This being the case, the move to reduce fees for the domestic students, hence increasing their enrolment can be positive economically. This is because it ensures that there is low pressure on institutional support services, hence leading to reduction in the expenditure hence encouraging more net revenues (McMahon, 2009).

Based on the law of demand, the reduction in the costs of education, or prices, will lead to an increase in demand for higher education. The following graph illustrates the relationship between the lowering of costs and the demand for education

Research summary 2


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