The universities in Pakistan in general and those in Khyber Pakhtunkhwa have witnessed state defunding of higher education since 2017 as a major problem. Under this “financial squeeze” the public sector universities in district Swat of Pakistan are compelled to look out for a workable solution to this problem by exploring avenues for commercialization through provision of value-added services as aim of the study. An inductive qualitative research design with a case study methodology of four public sector universities is used. For this purpose, data was collected from 4-6 participants in each of the four public sector universities. Findings of the study indicate that despite the “resource dilution” and “program duplication” across universities in the catchment area of Swat has resulted in strategic changes in universities which resembles business models of entrepreneurial financial models. The study recommends in light of findings that universities to cooperate with each other and solve the “Program Duplication” and “Resource Dilution” issues for wider public good as. The study tries to contribute by introducing a Value-added Framework” that could help reconcile “intense revenue generation” with “quality standards as safeguard for reputational management. The research emphasizes a shift from state funding dependent universities towards quality-dependent revenue generation to mitigate the challenges of maintaining quality amidst a financial crunch.

Keywords: Financial Squeeze, Resource dilution, Program Duplication, reputation investment, Quality