Case Study Description of Mercury Rising: Knight Ridder's Digital Venture
This case is accompanied by a Video Short that can be shown in class or included in a digital coursepack. Instructors should consider the timing of making the video available to students, as it may reveal key case details.Captures the efforts of newspaper publisher Knight Ridder to create a digital venture. Knight Ridder proves to be a pioneer in digital publishing, launching the first online newspaper site; builds a network of newspaper sites called Real Cities; and invests in Careerbuilder, the second largest career site after Monster.com. However, the company has cumulatively lost over $100 million in its core Internet operations, is missing important categories of advertising revenue, and is operating in an ad recession at the time of the case. Tracks the evolution of the venture that spans nearly a decade and can be summarized in three distinct periods: 1) initial launch and experimentation, 2) rapid expansion within the newspaper organization vs. operation as a separate venture, and 3) managing the venture after the Internet bubble has burst.
Swot Analysis of "Mercury Rising: Knight Ridder's Digital Venture" written by Clark Gilbert includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Newspaper Knight facing as an external strategic factors. Some of the topics covered in Mercury Rising: Knight Ridder's Digital Venture case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Internet, Managing uncertainty, Marketing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Mercury Rising: Knight Ridder's Digital Venture casestudy better are - – increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing energy prices, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Mercury Rising: Knight Ridder's Digital Venture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mercury Rising: Knight Ridder's Digital Venture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Newspaper Knight, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Newspaper Knight operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Mercury Rising: Knight Ridder's Digital Venture can be done for the following purposes –
1. Strategic planning using facts provided in Mercury Rising: Knight Ridder's Digital Venture case study
2. Improving business portfolio management of Newspaper Knight
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Newspaper Knight
Strengths Mercury Rising: Knight Ridder's Digital Venture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Newspaper Knight in Mercury Rising: Knight Ridder's Digital Venture Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Newspaper Knight are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Newspaper Knight is one of the most innovative firm in sector. Manager in Mercury Rising: Knight Ridder's Digital Venture Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Newspaper Knight is one of the leading recruiters in the industry. Managers in the Mercury Rising: Knight Ridder's Digital Venture are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Newspaper Knight has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Newspaper Knight has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the Mercury Rising: Knight Ridder's Digital Venture Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Newspaper Knight has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Newspaper Knight
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Newspaper Knight does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Newspaper Knight has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Mercury Rising: Knight Ridder's Digital Venture HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Newspaper Knight has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Mercury Rising: Knight Ridder's Digital Venture - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Newspaper Knight has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mercury Rising: Knight Ridder's Digital Venture Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Newspaper Knight digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Newspaper Knight has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Newspaper Knight has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Newspaper Knight to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Mercury Rising: Knight Ridder's Digital Venture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mercury Rising: Knight Ridder's Digital Venture are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Newspaper Knight is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mercury Rising: Knight Ridder's Digital Venture can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Newspaper Knight has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Newspaper Knight has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Mercury Rising: Knight Ridder's Digital Venture should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Newspaper Knight is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Newspaper Knight needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Newspaper Knight to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Newspaper Knight has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Newspaper Knight even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mercury Rising: Knight Ridder's Digital Venture HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Newspaper Knight has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mercury Rising: Knight Ridder's Digital Venture, is just above the industry average. Newspaper Knight needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Mercury Rising: Knight Ridder's Digital Venture has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Newspaper Knight 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Newspaper Knight has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Mercury Rising: Knight Ridder's Digital Venture that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Mercury Rising: Knight Ridder's Digital Venture can leverage the sales team experience to cultivate customer relationships as Newspaper Knight is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Clark Gilbert suggests that, Newspaper Knight is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Mercury Rising: Knight Ridder's Digital Venture | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Mercury Rising: Knight Ridder's Digital Venture are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Newspaper Knight is facing challenges because of the dominance of functional experts in the organization. Mercury Rising: Knight Ridder's Digital Venture case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Newspaper Knight to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Newspaper Knight can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Newspaper Knight has opened avenues for new revenue streams for the organization in the industry. This can help Newspaper Knight to build a more holistic ecosystem as suggested in the Mercury Rising: Knight Ridder's Digital Venture case study. Newspaper Knight can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Newspaper Knight can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Newspaper Knight in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Newspaper Knight in the consumer business. Now Newspaper Knight can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Newspaper Knight can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Newspaper Knight can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Newspaper Knight can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Mercury Rising: Knight Ridder's Digital Venture, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Newspaper Knight can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Loyalty marketing
– Newspaper Knight has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Newspaper Knight to increase its market reach. Newspaper Knight will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Newspaper Knight can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Mercury Rising: Knight Ridder's Digital Venture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mercury Rising: Knight Ridder's Digital Venture are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Newspaper Knight will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Newspaper Knight can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Newspaper Knight.
Regulatory challenges
– Newspaper Knight needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Environmental challenges
– Newspaper Knight needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Newspaper Knight can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Newspaper Knight is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Newspaper Knight can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Newspaper Knight has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Newspaper Knight needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Newspaper Knight high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Newspaper Knight
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Newspaper Knight.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mercury Rising: Knight Ridder's Digital Venture, Newspaper Knight may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Newspaper Knight can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Mercury Rising: Knight Ridder's Digital Venture .
Weighted SWOT Analysis of Mercury Rising: Knight Ridder's Digital Venture Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Mercury Rising: Knight Ridder's Digital Venture needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Mercury Rising: Knight Ridder's Digital Venture is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Mercury Rising: Knight Ridder's Digital Venture is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Mercury Rising: Knight Ridder's Digital Venture is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Newspaper Knight needs to make to build a sustainable competitive advantage.