The industry that we will be discussing is eLearning industry which has disrupted traditional learning system. MOOC is the biggest and most well-known eLearning platform which has major providers such as Coursera, Udacity and EdX. M—Massive, O—Open, O—Online, C—Course. MOOCs is open to everyone and free of charge, the question is how to make revenue?
Revenue can be generated by offering premiums next to freemium account. For example, Coursera offers certain options:
Signature Track -> Students pay for verified certificates
Specializations ->A sequence of courses are given and skills are applied with a practical project to earn a certificate.
Purchase Course -> Students need to pay for access to graded assignments
How does MOOCs disrupt traditional education?
With MOOCs, students are provided with higher education and cost effectiveness. Suppliers would apply pricing strategies to online courses. MOOCs offer personalized pricing (financial aid). They also offer different versions of the content with different prices. Lastly, they can bundle courses into a specialization sequence. It depends on student’s willingness. Besides, according to equation of production cost of information (F+C*X), fixed cost is relatively high while marginal costs are close to zero.This leads to pre-made content being reusable, you can sell the same thing repeatedly.
Since there is no limit for the number of students, well-known courses can register as many students as possible. Online made-to-order lessons would be more diversified to meet different demand. Students can break away from monotonous syllabus and get personalized curriculum.
Geographical limitations have been decreased. Previously, student could only enroll into institutions that were within daily traveling distance. MOOCs enable students to be more flexible and allow institutions to reach potential customers globally.
E-learning indeed influence the dynamic of economy.
Firstly, competitive rivalry is high. The number of competitors is high, which makes switching cost low. Secondly, the bargaining power of suppliers decreases.With MOOCs, more suppliers will be available. Moreover, the bargaining power of buyer decreases. As most governments decide the fees for universities and eLearning will increase the size of customer group, bargaining power will drop.
The threat of new entrants has increased, as eLearning can provide same quality without previous limitations which makes the entry barriers lower. Finally, the threat of substitute increases, as eLearning/MOOCs offer attractive price-performance outcomes. MOOCs are mostly free and easy to switch.
The future of eLearning lies with Mobile learning. More learners will use portable device when having online courses. Social media will become study forum for idea sharing and tutoring. Virtual Reality (VR) is another opportunity to further engage online content and interact with others in 3-dimensional ways. With VR, users can also have face-to-face virtual contact with individuals to have instant discussion. Furthermore, We expect that employers deem online certificate recognizable and encourage employees to master skills using MOOCs. Besides, we predict that universities will offer online degree program. Students all over the world can access the program without geographical limitations.
