GMAC is going on tour.
The Graduate Management Admission Council, the organization that administers the GMAT, has bought The MBA Tour, a company that hosts forums in which representatives from admissions teams meet prospective MBA students. The MBA Tour, which conducts more than 60 such events per year in over 30 countries, is one of several players in the admissions space, including the QS World MBA Tour, Access MBA Tour, and the CentreCourt MBA Festival, the latter co-sponsored by Poets&Quants.
GMAC will look to grow its core offering and expand into additional markets, says Sangeet Chowfla, president and CEO of GMAC. The MBA Tour is the third acquisition made by Chowfla since the former Hewlett-Packard executive became CEO in 2014. He also acquired the NMAT test in India in 2015 (see GMAC Acquires An Indian Entrance Exam) and BusinessBecause, a business school website in the U.K., last year (see GMAC Buys A Business School Website). All the acquisitions were made for undisclosed sums.
A STRATEGY TO REVERSE THE DECLINE IN GMAT TEST VOLUME
Faced with growing competition from the Educational Testing Service’s GRE exam, GMAC has seen test volume for the GMAT decline in recent years. More business schools, moreover, are waiving standardized tests for specialty master’s programs, online MBAs, and Executive MBA programs. A strong U.S. economy also has provided job opportunities to keep more potential applicants in the workforce. The novel strategy that Chowfla is pursuing is intended to reverse the decline in test takers.
In 2016, the last year for which GMAC’s financials were made public, the organization’s test revenue came to $85,015,655, barely up from $84,730,531 a year earlier, despite the addition of the Indian test taken by 585,436 students and a newly launched Executive Assessment exam for EMBA programs taken by 887 applicants. GMAT volume declined to 290,089 in 2016, from 292,753 in 2015.
Chowfla says he expects GMAC will add value to The MBA Tour by “integrating its market intelligence and digital assets to create an even richer event experience and attract prospective students through comprehensive recruiting solutions that align its data, reach, and presence along multiple candidate touchpoints.” Among the planned changes: expansion into under-served markets.
“The acquisition of The MBA Tour is part of an ongoing effort to develop smarter, more innovative ways to help business schools grow their candidate pipeline while providing programs with more intuitive, data-driven solutions to meet their recruiting needs,” Chowfla says. “Building a robust and diverse pipeline is a critical issue facing business schools around the world, and GMAC recognizes the important role it plays in connecting schools and candidates.”
‘THE MBA TOUR HAS BEEN A VALUED PARTNER’
The MBA Tour was founded in 1993. Currently listed as its schedule for 2019 are six events in North America in January-February, three events in India next month, and four events in Latin America in February-March. Geoffrey Basye, a GMAC spokesperson, says there will be no significant changes to either the itinerary or the organization of the tour this year. “The MBA Tour schedule will go as planned in 2019 as GMAC and MBA Tour leadership begin to lay the groundwork for future enhancements,” Basye tells Poets&Quants. “While it’s too early in the process to talk substantively about these developments, there are a lot of exciting opportunities that we’ll be pursuing that will have an impact across our organization. This includes looking at how we can extend events in areas that have been under-served.”
Last year, P&Q joined The MBA Tour during its annual visit to Africa, meeting with B-school prospects in Lagos, Nigeria to offer readers a snapshot of the talent pool in the country known as “Africa’s economic engine.” We talked with Leigh Gauthier, assistant director of MBA admissions at University of Toronto’s Rotman School of Management, about the value the tour provides a program like hers: last fall, Rotman enrolled 12 Nigerian students in its MBA program, up from zero the year before.
“The MBA Tour has been a valued partner of Rotman for many years with deep knowledge of numerous markets,” Gauthier tells P&Q in response to the news of the tour’s acquisition by GMAC. “As the administrator of the GMAT test, GMAC’s depth of research and statistical knowledge of market trends provides a significant strategic advantage in attracting students to recruitment events. This, plus GMAC’s worldwide presence with global offices, will enhance their combined capabilities.
“Like most universities, we have multiple tour partners and find an advantage in doing so. We hope this acquisition will lead other fair companies to continue to strengthen some of their differentiators such that business schools can use multiple organizations with advanced strategies to connect with top talent around the world. We’ll look forward to seeing how nimble and responsive a large organization such as GMAC will be in partnering closely with schools to develop their recruitment strategies, and how they might develop their international on-the-ground knowledge quickly.”
A MARRIAGE INTENDED TO GROW SCHOOLS’ OPPORTUNITIES TO MEET TALENT
Gauthier says one thing that will make the transition go more smoothly — and provide “peace of mind” — is knowing that Peter von Loesecke, MBA Tour CEO and managing director, is staying on until the end of 2019. After the sale, in an email to schools that participate in the tour, Loesecke offered hints about the direction of the tour and shared his excitement about the “operating synergies” that will result from GMAC taking the reins.
“As you know, we operate a well-recognized brand within the industry and support business schools’ global recruiting efforts by organizing MBA-focused events each year around the world,” Loesecke wrote. “We support these events with lead-generation and marketing services that GMAC will be able to scale up by using their digital assets and the tremendous amount of data they receive each year from more than 6 million visitors to mba.com and other sources. We are also hoping to expand the reach of events to traditionally under-served markets. Broadly, our intention is to help you better attract prospective students through comprehensive recruiting solutions that marry GMAC’s market intelligence, data, reach, and candidate touchpoints with our renowned face-to-face events. By doing so, GMAC and The MBA Tour will provide schools with more opportunities to build stronger, more informed, and meaningful in-person connections.”
Loesecke noted that the tour already has been working with GMAC’s social media subsidiary and says more details about the direction of the tour under GMAC’s ownership will be made clear in coming months. “I believe,” Loesecke wrote in the email to school partners, “that together with GMAC, The MBA Tour will be able to provide uniquely powerful events by integrating GMAC’s assets in a way that better prepares candidates and schools for more meaningful discourse and provides greater insight into how candidates choose business schools.”