The barbarians are at the gate! Of universities, moats and disruption! - by Aswath Damodaran
In my last post, I attempted to break down the bundled
product that comprises a college education into its component parts, and closed
by arguing that the future of universities rests on their ability to preserve
the competitive advantages that have allowed them to get premium prices for
these bundles and that of online education entrepreneurs on their capacity to
find chinks in the university armor.
In this one, I would like to look at the competitive
advantages that colleges/universities have on each component and how close (or
distant) the online threat is on each of them. Borrowing from the terminology
of value investing, universities have moats around their “educational castles”
and the online barbarians (at least as seen by the members of the educational
establishment) are trying to breach the establishment. Since so much of this
debate comes from one side of this divide or the other, I decided that it would be good to try to
look at both sides.
