Yes. It is highly possible.
Imagine this:
There are over 2217 B-schools which comprises of about 1817 AICTE approved institutions and 400 un-approved private b-schools.
Together, they have over 1,99,000 seats for about 2,50,000 CAT Takers (if we consider CAT 2008 or CAT 2009).
If we hypothetically consider that Average fees charged by these bschools is Rs.2,00,000 for the program, then the total potential revenue for B-schools in India = Rs.3,990 Crores.
As there are less seats than the total supply of students, there should be no worries for these b-schools to get the required number of students for their batches to begin, right?
WRONG. Every year, from the last 2-3 years, more b-schools are finding it difficult to fill their batches when they begin in the month of June every year.
I am not talking about the Top-50 b-schools here. They have enough pull effect to attract excellent numbers and thereby have the privilege of even providing a waiting-list for candidates.
The worry is with the second and third category of b-schools. Most of them are run privately and are not funded. They were probably set-up with the right intentions to provide Management education to students in India who could not get through to the best b-schools due to some or the other reason. Some were also set up to provide education to a special section of the society.
However, Death looms large on these bschools. Primary reason is that they have never figured out the changing dynamics of the market and also the way aspirants choose bschools in the past few years.
Take so data for example - in the year 2003, out of the 95000 students who took CAT, the percentage of freshers was 60% and 40% were with work exp. Cut to 2009 CAT - 2,50,000 takers and 40% freshers with 60% work-ex junta.
We will all probably agree that in 2003, freshers chose higher education due to the fact that economy then promised them something really big if they were out in the next two years in the market. People who were working were already happy and never bothered much then with a 2 yr full time program. Filling seats for bschools therefore was never an issue.
Seeing these trends in 2003, many bschools mushroomed since then.
In the last couple of years, things have been really bad for most of these b-schools. They have found it tough to fill their batches with quality candidates. They have found that responses to their communication messages through marketing and branding are appalling. Overall, things have looked very bad.
A deeper look into the trends will give us a better idea - since there has been about 60% of the total CAT takers who had prior work-ex, we can safely assume that these people will not settle for a b-schools thats not in the top 50. This is due to the fact that they are very sure of the time they will spend (2 years) and also the return on investment that they will realize after the 2 yr period.
This means that 60% of the crowd now doesnt consider the remaining 2000 odd institutes as the ones they will want to join for this year. Thats a huge blow.
The freshers are always the confused lot. If they get into a top50 bschool, they will take that immediately. If not, then they look out for the best options (mostly understanding what kind of placements are available with other bschools). This means a very slow decision process. With bschools who would have generated leads from websites or other sources, most of these freshers will be called atleast 30 times for following up if they have made any decision. That produces frustrations on both ends. Aspirants feel that - this college doesnt get applications and are therefore following up. For them it doesnt mean anything that the bschool is looking for genuine candidates to apply to them.
Which means that the spending on Print media (almost 20% of the total revenue) and other spending (like seminars, education fair) is now giving almost no result whatsoever.
If this is the trend, very soon these bschools will have to shutdown. Already, they have optimized in operational expenditures through - visiting faculty, class schedules, etc. They have already stretched it too thin. If they dont take the right steps right now, then they will surely be heading for a sad end. There is still hope. These bschools will need to look inward and ask themselves some very important questions:
1. What is lacking in us that we dont have the pull effect like others?
2. What are the right things that bschools like Glakes, ISB, etc have done that they are doing good today?
3. Do I have a Marketing+Admission team that has more people than my Full-time faculty members?
4. Whats my status in connection to important parameters on which the best forums dissect bschools on? (In most cases its not tables/chairs/food/computers/hostels/etc).
5. How will I reorganize the entire spending pattern for my bschool so that I make the right decisions in branding and consciously move into the Top Bracket?
I have answers to all the above questions. the trouble is that with the kind of sweatshop way of working that these bschools have, it is difficult to make them see the light. However, extinction is a big threat and I guess it will have them thinking on this. It is high time that these bschools make the right decisions.
