Harvard Business School doesn’t need to do much to market itself to applicants. Outside of the extensive work the HBS admissions team has done in recent years to spread the word about its relatively new HBS 2+2 Program, Harvard is more concerned with identifying which applicants fit the school best than with encouraging applicants to apply.
Here at Veritas Prep, we have no shortage of inquiries from clients who are certain they want to go to HBS. Once we dig a little deeper to get at their reasons, though, many of them realize they still have a lot more homework to do. Without a doubt, it doesn’t get more prestigious than HBS. But, before you apply, you really need to understand a few important things about the HBS experience.
We’re not presenting “Secrets of HBS Admissions!!!” here. None of these four things is a magic bullet that will get you into Harvard. But, not understanding these facets of the HBS experience absolutely can keep you out of the school:
The Case Study Method
HBS adopted Harvard Law School’s dialogue-oriented case method of teaching in 1924 to help students begin thinking like executives, and today, almost all HBS classes are taught using the case method. HBS created this teaching method to foster a dynamic learning environment that hews closer to real life activity than the typical academic assignments. From a skill standpoint, the case method gives Harvard grads increased capacity, perspective, and confidence for dealing with real business situations. HBS produces the majority of the cases they — and other schools — teach: Over 80% of the cases sold throughout the world are written by HBS faculty. HBS faculty produce 350 new cases each year by working with business leaders and global organizations. And, in line with Dean Nohria’s emphasis on this as the “global century,” at least 50% of the cases cover international companies and themes. The case method is central to Harvard Business School academics, and is discussed more extensively in the Academics section of this Annual Report.
HBS is also a nerve center of academic research, which can be both an advantage and a disadvantage to students. As with any other program — be it undergraduate, law, or medicine — there is a tradeoff when faculty spend a great deal of their time researching and publishing, as that means fewer hours are left for instruction and meeting with students. Of course, it also means that the curriculum is cutting-edge and relevant. HBS addresses the downside by limiting formal teaching responsibilities to as little as one semester-long class per year, ensuring that faculty can balance their workload between research and instruction without compromising either. HBS has a self-funded research budget of $70 million and annually produces over 30 books and more than 300 academic papers authored or co-authored by the school’s faculty.
Believe it or not, HBS’s international presence may be underrated. With research centers and offices in cities as diverse as Hong Kong, Tokyo, Mumbai, Buenos Aires, Sao Paulo, Paris, and, as of Spring 2010, Shanghai, Harvard Business School truly has a global footprint. With the Class of 2010, 34% of the school’s MBA students were from outside the United States, representing 73 different countries, and half the cases produced annually by the HBS faculty deal with international business issues. “Global impact” is a popular buzzword in business school circles these days, but few schools can rival HBS in this area of management education, and the emphasis is expected to only increase with the advent of Dean Nohria and his international network.
Sections and Learning Teams
Like many graduate business programs, HBS makes a large class smaller and more manageable through the use of sections. Each Harvard Business School class features ten sections of about 90 students each — which means that 90 is the number of students in each course of the Required (core) Curriculum (since a student goes through all the core courses together with her section). Last year, then-Dean Jay Light asserted that 80 to 100 students makes the ideal size for a robust case discussion, and it’s unlikely that this ratio of students per section will change. Nor does it seem likely that HBS will dramatically increase its overall class size. The number of students in the Class of 2012 actually went down by about two dozen from the all-time high of 937 the year before.
During orientation, new students are assigned to six- or seven-person learning teams composed of individuals from different sections and intentionally diverse backgrounds with whom they will work throughout their entire first year. These teams collaborate on graded projects in certain first-year courses, but they primarily serve as a resource for students to confer on cases.
Today’s blog post was clipped from our Harvard Business School Annual Report, one of 15 guides to the world’s top business schools, available for purchase on our site. If you’re ready to start building your own application for HBS or other top MBA programs, call us at 1-800-925-7737 and speak with an MBA admissions expert today. And, as always, be sure to find us on Facebook and follow us on Twitter!
We often get questions about the concepts taught in CORe and what a sample assignment looks like, so we thought it would be fun to share some of our bloggers' weekly assignment submissions to give additional insight into the program.
These assignments seek to find real-world examples of the concepts taught in the course. This week, we asked students to share an example of an important "fixed cost" incurred by businesses and tell us whether this type of fixed cost would scale well as the business grows. Elizabeth, Conor, Dan, Michael, Sam, and Chelsea share their examples below!
A boat manufacturing business has high fixed costs as it not only needs a large factory in which to produce the boats and to store them until they are shipped out, but it also needs several $1M+ pieces of equipment to make the boats and casings, etc.
Many factories like this will tend to run triple shifts because if the facility has purchased the expensive machinery it can't afford to not have it running. Due to these high fixed costs, the barrier to entry is higher and so there are fewer competitors in the space.
As a result, if a company can get to a point where they are manufacturing above the costs of operating and owning/renting their plants the boat manufacturing business can prove to be a very lucrative one.
The company that I work for is a private English language school in Vilnius, Lithuania. While the main building containing classrooms is owned by the company, there are additional classrooms across the street which are rented. This is a local fixed cost, incurred regardless of whether or not they are currently being used.
In the summer months when people are usually on vacation or taking a break, rent is still paid even though they remain empty. It is worth it to pay the rent as the company knows there will be plenty of use once the school year resumes in September. Were the business to expand, this would be an important fixed cost to consider.
That is, the question of renting or buying classroom space would have large implications.
Novartis is a Swiss multinational pharmaceutical company with approximately $60 billion in sales annually. In the 2014 Annual Report, the Swiss company indicated $9.94 billion dedicated to research and development (R&D). Moreover, the pharmaceutical company spent $14.19 billion in marketing and sales in 2014. R&D and marketing expenses represent a large portion of their total fixed costs with more than $24 billion! With this amount injected, Novartis creates a barrier to entry for other firms that are considering whether to enter the pharmaceutical market or not.
It is only by going global through a large distribution network will Novartis be able to benefit from economies of scale. By going global, Novartis will target more customers and spread theirs fixed costs better. This also explains why the multinational company has such high marketing costs.
Pfizer, a pharmaceutical company that applies science and resources to discover, develops and manufactures healthcare products like Advil and Centrum. Pfizer is a giant in the pharmaceutical industry and one important fixed cost incurred by their business is research and development.
When producing a drug, the investment in research and development is incurred upfront. The cost remains the same whether Pfizer sells the drug to 1 person or 1 million people.
This fixed cost resides on a global scale, and it scales very well as a pharmaceutical company expands: as a pharmaceutical continues to grow, it doesn't incur more research and development costs on the original drug, and thus it can easily spread these fixed costs across a global scale.
Zipcar maintains a fleet of over 10,000 vehicles in 27 different metropolitan areas worldwide. Car sharing has become an increasingly popular way for urbanites to access a car when they need one without having to deal with the headaches of parking, maintenance, and insurance/ registration fees.
Each individual Zipcar has a "home" parking spot that it must be returned to after every use, and these parking stations are broadly distributed so that no Zipcar member is ever too far from a car. Zipcar's fixed costs reside at the local level: for every new parking station they open, they need to pay the up front fixed cost to buy a car and rent a parking spot in that neighborhood.
Zipcar members benefit from network effects, because as Zipcar expands there are more and more cities and campuses where Zipcar members can access vehicles.
However, Zipcar’s fixed costs will expand proportionally to the number of rental locations that they offer. Zipcar can expand effectively, but their fixed costs are not easy to scale.
For bars, pubs, and restaurants wishing to sell alcohol, a liquor license would be really important fixed cost. If the establishment failed to get a liquor license, then it would go out of business pretty quickly! Liquor licenses have to be purchased for each location, so if someone owns a small chain of bars or pubs, then each one will have to have a license in order to legally sell alcohol. Therefore, this would not scale as the business expands.