This study investigates the relationship between a school's enrollment percentage, business model, and profitability within identified competitive groups of international schools in two metropolitan cities. The competitive groups were identified based on tuition levels, geographic proximity, curriculum offerings, and the ratio of expat teachers to local teachers, and were checked for matching the expectations of The Rule of Three, which suggests that three generalist competitors in a market, drive competition and establish market equilibrium. The groups consisted of a mix of non-profit and for-profit international schools managed by school management corporations, private land owner operators, or property developer-owned management companies and facilities. The hypotheses tested were that a school's enrollment as a percentage of total capacity is a predictor of the school's profitability or loss position, and that a school's business model is also an indicator of likely profitability. Non-parametric analyses were conducted, and the results provide evidence to support both hypotheses. The study found that a school's enrollment percentage discriminates between profitable and unprofitable schools, and that the owner-operator model was most strongly associated with profitability. These findings have significant value for school leaders and managers who need to assess their competitive environment, engage in strategic planning, and implement change management initiatives. By understanding the factors that influence profitability in the international school sector and knowing the impact of The Rule of Three, school leaders and investors can make informed decisions to improve financial performance and better compete in their respective markets.

Authors:
Kenneth Tuttle Wilhelm, Riviera University, France

About the Presenter(s)
Kenneth is a DBA Scholar with Riviera University in Valbonne, France. Interests: Business analysis & strategy, psychology in the educational context, and pedagogical practice. Currently developing a model for analysis & strategy in the school market.

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