To pursue its academic goals, a university adopts a business model to fund
its operation. This involves defining the university’s value proposition to society, its
offerings to students, cost structures, and the revenue streams needed to run the
institution. But universities are facing many challenges to their current value
proposition. Students and employers are questioning the value of an expensive higher
education. Universities themselves are also having financing and resourcing problems.
Furthermore, the productivity and efficiency of universities are increasingly under
scrutiny. Changing demand from local and international students, along with
technology transformation and unprecedented competition from newcomers, makes a
compelling case for universities to reimagine their business models. The impact of
online learning, especially from the private sector, challenges the traditional business
model of bricks-and-mortar public universities. The lower costs, flexibility and fast
response time presented by MOOCs seriously threatens the traditional market of
universities.
Keywords: Business Model, Coursera, edX, Digital Badges, Disruption, High-
Margin Courses, Learning Store, Low-Margin Courses, Micro-Credentials,
MicroMasters, MOOCs, Nanodegree, OpenCourseWare, Pricing Model, Value
Proposition.
