In 2009 the Economist was seeing impressive growth and operating margins even though many of their peers reeled from both a cyclical recession. The situation describes the three issues facing Andrew Rashbass, the group’s leader (CEO):
• Firstly, assess the magazine’s digital strategy
• Second, planning for the e-visitors and,
• Lastly, positioning the organization to take advantage of exactly what the Economist
The industry trends at the time had to be addressed by Andrew Rashbass, having been appointed in role of CEO. He was in right person to drive the change in the digital world as he was the CIO for the organisation before taking on the role as CEO in 2008.
The Economist, based on the case anticipate a decline in their readers’ preference
…show more content…
Rashbass runs a very successful organisation; all the numbers for The Economist are heading upwards, in terms of both its print and digital offerings. ‘Lean-back’ and ‘lean-forward’ are phrases used/ coined by Andrew Rashbass.
The original business proposition put forward for the web, that people would ‘surf’ for hours, hopping from website to website as the recreational fancy took them, was not playing into the hands of “The Economist” revenues (Exhibit 6). People dive into the web to find particular items, or to retrieve specific information . As such, their mind-set is focused and at the same time impatient. If a page doesn’t fulfil their requirement, they’re off to continue the hunt on other websites (google has allowed the user to hunt for information at a fast pace). That is not a conducive environment for a magazine/newspaper, which involves persuading readers to invest lots of time. So, the ‘lean-forward’ frame-of-mind is uneasy, driven and, impatient at times; and ‘lean-back’ is contented, relaxed and engaged. The Economist has always been a ’lean-back’ experience which requires its customers to read without being
…show more content…
Offer mobile-friendly content. o ? Create a cross-platform experience. o o Win ‘Mass Intelligence’ consumers.
? Modernize the brand without diluting it.
? Use traditional marketing in new markets.
Challenges and Risks:
- Increased emphasis on digital content may alienate older consumers.
- Gearing business towards new markets will increase marketing and development costs.
He can do this by using the Resource and Capabilities Based View by Prahalad and Hamel of “The Economist Group”
Prahalad and Hamel (1994) preach that companies that do better in understanding, nurturing and leveraging these resources outshine the competitors that are engaged in more conventional type of strategic planning. Also a firm’s commitment to existing resources will make it difficult for it to acquire new resources and capabilities. In fact, the onus is on the publishing firms (“The Economist”) to adapt them to this technological disruption before new entrants which do not carry the baggage of tradition push the incumbents out of competition.
The source of competitive advantage in digital media are
? Early and large scale moves
? Product Differentiation
? Cost and Access: Print vs.