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Case
| HBS Case Collection
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January 2009
Xi'an International University: The Growth of Private Universities in China
by
William C. Kirby, Michael Shih-ta Chen, Keith Chi-ho Wong and Tracy Manty
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Abstract
Huang Teng founded Xi'an International University (XAIU) as a private institute of higher education in 1992. Throughout its ensuing years, the school filled a niche and met the demand of students who did not test into one of China's public institutions. In 2008, it was seeking to grow by aggressively pursuing opportunities in other provinces and municipalities. Huang's plan was to franchise his university throughout China. However, in pursuing this strategy in Beijing, Shanghai, and Guangzhou, China's largest cities, Huang was not receiving warm responses. Local officials feared XAIU would jeopardize the survival of locally run private universities, and competition among private universities was heating up as institutions from the United Kingdom and Hong Kong partnered with public universities to form joint-ventured "independent colleges." Buoyed by the success of XAIU, Huang was confident that despite these setbacks, his franchise model would work. But was an alternative plan of expanding into second- or third-tier cities compromising too much of the groundwork that had already been laid, would it jeopardize XAIU's funding opportunities, and finally, would it hurt the academic quality and integrity XAIU had built up at home?
Keywords: Higher Education;
Growth and Development Strategy;
Private Ownership;
Expansion;
Education Industry;
China;
