Case Study

Growth strategy for a major media company

Finding new sources of profitable growth in a difficult media environment

A global media organization was struggling financially in the face of tough industry headwinds. On the plus side, they were armed with a strong brand, a diversified portfolio of holdings, and access to capital.

The questions were how and where to grow in order to re-assert profitability in the short term, while at the same time positioning itself for the future, with the increasing dominance of digital channels.

The business was currently losing tens of millions of dollars per year. 

Root causes: difficult media headwinds with declining advertising revenue and huge levels of complexity in the business. 

It was operating in multiple channels (TV, print, radio, digital, and conferences) across more than 100 countries—from Europe and the US to Russia and South Africa. Each had its own idiosyncrasies and consumer preferences for media consumption. Many times, this expansion happened via opportunistic partnerships. 

It was the classic ‘Greener Pasture’ siren that had led the business to chase short-term revenue at the expense of profitability. 

Given that context, a key role for WP&C was injecting a disciplined, analytical view of growth adjacencies, where the theoretical adjacency-expansion opportunities were almost unlimited.

1: Build a new fact base

WP&C assessed and quantified the media landscape, advertising revenues, trends, competitors, and growth rates. We drilled down into individual end-markets & channels.

2: Identify strategic options

Based on the analysis, and the current position of the business, we developed a series of strategic alternatives, with a range of potential outcomes and differing capital requirements.

3: Operationalize the plan

In addition, we assessed how well the current operating model supported the strategic options? Once aligned on the growth plan, we highlighted specific changes required to execute on the plan.

 

 

  1. Use region-specific strategies. Each region needs to be treated differently based on how media is consumed, and level of return expected.
  2. Heavily focus on Western EU, where brand best positioned & financial returns highest. Hold off investment in Eastern Europe.
  3. Generally, reduce cost to serve. Leverage existing TV assets to broaden reach and access. In Africa, achieve better scale economies by moving to a regional hub model.
  4. Integrate the operating model. Historically, business was siloed by media platform: inefficient, expensive and out of step with how people consume media. Move to new operating model oriented around markets and audience, as opposed to platforms.

Bloomberg 2 (rec)

 
  • In 2 years, since the strategy was launched, the business has reversed its fortunes to be once again profitable.
  • Revenues are up in TV, Radio, and Events. Since launching the strategy, digital ad revenues grew more than 50%.
  • The business has also successfully moved to a new operating model—a multiplatform ad proposition with content at the core, which is driving sales and focusing the business on customers

 

The business was currently losing tens of millions of dollars per year. 

Root causes: difficult media headwinds with declining advertising revenue and huge levels of complexity in the business. 

It was operating in multiple channels (TV, print, radio, digital, and conferences) across more than 100 countries—from Europe and the US to Russia and South Africa. Each had its own idiosyncrasies and consumer preferences for media consumption. Many times, this expansion happened via opportunistic partnerships. 

It was the classic ‘Greener Pasture’ siren that had led the business to chase short-term revenue at the expense of profitability. 

Given that context, a key role for WP&C was injecting a disciplined, analytical view of growth adjacencies, where the theoretical adjacency-expansion opportunities were almost unlimited.

1: Build a new fact base

WP&C assessed and quantified the media landscape, advertising revenues, trends, competitors, and growth rates. We drilled down into individual end-markets & channels.

2: Identify strategic options

Based on the analysis, and the current position of the business, we developed a series of strategic alternatives, with a range of potential outcomes and differing capital requirements.

3: Operationalize the plan

In addition, we assessed how well the current operating model supported the strategic options? Once aligned on the growth plan, we highlighted specific changes required to execute on the plan.

 

 

  1. Use region-specific strategies. Each region needs to be treated differently based on how media is consumed, and level of return expected.
  2. Heavily focus on Western EU, where brand best positioned & financial returns highest. Hold off investment in Eastern Europe.
  3. Generally, reduce cost to serve. Leverage existing TV assets to broaden reach and access. In Africa, achieve better scale economies by moving to a regional hub model.
  4. Integrate the operating model. Historically, business was siloed by media platform: inefficient, expensive and out of step with how people consume media. Move to new operating model oriented around markets and audience, as opposed to platforms.

Bloomberg 2 (rec)

 
  • In 2 years, since the strategy was launched, the business has reversed its fortunes to be once again profitable.
  • Revenues are up in TV, Radio, and Events. Since launching the strategy, digital ad revenues grew more than 50%.
  • The business has also successfully moved to a new operating model—a multiplatform ad proposition with content at the core, which is driving sales and focusing the business on customers

 

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