Internal and External Environmental Forces in Higher Educational Institutions (HEIS) for Sustainable Competitive Advantage: A Systematic Review of Literature

Internal and External Environmental Forces in Higher Educational Institutions (HEIS) for Sustainable Competitive Advantage: A Systematic Review of Literature

Daphne Munsaka Phiri¹, Charles Muwe Mungule², Jackson Phiri³

¹PhD Candidate, Graduate School of Business, University of Zambia

²Lecturer, Graduate School of Business, University of Zambia

³Associate Professor, Department of Computer Science, University of Zambia

DOI: https://dx.doi.org/10.47772/IJRISS.2024.8110036

Received: 15 October 2024; Accepted: 21 October 2024; Published: 29 November 2024

ABSTRACT

Higher education institutions (HEIs) play a very important role in the economy of any country because they shape future leaders. Like any industry, the higher education industry is faced with increased competition. Therefore, achieving competitive advantage and sustaining it has become more and more important for HEIs. A number of theoretical views have been advanced on how firms, including HEIs can achieve a sustainable competitive advantage. This systematic review of literature reviewed 60 articles extracted from Scopus, WoS, Research Gate and Google Scholar with the aim to review key theories, including, porter’s five forces, resource-based view (RBV), dynamic capabilities view (DCV), and the relational view (RV) and their application to the higher education sector. More specifically, the review sought to address the internal and industry forces in the environment of higher education institutions that influence their competitive advantages. This systematic review highlights five major internal resources, namely, physical resources, human resources, institutional reputation, rankings and collaborations. The study also highlights three significant indus forces from porter’s five forces, that is, the bargaining power of suppliers, the threat of substitute goods and rivalry among competing HEIs. The literature reviewed strongly indicates that higher education institutions need to enhance their performance in response to the evolving educational environment by developing adaptive strategies aligned with academic excellence.

Keywords: Higher Education Institutions, Sustainable Competitive Advantage, Resource Based View, Dynamic Capabilities, Relational View, Porter’s Five Forces

INTRODUCTION

The pursuit of sustainable competitive advantage for Higher Education Institutions (HEIs) has gained increased importance due to the rapidly evolving landscape of the higher education sector. Increased globalization as well as improvements in technology have led to the development of new training technologies and changes in student demographics have increased the complexity of the competitive business environment (Strategy Education Strategy, 2021). In addition, political/economic changes have led to changes in the regulatory framework governing the higher education sector, presenting both challenges and opportunities. Furthermore, competition among higher education institutions has transcended beyond national boundaries, compelling HEIs to adopt strategies to ensure their survival. Therefore, striving towards sustainable competitive advantage is strategically imperative. The concept of sustainable competitive advantage has been explored extensively in the realm of strategic management. Scholars, such as Porter & Canada, (1985)and Barney, (1991) have developed frameworks, such as the generic strategies and Resource Based View, which can be adopted by institutions to achieve sustainable competitive advantage. HEIs are compelled to leverage their distinctive resources and capabilities in order to strengthen their competitive position in the higher education market place.

The increase in the number of higher educational institutions (HEIs), has intensified competition among them, both in domestic and international markets. Therefore, attaining competitive advantage in HEIs may be achieved through various modes, using both tangible and intangible resources (Bhutto, 2018). The increase in competition has also increased the costs of providing education because these institutions have to use more innovative delivery methodologies in order to attract new learners.  According to (Wang, 2014), competitive advantage is obtained when an organization develops or acquires a set of attributes that allow it to outperform its competitors. However, competitive advantage is temporary, therefore, the, strive should be towards gaining and sustaining competitive advantage. Competitive advantage is sustainable when rival firms give up plans to imitate the resources of competitors or when barriers to imitation are high (Brahma & Chakraborty, 2011; Barney et al., 2001). The higher education sector plays a very important role in the economy of any country. Education is seen as a public good, that produces an educated workforce, and this in turn, translates into higher national output (Thomas & Peters, 2012). Therefore, educational institutions are better placed to initiate technological changes and a source of innovative minds. According to (Sikwibele, (2007), the ability for countries to compete in the global economy and respond to current and emerging challenges depends on their education systems’ ability to impart foundation skills. According to (Lehmann et al., 2020), universities are at the center of knowledge creation and exploitation, therefore they are key players in promoting economic growth and competitiveness. The higher education sector in Zambia has become increasingly competitive in the last ten years, with more than 50 universities (HEA, 2022).

This systematic review examines and synthesizes theoretical literature on competitive advantage to develop a model of sustainable competitive advantage for HEIs. The paper draws on the concepts from the resource-based view, porter’s five forces, dynamic capabilities view, and the relational view to investigate the relationship between the internal and external environmental forces with competitive advantage of HEIs. The paper examines existing research from 2000 to 2024, guided by the following research questions.

RQ1: What is competitive advantage?

RQ2: What are the factors in the external environment of HEIs that influence strategy development for competitive advantage?

RQ3: What are the key factors in the internal environment of HEIs required for competitive advantage?

This review of theoretical literature proposes a conceptual framework anchored on four models, that is, the resource-based view, dynamic capabilities view, relational view, and porter’s five forces. The framework provides a foundation for testing the proposed prepositions.

The paper is structured as follows: the first section introduces the literature review. The next section outlines the research methodology adopted for this systematic review, followed by a descriptive analysis of prior research which details the theoretical foundations and methodologies used. The final section presents the discussion of the findings, followed by the conclusion.

RESEARCH METHODOLOGY

This review adopted the PRISMA protocol recommended for systematic review. According to (Connolly et al., (2022), systematic literature review is comprehensive, rigorous and methodical. It involves analysis of numerous documents in a systematic manner. Systematic review of literature differs from the traditional review in that the former seeks to answer questions by evaluating evidence from all published research that relates within specified boundaries (Ankrah & AL-Tabbaa, 2015). The search for literature was guided by three research questions. The search strategy considered journal articles published in electronic databases. The following databases were search for titles of potentially relevant literature: Elsevier (Science Direct), Web of Science, Google Scholar, Scopus and Research Gate. These databases were selected because of their wide coverage on the subject matter and the quality of articles. The databases were searched or initial relevant literature using combination of terms, including; theories of competitive advantage, competitive advantage and higher education institutions, or university, porter’s fives forces, resource based view, dynamic capabilities view, relational view, alliance or collaborations,  this procedure yielded more than 2800 results. The selection criteria followed; published journal articles and conference papers between January 2000 and September 2024, those that were in English language and those articles referring to higher education or university and resource based view, relational view, porter’s five forces. This narrowed the results.

Figure 1: PRISMA flow diagram (Haddaway N. R et al., 2022)

Table 1: Journal Articles Reviewed

RESULTS

Descriptive Analysis

The systematic review considered 60 studies, as presented in Table 1 above, published mostly in Education, Management and Strategic Management Journals. This review of literature from 2000 to 2024 was conducted to assess the sources of competitive advantage using an integrated framework of four theories, namely the resource-based view, dynamic capabilities view, relational view, and porter’s five forces by Michael Porter. The review showed that he RBV was the most popular theory explaining the source of competitive advantage of HEIs. The next popular theory was porter’s five forces, followed by the relational view. The Dynamic capabilities theory was mostly discussed under the RBV, except in a few studies where it was discussed in isolation.

RQ1-What is Competitive Advantage?

The concept of competitive advantage of firms has its history in strategic management literature (Asma & Rosdi, 2017). Ansoff (1965) first defined competitive advantage as the properties of individual products/markets which will give the firm a strong competitive position (Asma & Rosdi, 2017). Since then, more definitions have been advanced by several authors, such as, Armstrong et al., (2011); Barney (1991); Porter (1985), to mention only a few. The concept of competitive advantage gained popularity because of the work of Michael Porter, a Harvard Professor, who has written so much on the subject matter. Porter, (2008), states that competitive advantage is the firm’s ability to create superior value for its buyers by offering lower prices than competitors for equivalent service offer or by providing unique services that a buyer is willing to pay at a premium price.  Sigalas and Pekka- Economou define competitive advantage as “the above industry average manifested exploitation of market opportunities and neutralization of competitive threats” (Sigalas & Pekka-economou, 2018). Furthermore, the concept of competitive advantage has broadened to include other aspects, such as, services, value creation as well as overall firm performance (Abdurachman et al., 2023; Tuan et al., 2022; Haan, 2015;Loh, 2011).The broadened view of competitive advantage has made it to be applicable to the higher education sector. According to Haan, (2015), HEIs have always had in their genes to be competitive, for example, when they try to attain academic excellence and obtain international reputation.

RQ2-What are the factors in the external environment of HEIs that influence competitive advantage?

This paper will assess the external environmental forces of the higher education industry through the lenses of Porter’s Five Forces. According to Išoraitė, (2018), Porter’s Five Forces Model provides an opportunity for firms to examine the continuing competitive advantage in a rapidly changing environment. Jones and (Mugo, 2020), supported the notion that as the power of the five forces increases, it tends to limit the ability of firms to boost profitability.

Porter’s Five Forces Theory

Porter (1985) developed this model to enable organisations assess their competitive environment and develop appropriate strategies. Each of the five forces, also referred to industry forces is expected to influence various measures of competitive advantage (Baird et al., 2024). Goyal, (2021)  asserts that universities should pay close attention to the industry analysis (rivalry, bargaining power of buyers) when developing academic programs. Dälken, (2014) claims that Porter’s model sets the standard for industry analysis and can complement strategic planning. Porter’s five forces analysis is usually used as a tool to assess the industry’s level of profitability by analyzing the relative effect of each force. The stronger the force, the less profitable the industry will be. These forces, however, have varying degree of effect on industry competition and profitability. For example, some industries may have low threat from potential entrants, but high bargaining power of buyers. For other industries, threat of substitute products may be very low, but they may face strong competitive rivalry. Therefore, it is important for firms to carry out an analysis of the competitive forces to determine which forces are strong. It is also important that such an analysis is conducted regularly because the strength of these forces tends to change with time depending on environmental dynamics. Thus, a firm’s competitive strategy should be aligned with the relative effect of the competitive forces.

Although many firms popularly use Porter’s five forces framework, it has some limitations. One of the limitations of the model is that it assumes static environments (Goyal, 2021). Industry structure is not static, it is always changing, changing customer needs and preferences, improvements in technology, changes in government policies- such that, any analysis done at any given point would be rendered obsolete as soon as there is change in any one of the factors Dälken, (2014). The model also assumes that industry consists of buyers, sellers and competitors that do not interact with one another (Mugo, 2020). It may also be difficult to apply the framework to large firms which operate in multiple industries. It becomes difficult to define the industry in which they operate (Mahat & Goedegebuure, 2016).

Porter’s Five Forces Model Application to the Higher Education Industry

Using the five forces model, buyers can be thought of as students, suppliers as lecturers and professors, rivalry as competing universities within the industry, threat of entry as potential new training institutions and threat of substitutes as online and professional programs. The five forces are discussed in detail as follows:

• Threat of new entrants

The threat of new entrants in an industry leads to intensified competition that can affect an industry’s profitability. According to Porter (2008), new entrants to an industry result in increased pressure on prices, costs, and the rate of investments. Entry barriers determine the threat of new entrants. A low barrier to entry can intensify competition, and a high barrier to entry can lead to fewer competitors (Aydin, 2017).

If existing institutions are enjoying economies of scale, then the barrier to entry is high or the threat of new entrants will decrease. Capital requirements for entering an industry may act as a barrier if they are too high. In some cases, the capital required for investing in a traditional university are very high, making it very difficult for new universities to enter the industry. Another factor that acts as a barrier is the reaction from existing universities. The reaction could be in form of adjusting fees down wards or adding new features to their programs at no additional costs. The other barrier is buyer resistance, which may be because of high switching costs or simply not accepting the new institutions. Students may make comparisons between existing universities and new ones in terms of quality (Lysokon et al., 2024; Aydin, 2017). Additionally, another barrier to entry according to (Pringle & Huisman, 2016) is switching costs. Switching is determined by location, social networks and transfer credits. Students will, therefore consider all these costs when they want to shift to another institution (Aydin, 2013).  Another entry barrier is access to distribution channels. For universities that have been inexistence for a long time, they have an advantage in terms of locations that are easily accessible. They are in proximity to public transport system and a number of social amenities that students would be attracted to

However,  Mathooko & Ogutu, (2015) have argued that barriers to entry in higher education was high in the past, mainly because of the need to build physical structures, but, with recent innovations in technology, there is a notable decrease in these barriers. Pringle and Huisman (2016) add another important barrier, incumbency advantages, which for higher education, include, excellent reputation, established structure, willingness of students to enroll and a complex faculty and political connections.

• The Intensity of Competitive Rivalry

The intensity of rivalry depends on the object of competition, namely: students, research funds, staff, government funding (Aydin, 2017). The intensity of competitive rivalry may take many forms, such as, price discounting, new product development and service improvements (Porter, 2008). In higher education industry, the intensity of competitive rivalry depends on the object of competition; students, academic staff, government funding, research funds and possibly donor funds (Mathooko and Ogutu, 2015). Intensity of rivalry increases with an increase in in the number of HEIs, both within the domestic environment and globally. Globalization in the higher education sector has increased the mobility of staff and students alike (Aydin, 2017).

• The Power of Suppliers

Suppliers provide materials, information or knowledge to allow an organization to produce its products and services Budiharso et al., (2022). According to Porter (2008), supplier have a bargaining power when they are few within an industry, or when they sell an essential good or service. In the context of higher education, academic staff members are the biggest suppliers of universities who provide information and teaching (Aydin, 2017). Books, computers and support services, such as, clinics and catering services are also suppliers, but they are very insignificant in higher education (Pringle and Huisman, 2016). The commercial value of academic knowledge has increased, therefore the competitive bidding for such talent tends to drive salaries upwards (Mahat & Goedegebuure, 2016). For higher education, academicians are the most significant suppliers. They may have a higher bargaining power if they differentiate themselves by their qualifications, experience and research work (Aydin, 2017).

• The Power of Buyers

Buyers are said to have bargaining power when they are few, or when they buy in large quantities (Porter, 2008). Powerful buyers can force down prices, demand better quality goods and service and even play competitors against one another. In addition, if buyers have many options, they become even more powerful. In the context of higher education industry, buyers are students and their parents (Pringle and Huisman, 2016). The authors further state that, buyer power has been traditionally low and that there are several factors that have led to this. These factors include inability to negotiate tuition fees; reduced student price sensitivity as a result of differentiation by prestigious institutions; and the intangible quality of education. (Duczmal, 2006) argues that the power of students increases with the number options they have. Therefore, an increase in the number of HEIs inevitability increases buyer power because the choice of institution is widened. The author further argues that students increase as the services offered become more standardized. This greatly affects the competitive position of that institution in the market (Huang & Lee, 2012).  Employers are also considered as buyers or customers of higher education since they are the consumers of the higher education product, the students. Employers prefer to employ graduates from reputable and accredited institutions, therefore, graduates from accredited institutions stand a greater chance in the employment market Pringle and Huiseman, 2011).

Figure 2: Porter’s Five Forces Model Application to HEI (Pringle & Huisman, 2011)

• The Threat of Substitute Goods

A substitute product is one that performs a similar function in a different way (Porter, 2008). The threat of substitute goods is high if the substitute offers cost-effective alternatives to the goods of the industry. When the threat of substitute products is high, then industry profitability will be low. There are several factors that may determine the threat of substitutes for higher education. For higher education, threats may include vocationally oriented courses offered by different non-higher education institutions and the labour conditions for secondary school graduates (Duczmal, 2006). Additionally, the threat may come from distance and online programmes, which are now on the increase with increased accessed to ICT facilities (Mathooko & Ogutu, 2015). Most adult learners and working professionals demand convenient modes of delivery which can fit into their busy schedules. Additionally, students generally seek shorter completion time (Mathooko & Ogutu, 2015). Duczmal (2006) argues that the threat of substitutes for universities can be reduced by entering substitute markets. Most universities today are moving in that direction. Universities are now offering distance, and online modes, alongside their traditional face to face modes (Pringle and Huiseman, 2011).

In higher education, the value of porter’s industry analysis is in its ability to identify the factors that drive change either directly or indirectly (Duczmal, 2006b).

RQ3- What are the key factors in the internal environment of HEIs required for competitive advantage?

Internal environmental forces of organisations refer to factors within an organisations that have an influence on its operations, positively or negatively. These factors may include technological capabilities, human resources, culture, and financial resources, to mention only a few. There are a number of perspectives on internal forces and their influence on competitive advantage. This paper analyses three perspectives, namely, the Resource Based view (RBV), the Dynamic Capabilities View (DCV) and the Relational View (RV),

The Resource Based View

The resource-based view can be traced back to the work of Selznick (1957) as cited in (Wang, 2014), who suggested that work organisations possess ‘distinctive competences’ that enables them to outperform their competitors. The basic assumption of this theory is that internal resources of a firm are a source of its competitive advantage. Furthermore, Penrose, 1959 in (Brahma & Chakraborty, 2011) conceptualized the firm as a ‘collection of productive resources’ and distinguished between physical and human resources. (Wang, 2014) conceives the firm as a broad collection of resources, which can be thought of as either strength or weakness of a firm. Some of the resources provided by Wang, (2014) and Ngaruko, (2014) include brand name, in-house technology, skilled personnel, machinery and efficient procedures. Barney, (1991;101) defined firm resources as “ including all assets, capabilities, organizational processes, firm attributes, etc… controlled by the firm that enables it to conceive of and implement strategies that improve its efficiency and effectiveness. He further argued that sustained competitive advantage is achieved, not through an analysis of a firm’s external market position, but through a careful analysis of its skills and capabilities, characteristics that competitors may find difficult to imitate. Therefore, according to Barney (1991), a firm can gain competitive advantage when it develops strategies based on internal resources, and hence, neutralize external threats. Similarly, Brahma & Chakraborty, (2011) argued that there are four major attributes of resources that determine sustainable competitive advantage, and these include durability, transparency, transferability and replicability. Organizational resources have been classified differently by different researchers.

Early researchers in the field of RBV, such as, (Ansoff, 1965) categorized firm resources into; physical, monetary and human, Barney (1991) categorized them into three groups; physical capital resources, organizational capital resources and human capital resources. Amit et al., (1993) categorized them as physical, human and technological resources. A number of other authors have contributed to this classification, and comprehensively, resources can be classified as; physical assets, human resources, financial resources, knowledge/technology and intangible resources (Lynch & Baines, 2004a)

Application of the Resource Based View to the Higher Education Industry

The Resource Based View charges that the firm should identify its key or distinctive resources and develop them to maximize returns. Distinctive competences in HEIs come from several factors ( Yaping et al., 2023; Miotto et al., 2020; Sánchez-Chaparro et al., 2020; Mazzarol & Soutar, 1999). Competences may include, educational services offered, physical structures, capabilities of the human resources, reputation and institutional image. In addition, teaching and research performance, patents, location of the HEI, financial resources, capability of the HEI to innovate and organisational learning are among the many competencies HEIs may possess. When HEIs are innovative in terms of products (programs offered), curriculum and teaching methodologies, they are able to create and/ or maintain competitive advantage (Bhutto, 2018; Jeketule, 2018). Organisational experience and expertise; this gives an institution competitive advantage because it forms a basis for selection by prospective students (Patnaik et al., 2022; Aydin, 2013).

The RBV considers reputation as an intangible asset that can provide an organization with great value and advantage. According to Amado & Juarez, (2022) identifying the causes of reputation is important in ensuring an institutional differentiation strategy. HEIs with higher reputations can have higher entry requirements and attract better quality students (Amado & Juarez, 2022). Organisational learning is also another important internal resource that HEIs can adopt to improve their performance (Mainardes et. al., 2011).

While the RBV puts emphasis on organisational resources, the dynamic environment has led to a shift in attention to development of alliances and networks (Williams, 2014). It is argued that networking capabilities can be associated with superior performance. Furthermore, Wong, (2011) reports that declining student numbers, intensified international competition have increasingly made collaborations, alliances and mergers among HEIs a priority. Some authors have suggested that international collaborations have more productivity effects than domestic ones (Tuan et al., 2022). Others further add that collaborative research tends to be published in more respected journals and/or receive more citations (Šula & Banyár, 2015). Some authors have added that, coalition formation may be the most effective strategy to enter the global market (Lynch & Baines, 2004b).

Dynamic Capabilities View (DCV)

The dynamic capabilities view has become one of the prominent theories that explain how firms may achieve competitive advantage. According to (Teece et al., 2003)), dynamic capabilities is a firm’s ability to upgrade and renew its competencies to meet rapid changes of the environment, thereby, achieve new forms of competitive advantage. According to this view, firms do not exist in stable environments, but rather in dynamic environments (Vu, 2020; Gomes & Romão, 2018)Therefore, this view argues that firms need to develop resources both for current use and for future use (Eisenhardt & Martin, 2000). Authors who support this view add that, performance differences across firms are due to differential capacities of firms to integrate, utilize, renew and reconfigure resources in response to the dynamic environment.

Dynamic capabilities is the creation of new set of valuable resources (Kuria & Professor, 2014). From the various contributions by many authors on the concept of dynamic capabilities, it can thus be said that dynamic capabilities are aimed at developing unique resources that respond to the changes in the external environment.

Application of the Dynamic Capabilities View to the Higher Education Industry

The Dynamic Capabilities view posits that in order for HEIs to remain competitive, they must continuously adapt to changes in their environment. Technological advancements have necessitated a lot of changes in the educational environment. Most universities have now adopted blended learning models, as well as offering certification at micro, in order to stay ahead of the competition (Ambrosini & Bowman, 2021). Universities may also restructure their academic departments in order to prioritize demand driven programs in response to external environmental changes (Teece, 2023).

Therefore, HEIs need to assess their internal resources so as to identify their bundle of unique resources and establish which resources they lack. Such an assessment would enable HEIS to formulate strategies that are in line with its strengths in terms of resources. The RBV and the DCV together can be used to help a firm formulate strategies that can help it attain competitive advantage.

The Dynamic Capabilities View has been criticized due to its complexity when it comes to implementation. Teece (2023) argues that the continuous reconfiguration to suit the changing environment can be quite a complex process. Additionally, the higher educational sector is usually bureaucratic and highly regulated, making it difficult respond to the changing environment. Furthermore, the emphasis on adapting to environmental dynamics may make institutions to be reactive and focus on short-term goals, instead of long term goals, which are as a result of long term planning(Dyakon, 2016). Private institutions compared to public institutions may find it much easier to adapt to environmental changes than public institutions (Teece, 2023).

The Relational View

The Relational View (RV) advances the importance of strategic relational resources generated from collaboration between firms as sources of competitive advantage (Dyer & Singh, 1998). The Relational View argues that firms can gain competitive advantage when they form relationships or partnerships with other firms, rather than just relying on their internal resources or capabilities.  Lu et al., (2022) asserts that, firms form partnerships as a response to the environment, in order to enhance competitive advantage, share responsibilities, risks and rewards through complementary resources. Literature shows that the relational view has been regarded both as a critique to the RBV Wang, 2014; Sanders & Wong, 2021) as well as an extension to it. Inter-organisational networks have now characterized the order of business, and they take a number of forms, such as, strategic alliances, joint ventures, exchange programmes and buyer-supplier relationships to mention a few (Montgomery, 2019; Koch & Windsperger, 2017). The relational view has become increasingly popular as a source of competitive advantage. This view argues that a firm’s competitive advantage comes from collaboration between firms. Therefore, in contrast to the resource-based-view, a firm’s distinctive competences are not those developed within the firm, but those created through alliances or collaborations between firms (Dyer & Singh, 1998).

Application of the Relational View to the Higher Education industry

The Relational View has its origin in the corporate world as indicated by the number of firms in the corporate that have adopted strategic alliances to combat increasing competition (Lu et al., 2022). Strategic collaborations have also become strategically significant for HEIs, (Jowi, 2024). Collaborative arrangements can take many forms, including, collaborating with government agencies, industry as well as with international institutions in a number of areas.

The higher educational sector has in recent years engaged in a number of strategic alliances. Universities can form partnerships with other universities, industry and funding organisations. These collaborations can contribute to a university’s competitive edge due to unique programs, innovative research outputs, as well as commercialization of technologies  (Jowi 2024; Sanders & Wong, 2021) Collaborations with industry can also ensure that curriculum is aligned with trending market needs. This increases the chances of employability for the graduates. University-industry collaboration has increased over the years, mainly due to pressures faced by both industry and universities separately (Hung, 2021; Ankrah & AL-Tabbaa, 2015). Universities can form partnerships with universities abroad in various forms, such as collaborative research projects, joint programs and student exchange programs (Fehrenbach & Huisman, 2024; Semali et al., 2013). International collaborations can improve a university’s image and reputation, as well as global recognition. Other opportunities for collaborations include industry and government agencies (Mehling & Kolleck, 2019). Universities can engage in joint projects with industry and government agencies to address specific needs of universities and their respective partners (Dyer et al., 2023). Alumni engagements can also be very beneficial for universities in terms of industry linkages, financing university projects and employment placements for university graduates (Jowi, 2024). Literature shows that the choice of university is also influenced by its alumni. Prospective students are inspired by what the alumni have become and may want to follow the same path (David & Coenen, 2015).  The authors further argue that, various alumni activities have a positive influence on student retention, that is, they may increase the likelihood of alumni returning for further studies or for employment at the university.

Therefore, in the context of higher education, the sources of competitive advantage can be summarized as follows: (1) Relation-specific assets: universities can enter into collaborations with other universities or with industry to differentiate themselves from other universities and to enhance employability of their graduates (Lu et al., 2022). (2) Knowledge-sharing routines: universities can collaborate in the area of research, with government agencies, donor institutions, other universities and industry (Ankrah & AL-Tabbaa, 2015). (3)Complementary resources and capabilities: universities can collaborate with industry to develop educational tools and platforms to enhance learning experience (Waham et al., 2023) and (4) Effective governance: universities can work with alumni networks for fundraising activities as well as industry placements for their graduates (David & Coenen, 2015).

Collaborations are not without challenges and universities, just like industry, face a lot of complex challenges due to differences in national educational systems (for international collaborations), financial constraints and cultural differences (Waham et al., 2023). Universities must therefore be careful as they engage in these collaborations, not to become too dependent on external partners.

DISCUSSION

Competitive advantage is achieved when firms leverage their internal resources, considering external environmental forces, to adopt appropriate strategies. This study proposes a conceptual framework and prepositions to examine the influence of internal environmental forces, (RBV, DCV, and RV), and external environmental forces (Porter’s five forces) on a university’s competitive advantage. The proposed conceptual framework, as depicted in figure 3 below, will require to be tested using both qualitative and quantitative data. It is evident from the review of literature that these forces have an influence on the competitive advantage of higher education institutions.

Internal environmental resources were reviewed through the lenses of three theories, namely: the resource-based view, the dynamic capabilities view and the relational view. Authors who have contributed to these views argue that firms, including, higher education institutions can achieve competitive advantages by leveraging their internal resources to achieve superior performance. Barney (2001; 1991) asserts that as long as a firm has internal resources that are valuable, rare, inimitable and non-substitutable (VRIN), they should be able to achieve competitive advantage. Internal resources have been classified as physical assets, human resources, financial resources, knowledge/technology and intangible resources, such as reputation, brand image and rankings (Ilieva et al., 2019;  Shahsavar & Sudzina, 2017; Mainardes et al., 2011). In addition, Teece et al., (2021); Furrer et al., (2008) asserts that, for firms to achieve new forms of competitive advantages, they must upgrade and renew their competencies in response to changing environment. Furthermore, Supe et al., (2018) indicates that the competitiveness of HEIs is influenced by both internal and external forces. Technological advancements have played a key role in influencing changes in higher education. Universities have since adopted blended learning models and they have restructured their academic departments in order to meet the needs of their clients (Teece, 2023; Miandy & Hashim, 2019). Furthermore, it has been argued that networking capabilities can be associated with superior performance. Collaborations among HEIs are now on the increase due to intensified competition. Moreover, collaborations are also a way to penetrate international markets (Ambrósio et al., 2017; Elmuti et al., 2005)

The industry forces were examined through the lenses of porter’s five forces. Porter (2008). Assumes that there are five forces that can affect a firm’s ability to be profitable and ultimately affect its competitive advantage. Applying the five forces model to the higher education industry, buyers can be thought of as students, suppliers as lecturers and professors, rivalry as competing universities within the industry, threat of entry as potential new training institutions and threat of substitutes as online and professional programs (Raible, 2013; Huang & Lee, 2012).

Even though the studies reviewed indicate one-sided loop from the internal to competitive advantage, there may be a possibility that competitive advantage of an HEI may attract better internal resources (e.g Human resources). This reverse relationship has not been explored. Therefore, the proposed conceptual framework needs to be empirically tested to prove the prepositions. Furthermore, the role of technology adoption needs to be further explored on how it can contribute to sustainable competitive advantage for the HEIs in response to changes in the environment.

Based on the literature reviewed, it is recommended that policy makers in these HEIs should consider improving the quality of their internal resources especially through collaborations and institutional reputation in order to attact more students, and possibly more staff.

Figure 3: The Research Model

CONCLUSIONS

This paper presents the results of the systematic review on sustainable competitive advantage for higher education institutions for a period covering 2004-2024. 60 studies were selected out of a total of 2800 potential studies. The paper concludes that both internal forces and external forces have a significant influence on the competitive advantage of HEIs. The most significant internal resources are human resources, physical resources, institutional reputation, ranking and collaborations. The most significant industry forces, based on porter’s five forces are, bargaining power of suppliers, rivalry among competing universities and threat of substitute goods. The research model suggests that HEIs can achieve competitive advantage by enhancing their internal resources, managing the industry forces and developing appropriate strategies.

Limitation

The study was limited only to historical data of publicly available articles. Therefore, the findings may not be generalizable.

Conflict of Interest

There was no conflict of interest.

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