The Handbook for Economics Lecturers

6. Reviewing competition of existing taught postgraduate provision: external considerations

The higher education taught postgraduate environment is constantly evolving. This could be due to the courses that are currently in vogue, the on-going repositioning of taught postgraduate programmes away from the traditional general tuition and more towards specialist streams, or to wider external factors beyond our control. The recent government postgraduate review ‘One Step Beyond: Making the most of postgraduate education’ concluded that while postgraduate education is a significant asset to the UK’s economy and has consolidated its reputation as ‘world leading’ in many areas, there is a growing need to ensure that postgraduate provision remains internationally competitive.

Moreover, the postgraduate marketplace is only going to become more competitive as domestic institutional departments seek to diversify their programme portfolio to mitigate any negative impacts from the Browne Review’s recommendations within the undergraduate market, while the international sphere bolsters its competitive edge within Europe (due to the Bologna accords) and Asian nations as more programmes become internationally recognised and taught in English. Further, these programmes generally have lower fees (and in some cases no fees at all), opportunities for scholarship and the experience of being taught within a different culture, all of which are extremely attractive to students balancing their decision between a perceived ‘middling’ department and the opportunity of studying within a new country.

Although there are numerous uncertainties surrounding the long-term structure of higher education in general, there will always be demand for high-quality economics graduates taught on high-quality programmes. Given the increasing debts students are expected to shoulder for their education, it is only natural to expect students to become increasingly actively involved with all aspects of their course rather than passively settle for the provision that is being offered. Therefore, in order to retain student numbers, only those departments which respond rapidly to changing student demand with a degree of flexibility in their courses will retain students in this more consumer-orientated environment. The classic system of individual postgraduate programmes or even, in some cases, whole departments being cross-subsidised on former academic prestige when they are no longer financially viable, is unlikely to continue, considering the increasing budgetary pressures many institutions now face.

Hence, as the postgraduate environment shifts so too must the postgraduate provision provided to meet the demands of prospective students to ensure departments remain competitive. With the abundance of postgraduate programmes available, it is crucial to identify and build upon a competitive advantage that a department offers and that students highly desire, so that they choose the department over available alternatives. Thus, simply offering degree streams that directly copy other institutions is unlikely to satisfy this new student-informed market, especially if there is a lack of necessary human and technical resource allocated to the programme’s provision, and ultimately only serves to undermine both student numbers and the department’s reputation in the long-run.

Therefore, it is critically important that a periodic strategic review is conducted, for example relating to:

  • your current provision and whether it meets the current programme’s aims
  • the current and likely future demand
  • your identified postgraduate competitor institutions.

The first of these essentially represents internal considerations and is discussed in this section, whilst the second and third highlight the need for awareness regarding external factors and are discussed in the next section. However, each of the three parts of this review will need to run concurrently, in order for feedback to inform each section and its resultant strategy.

Rather than purely focusing upon postgraduate provision, it is advisable that the strategic review covers the entire department’s provision, including undergraduate degrees, since most departments have human and technical resources shared across multiple programmes. An isolated review would fail to acknowledge these synergies in addition to ignoring potential crossover factors, such as designing postgraduate programmes to complement the undergraduate provision and thus bolster the conversion rate of undergraduate students progressing onto postgraduate study within the same department.

When conducting a comprehensive examination of the current provision and where this fits into the marketplace, we need to distinguish between those sources which are external (i.e. those factors which are uncontrollable by the institution but yet still influence students’ decisions on whether they study at a postgraduate level and which institution they choose) and factors which are internal (i.e. that we possess some control over).

In order to identify the external macro environmental characteristics that will affect the provision there are numerous approaches that can be utilised with a Political, Economic, Social and Technological (PEST) analysis being a typical technique. Political factors include current and potential future government policies and those legal and informal rules under which institutions operate. Economic factors will affect individuals’ decisions on whether they choose to progress within higher education and will also have a material impact upon the department’s financial viability and the university’s cost of capital especially if borrowing has been entered into in order to modernise the campus to fulfil student expectations. Social factors include the demographic and cultural aspects, thereby referring to students’ needs and the potential size of the higher education market. Technological factors can lower the barriers to entry, reduce cost levels of provision and offer new techniques in teaching. An example of this analysis is given in Figure 1.

Figure 1: Political, Economic, Social and Technological (PEST) analysis for a UK HEI

Factor Impact on department Planned initiatives

Government caps growth in home undergraduate student numbers as student support costs become prohibitive

  • Income from fees likely to decline
  • Student numbers likely to decline if programme is not attractive compared to other institutions
  • Institution and hence department cannot apply for additional student numbers (ASNs) if demand outstrips supply
  • Concentrate marketing on postgraduate programmes and in attracting international students
  • Explore opportunities for additional external revenue streams (e.g. knowledge transfer)
  • Focus upon increasing quality of courses offered at undergraduate level in order to boost league table position and therefore attract additional new postgraduate numbers and increase undergraduate conversion rate

Increased higher education competition internationally ( e.g. Bologna reforms) and increased recognition of international institution degrees; new private providers of higher education established in UK and abroad

  • Competition for international students more intense
  • Opportunity for joint ventures with specialist providers
  • Increased emphasis needed for partnerships for overseas course delivery
  • Increase partnership links with international institutions
  • More proactive recruitment and targeting of international students
  • Devising new programmes to take advantage of final year entry international students

Government policy shift towards intervention within the higher education market

  • Decline in home funded economics student allocation as STEM subjects prioritised
  • Threat of reduction in undergraduate funded places if quality is perceived poor
  • Regulation increases and hence compliance costs
  • Reduced focus on widening participation
  • Focus on increasing quality and value added
  • Increased emphasis on attracting and keeping international students
  • Raise entry requirements

Continued economic downturn and slower recovery than previously expected

  • Less publicly supported opportunities for research funding
  • Increased pressures on budgets given likely cut in governmental funding allocations
  • Increased importance to diversify income
  • Pressure on improving efficiency with staff:student ratios increasing
  • Stricter controls on expenditure

Slower growth requiring less economics graduates and increased unemployment for those newly qualified economics graduates

  • Reduced demand for economics graduates in the short term
  • Potential to affect student application numbers for all programmes with a reduction in income
  • Greater attention in curriculum on transferable skills
  • Development of closer ties with employers and introduce a proactive placement system for students to gain experience prior to graduation

Demand for higher education programmes shifts due to introduction of increased fee levels

  • More students attend institutions near home to minimise costs
  • Increased student numbers given that economics is ranked as a multi-disciplined subject with a wide range of transferable skills
  • Develop courses with competitive advantage over competitor institutions
  • Consolidate local market position
  • Work with schools and FE colleges, etc. to encourage students to attend your department

Perceived cost of higher education too costly and not worthwhile

  • Decline in student numbers due to worry about debts incurred
  • More students working excessive hours in part-time jobs to the detriment of their studies
  • Increased co-operation with schools, and FE colleges and UCAS/careers fairs, to illustrate the benefits and funding mechanism to fully inform prospective students
  • Develop monitoring system to catch students at risk of dropping out

Increased use of internet-based resources

  • Increased demand for interactive internet-based learning software/environment
  • Opportunities for new programmes with partner institutions or distance learning with e-lectures
  • Potential to develop new approaches to delivering content to students
  • Increased research and identification of best interactive resources which fit with current material taught and the ‘value-added’
  • Constant revision of department website to keep up-to-date with new interactivity advances to enhance external reputation for prospective students

These macro environment variables are just some of the factors over which we have no direct control. Thus, to develop these and to identify internal factors we need to develop our perspective in terms of a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. As the process aims to identify only those strengths and weaknesses that prospective students identify with (i.e. it is consumer orientated), we should only include those resources or capabilities that the department has at its disposal which students recognise within this analysis. Whereas any variable which is outside the department’s control, which will affect student intake, should be noted in the opportunities and threats sections. These points under each section can be identified from focus groups (or other feedback systems at your disposal) conducted with students, employer feedback, faculty members (both internal and external) and information from publicly available domains of competitor institutions. An example of this analysis is given in Figure 2.

Figure 2: Strength, Weaknesses, Opportunities and Threats (SWOT) analysis for a UK HEI


  • Strong reputation with stakeholders (e.g. current students, graduates, employers)
  • Rising student numbers and demand for places (home and international)
  • Cultural and nationality diversity of city, students and staff
  • Increasing amount, and quality achieved of research
  • Graduate employment rate


  • League table position of undergraduate programme and overall institution ranking
  • Student satisfaction surveys
  • Lack of postgraduate programme


  • Develop postgraduate programme
  • Increase numbers of non-EU student numbers
  • Economics as a subject more prominent in media given current global financial/political conditions


  • Reputation of city/location
  • Browne Review reforms
  • National decline in home (UK/EU) 18-year-old cohort
  • Impact of Bologna reforms (e.g. increased competition from overseas providers)
  • Increased competition for overseas students (due to their higher fee paying status)

By identifying the internal weaknesses and external threats, attention can be focused upon conversion strategies; how weaknesses can be transformed into strengths and threats into opportunities. Also, attention should be given to exploiting the current strengths and how new opportunities can arise. For instance, strong relationships with a local employer could lead to internships being offered or opportunities for student scholarships. A more structured relationship, with partnerships formed and employer engagement within the curriculum design, could become a new and exciting prospect.

Consequently, the results from the higher education environment PEST audit and SWOT analysis should lead to a revision of the on-going objectives of the department. These objectives should be at two levels: the first covering the overall departmental strategic direction, covering aspects across programme levels, and the second focusing upon particular streams which are offered.