What is the right size for the independent education sector?

Seth Godin's blog today is an interesting comparison of two different ways of producing fried chicken eggs.  One is the industrialized way we all have come to know and the other is the more costly free range egg, cooked in olive oil and seasoned with a specialty salt.  The per unit cost difference is trivial in absolute terms (14 cents versus 39 cents), but huge in percent terms (more than double).

What a great analogy for independent education!  We use our low faculty/student ratios, massive array of programs, individualized instruction, and lots of extras to produce a qualitatively different experience at a much higher cost point than, say, our public or parochial rivals.  We are clearly the higher-priced egg.  But, just as there will always exist a larger market for the 14-cent egg, independent education will likely always be a minority player in the education marketplace.

Maybe the real question we should be talking about is how big a share independent education will attract averaged over a 25-year time horizon. When times are good, selling 39-cent eggs is no problem even though they are more than 2X the cost of the regular variety, a difference that in educating students translates into thousands of dollars.  If prolonged, good times can lead to excess production capacity for high-end eggs by giving the appearance of a perpetally larger demand than actually exists over time.  

So, is the problem how to serve more students with less cost, or how to serve fewer students but at a premium price point, or (more likely) which of these approaches best suits a given school in its context?
Previous
Previous

Implementing Policies

Next
Next

Changing How We Think about Business Models