Thursday, July 8, 2010

European Business Schools Set Sights on U.S.

Over the past decade or so, European business schools have been aggressive about reaching out to the American market, doing everything from forming alliances with U.S. schools to launching student- and faculty-exchange programs. Now a handful of elite European schools are taking this a step further, trying to create a more substantial presence in the U.S. by opening up traditional brick-and-mortar campuses.

In the past few months, schools from France to the U.K. have announced plans to build campuses in the coming year in the U.S., including one planned outpost announced just last week. It's a strategic move by these institutions to increase their stature and influence in the American market, says Robert Bruner, dean of the University of Virginia's Darden School of Business (Darden Full-Time MBA Profile).

"The U.S. is where the MBA was invented and, to some extent to establish a footprint in this market, is an additional means of legitimizing a school's brand and stature globally," says Bruner, who also chairs the Globalization of Management Education Task Force of the Association to Advance Collegiate Schools of Business, one of the leading business school accreditation agencies.

Eye on the Hot Spots
That's a viewpoint that these European B-schools are taking as they cautiously attempt to entrench themselves in the U.S. A number of the schools that have announced plans to build campuses are well-regarded universities in Europe, but not as well-known by students outside their home countries. By starting degree programs in such hot spots as Miami and New York, they say they will be able to enhance their global reputation in both the academic and business community in the U.S. as well as expand and enhance the degree programs they offer students. Another underlying motivation is the opportunity for them to recruit more American students to their campuses. At most European business schools, Americans make up just a handful of the students in the degree programs, making it hard for them to build up a strong alumni base in the U.S., deans at these schools say.

Many European business schools will be watching closely to see whether these business schools will be successful at branding themselves in the U.S., says Dave Wilson, president and chief executive of the Graduate Management Admission Council, which administers the Graduate Management Admission Test (GMAT). Of U.S. GMAT test takers, the vast majority, or about 98 percent, send their test scores to U.S. schools, leaving just a handful of American students who consider non-U.S schools. The European schools will have to work hard to attract these students to their U.S. outposts, Wilson says.

"These are sort of pioneers who are breaking new ground, and it will be a challenge to get U.S. students," Wilson says. "I think most European schools are going to sit back and watch, because this is really a brand new bet for them."

Manhattan Opening
Just this May, Spain's IESE Business School (IESE Full-Time MBA Profile) opened the doors of its New York campus on West 57th Street, a six-story building with two classrooms, breakout rooms, and office space. The school had been planning its U.S. campus for three years and has spent close to $20 million refurbishing the building, says Eric Weber, an associate dean of IESE and director of the school's New York office. Says Weber: "We're pretty bullish about the U.S."

The school will not be offering an MBA program at the New York office, but it has ambitious plans for the site, which include promotion of its custom programs for executives, establishing a research center on global business, and setting up activities for alumni and corporate sponsors. Professors from the school's Barcelona campus will take students to New York for several weeks, where they will study business in the context of New York City, Weber says.

Another motivation? IESE hopes that the New York branch will help the school attract more and better-qualified North American students. The school's incoming MBA class is currently made up of about 12 percent to 15 percent of American students, the second-largest group in the school after Spaniards, Weber says.

"The buyer wants to touch and feel the product before [he buys] it, so having a place in New York where potential students can participate in our programming and have interactions with professors helps a lot," Weber says.

The British Are Coming
One of the newer European B-schools to enter the U.S. market is the U.K.'s Manchester Business School (Manchester Full-Time MBA Profile), which announced last week its plan to set up a campus in Miami, where it will offer the school's Global Part-Time MBA program. The school has hundreds of alumni in America and has long wanted to have a permanent U.S. home, says Michael Luger, dean of Manchester Business School, which will be the first accredited U.K. business school to set up a campus in the U.S.

The school was strategic about its decision to open a campus in Miami, a market not dominated by such top B-schools as Harvard Business School (Harvard Full-Time MBA Profile) or the University of Chicago Booth School of Business (Booth Full-Time MBA Profile) and close to many Fortune 500 company headquarters, says Luger.

"We felt we could be the highest ranked B-school in the region and also have access to the Caribbean, South America, and other markets," Luger says

Plans are underway to open the campus in Miami's financial district this September, with an initial intake of 30 students and a goal of attracting 600 students in the next three years, Luger says. He's hopeful that the school's more affordable price point, listed on its Web site as £21,000, or $31,000, for its Global Part-Time MBA program, will help the school compete with similar but more expensive programs offered in the U.S., he says. The school now has only about a half dozen Americans in its full-time MBA program and few in its larger part-time program, Luger says.

French Aims in North Carolina
Another school hoping to ramp up its visibility among American students is SKEMA, the largest business school in France, with campuses in Lille, Paris, and Sophia Antipolis, a technology park near Nice. The school was born of last year's merger between two other French schools, ESC Lille and CERAM Business School, and has ambitious global expansion plans, which include opening up a 30,000-sq.-ft. campus in Raleigh, N.C., next January. The school has forged a partnership with North Carolina State University (NC State Full-Time MBA Profile) and plans to collaborate with the school on everything from dual-degree masters programs and executive programs to joint faculty research, says Alice Guilhon, SKEMA's dean. The school has also signed a partnership with the Research Triangle Park Foundation of North Carolina, which will give students access to dozens of high-tech companies in the area. By next winter, the school expects 300 students from its Master of Science in Management and other degree programs to arrive on the U.S. campus. Like Manchester Business School, SKEMA also hopes to bring more American students to its door. Of the 6,000 students who currently attend SKEMA, only about 40 are from the U.S. and Latin America.

"This campus is a good way to attract American students, because they will be assured and reassured about the quality of the teaching and the reach of the school," says Guilhon.

But whether American students will embrace these programs is an open question. American students are attracted to European programs at least in part because the programs are shorter and less expensive than at U.S. schools, are far more diverse, and offer a better path into the European job market. But many students may be hesitant to attend the European programs setting up shop in the U.S., which lack the kind of recruiting relationships with the most coveted MBA employers in the U.S. that top American schools enjoy.

Darden's Bruner, who is in the midst of producing a report for AACSB on the globalization of management education ()to be released this fall), says the European schools may also face challenges adapting to the local culture and will need to persuade American students they can offer a unique product equal to or better than what they currently get in the U.S.

"It remains to be seen how magnetic the European brands will be here in the U.S.," he says. "One-year and two-year programs are radically different from each other and may or may not succeed here. It will create a very interesting experiment in consumer preference."

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