The Udacity Company’s Competitive Advantages

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Executive Summary
Introduction
Udacity’s Business-Level Strategy
Udacity’s Corporate-Level Strategy
Udacity’s International-Level Strategy
Udacity’s Cooperative Strategies
Strategic Strengths and Weaknesses
New Strategic Options and Recommendations
Conclusion
References

Executive Summary

Udacity is a for-profit MOOC platform that offers industry-relevant educational programs developed by leading technology experts for students who would like to develop in the tech industry. For the expansion of any company, it is essential to evaluate its current strategies, core competencies, and major strengths and weaknesses to provide the most appropriate strategies for development in a new territory. Thus, this work aims to examine Udacity’s business-level, corporate-level, international, and cooperative strategies, strengths, weaknesses, values, competencies, and competitive advantages to determine its strategies for entering the Australian market.

Introduction

Udacity may be defined as an educational organization that offers massive open online courses (MOOCs) in various disciplines related to the tech industry. The company’s nano degree programs are developed by leading technology experts who prove their reliability and expediency. Udacity’s mission statement is “to democratize education by offering world-class higher education opportunities that are accessible, flexible, and economical” (“Udacity,” n.d., p. 160). Indeed, the company provides an opportunity for already qualified specialists and newcomers to obtain or improve their technical skills at an affordable price.

Udacity is a highly accessible and convenient service based on courses’ digital delivery. In other words, all programs are available through the internet on a for-profit basis. Users receive access to courses through a one-time or monthly fee (Cuofano, 2021). Udacity’s clients are not only private consumers but large commercial enterprises and even local governments as well. Although there are courses available for students for free, they should be regarded as introductory (Madhav, 2021). They may provide an understanding of a program’s requirements, but only paid courses presuppose the receiving of recognized certification.

Udacity’s Business-Level Strategy

In general, business-level strategies refer to coordinated and integrated commitments and actions that a company takes to gain a competitive advantage by exploiting its core competencies within a framework of a particular market. Udacity performs in the sphere of education, and its main competitors include Coursera, Udemy, Skillshare, Collective Academy, Degreed, Coderhouse, KIMO, Crehana, and many others. It goes without saying that the company pays particular attention to the quality and diversification of materials it provides, creating “its course content in partnership with leading industry experts so it is highly relevant within the technology sector” (“Udacity,” n.d., p. 163). In this case, Udacity graduates are more attractive to employers.

In addition, Udacity uses technologies not only to improve the quality of knowledge and the ways of its delivery but to monitor the tendencies in other spheres to provide the most actual courses. For instance, in the present day, the company offers training dedicated to autonomous vehicle engineering as this specialty is among the most perspective professions of the future (Bernick, 2018). In this case, Udacity provides not only customer–oriented but success-oriented services.

At the same time, the quality of Udacity’s customer service may be regarded as the company’s major competitive advantage. In 2014, Udacity introduced its nano degree program that offered a wide range of online degrees to acquire various technical skills essential for a student’s entry-level position. In addition, the program’s important part was quality feedback provided by not bots but actual professionals. As a result, the nano degrees have become immeasurably popular; however, there were not enough internal reviewers, and students had to wait for weeks to receive feedback.

In response to this situation, Udacity focused on the provision of high-quality and time-sensitive customer service to retain students, leave them satisfied, and improve customer loyalty in general. In particular, it started to attract more qualified reviewers and forum responders from programmers and Udacity graduates. Along with providing training, people’s experience and skills allowed the company to get a leading position in customer service in the education industry. Thus, more than 100,000 student-issue tickets have already been solved on time (Ferguson, 2021). At the same time, the company has a CSAT of 89.4% which is higher than the average score in the education industry (Ferguson, 2021). Finally, due to the increased number of reviewers, Udacity reduced the median full resolution time up to 39% (Ferguson, 2021). All in all, it is possible to say that the company understood the significance of customer service in the sphere of commercial education and applied strategies to make it excellent to stay competitive and develop.

Subsequently, in order to increase customer satisfaction, Udacity extended the range of its options. Thus, for students who took the company’s degree courses and are searching for a job, Udacity offers career services. Although the company underlines its educational mission, it pays particular attention to student’s success as well (Bernick, 2018). Thus, its career services may be regarded as an efficient tool that “helps job seekers with resume reviews, learning how to build their network, learning how to present themselves in digital profiles like LinkedIn, and preparing for technical interviews for different types of roles, whether in software engineering, machine learning, or data sciences” (Bernick, 2018, para. 15). In addition, job seekers’ resumes are also reviewed by the company’s professional team. In this case, students receive more opportunities to receive the desired job after the accomplishment of the program.

Finally, one more strategy that provides Udacity’s competitive advantage is its entering the global market. According to Clarissa Shen, the company’s Chief Operating Officer, in 2017, international expansion “was a large driver of growth” (Bernick, 2018, para. 11). The company strengthened its presence in regions where the necessity for jobs connected with tech transformation is rapidly growing and in countries where the application of nano degree programs is justified by the development of tech-driven and digital economies supported by governments.

Udacity’s Corporate-Level Strategy

Corporate-level strategies examine the corporate organization and a company’s command decisions that help it gain a competitive advantage. While there are a considerable number of competitors in the education industry and a lot of companies offer training and courses, the decision of Udacity to focus on customer service determines its inner approaches and practices. In particular, Udacity developed a particular program for the recruitment and training of reviewers. Specialists are chosen from freelance, unemployed, and employed programmers and Udacity graduates for whom appropriate working conditions and salaries are offered. In addition, the company provides a flexible schedule and training through communication with customers in the process by which the main rules and regulations are perceived. Finally, Udacity has a well-elaborated internal system that allows the spreading of students’ tasks among reviewers automatically.

While Udacity faced the struggles of students’ potential unpreparedness for a program, the company undertook all efforts to solve this issue. In particular, a company applies its retention strategy by categorizing programs into entry-level and advanced ones (“Udacity,” n.d.). Before enrollment into an advanced program, students’ prerequisites and qualifications are thoroughly tested. Moreover, students have an opportunity to test free courses to perceive the program’s format and requirements. All in all, the company aims to make education as comfortable, flexible, and accessible as possible through the digital format, the attraction of qualified instructors, and the provision of quality feedback in a time-sensitive manner.

Udacity’s International-Level Strategy

Udacity is the first education provider that entered the Australian market. This decision is fully justified by the fact that according to the Australian Industry Group’s study, 75% of Australian organizations “reported skills shortages when recruiting for jobs relating to automation, big data and Artificial Intelligence (AI) in particular” (RMIT Online, 2018, para. 3). The expansion of Udacity will bring multiple benefits to the country and its citizens. The latter will receive an opportunity to obtain knowledge and a world-class learning experience that was developed by internationally acclaimed facilities and experts to develop in the technical sphere of their interest. In turn, the availability of qualified specialists will positively contribute to the development of the Australian economy by addressing skill gaps within the framework of the changing workforce (RMIT Online, 2018). And it goes without saying that entering this country’s market will impact the company’s revenue.

Udacity’s Cooperative Strategies

The cooperative strategies of Udacity is closely connected with the diversification of its customers. To be precise, the company develops its training partnership with tech and non-tech companies, enterprises, public sector entities, and local governments. While more and more organizations realize the significance of investments in the talent ecosystem and the role of technical specialists in their growth and development, Udacity not only prepares specialists but provides an opportunity to upskill and re-skill current employees (Bernick, 2018). Sponsoring scholarship programs in collaboration with Udacity, companies contribute to their own success and the enhancement of the country’s digital economy.

Strategic Strengths and Weaknesses

SWOT Analysis

Strengths:

High-quality materials developed by leading industry experts;
The comfortable and flexible online format of education that presupposes the delivery of short courses. In addition, all courses refer to real-life situations, which makes them more understandable and relevant;
High-quality and time-sensitive feedback from reviewers and responders;
An opportunity to test free courses;
The diversification of customers;
Focus on students’ success and strong career support;
The uniqueness of several courses that are unavailable in universities or on other educational platforms, including self-driving cars, artificial intelligence, flying cars, robotics, and blockchain development (“Udacity,” n.d.).

Weaknesses:

The range of courses is substantially limited. Moreover, the number of free courses is insufficient as well;
Low graduation rates due to a constant restructuring of the company’s pricing plans;
High prices for particular courses and the differentiation of prices depending on additional options that make personalized coaching difficult to afford;
Unavailability of other languages except for English.

Opportunities:

Partnership with traditional universities and colleges for the provision of their services;
The provision of training for employers to raise their awareness in the recruitment of qualified talents in the sphere of technologies;
The enlargement of the number of courses and disciplines’ range;
Entering new markets;
The creation of more affordable or even free courses in partnership with employers.

Threats:

The availability of free materials on the Internet that negatively impacts people’s desire to pay money for education;
Better quality of competitors’ materials that allows them to prepare more specialists attractive to employers.

Udacity’s Value Chain

Company’s Infrastructure (Web Format of Education)
Human Resource Management (Search for Talents and an Appropriate Number of Employees)
Focus on Innovations, Technologies, and Information
Procurement Typical for MOOC Platforms
Provision of Courses and Career Services	Development of New Programs	Performance of Responders and Reviewers on the Basis of Inner Algorithms	The attraction of New Customers Through Advertising	Partnership with Employers and Large facilities

VRIO Framework

Resources	Value	Rare	Imitation	Organization	Competitive Advantage
Relationships with partners	Yes	Yes	Challenging to imitate	Yes	Sustainable Competitive Advantage
Quality of materials	Yes	Yes, exclusive courses	Challenging but possible	Yes	Strong Sustainable Competitive Advantage
Pricing Strategies	Yes	No	Definitely	Yes, plans are constantly updated	Not Critical
Opportunities for Expansion	Yes	No, other companies do the same	Yes	Yes	Sustainable Competitive Advantage
Intellectual Property	Yes, extremely valuable	Yes	Concerning unique material, the risk of imitation is currently low	Yes	Sustainable Competitive Advantage
Customer Service	Yes, extremely valuable	Yes	Possible to imitate, however, in the present day, the company retains its leading positions	Yes	Strong Sustainable Competitive Advantage

BCG Matrix

According to the BCG matrix, Udacity belongs to the category of Question Mark characterized by rapid market growth and low market share. According to the company, in 2020 it experienced “ a 260% increase in annual recurring revenue” with more than $160 million in funding (Udacity, 2020; Mendez, 2021). In turn, its market share is 0.20%, which is considerably lower than other companies operating in the same industry (“Udacity,” 2022). In this case, the company relies on appropriate management and investments to increase its market share and keep revenues.

Core Competencies

Personalized approach with time-sensitive and quality project feedback;
Focus on student’s professional growth and career achievements;
Unique courses available for students across the globe.

New Strategic Options and Recommendations

Entering the Australian market, Udacity should take into consideration the existence of competitors that already exist there. In this case, the company should focus on its promotion strategies and advertisement of its competitive advantages through the use of social media. In addition, Udacity should constantly monitor the tendencies of the country’s workforce market to detect skill gaps and address them efficiently. In this case, it should establish and strengthen its partnership with large companies, local governments, and enterprises to re-skill its employees when necessary and prepare new specialists on the basis of the tech industry’s requests.

At the same time, Udacity should consider the nature of Australian MOOC platforms. In particular, Australian universities, such as Monash University, Charles Sturt University, the University of Queensland, and Australian National University, develop their own educational platforms (“Free online courses (MOOCs),” n.d.). In this case, Udacity should either create more competitive advantages, such as the introduction of new programs, to stay at the same quality level as university-based platforms or collaborate with other universities to improve its reputation, raise customer awareness, and perform according to the country’s regulations.

Another strategy may imply the courses for employers, due to which they will be able to manage their human resources in relation to tech specialties more efficiently. This strategy has several important benefits – first of all, it will positively impact the company’s revenue and investments. In addition, it will lead to customer awareness and the enlargement of the company’s network with partners. Finally, one more strategy that should be applied by Udacity is a new pricing policy. It goes without saying that prices should be competitive; however, entering new markets is frequently associated with price sensitivity before customer loyalty is established. In this case, Udacity may make prices more affordable for Australian students or provide special conditions for talented specialists. In this case, Udacity may partner with large companies and look for the best specialists, especially for these companies’ recruiters, for subsequent employment. In this case, tuition fees for these students may be absent as their education will be sponsored by employers. In this case, the platform will continue to generate revenue; however, the scope of successful graduation will be enlarged.

Conclusion

Udacity may be defined as a for-profit MOOC platform that offers industry-relevant educational programs developed by leading technology experts. It provides an opportunity to learn and improve students’ digital skills at an affordable price and in a time-sensitive manner. On the basis of an in-depth analysis of the company’s business strategies, major strengths and weaknesses, core competencies, and competitive advantages, it is possible to say that Udacity may efficiently enter the Australian market as there is a necessity in its services there that may be addressed by the provider’s unique courses and excellent customer service. It is recommended to promote the company through social media, develop independently or collaborate with universities, provide courses for employers, update a pricing plan for Australia, and work with large companies and look for talented students who receive an opportunity to receive knowledge for free in exchange for subsequent employment.