ProfitWizardry: Maximizing Hogwarts University's Magical Margins

The candidate should immediately notice that enrollment is declining and determine the drop in student enrollment between 2018-2022 is ~12% decline ([10.7-9.4]/9.4). 

Brainstorms reasons for the drop in enrollment should include reasons such as:

• Lack of in-demand course offerings
• No online or hybrid courses for remote students
• Few notable or famous professors
• Poor student facility upkeep
• Low athletic offerings or performance
• Tuition too high
• Low ROI on degree

Additional information to determine the breakeven point of students will require revenue and cost per student.

Calculate the current total expenses of Hogwarts University. You may assume all costs are fixed and will not grow with enrollment. 

Following the calculation of total expenses, you require this number to calculate the enrollment gap to breakeven.

Upon calculating, push towards ideas as to how to prevent the ongoing drop in enrollment and begin to grow toward the target enrollment number to achieve breakeven. 

There are several attractive programs based on the 3-year CAGR: Data Analytics (105k at 17%)  has high growth, but a low number of students, Health Care (333k at 2%) has a high number of students, but low growth and Computer Science (266k at 9%) has high growth with a high number of students. Ensure the selection aligns with Hogwarts’ 3-year emphasis on breakeven.

Each of these 3 programs works and calculate the exact projections of each program by the 3-year mark (use a simple growth calculation vice a compound, year over year growth).

To achieve Hogwarts’ breakeven goal, can calculate what % of the market they should obtain.

After determining the specific program, recognize that offering an online/hybrid option would be most appropriate given level of interest (and today's climate). 

Understanding that initiating a new program is inherently risky, so make sure to be leaning into ideas for how Hogwarts can proactively hedge against the cons of opening a new program (i.e. starting out only online to minimize the costs and extract the best methods for teaching the course through competitive universities). 

Recommendation:

•Hogwarts University should create a Computer Science program that offers an online/hybrid option because of the 9% project CAGR for the program that is already substantial in size. For Hogwarts to reach its breakeven goal, the university will need to obtain 1% market share of the Computer Science market.  

Risks:

•Hogwarts may lack the existing IP to create the program forcing them to raise costs by hiring more professors

•The projected growth for Computer Science is not guaranteed to last and might be surpassed by Data Analytics 5-10 years out

Next Steps:

•Assess Hogwarts’ current IP capabilities to determine if more professors are necessary and how much the program will cost to implement