01 May How Might the EMBA Product Need To Change?
Working with EMBA program directors around the world, we hear one common theme: We are under pressure! Wanting to move beyond “enrollments or corporate sponsorships are up or down” discussions, Eduvantis has recently been analyzing the relationships between product dynamics and market factors, to better understand how programs may need to evolve in order to be successful in the future. We’re looking at relationships between more than a dozen attributes across 3 categories: inputs (e.g., class profiles; school stature/ranking, role in pricing), process or throughput (e.g., services such as coaching and mentoring; flexibility and convenience through hybridity), and outputs (e.g., alumni networks; salary increases; percent goals achieved).
Among the many interesting findings, here are a few insights regarding the interplay between program prestige, pricing and competitive choice-making across related product types:
School “Prestige,” Price Premium and Program Choice
“Prestige” plays a large role in program pricing for executive MBA programs. Among EMBA Council members in the U.S., the average cost of EMBA programs ranked by the USN&WR is $127K, while the average for unranked programs is just $70K. However, despite its influence on price in terms of absolute dollars, an EMBA program being ranked does not seem to increase the premium a student pays over, say, a PT MBA program; the average premium of an EMBA program over a PT MBA program at ranked schools is only 33% while it’s 57% for unranked schools.
While rankings are, of course, not a perfect measure of anything, they are a proxy for key attributes sought by the market, and thus among the important elements in a prospective student’s decision-making process. Many elite EMBA programs are housed in business schools that also have strong PT MBA programs. In fact, 14 of the top 24 EMBA programs are at schools that also have a PT MBA program with a top 25 ranking. Thus, we see that students are essentially voting with their dollars for the school’s reputation, which is observed in both the EMBA and PT MBA categories.
Time to Degree
We also explored how duration of an EMBA program affects the price of that program. “Short” programs (≤18 months) have an average tuition of $76K. “Medium” programs average $93K, and “long” programs (≥21 months) have an average tuition of $103K. However, even though the duration of an EMBA program has some effect on price, it does not have a strong impact on how much more an EMBA program will cost than a PTMBA degree at the same institution. This is likely due to the fact that there is currently so much homogeneity in program durations in the EMBA market; over 80% of EMBA programs take 18-22 months to complete.
This may be an area for EMBA programs to explore as a means to achieving an ideal product/market fit, especially as prospective students seek convenience in all its forms – potentially opting for programs with a shorter time-to-degree.
In our next post, we will take a look at how international trips and alumni networks impact pricing and program choice.