Axel Springer in 2016: From Transformation to Acceleration? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Axel Springer in 2016: From Transformation to Acceleration?
As of 2016, Mathias DA¶pfner, chief executive officer (CEO) of Axel Springer SE, had successfully transitioned the German publishing house through a major digital transformation in the world of journalism. Given the massive disruption that had occurred over the previous two decades with how people consumed news, this was no small feat. During this time, many newspapers, magazines, and journals failed to keep up with the rapidly changing industry. Historically, print advertising constituted the majority of revenue for large publishers. But the digital revolution in journalism meant that print advertising revenues dropped precipitously. This downward trend in print advertising revenues happened around the globe, with traditional publishers cutting thousands of jobs. Many publishers were forced to declare bankruptcy during this period. In spite of these industry headwinds, Axel Springer was thriving. DA¶pfner had transformed Axel Springer through a two-stage digital transformation strategy process. Starting in 2006, Axel Springer first focused on organic growth and late-stage digital acquisitions, which infused digitization into Axel Springer's corporate culture. In 2013, the second stage centered around DA¶pfner's mission to become "The Leading Digital Publisher"; Axel Springer would be defined not by its distribution channels, but by its (content) brands and services. Having successfully transformed Axel Springer from a print-only company to a thriving print and digital media conglomerate, DA¶pfner wanted to accelerate Axel Springer's growth even further. He believed that Axel Springer was well positioned to succeed not only in their core German market, but also more broadly on the world stage. Yet he knew this path to becoming a global media powerhouse would not be straightforward, especially given the rapid changes occurring within the media and publishing realm. In a world in which people were consuming content from a variety of sources-traditional print
Authors :: Robert A. Burgelman, Robert Siegel, Ryan Kissick
Swot Analysis of "Axel Springer in 2016: From Transformation to Acceleration?" written by Robert A. Burgelman, Robert Siegel, Ryan Kissick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Axel Springer facing as an external strategic factors. Some of the topics covered in Axel Springer in 2016: From Transformation to Acceleration? case study are - Strategic Management Strategies, Disruptive innovation, Growth strategy, Marketing, Mergers & acquisitions, Social platforms and Global Business.
Some of the macro environment factors that can be used to understand the Axel Springer in 2016: From Transformation to Acceleration? casestudy better are - – cloud computing is disrupting traditional business models, there is backlash against globalization, increasing transportation and logistics costs, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings,
increasing commodity prices, technology disruption, etc
Introduction to SWOT Analysis of Axel Springer in 2016: From Transformation to Acceleration?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Axel Springer in 2016: From Transformation to Acceleration? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Axel Springer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Axel Springer 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 Axel Springer in 2016: From Transformation to Acceleration? can be done for the following purposes –
1. Strategic planning using facts provided in Axel Springer in 2016: From Transformation to Acceleration? case study
2. Improving business portfolio management of Axel Springer
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Axel Springer
Strengths Axel Springer in 2016: From Transformation to Acceleration? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Axel Springer in Axel Springer in 2016: From Transformation to Acceleration? Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Axel Springer in 2016: From Transformation to Acceleration? 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.
Low bargaining power of suppliers
– Suppliers of Axel Springer in the sector have low bargaining power. Axel Springer in 2016: From Transformation to Acceleration? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Axel Springer to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Axel Springer is present in almost all the verticals within the industry. This has provided firm in Axel Springer in 2016: From Transformation to Acceleration? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Axel Springer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Axel Springer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Axel Springer 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.
Highly skilled collaborators
– Axel Springer 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 Axel Springer in 2016: From Transformation to Acceleration? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Axel Springer is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Axel Springer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Axel Springer in 2016: From Transformation to Acceleration? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Axel Springer 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 Axel Springer in 2016: From Transformation to Acceleration? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Axel Springer in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Global Business field
– Axel Springer is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Axel Springer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Axel Springer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Axel Springer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Axel Springer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Axel Springer in 2016: From Transformation to Acceleration? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Axel Springer in 2016: From Transformation to Acceleration? are -
Increasing silos among functional specialists
– The organizational structure of Axel Springer is dominated by functional specialists. It is not different from other players in the Global Business segment. Axel Springer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Axel Springer to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Axel Springer 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. Axel Springer 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Axel Springer in 2016: From Transformation to Acceleration?, in the dynamic environment Axel Springer has struggled to respond to the nimble upstart competition. Axel Springer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Axel Springer in 2016: From Transformation to Acceleration?, it seems that company is thinking about the frontier risks that can impact Global Business 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Axel Springer supply chain. Even after few cautionary changes mentioned in the HBR case study - Axel Springer in 2016: From Transformation to Acceleration?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Axel Springer vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Axel Springer in 2016: From Transformation to Acceleration?, is just above the industry average. Axel Springer 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.
Need for greater diversity
– Axel Springer has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Skills based hiring
– The stress on hiring functional specialists at Axel Springer 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.
Capital Spending Reduction
– Even during the low interest decade, Axel Springer has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Axel Springer in 2016: From Transformation to Acceleration? 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 Axel Springer 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Axel Springer 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.
Opportunities Axel Springer in 2016: From Transformation to Acceleration? | 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 Axel Springer in 2016: From Transformation to Acceleration? are -
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 Axel Springer in the consumer business. Now Axel Springer can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Axel Springer 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 Global Business segment.
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 Axel Springer 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.
Manufacturing automation
– Axel Springer can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Creating value in data economy
– The success of analytics program of Axel Springer has opened avenues for new revenue streams for the organization in the industry. This can help Axel Springer to build a more holistic ecosystem as suggested in the Axel Springer in 2016: From Transformation to Acceleration? case study. Axel Springer can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Axel Springer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Axel Springer in 2016: From Transformation to Acceleration? 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Axel Springer can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Axel Springer 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 Axel Springer to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Axel Springer 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Axel Springer is facing challenges because of the dominance of functional experts in the organization. Axel Springer in 2016: From Transformation to Acceleration? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Axel Springer in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Axel Springer can use these opportunities to build new business models that can help the communities that Axel Springer operates in. Secondly it can use opportunities from government spending in Global Business sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Axel Springer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Axel Springer in 2016: From Transformation to Acceleration? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Axel Springer in 2016: From Transformation to Acceleration? are -
High dependence on third party suppliers
– Axel Springer 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.
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. Axel Springer needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Axel Springer business can come under increasing regulations regarding data privacy, data security, etc.
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 Axel Springer.
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.
Stagnating economy with rate increase
– Axel Springer 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Axel Springer with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Axel Springer has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Axel Springer needs to keep up with the evolution of technology in the Global Business 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.
Shortening product life cycle
– it is one of the major threat that Axel Springer is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Axel Springer 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 Axel Springer in 2016: From Transformation to Acceleration? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Axel Springer in 2016: From Transformation to Acceleration?, Axel Springer may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing wage structure of Axel Springer
– 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 Axel Springer.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Axel Springer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Axel Springer in 2016: From Transformation to Acceleration? 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 Axel Springer in 2016: From Transformation to Acceleration? 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 Axel Springer in 2016: From Transformation to Acceleration? 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 Axel Springer in 2016: From Transformation to Acceleration? 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 Axel Springer in 2016: From Transformation to Acceleration? 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 Axel Springer needs to make to build a sustainable competitive advantage.
