University of Phoenix - #1 Provider of Online Education

Abstract

University of Phoenix (UoP) was the pioneer in the e-learning industry of the US. Set up in 1976 with the mission of providing advanced degrees to working adults, the university began experimenting with providing online education in the 1980s. In 1989, it set up an online division called UoP Online, through which it offered a variety of bachelors, masters and doctorate degrees to working professionals who did not find it convenient to attend regular college. The case discusses the events that led to the setting up of UoP and how it has functioned since. The operational features of a provider of online education are clearly discussed as well as the pros and cons of online education in general, and UoP in particular. The case ends with an analysis of the future of UoP Online.

"University of Phoenix was nimble and sensed there was a market for this (online education). They took a gamble, and it turns out they were right. They were very entrepreneurial about it."

-Robert Reilly, director of membership services at United States Distance Learning Association, in 2001.

"Online is the wave of the future and will not dwindle. University of Phoenix is on the leading edge of educational technology for this century."

-Clint Stirling, student of Phoenix Online, in 2001.

"Employers are starting to recognize that online (education) is just as good and in some cases better. There's been a big shift in just the past couple years in how credible online education has become."

-Sean Gallagher, senior analyst at research and advisory firm Eduventures Inc., in 2004.

In August 2003, Apollo Group Inc., (Apollo) the parent organization of the University of Phoenix (UoP), announced its annual results for the fiscal ended 2003. Apollo's revenues had grown 33 percent, from one billion dollars in 2002 to $1.3 billion in 2003 (Refer Exhibit I). A major part of this growth was fuelled by Apollo's most successful subsidiary, UoP, and especially the online division called UoP Online. In fiscal 2003, enrollments at UoP Online grew 61 percent, while those for campus-based programs grew 13.4 percent, leading to a sharp rise in revenues for the university. It was estimated that revenues from UoP (at $529.6 million) constituted almost 40 percent of Apollo's revenues in 2003.

UoP was founded in 1976, by John G Sperling (Sperling), a keen researcher of adult education systems. Sperling had a doctorate in Economics from Cambridge University (UK) and had spent considerable time conducting field research in adult education at the San Jose State University in San Jose, California, where he was a professor of Humanities in the 1960s.

In the course of his research, Sperling found that there were few universities that offered courses suitable for working professionals. Most universities catered to regular fresh-out-of-school college-goers, and their commitment to advanced education was limited to a few night courses. The apathy of the universities was also evident in the fact that no university offices or bookstores were open at night, and working students had to leave work during the day to enroll, register for classes, buy books or consult with instructors and student advisors.

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        Case Code   ITSY039
   Case Length    09 Pages
              Period    1976 - 2004
 Organization     University of Phoenix
        Pub Date     2004
Teaching Note    Not Available
     Countries    USA
      Industry    Education

Issues

• Analyze the operational aspects of e-learning institutes vis-à-vis traditional universities.

University of Phoenix, Online Education, e-learning, Apollo Group Inc., University of Phoenix Online, Distance Education, Online University, Digital Technology, Adult Education, Collaborative Learning, UNext.com, Cardean University, University of Chicago, Carnegie Mellon, London School of Economics.

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.