SCHIBSTED CASE ANALYSIS, Study Guides, Projects, Research of Strategic Management

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Schibsted

Group-19 | Section-A

Situational Analysis

● Schibsted is media group which was founded in 1839 as a newspaper company in Oslo, Norway. It is present in 20 countries. ● Currently, its management is facing some serious challenges after enjoying continued success for past few years. ● Google is threatening its profitability and core value proposition with its plan of a news aggregator in Norway. ● The company is also confronted with challenges surrounding the changing nature of its audience, the startups’ threat and its internal organisational culture. ● They are also faced with a dillemma whether or not to launch ‘free dailies’ in their core and established newspaper markets.

Company’s History

● Schibsted started as a family owned company and was publically listed in July

● A legacy of more than 150 years, with 8500 employees. ● It had two major subsidiaries - Aftenposten and VG. ● After going public, it started investing into Television and other media networks. ● It was well known for its investments in innovative segments.

The Transformation Years

● In 1995, they acknowledged the threat posed by the Internet to their core newspaper business and decided to act on it. ● They decided to take aggressive positions by utilising their strong finances. ● They decided to transform from a newspaper company to an electronic media company. ● They also planned to expand beyond Norway to other Scandavian nations. ● Schibsted reorganised itself into three business units - Print Media, TV/Film and Multimedia. They planned to keep them separate. ● They invested in certain new IT related projects by partnering with various such companies. ● They introduced free dailies where they did not have traditional media majorly.

Google Collaboration

Pros: ● Readers are moving towards online news aggregators such as Yahoo, Google etc. for looking at varieties of news headlines. ● It will increase the customer’s base of the company as non-readers of Schibsted will also visit their site if they found the news interesting. Cons: ● It will impact the advertising revenue of the company as there will be less visit on the website. ● There is no ordering in online news feed. ● They will get very less amount from news aggregator for their offering which can not justify the effort made by the company in developing the news content.

Free Dailies in Core Market

Pros: ● It will help in expanding the current market of their print news business. ● Less Administration Cost. ● Revenues only from Advertisement. Comapny can increase the charges for advertisement. ● Suitable for Office Goers who uses public transport. Cons: ● Cannibalization of existing market offerings by the company. ● Complete dependence on advertisement. ● It may not work out well in long term as the company will face challenges in terms of reduced margins. ● It can also got in some legal arguments with its competitors for trying to gain unfair. advantage in the market and exploiting the current competitive ecosystem.

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