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Axel Springer’s digital transformations
Group 3Sarah Bennani Vladimir Pushmin Anton Telepnev Maria Zatkova
140008670130014419140010985 140022155
In 2000-2005 the digital transformation was one of the three key pillars of the business strategy
Conceptualization
The digital transformation was perceived as a transfusion of technologies, a new opportunity to
complement its current product line and create more revenue and cut costs in a consumer-orientated way
As part of this strategy, the company became more involved in the Internet sector, produced new web services for advertisers, launched general interest
portal, several publications, digital TV guide as well as bought a leading real estate service website and 49% in
StepStone platform.
Key strategic initiatives in 2000-2005
Divestment of unprofitable business operations
Reduction in employee base
Internal consolidation
Launch of new publications
Consolidation of management functions
Strengthening of company position in digital advertising
market
In the context of digital arena, first mover advantage exists, but there is a high chance of failure, therefore, follower strategy can be used
Digital arenaVery fast introduction of new technologies
Both technology and consumer acceptance advance rapidly
Fast growing market create competitive space for followers
Possibility to observe situation in the market, hence exploit pioneers
mistakes
Possibility to learn at almost no cost, e.g. avoid high R&D and marketing
costs
Follower can enjoy higher profits, as there was no high
set up costs
Follower can beat pioneers by taking the product from
niche to mass market
Search engine
Web browser Social networking Online bookstore
Online messenger Online music streaming
Online auction
Online food ordering
Companies with very deep pockets can enter the market first as there is a risk of experiencing flat sales for many years and operational
losses
Superior R&D capability and technological
forefront is essential
Difficulties to ensure long-term dominance, but short-
term gains are possible
Strong brand name may help to achieve long-tern
dominance and market acceptance
First mover advantage
Second mover advantage
The corporate strategy framework is an effective tool to approach the future of a digital industry, segmenting the units gives the company an advantage and a snapshot of the way forward
Framework based on 4 new pillars: Paid Models, Marketing Models, Classified Ad Models, Services/Holdings -> the division helped to make a full transformation into a digital world
Agreed/not agreed• Based on the assumptions, we agree that the joining
technology and media industry is the way forward • With the exponential development and presence of
these technologies, and their success with the general population, shows that the media industry could use their experience
Döpfner’s 2013 corporate strategy assessment
Döpfner’s assumptions
In order to increase innovation, as wanted by a business, the division of services they provide was separated into 4 units that enabled Axel Springer to become more focused and goal-driven
Being successful in a digital business is an important step that the company accomplished, however in order to sustain this success, the company’s digital business needs to be more accurate and specific about their outcomes
Hence, 2013 corporate strategy framework is a strategic tool for achieving this purpose, however the previous strategy Axel Springer has been working with for decades, has proven its efficiency: the digital business of Axel Springer has, throughout the years, been able to gradually implement itself into the market, keeping track of the digital evolutionThe 2013 framework bases its core idea on forcing the entire company to become digital -> this approach, unlike the previous one, may appear to be counterproductive
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Döpfner believes that, the world’s digital companies need the media industry and will continue to value it in the future
Collaborating with the greatest enemies in Silicon Valley, such as Facebook, Google, ensures a close relationship with them by experimenting life video broadcasts and instant articles
The collaboration with Silicon Valley will transfer as many experiences as possible to its working environment
The technology industry defines its relationship with the content industry
Therefore, Döpfner understands that the changing is the only way not to fail
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The recommendations for Mr. Döpfner• Build strong relationship with generation Z (post-millennium) -> the aim to focus on concretion,
authenticity and transparency • Develop a better ad experience for consumers -> straighten the bond between Axel Springer
and its consumers • Promote and support entrepreneurship as an opportunity for acquiring digital skills and career
conversion, and promote digital training to all decision makers involved