University of Phoenix - #1 Provider of Online Education

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Case Details:

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

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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.

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"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 2001.¹

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 2001.²

"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 2004.³

Phoenix Leads Profits

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.

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1] Stephanie Brenowitz, "Phoenix Rising", Matrix: The Magazine for Leaders in Education, September 2001.

2] Stephanie Brenowitz, "Phoenix Rising", Matrix: The Magazine for Leaders in Education, September 2001.

3] Mary George, "Dot-com dynamo", Colorado Biz Magazine, 2004.

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