Axel Springer’s digital transformations

Group 3Sarah Bennani Vladimir Pushmin Anton Telepnev Maria Zatkova

140008670130014419140010985 140022155

In 2000-2005 the digital transformation was one of the three key pillars of the business strategy

Conceptualization

The digital transformation was perceived as a transfusion of technologies, a new opportunity to

complement its current product line and create more revenue and cut costs in a consumer-orientated way

As part of this strategy, the company became more involved in the Internet sector, produced new web services for advertisers, launched general interest

portal, several publications, digital TV guide as well as bought a leading real estate service website and 49% in

StepStone platform.

Key strategic initiatives in 2000-2005

Divestment of unprofitable business operations

Reduction in employee base

Internal consolidation

Launch of new publications

Consolidation of management functions

Strengthening of company position in digital advertising

market

In the context of digital arena, first mover advantage exists, but there is a high chance of failure, therefore, follower strategy can be used

Digital arenaVery fast introduction of new technologies

Both technology and consumer acceptance advance rapidly

Fast growing market create competitive space for followers

Possibility to observe situation in the market, hence exploit pioneers

mistakes

Possibility to learn at almost no cost, e.g. avoid high R&D and marketing

costs

Follower can enjoy higher profits, as there was no high

set up costs

Follower can beat pioneers by taking the product from

niche to mass market

Search engine

Web browser Social networking Online bookstore

Online messenger Online music streaming

Online auction

Online food ordering

Companies with very deep pockets can enter the market first as there is a risk of experiencing flat sales for many years and operational

losses

Superior R&D capability and technological

forefront is essential

Difficulties to ensure long-term dominance, but short-

term gains are possible

Strong brand name may help to achieve long-tern

dominance and market acceptance

First mover advantage

Second mover advantage

The corporate strategy framework is an effective tool to approach the future of a digital industry, segmenting the units gives the company an advantage and a snapshot of the way forward 

Framework based on 4 new pillars: Paid Models, Marketing Models, Classified Ad Models, Services/Holdings -> the division helped to make a full transformation into a digital world

Agreed/not agreed• Based on the assumptions, we agree that the joining

technology and media industry is the way forward • With the exponential development and presence of

these technologies, and their success with the general population, shows that the media industry could use their experience

Döpfner’s 2013 corporate strategy assessment

Döpfner’s assumptions

In order to increase innovation, as wanted by a business, the division of services they provide was separated into 4 units that enabled Axel Springer to become more focused and goal-driven

Being successful in a digital business is an important step that the company accomplished, however in order to sustain this success, the company’s digital business needs to be more accurate and specific about their outcomes

Hence, 2013 corporate strategy framework is a strategic tool for achieving this purpose, however the previous strategy Axel Springer has been working with for decades, has proven its efficiency: the digital business of Axel Springer has, throughout the years, been able to gradually implement itself into the market, keeping track of the digital evolutionThe 2013 framework bases its core idea on forcing the entire company to become digital -> this approach, unlike the previous one, may appear to be counterproductive

1

2

3

4

5

Döpfner believes that, the world’s digital companies need the media industry and will continue to value it in the future

Collaborating with the greatest enemies in Silicon Valley, such as Facebook, Google, ensures a close relationship with them by experimenting life video broadcasts and instant articles

The collaboration with Silicon Valley will transfer as many experiences as possible to its working environment

The technology industry defines its relationship with the content industry

Therefore, Döpfner understands that the changing is the only way not to fail

1

2

3

4

5

The recommendations for Mr. Döpfner• Build strong relationship with generation Z (post-millennium) -> the aim to focus on concretion,

authenticity and transparency • Develop a better ad experience for consumers -> straighten the bond between Axel Springer

and its consumers • Promote and support entrepreneurship as an opportunity for acquiring digital skills and career

conversion, and promote digital training to all decision makers involved