Discuss about the Integrated Business Experience 1.
This assignment is based on the case study of Axel Springer, which has achieved huge success during the digital media transformation. This assignment discusses on the key strategic action taken by the CEO of Axel Springer during the period of digital transformation. At the same time, the assignment also focuses on the strategic issues faced by the company. Apart from that, the discussion on the competitors and company’s strategic position has also been carried on in this assignment.
Key strategic action taken by Mathias Dopfner
During the period of digital transformation of print media, Mathias Dopfner, the CEO of Axel Springer took a unique strategic action, which included the process of two-stage digital transformation. In the first stage, the company took on the organic growth strategy that focused on increasing profitability and involving the process of digitization in to the culture of the organization. On the other hand, in second stage, the company took the strategy to be “The Leading Digital Publisher” within the industry.
The digital transformation strategy took by Axel Springer was quite different from the strategies taken by the other companies in the same industry. The main difference between the strategies taken by Axel Springer and other organizations is that Axel Springer focused specially on its contents and team spirit, while, the other organizations focused specially on the distribution channels (KljajiÄ‡ and KljajiÄ‡ 2015).
In 2013 to 2014, the digital transformation of Axel Springer achieved huge success within the industry. The success started on 2013, when the revenue of the company reached to $3.9 billion and EBITDA reached to $625 million. During 2014, the business of the company expanded to 44 countries and had 98 million digital visitors I worldwide basis. In 2014, it acquired many new assets and the company achieved new strategic opportunities in the international market. The main reasons behind this huge success were its strategies to accept entrepreneurial and diverse personalities, digital divisions and rejection of silos (Knoche 2015).
Strategic issues faced by Axel Springer
The major strategic issues that Axel Springer faces are as follows:
- The first issue that the organization faced is that the company fails to provide the updated news consistently. At the same time, the company does not provide the layer of stories. The company focuses more on the process of installing and transforming the print mentality to digital mentality (Vidas-Bubanja and Bubanja 2015).
- Another issue was regarding the expansion of business. Though the company had large coverage, still it fails to develop its business by acquiring new assets at reasonable price. The competitive market increased the value of the assets, which created a big trouble for the company to continue its business expansion (KljajiÄ‡ and KljajiÄ‡ 2015).
Both of the above-mentioned issues are the strategic issue because these are related to the business operation strategy. In case of the first issue, it is related to the strategies taken by the company regarding its news contents. On the other side, in case of the second issue, it is related to the business expansion strategy of the company (Herbert 2015).
These two above-mentioned strategic issues affected the business of the company. As the company failed to provide updated news on a regular basis, the interests of the customers has reduced and if it goes on, then in future, the company will lose a large number of customers. At the same time, if the company fails to expand its business by acquiring new assets, then it will be more difficult for the company to expand its business in future because the value and price of the assets may increase more (KljajiÄ‡ and KljajiÄ‡ 2015). Due to this, the company will not be able to compete with the large companies in the industry.
In order to configure the issue, at first the company needs to focus on the quality of its news. The news must be updated and as per the demand of the people. At the same time, the company needs to take improved strategies other than Idealo’s and KaufDA for expanding its business.
Type of competitors
Beyond 2014, the new technology experts are in the best position to take advantage in the evolving digital world. The main reason behind this is the new technology experts have the knowledge and expertise is using advanced technology of digital media (Knoche 2015). For example, Google and Apple use advanced technology to provide the most updated news to the public as soon as possible.
At the same time, the new technology experts can produce the contents as per the evolving demand of the customers. They are able to accept the change quickly. With the help of the RACE planning framework, the new technology experts can reach to huge number of customers (Hayles 2012). However, the old media content experts are not much flexible with the advanced technology. Though they are good in producing branded or rich contents, they are not efficient in accepting the rapid change in the market demand.
Strategic position of Axel Springer
In future, Axel Springer must be at the leading position in the marketplace. In order to achieve the leading market position, the company needs to take the following strategies:
Recommendation for question 1: Axel Springer must maintain the diverse personalities, entrepreneur skills, digital divisions, and rejection of silos
Recommendation for question 2: Always provide the updated news to the people. The company must change its quality of the contents and the contents must be as per the new demand in the market.
Recommendation for question 3: The Company can reduce its production cost by introducing advanced technology
Recommendation for question 4: In order to achieve the leading market position, the company must have the distinctive competencies like, innovative marketing, advanced but simple technology and large customer base.
In this assignment, it has identified that Axel Springer was one of the leading companies in print media until 2014. After 2014, the company started to face several strategic issues. Due to this, the company failed to improve its performance and expand its business further. The company needs to improve its content quality and introduce advanced technologies to get back the leading market position in future.
Hayles, N.K., 2012. How we think: Digital media and contemporary technogenesis. University of Chicago Press.
Herbert, J., 2015. Journalism in the digital age: theory and practice for broadcast, print and online media. CRC Press.
KljajiÄ‡, V. and KljajiÄ‡, M., 2015. Printed Vs On-Line Media And Challenges For Editorial Concepts: Examples Of News Magazines In Serbia. Socioloski Pregled, 49(1).
Knoche, M., 2015. The Media Industry’s Structural Transformation in Capitalism and the Role of the State: Media Economics in the Age of Digital Communications. tripleC: Communication, Capitalism & Critique. Open Access Journal for a Global Sustainable Information Society, 14(1), pp.18-47.
Vidas-Bubanja, M. and Bubanja, I., 2015. Competitive management strategy for print media advertising activities. Journal of Engineering Management and Competitiveness (JEMC), 5(2), pp.68-76.