1. Introduction & Agenda

Situational analysis Competitor analysis Products Pricing and revenue analysis Distribution including customer acquisition and international Process Market sector analysis Customer needs analysis Headline recommendations Areas to explore 1. Introduction & Agenda

2. Definition • What is “B2B”? “Generating revenue and building reputation from activities in areas other than the direct education of students” • Collateral benefits • Supports strategic priorities – research engaged, business focussed • Greater industry & business relevance of University offering and research • Enhanced student / faculty opportunities and experience • Community and stakeholder benefits • Enhanced reputation with students, academics and businesses/organisations

2. “B2B” engagement and the Virtuous Cycle “Real World” experience & results Enhanced student/stakeholder perception Feedback to Curriculum & Offering Enhanced Business & Industry engagement Better offering to students & stakeholders Better focus on Industry & Business needs Improved graduate employability prospects

3. Situational Analysis: Competitive Set • Perceptions of Strengths & Weaknesses

Art, Design & Social Sciences Business & Law Engineering & Environment Heath &Life Sciences 1Q 2Q 3Q 4Q 3. Situational Analysis: Competitive Set CUG Overall, Research and Graduate Prospects Rank 2013

3. Situational Analysis: Products • Product set broadly in-line with HE offerings • Selected opportunities for product development • Strengths & track-record in selected disciplines • Reliance on these few specialisations = future risk • Historically faculty driven • Need integrated & multidisciplinary product approach • Core competencies restricted to specific disciplines • e.g. Student Law Clinic model – expand into other areas • Not used capabilities to expand/build reputation in new sectors/disciplines • CPD and employee training highly rated, research strength variable • Variable customer experience – dependent on individuals • Course delivery options could be more flexible • No obvious prioritisation – capacity and focus issues

3. Situational Analysis: Pricing & Revenue • Current Revenue Streams 2010/11 0.13% 0.11% 0.11% 1.22% 0.09% 6.10% 0.00% 0.14%

3. Situational Analysis: Pricing & Revenue • Breakdown of 2011/12 Revenue Streams

3. Situational Analysis: Pricing & Revenues • Pricing internally focussed and faculty based • cost plus, lack of transparency/consistency • Lack of clarity around margins – overall and by discipline/market • Strengths & track-record in selected disciplines • But ... insensitive to market trends and opportunities • Limited understanding around different revenue stream profitability • e.g. research margin % and value versus consultancy • Disproportionate income from CPD • Not a bad thing per se, but a source of risk • Benchmarking data not readily/easily available • Barrier to understanding and creating external/competitor focus • Use to inform where resources best deployed

Figure 1 Total income by partner 2003-04 to 2010-11 (real terms) 3. Situational Analysis: Revenues • Surprisingly low contribution from SMEs • Consultancy largest revenue generator for SMEs (£56m). Contract research contributes £40m, as does equipment/facilities. • SME income increasing – indicates increasing appetite and engagement to innovate SME products and services.

Figure 2 Selected HE-BCI income streams 2003-04 to 2010-11 (real terms) Figure 3 Income by activity and partner 2010-11 3. Situational Analysis: Revenues • Contract research represents largest opportunity, with largest demand from public and third sector • Consultancy services offer similar market opportunity to CPD • As pressure mounts on public sector spending, large business spending next attractive opportunity

Figure 7 Consultancy income 2003-04 to 2010-11 (real terms) Figure 6 Contract research income 2003-04 to 2010-11 (real terms) 3. Situational Analysis: Revenues • Consultancy & Contract Research income • Collaborative research presents potential opportunity due to nebulous nature – plays to partnership strengths and project specific expertise. • But ... often multi-disciplinary • Non-commercial and SMEs increasing spending on contract research

3. Situational Analysis: Revenues • IP • Mix of in-house and outsourcing options used by HEIs – outsourcing most popular option • Income from intellectual property grew by 52% in real terms from 2003-04 to 2010-11 • Potential for further expansion as economy recovers – therefore potential to help customers develop technologies in readiness for upturn Figure 9 Income from intellectual property 2003-04 to 2001-11 (real terms)

3. Situational Analysis: Revenues • CPD Figure 14 CPD and continuing education 2010-11 • High proportion of CPD from public sector plays to Northumbria University's strengths • But...potential risk through over-reliance • Opportunity to take CPD/training/personal skills training competencies into new disciplines and areas • Need to articulate clearly the generic capabilities and target audience benefits

Figure 8 Facilities and equipment 2003-04 to 2010-11 (real terms) 3. Situational Analysis: Revenues • Facilities & Equipment • Northumbria University's facilities stand up well against other HE offerings • Large businesses increased their spending • Opportunity to leverage to build business relationships as well as generate income – focussing on combination of facilities with leading edge expertise – not each in isolation • Need to understand if any facilities are unique in what they offer • Opportunity to invite businesses to experience and also offer virtual tours to potential students • Market focus more on technology e.g. digital media suites, wind tunnels • Vocational facilities e.g. sports centres could be used to support wider offering e.g. sports psychology

3. Situational Analysis: Revenues 3. Situational Analysis: Revenues • Northumbria average project revenue is low • Contract research average significantly higher than consultancy and facilities but still low value as an average • Indicates not selling across full range of capabilities and penetrating with client • Indicates some work may be uneconomical to undertake • Need to understand the total value of spend over a period to see if small pieces of work are successfully converted into larger projects

3. Situational Analysis: Process • Customer Acquisition • Unclear Process – does not support full capabilities • Competing priorities and issues with capacity to deliver • Not easy to navigate around the University and find the right person • Industry feedback indicates identifying and engaging with academics is a major barrier for external clients (in particular SMEs) • Demonstrated ability to focus on the process of design & methodology • Not maximised this capability or communicated competency • CRM system & process being introduced – crucial to successful acquisition strategy – behavioural change required • Must provide information to support proactive BDM lead generation • e.g. finding target companies/companies similar to university successes, • e.g. holding information on existing customers including contact details & routes to access • e.g. won/lost reporting and analysis of opportunities • Performance metrics support behaviours and focus

3. Situational Analysis: Distribution • Customer Acquisition Analysis Figure 5 Selected infrastructure indicators (2000-01 to 2010-11) • Recognised value of and need for processes and systems within the HE industry • Necessity of a simple entry/enquiry point acknowledged • Indication SMEs becoming more confident at specifying own needs – need to demonstrate value add in helping address challenges early on in discussions – case studies can support capabilities

3. Situational Analysis: Distribution • Customer Acquisition Analysis Figure 4 Incentives for staff to engage with business and the community 2000-01 to 2010-11 • HE staff recognise the importance of engaging with businesses – the challenge is to provide the processes and develop the capability to optimise the opportunity In response to the question ‘How would you rate the level of incentives for staff at your HEI to engage with Business and the Community?’

3. Situational Analysis: Distribution • International development - 1 • Handled through international office independently of BDMs • International office focus is on student recruitment • Most of business is from Middle East – have the money to invest • Risk of over-reliance on this Region • Monitor and seek out opportunities globally • International sales model: individual reps covering specific countries talk to sponsors to communicate Uni benefits • need resources and capabilities to offer full range and demonstrate wide range of experience • Indications not promoting/focussing on all opportunities/disciplines e.g. not strong in oil and gas – growing market opportunity and synergies with Middle East • Success measures not clearly defined or co-ordinated with BDMs

3. Situational Analysis: Distribution • International – 2 • Businesses think in terms of product and capability • Reputation important for overseas – based on what delivered and longevity/heritage • Basic Marketing support not supplied: for example • brand messages e.g. quality, environment • specific sector/discipline competency examples • digital and soft copy communications • translated versions

3. Situational Analysis: Best Practice • NDC – Design Centre • Good reputation. Innovative. Good at problem identification and issue definition. Cross-disciplinary – bring together and lead cross-functional teams. • Focuses on the process of design and methodology rather than individual products • Demonstrated ability to work successfully with large companies e.g. Unilever, Mars; as well as SMEs • Designers good at e.g. blogs – use to promote university and engage with wider business community • Opportunity to use core competencies of NDC and also share best practices

3. Situational Analysis: Best Practice Examples • Coventry University • Business engagement focus • Newcastle University • MIT – ILP (Industry Liaison Programme) • membership model • Cranfield • communication of industry/student benefits • Lancaster • multi-disciplinary branded “Imagination”

3. Situational Analysis: Perceptions University Capabilities: CUG 2013 Overall Based on non-weighted averaging of CUG data

3. Situational Analysis: Perceptions University Capabilities – Art, Design & Social Sciences Subjects: CUG 2012 Based on non-weighted averaging of CUG data

3. Situational Analysis: Perceptions University Capabilities – Business & Law Subjects: CUG 2012 Based on non-weighted averaging of CUG data

3. Situational Analysis: Perceptions University Capabilities – Engineering & Environment Subjects: CUG 2012 Based on non-weighted averaging of CUG data

3. Situational Analysis: Perceptions University Capabilities – Health & Life Sciences Subjects: CUG 2012

3. Situational Analysis: Perceptions University Capabilities - Art, Design & Social Science Subjects (all HEIs): CUG 2012 Based on non-weighted averaging of CUG data

3. Situational Analysis: Perceptions University Capabilities – Business & Law Subjects (all HEIs): CUG 2012 Based on non-weighted averaging of CUG data

3. Situational Analysis: Perceptions University Capabilities – Engineering & Environment (all HEIs): CUG 2012 Based on non-weighted averaging of CUG data

3. Situational Analysis: Perceptions University Capabilities – Health & Life Sciences Subjects (all HEIs): CUG 2012 Based on non-weighted averaging of CUG data

4. Market Analysis • Sectors & Trends • Economic recession and challenges – impact on spending, investment, innovation and skills development • Identify and develop plans to maximise opportunities in emerging markets and growing sectors • Reduction in Public Sector spending increases need to diversify • Winding down of Regional Development Agencies means new relationships may need to be established • Impact arising from e.g. changes in e.g. HE Innovation Funding need to be assessed and quantified • Possible opportunities arising out of legislative and political changes e.g. freeing up legal market, CRE disbanding

5. Customer Needs Analysis • Businesses think in terms of product and (multi-disciplinary) capability • Business Needs from Graduates • Graduate leadership, management & communication skills • Graduate ‘real-world’ &/or workplace experience • Basic & fundamental skills • Common sense, commercial perspective • Independent thought and & problem solving capabilities • Self motivation, passionate, positive attitude • Articulate these outcomes in collateral – in business language • Demonstrate how they are integrated into courses and adopted by graduates • Student needs driven by business needs re employability

7. Strategy Development Define keycompetencies Define competitive advantage Develop proposition Articulate key messages Why NU? Benefits for clients Simplify and focus communications Provide Supporting Evidence

Recommended areas to explore Develop a clear proposition for engaging business community Internally focussed – need to focus on external market & customer needs Prioritise resources and activities based on market needs Develop brand positioning based on market needs and competitive advantages Develop multi-disciplinary capability and positioning Communications – key messages, simply articulated and presented Process improvements: e.g. easier access and interface with University Develop sales strategy that supports delivery of University objectives Embed business thinking and terminology in the University 8. Headline findings – early indications

(Marketing) organisational recommendations Remits more externally focussed: international, market, customer, competitor Increased market intelligence and competitor monitoring focus Dedicated B2B resource – “go to” person in Marketing who “lives” B2B Specific communications, brand and digital B2B responsibilities incorporated into Marketing roles Specific Brand and Communications Strategy Manager role covering B2B as part of remit B2B Product Manager focus on developing multi-disciplinary portfolio 8. Headline findings – early indications

Cultural recommendations Investigate option of Commercial Manager – with B2B accountabilities – responsibilities to include pricing and analysis of BDM activity/wins/losses Supports move to university being more commercially focussed Emphasis on centralisation in the short to medium term until disciplines embedded Enables control, consistency Dedicated resource to focus on agreed priorities and demonstrate importance Supports focus on market-led multi-disciplinary rather than individual faculty focus Facilitates cultural change and sharing of learning/best practice Need to ensure supports move to being more proactive and nimble Hold e.g. market insight and best practice sessions 8. Headline findings – early indications

1. Introduction & Agenda