Introduction
The higher learning sector in China is highly developed, as numerous institutions and universities offer higher learning education (Yang, 2017). Given that China is large, this essay will evaluate the status of higher learning in China but will focus on Beijing. In doing so, the essay will use porters five forces, namely the threat of new entrants, the threat of substitutes, the bargaining power of customers and suppliers, and the competitive rivalry, to evaluate whether Beijing University, commonly known as Peking university has a sustainable competitive advantage over other institutions in Beijing.
Porter Five Forces
The Threat of New Entrants
The threat of new entrants in higher learning in Beijing is low due to high entry barriers, and the cost incurred in developing a new university is high. This is such that most universities are public, with private institutions occupying lower positions, which makes the threat of entry low unless it is another public university (Cai & Yan, 2017). The Education Ministry in Beijing has been advising the provinces to restrain from constructing new universities in their regions and wait for their economy to recover from the impact of Covid-19 (Sharma, 2023). This directive to restrain the construction and expansion of universities hinders the development of new Universities in Beijing and the whole of China, lessening the threat of new entrants.
Beijing has numerous higher learning institutions, such as Peking University, Renmin University of China, and Tsinghua University, with robust brand recognition (Unirank, 2023). These universities have managed to build their reputation in Beijing and the whole of China, which makes it challenging for new universities and institutions to compete with them, giving Peking University a sustainable competitive advantage.
The Bargaining Power of Buyers
The bargaining power of the buyers is high. This is such that the buyers of Peking University are the students, and they have high switching power. This is such that they can easily switch from one university to another, as Beijing has various higher learning institutions, such as the Renmin University of China and Tsinghua university, which also have strong brand recognition in Beijing and China (Unirank, 2023). However, despite the bargaining power of the buyers being higher, Peking University has strong brand recognition as it is rated as the 2nd best University behind Tsinghua University in Beijing and the whole of China, and it is ranked 17th best universities globally (Times Higher Education, 2023). Hence, despite the buyers having higher switch costs, most higher learning students in China and Beijing will want to get their education from Peking University due to its strong brand recognition, as it was the first-ever national comprehensive university in China ever (Peking University, 2023). Therefore, although the bargaining power of the customers is high, Peking’s strong brand recognition in China and globally gives it a competitive advantage over other universities and institutions in Beijing and China.
The Bargaining Power of The Suppliers
The suppliers’ bargaining power is low as Peking University suppliers are mainly lecturers and professors. The suppliers’ bargaining power is low because Peking University has a strong brand reputation, and most suppliers will want to be associated with the university. Therefore, as much as the university might compete for the best talents of lecturers and professors, Peking retains the best talents due to its strong recognition in and outside China (Times Higher Education, 2023). Also, available alternatives for professors and lecturers are limited, which insinuates that Universities in Beijing, such as Peking, have a wide pool of resources where they can get the suppliers, which makes suppliers’ power low.
The Threat of Substitutes
The threat of substitutes is moderate. This is such that the substitutes for Peking university are international universities that offer online and offline learning. Ever since the pandemic came, online learning has become the new normal for most students in China (Sharma, 2023). This affected learning in higher education institutions such as Peking, as students could attend lectures using online platforms. For quite some time, international universities offering online learning were a substitute for traditional universities such as Peking, as Chinese students studying overseas universities could continue their studies after traveling had been banned (Sharma, 2023). Although international universities offering online learning are a threat, its impact on universities such as Peking is moderate.
The impact is moderate because although most international universities offering online learning are cheap and flexible, the Chinese government, under the ministry of education’s Chinese Service Center for Scholarly Exchange (CSCSE) in Beijing, has issued a warning that it will no longer acknowledge degrees from foreign universities which are obtained via online learning only (Sharma, 2023). Also, online learning is challenging as in one of the investigations conducted on professors at Peking University, the threat of online learning appears moderate, as online learning limits physical interaction (Wu, 2021). For instance, Professor Wang Dongmin, an associate professor who teaches Physical Education at Peking University, claims that online learning’s limited interactions and lack of space and equipment make teaching challenging (Wu, 2021). Hence, the immediate substitutes are international universities offering online learning which face tough regulations making their threat to traditional universities such as Peking moderate. This, in return, gives institutions such as Peking University a competitive advantage.
Competitive rivalry
The competition in the higher learning sector in China is high as the sector has constantly been improving in quality and quantity (Yang, 2017). As such, the strong competition in the sector has made the Chinese higher education sector develop faster in that, as of 2019, the country had about 2688 universities with about 30.31 million students (Luo, 2020). More so in regions such as Beijing, the competition is more intense, considering it is the capital of China with numerous institutions with strong brand recognition, such as Tsinghua University, Renmin University of China, Beihang University, and Beijing Normal university globally (Unirank, 2023). The high growth rate has made it have the largest population of undergraduate students, with universities such as Peking having over 48600 students, mostly local and 2500 international students (Peking University, 2023). This is such that the university has been spearheading international academic research and is also known for nurturing talents expected to lead the world in the future.
Peking University’s strong brand recognition and cooperation also give it a competitive advantage over other universities. This is such that since its establishment, the university has received about 30 Nobel laureates and more than 110 political dignitaries and heads of state (Peking University, 2023). As such, the university has managed to contain intense competition by cooperating with various partners. It has been at the forefront of cooperating in that it has cooperated with over 400 research institutions and universities in more than 60 nations and regions (Peking University, 2023). The cooperation at the university has been progressing well. In 2019, it published “International Development Strategy of Peking University: In Pursuit of Global Excellence .”This document ensures that Peking University engages in innovation, diversity, and distinction and leads and shapes global cooperation (Peking University, 2023). Therefore, despite the intense competition in higher education in Beijing and China, Peking’s strong brand recognition and ability to cooperate with numerous partners give it a competitive advantage over other institutions in China.
Conclusion
Beijing University, commonly known as Peking University, is among the best universities in Beijing and China. Therefore, this essay has evaluated the higher education sector in Beijing using porter’s five forces by evaluating Peking University and how it fares against its major competitors such as Tsinghua University, Renmin University of China, Beihang University, and Beijing Normal university. Ultimately based on the above analysis, it is evident that Peking University’s strong brand reputation and its ability to cooperate with multiple partners give it a sustainable competitive advantage.
References
Cai, Y., & Yan, F. (2017). Universities and higher education. Handbook of Education in China, 169-193. doi:10.4337/9781783470662.00018
Luo, Y. (2020). Retrieved April 2, 2023, from https://socialsciences.nature.com/posts/professors-that-love-teaching-are-dying-in-china-s-universities
Pekin University. (2023). Retrieved April 2, 2023, from https://english.pku.edu.cn/about.html
Sharma, Y. (2023). Beijing applies brakes to the construction of new Universities. Retrieved April 2, 2023, from https://www.universityworldnews.com/post.php?story=20230126133750940
Sharma, Y. (2023). China bans foreign universities’ online-only courses. Retrieved April 2, 2023, from https://www.universityworldnews.com/post.php?story=20230131132149728
Times Higher Education. (2023, October 21). World University Rankings. Retrieved April 2, 2023, from https://www.timeshighereducation.com/world-university-rankings/2023/world-ranking
Unirank. (2023). UniRank. Retrieved April 2, 2023, from https://www.4icu.org/cn/beijing/
Wu, N. (2021, March 26). Higher education in the time of coronavirus – perspectives of professors at Peking University. Retrieved April 2, 2023, from https://www.blog.classin.com/post/higher-education-perspectives-of-professors-at-peking-university
Yang, R. (2017). The Cultural Mission of China’s elite universities: Examples from Peking and Tsinghua. Studies in Higher Education,42(10), 1825-1838. doi:10.1080/03075079.2017.1376873
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