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Higher education and the power of choice: Universities may also need to consider more fundamental restructuring - EY - Australia

Higher education and the power of choice

Universities may need to consider fundamental restructuring

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Has your institution considered merger or divestment activities?

Institution-level restructuring — merger, acquisition and divestment activity — is a common strategy in the private sector, but frequently overlooked as an option in the public sector. Our view is that Australian universities, particularly tier 2 universities exposed in an increasingly competitive market place, should actively consider the potential benefits of restructuring.

The process begins with identifying gaps or cost issues in capabilities, programs or course offerings, target segments and locations, for example, to inform the need to collaborate or merge, or alternatively, divest existing capabilities or assets where the institution has limited competitive advantage.

Decisions on collaboration, mergers and acquisitions and divestments are strategic and need to be driven from the top of the university. These decisions need to be based on a clear understanding of an institution’s strengths and weaknesses, its market position, the state of the market and the suitability of potential collaborators or partners.

Many examples exist of Australian higher education institutions collaborating in research activities and investments. There are fewer examples of collaboration or merger activities across teaching programs or across whole institutions.

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