De Montfort University is one of the public universities in Leister England. It was founded in 1870 and has now grown to become one of the most reputable institutions in England and Europe. The aim of this paper is to analyze Montfort University. To do so, the report shall apply strategic analysis tools such as PESTEL, SWOT, Value Chain, and Porter's Five Forces analysis. Through the paper, it will be illustrated that the institution has made a name for itself and is competing among the previously popular university in the Europe region.
Overview of De Montfort University
As mentioned above, the institution was founded in 1870 and was at that time known as the Leister School of Art since the school was offering only art related courses. Montfort started as a small school where buildings were constructed through volunteer work. Later on, the school expended due to the demand for other educational needs such as medicine and engineering. On May 1930 the University of London recognized Montfort College for the provision of an external degree in Pharmacy and 1934 Royal Pharmaceutical Society of Great Britain recognized the college for a diploma in Pharmaceutical Chemistry. Today, the institution is offering a variety, of course, that is categorized in four faculties namely; health and life sciences, art design and humanities, the technology which includes engineering and computer science and business and law.
Additionally, the university has over 27,000 students who are both on part-time and full-time courses. The school has also managed to employ over 3,500 staffs hence generating year turnover of PS168 million. With over 3,000 university rooms sourced across the Leicester city, students can comfortably study and live in the city (History, 2018). One of the prominent buildings notable in the university is the Edith Murphy hall that is used by students taking Midwifery and Nursing.
There are 109 universities in England which include private and public universities. With a total of the number of university students in England as per 2016/2017 statistics stood at 231,788. De Montfort University had 23,205 students. This means that the university has a market share of 10% in England regarding the number of students. On the other hand, Leicester city has only two public universities; the University of Leicester and De Montfort University. The University of Leicester had 16,800 students in 2016/2017 statistics (History, 2018). This indicates that De Montfort University has a bigger market share in Leicester City.
Analysis of the University using Porter's Five Forces
Porters five forces tool is used to gauge the competitiveness of a company by looking at the five forces that includes threat of substitution, threat of new entrant, rivalry among competitors, power of seller and power of supplier. These forces, as related to De Montfort University, are discussed below;
Threat of new substitution
Substitution in higher education is very low in this case. The substitution by colleges offering diploma and certificate courses that are also offered at the De Montfort University is not seen as a threat. This is because the institute is in the category of higher education and most of the students are sponsored by the government. Even if private universities were to be opened in Leicester City, Montfort would still command a large number of students given that it is a public with high reputation in Leicester.
Risk of new entry
The likelihood of new universities entering the market is very low. For a college or university to get the caliber of Montfort, it would take a long period and a lot of resources. The university has a market share of 10% in the entire region of England, and it is the leading university regarding some students in Leicester City (Korski, 2018). If this number is translated into revenue, it can be seen that Montfort has a bigger share regarding revenue in Leicester city.
Rivalry among competitors
One of the major competitors of De Montfort University is University of Leicester. The University of Leicester also has a say when it comes to high education matters. It has created a name for a research-based university. In the previous years, it has always been ranked among the top 20 universities in the UK. It 2014 it was ranked 13th in the UK and in 2018 it was ranked 34th nationally (Studentcrowd.com2018). The University of Leicester also offers several degrees similar to those offered in Montfort. For instance, University of Leicester offers arts and humanities, Engineering, medicine and nursing just like Montfort. Regarding sports, the two universities have been arch-rivals for 18 years now. In both Universities, students pay the similar amount as school fees (PS9,250) in full time learning basis (Dmu.ac.uk. 2018). This indicates that the only competitive angel that the University of Leicester presents is regarding co-curricular activities and different courses.
Bargaining power of buyers
Buyers have power over companies if there are so many companies and a few buyers. In this scenario, there are only two public universities in Leicester city. Furthermore, high education has become a basic need in the world. This means that Montfort has more power over the buyers. Buyers in this scenario are students in need of higher education.
Bargaining power of suppliers
The supplier in this case of education is lecturers and tutors. They are the people who ensure that students are going to university gain education. The report that was published in 2017 by the National Audit Office (NAO) indicated that the UK was facing a crisis of lack of teachers and recruitment crisis. The problem affects all sectors of education from primary, high school and university. One of the reasons for the shortage was said to be graduates finding jobs elsewhere or in a field that is not related to education. The shortage means that educators have higher bargaining power (Hayes, 2018). However, Montfort might not be affected by this shortage so much because the government of UK is responsible for employing and paying teachers.
PESTEL tool analysis looks at the external forces facing an organization. These forces are political, economic, social, technological, environmental and legal factors. Some of these factors are uncontrollable, and the organization has to cope with them. The PESTEL's factors facing Montfort University.
De Montfort University Operates in Leicester City and more so in the great region of UK. It is a public university which makes it vulnerable to political issues. These issues include pay regulations, taxation and other laws and regulations. For instance this the government of UK enforced a low which was to cut down the number of student leaders' representation. This was meant to cut down cash used to support student leaders by 20% (Coughlan, 2018). Furthermore, this year there was the protest by university students and staffs over what they termed as high payroll for Vice-chancellors by the government while the government was ignoring other factors such as funding for research.
The economic factors facing universities are similar to those facing other business because universities operate in the same environment businesses are operating in. Since De Montfort University operates in the global environment, it must look at the global factors facing universities. For example in 2012 and 2013 the amount generated from tuition fee by international students in the UK was PS3 billion. This calls for UK universities to ensure that they incorporate high numbers of international students to gain economic benefits from them. (Grove, 2018). On the other hand, there is an increase in expectations by students undertaking higher education. The student is in demand for higher education and ends up taking large loans to finance their education. Due to increasing number of students, institutions are under pressure of increasing infrastructure and number of staffs. This is hence increasing the costs of paying staffs. As the expectations from students go higher, high education institutions are likely to face the financial crisis (Grove, 2018). This issues as they affect high education institution will also affect De Montfort University. The institution, therefore, needs to be prepared by having its mix of subjects and own cost structure that is separate from that which is given by the government to tackle these economic pressures.
A research that was done recently by Department for Education and Employment's research found out that social class is affecting decision making in higher education. Students from lower social class are motivated to join HE due to the belief that after education they will get good jobs, improve their earning and move from poor states of living. While finances to support their education was one of the challenges faced by lower social class students, they also faced other challenges such as personal issues such as childcare, gaining the minimum entry qualification and academic workload and pressures (Report summary2018). Thus universities should not only help these type of students academically but also how to deal with real life issues and decision making (Coughlan, 2018). If Montfort would focus on this, then it would help students who are will not only face the world with academic papers only but also students who will be able to tackle real-life issues. On the other hand, there have been concerns that top-ranked universities in the UK are faced with a culture of decreased press freedom and higher power distance. Such universities end up destroying their reputation.
Technology is affecting or sectors in the current world of business. Just a few years ago, there were no aspects such as Instagram, iPhone, Spotify and Uber just to mention a few. In the last ten year years, Facebook has not reached in the UK, and Twitter was barely known. More is expected to change in the next couple of years. Most universities are embracing careers and courses that integrate technological aspects to prepare the student for the future. In normal activities of the school, students are now relying on using online search engine recorded lecturer information and lecturers notes (Grove, 2018). It is therefore advisable for institutions to embrace technology in all aspects of the operation to remain competitive. De Montfort University can be said to have embraced technological operations in several ways. The institution is now offering online courses as well as offering courses that are technologically oriented such as engineering and IT.
The government is encouraging universities and other institutions to embrace green environment. Additionally, there is a growing demand to increase the need for reducing carbon in the environment. A research that was conducted by times higher education ranked De Montfort University as number thirteen in the UK regarding environment consciousness and carbon reduction (Grant, 2018). This indicates that the university has made useful measure of promoting the green environment. The table below shows the ranking of UK universities regarding environmental consciousness.
Rank University Environmental Class Total Score (%)
1 Nottingham Trent University1st 76.2
2 University of Brighton1st 74.8
3 Manchester Metropolitan University1st 73.8
4 Cardiff Metropolitan University1st 73
5 University of Worcester1st 72.8
6 Aston University1st 71.4
7 City, University of London1st 70.6
8= Newcastle University1st 68.2
8= University of Gloucestershire1st 68.2
10 Swansea University1st 64.8
11 University of Bedfordshire1st 64.7
12 Plymouth University1st 64.3
13 De Montfort University1st 64
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