AFTER ONE HUNDRED YEARS OF SOLITUDE: Challenging the Status Quo of the Finnish Trade Magazine Industry by Applying Foresight to Business Models

A Master’s Thesis presentation

Johannes Koponen 2.3.2011johannes.koponen@gmail.com

AGENDA

Trade Magazine Business Models

ScenarioOut of the Frying

Pan

ScenarioTogether We Can

Scenario Rip ’em ApartConclusions

Goal and research problem

Business Models: a theoretical approach

Empirical research process

GOAL

Foresight about futures strategic

business landscape

In fast-moving environments

companies need mission, vision and strategy to keep the

focus

However, vision – where we are going

– is not enough. Companies also

need insight about where everyone else

is going

Everyone else meaning not only competitors but

also all stakeholders that have a say in

shaping the future

RESEARCH PROBLEM

How different media business environment futures are

related to the Finnish trade magazine business model?

BUSINESS MODEL

Reveals the value creation and delivery

logic of a specific company

Is built from choices and the consequences

of these choices, linked by a hypothesis

Loops typically have certain amount of

intrinsic delay

Business models are highly contextual, and

at the same time different business

models might fit to a same situation

Business models are representations that are constructed in a representation of an environment (current

or future)

It is useful if consequences form

self-reinforcing loopsSterman 2000, Picard 1989, Doyle 2002, Casadesus-Masanell ja Ricart 2007; 2009; 2010 and Teece 2010; Giesecke et al. 2010; Fetscherin & Knolmayer 2004; Aaltonen 2010; Itami and Nishino 2009; Wirtz et al. 2010; McGrath 2010)

TRADE MAGAZINE BUSINESS

2) Economies of scale and scope

3) Media company dominates in the value

network

According to sources (esim. Sterman 2000, Picard 1989, Doyle 2002, Casadesus-Masanell ja Ricart 2007; 2009; 2010 and Teece 2010)

And taking into account the nature of

the reference organization

Trade magazine business model: Seven self-reinforcing loops

that create the growth and diminishing of

trade media business

1) Dual market model

1) Dual markets

2) Economies of scale and scope

3) Market powers

STRATEGIC LANDSCAPE

"What does he say?” he asked.

“He’s very sad,” Ursula answered, “because

he thinks that you’re going to die.”

“Tell him,” the colonel said, smiling, “that a

person doesn’t die when he should but when

he can." — Gabriel Garcia Marquez (One Hundred Years

of Solitude)

RESEARCH PROCESS

Topics to Delphi panel from an earlier media

scenario research (Giesecke et al. 2010)

Delphi: 8 person iterative expert

interview with two argument rounds

Based on Delphi opinions, futuribles were constructed

(argument-based single events in the future)

Intrinsic coherence of the futuribles were analyzed with Field Anomaly Relaxation

analysis

Three scenarios were constructed using the

Field Anomaly Relaxation analysis

The functionality of the current business

model was analyzed in each scenario environment

In addition, novel business opportunities were analyzed in each

scenario

Current trade magazine business

model from literature and with discussions

SCENARIO:1) OUT OF THE

FRYING PAN

Delphi panel was worried about the

advertisement revenues

Another fear was that media companies lose

the direct customer relationship

What happens if both threats are realized?

New business opportunity from lack of trust within the

media field:

SCENARIO:2) TOGETHER WE

CAN

Socialization of media was a very important

topic in Delphi interviews

Can inter-expert communities create

enough value to themselves?

Communities challenge the power

within the established media

There are lucrative business opportunities in facilitated

communities

SCENARIO:3) RIP ’EM APART

Digital content is easily tailored.

How could a media company compete

against easily deliverable and

completely personated media service?

Tailoring challenges the economies of scale

It is possible to change the business system so that it supports hyperlocalized

content production

SCENARIO CONCLUSIONS

Fascinated by the discovery, Aureliano, read aloud without skipping the chanted encyclicals that Melquiades himself had made Arcadio listen to and that were in reality the prediction of his execution - - -

— Gabriel Garcia Marquez (One Hundred Years of Solitude)

REMEMBER FROM THIS

PRESENTATION

There are at least three grave threats to trade

magazine business models

(when environment changes, the self-

reinforcing loops turn to vicious circles)

New business opportunities do not seem lucrative in the

beginning

(but it is easier to try and fail now than

have a must succeed situation later)

There are many business opportunities in

professional-specified media markets

(most of them are found from the

outside of the current business field)

Using futures studies methodologies in business

model assertion and innovation is useful

(This research used Delphi and scenarios)

Feel free to ask questions or give feedbackjohannes.koponen@gmail.com

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