Strategic Plan of the Apollo Group Inc

MBA 580Presented by: Rose SotoInstructor: John Vincent

History of the University of PhoenixJohn Sperling (88 yrs) – FounderChairman of the Apollo Group Inc“Unintentional” entrepreneur now on the

Forbes 400 list of America’s wealthiest peopleCompleted high school Joined the merchant marine Went on to Reed CollegePhD from Cambridge University (Economics

major)

Online Concept Formed Early On1972 Sperling was chosen to run workshops

at San Jose State Brought in teachers who were experts in

their fields, divided the class into small groups, and challenged each group to complete a project

Curriculum he sketched out was slapped down

Stanford University backed his ideaUSF became his first client and became a

success

Strategic ThinkingBecame a for-profit enterprise“The faculty member is an equal in the

classroom. His job isn’t to expound wisdom, it’s to serve a learning group.”

Sperling forbade tenure in his own programsAfter a futile five year battle to win

accreditation, Sperling left California and headed to Phoenix

In 1979, UoP earned its accreditation

UoP – How a university for working adults should look, feel and functionMain campus has no student center, no fine-

arts buildings, no centerSchool offers undergraduate and graduate-

degree programs in business, information technology, accounting, management, marketing

Age of average student – 34 yrs earns between $50,000 and $60,000 a year

1989 Sperling purchased a distance-learning company to create profitable electronic education system

John Sperling was ahead of the game (a strategic thinker)In 2000 the university’s online enrollment

jumped 81%Phoenix online now generates $327 million in

revenueAnalysts at William Blair & Co. call it one of

the best-performing tracking stocks of all time

SWOT ANALYSISStrengths: UoP offers classes both online and

on campusInstructors are working professionals in their

fieldsCredit is given for prior courses and life

credit is also considered when enrolling

SWOT ANALYSIS CONT’DWeaknesses: Many other online schools today

that rival with UoPUoP must invest more money in their

technology in order to stay ahead of the gameFaces controversy over traditional higher

educational schooling

SWOT ANALYSIS CONT’DOpportunities: To continue being a leader in

online educationTo increase the program offerings at the

school in order to keep up with the market To expand on a global level and use the same

business model that has made it successful

SWOT ANALYSIS CONT’DThreats: Ongoing battles to force the

university to continue to meet accreditationMany other online competitors will try to

gain advantage over UoP with newer marketing methods

Concept of attracting only working adults is changing to lure in students who are completing high school as a potential market share

Since going public in 1994, Apollo has racked up an annual growth rate of roughly 25%

In 2002, it had $1 billion in revenue-a 31% increase over 2001.

Its distance-learning division claims nearly 60,000 students and an enrollment that’s increasing at a rate of about 60% a year

Its stock has split twice and nearly tripled in price since its IPO in 2000, making it one of the few Interact companies to have prospered

Financial Key Notes

John Sperling’s lessons on business: Ignore themIgnore your detractors: “If I weren’t immune to

criticism, it would have been impossible to create and protect the University of Phoenix from hostility and legal assaults. But that’s a unique characteristic that was positive for me. If someone in an organization is indifferent to the feelings of others, he won’t function well.”

Take bet-the-farm risks: “I drove my company to near bankruptcy on a couple of occasions, that kind of bet-the-farm risk taking helped build the Apollo Group. But I had nowhere to go but up. I had nothing to lose.”

Challenge authority: “If you challenge authority, but you’re not tough enough or shrewd enough to carry it off, you’ll be ill served by this advice. The same can be said for a number of characteristics that have served me best: opportunism, joy in conflict, a thrill from taking risks. None of them is a safe ride.”

Never set a goal: “An English historian once observed, ‘He goes farthest who knows not whence he goes.’ There’s much truth in this. If you have a goal, you’re constrained by the goal. Organizations must have a coherent philosophy, a clear direction, and the strategies to make the journey successful.”

More advice we should ignore…

ReferencesBreen, Bill. (2003). The hard life and restless

mind of america's education billionaire. Fast Company, (68), 6p. Retrieved May 17, 2009, from Business Source Complete database.

Apollo Group, Inc. (2007). Mergent's Handbook of NASDAQ Stocks (Wiley), (1), p22. Retrieved May 16, 2009, from Business Source Complete database.

Questions?