Belmont Abbey College: Strategy Formulation in Turbulent Times

Belmont Abbey College was on the verge of closing when a new president took office in the spring of 2004. Enrolment at the private liberal arts college had dropped to just over 500 students, and net revenues were insufficient to support ongoing operations. Belmont Abbey College was not alone in facing dire financial prospects, however. Higher education in general confronted an array of challenges due to dramatically escalating costs and a significant decline in the number and economic circumstances of prospective students. The president made efforts to strategically position the college in attempting to mitigate costs. In 2014, would his efforts over the last decade—including a bold and perhaps risky move to compete directly on the basis of price—pay off and secure future enrolment?

This case provides an opportunity to examine a host of interrelated issues, including differentiation, brand identity, competitive positioning, cost control and price elasticity, the threat from for-profit institutions and online education, joint governance and the challenges of academic leadership, and the role of a governing board in promoting institutional change. Given its strategic orientation, the case is appropriate for use in an undergraduate capstone course or in a policy course at the graduate level. It would be of interest both in business schools and in graduate schools of education. The four primary learning objectives of the case are to<br><br><li>provide an opportunity to examine the dynamics of the higher education industry and the particular challenges facing small, private colleges with limited endowments in an increasingly competitive marketplace;</li><li>examine the relatively precarious competitive position of one small, Catholic liberal arts college that relies almost exclusively on tuition to finance its operations;</li><li>provide an opportunity to analyze the changes made by the current president to try to bolster the college’s competitive position; and</li><li>offer a launching point for a broader discussion about the difficulties that many small colleges face as they try to differentiate themselves in a crowded and competitive marketplace.</li></ul>

• competitive positioning, institutional change, leadership