The Competitiveness of the Online Higher Education Market

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As the online higher education market grows, the amount of competition will increase. A number of large providers will capture a large share of nonresident students, while many smaller providers will primarily enroll residents. The impact of these new players on the market will be different for each sector. The competitiveness of the online higher education market depends on the quality of the offered courses and programs. This article describes a few factors to consider as the market grows.

First, a number of factors influence the concentration of online higher education. For example, early entrants enjoyed positive net revenues from online programs, which they used to cross-subsidize other programs. These factors are related to economies of scale, which limit the increase in expenditures due to the addition of new online programs. These factors may have a significant impact on potential students’ perceptions of the quality of the educational offerings of different providers.

Second, the number of institutions has increased dramatically. While this has reduced the gap between traditional and for-profit institutions, it has broadened the competition. Today, there are thousands of for-profit colleges and MOOC providers. As a result, students are faced with a difficult task of selecting among these many options. While these trends are beneficial to the online higher education market, they are likely to hamper traditional higher education providers, especially in developing countries.

The adoption of distance learning and synchronous education has increased the capacity of many institutions to offer fully online programs. This expansion may help shape the future of the online education market. In addition to enhancing online education, these institutions can leverage the infrastructure that has been built for synchronous instruction. However, the degree quality and number of online programs may not improve significantly due to the fact that the distance from the student’s location is not considered.

However, many for-profit institutions are likely to face significant cost issues in entering the online higher education market. Because of the low number of online students, they may not be able to cover their start-up costs from internal funds. This may lead to a loss of revenue for such institutions. The other factor that may affect the size of the online higher education market is the ability to find new sources of revenue. However, while the competition is higher than ever before, the advantages of the online higher education market will outweigh the downsides.

The cost of online higher education can also be determined by the quality of the educational experience. Whether a student is offered the same quality as in-person, one depends on the quality of the institution’s offerings. In-person enrollment patterns vary from online ones, but they generally have higher prices. As a result, in-person education is more expensive and selective, while online education is less expensive and easier to scale.

The competitiveness of the online higher education market will depend on how well institutions are able to differentiate themselves from competitors. Public institutions may launch resident online programs with non-financial goals. While financial considerations may be a deterrent, non-local programs may attract a larger number of residents. However, local institutions may have limited options in this arena. Moreover, they may also be more likely to benefit from local enrollment.

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The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Exodus University.

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