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 - – there is backlash against globalization, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
increasing transportation and logistics costs, geopolitical disruptions, 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 -
Low bargaining power of suppliers
– Suppliers of Newspaper Knight in the sector have low bargaining power. Mercury Rising: Knight Ridder's Digital Venture has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Newspaper Knight to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Newspaper Knight in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Slow to strategic competitive environment developments
– As Mercury Rising: Knight Ridder's Digital Venture HBR case study mentions - Newspaper Knight takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Mercury Rising: Knight Ridder's Digital Venture, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Newspaper Knight needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Lack of clear differentiation of Newspaper Knight products
– To increase the profitability and margins on the products, Newspaper Knight needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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.
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.
Buying journey improvements
– Newspaper Knight can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mercury Rising: Knight Ridder's Digital Venture suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Newspaper Knight has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Mercury Rising: Knight Ridder's Digital Venture - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Newspaper Knight to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Newspaper Knight to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Newspaper Knight can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Newspaper Knight to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Newspaper Knight to hire the very best people irrespective of their geographical location.
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.
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 -
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Newspaper Knight in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Newspaper Knight business can come under increasing regulations regarding data privacy, data security, etc.
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 .
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.
Consumer confidence and its impact on Newspaper Knight demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Newspaper Knight with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Newspaper Knight in the Technology & Operations sector and impact the bottomline of the organization.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Newspaper Knight needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
