The case traces the digital transformation journey of Axel Springer, one of Europe’s largest media houses, from a traditional print business to a digital powerhouse in the online world of paid content, classified advertisements and marketing businesses.
In the information age, the publishing industry has been challenged by the dual forces of rapid technological advancement and evolving consumer behavior. In addition, stiff competition from non-traditional players such Internet giants as well as nimble start-ups resulted in a blurring of lines between publisher and content marketer.
Like most publishers, Axel Springer faced falling readership and declining revenues during the 2000s. However, it made a bold move to cannibalize its core newspaper and magazine businesses and reposition its content across digital platforms.
This required building new technological capabilities and seeding a culture change within the organization. In order to do so, it embarked on an aggressive acquisition strategy, which in turn enabled the company to expand its footprint across Europe.
The case is positioned in 2016 when Axel Springer had successfully transformed itself – the majority of its revenues and profits came from digital media.
However, several challenges remained. While remaining true to its journalistic core, how should Axel Springer continue to monetize its content? How could it compete with digital giants like Facebook and Google? Should the company look for bigger acquisitions in diverse geographies to create a stronger global presence? How should it leverage digital reader data to capture value?
The case allows instructors to examine responses to the threat of digital disruption by cannibalization of own business.
It helps instructors explore the process of digital transformation mainly through extensive acquisitions and divestitures.
Finally, instructors can use the case to trace an extensive set of programs the company introduced to change its culture and HR practices to match the digital strategy.