There’s a basic problem with trying to get universities to compete with one another: most of them are structurally incapable of following any coherent competitive strategy at all.

Michael Porter posited that there were basically three generic types of competitive strategies.  Those competing on a broad scale could compete on cost (e.g., WalMart), or they could compete on product differentiation that allows them to charge a premium (e.g., Apple, Mercedes-Benz).  A third option is to limit oneself to a particular niche and compete in a very small market (e.g., Porter Airlines, which only tries to serve a few destinations).

Universities have a hard time restricting themselves to niches, as breadth is one of the things that distinguishes universities as an institutional type. Competing on cost is also extremely difficult for them to do. That’s not just because of their well-known tendency to conflate quality and expenditures; it’s because low-cost (and hence low-margin) strategies tend to work through expanding production and becoming a high-volume producer. Needless to say, exorbitant physical infrastructure costs make this an unviable strategy for all physically-based universities (though distance and e-learning providers can obviously make it work).

That leaves only product differentiation as a viable strategy. But deep down, this idea scares everyone because higher education is an almost comically conservative and isomorphic industry; what Harvard and Stanford do, virtually everyone else wants to copy, to at least some degree. At the margins, there are some value-enhancing alternate delivery models, with Waterloo’s co-op model probably being the best (McMaster could have done it with problem-based learning, but was so conservative that it never fully capitalized on its medical school’s breakthrough). But even that’s too much for most; hence the rush to differentiate on meaningless points such as food quality.

So – no strategy, no differentiation, just individual universities all providing the same services with some different marketing attached and hoping people will think they’re a “brand.”  This kind of thing leads governments to believe that institutions are really undifferentiated and should be treated like utilities; institutions, meanwhile, think their “brand” status entitles them to think of themselves as luxury goods.