Case 6: New Business Models

for Heise Medien: Heading for

the Digital Transformation

Case Questions

Solved by:

Iqra

Muhammad Mujtaba

Deepsheikha

Syeda Kaneez Fatima

Farhan Haider

Babar

Abdul Ahad

Submitted to: Dr. Adnan Kehar & Zaibunnisa Siddiqi

Q#2 Mission statement of Heise Medien

A mission statement for Heise Medien could be:

"Our mission is to provide timely, accurate, and unbiased information and services on
technology, science, and society to our audiences. We strive to empower individuals and
organizations to make informed decisions, stay up-to-date with the latest developments, and
engage in constructive dialogue and exchange of ideas. We are committed to quality journalism
and ethical standards, and we value independence, innovation, and diversity in all our activities."

Q.3 Pastel Analysis and any identify key factors and counter strategies the Company

Political Factors:

Regulations and laws: Heise Medien operates in a highly regulated industry, especially when it
comes to data privacy and security laws. Any changes in these regulations may impact their
business operations.

Political instability: Any political instability in Germany, where Heise Medien is based, may
also impact their business.

Economic Factors:

Economic growth: Economic growth in Germany and Europe may impact the advertising
revenue of Heise Medien, as companies may reduce their marketing budgets during times of
economic slowdown.

Foreign exchange rates: Fluctuations in foreign exchange rates may impact the revenue and
profitability of Heise Medien, especially if a significant portion of their revenue is generated
from foreign markets.

Sociocultural Factors:
Shifts in consumer behavior: Changes in consumer behavior, such as the increasing use of
mobile devices, may require Heise Medien to adapt its business model and offerings to stay
relevant.

Social media trends: The popularity of social media platforms may impact the reach and
influence of Heise Medien's traditional media outlets.

Technological Factors:

Rapid technological change: The digital media landscape is constantly evolving, with new
technologies and platforms emerging. Heise Medien needs to keep up with these changes to
remain competitive.

Cybersecurity: As a company that deals with sensitive user data, Heise Medien needs to invest
in robust cybersecurity measures to protect against cyber threats.

Legal Factors:

Data privacy laws: Heise Medien operates in an industry where user data is crucial. Any
changes in data privacy laws may impact their operations.

Intellectual property laws: As a media company, Heise Medien needs to protect its intellectual
property and ensure they are not infringing on the intellectual property of others.

Environmental Factors:

Environmental regulations: As a media company, Heise Medien has a relatively low

environmental impact. However, they still need to ensure they are in compliance with
environmental regulations and take steps to reduce their carbon footprint where possible.

Possible key factors and counter strategies:

Increased digital presence: Given the rapid shift towards digital media consumption, Heise
Medien should focus on expanding its digital presence to reach a wider audience and adapt to
changing consumer behavior.

Diversify revenue streams: To reduce their reliance on advertising revenue, Heise Medien
could explore new revenue streams, such as subscription-based models or e-commerce.
Embrace emerging technologies: To stay competitive, Heise Medien needs to embrace new
technologies, such as artificial intelligence and machine learning, to improve its products and
services.

Robust cybersecurity measures: To protect against cyber threats, Heise Medien needs to invest
in robust cybersecurity measures, such as multi-factor authentication and regular security audits.

Adapting to changing regulations: Given the highly regulated nature of their industry, Heise
Medien needs to stay up to date with changing regulations and adapt its operations accordingly
to ensure compliance.

Q.5 Competitive Advantage includes, what type of Resources when bundled to create
organizational capabilities

Types of Define Capabilities Identify Actions\Strategies

Tangible SWOT’s
resources
Infrastructure Strong technology and Strength Invest in R&D to maintain the
efficient processes technological advantage and
continuously improve process
efficiency and productivity
Human Highly skilled staff and Strength Provide ongoing training and
resources experienced managers development opportunities to maintain
skill levels and Foster a culture of
strong leadership and decision-making

Physical Prime office location Strength Leverage location for brand visibility
Resources and accessibility
Weakness Address any outdated or insufficient
equipment or facilities
Opportunity Explore new locations for expansion or
relocation
Types of Define Capabilities Identify Actions\Strategies
Intangible SWOT’s
resources
Brand Strong brand recognition Strength: Leverage brand equity to expand into
reputation and loyalty Enhances new markets and increase market share.
brand image
and customer
loyalty.
Opportunity:
Leverage for
increased
market share.
Intellectual Exclusive rights to Strength: Use the intellectual property to create
property valuable patents and Protects new products and services while also
trademarks company's exploring alternative strategies for
innovations innovation.
and assets.
Weakness:
May limit
flexibility in
product
development.
Customer In-depth understanding of Strength: Leverage customer knowledge to
knowledge customer needs and Enables develop and market products and
preferences development services that align with customer needs
of products and preferences.
and services
that meet
customer
demands.
Opportunity:
Use customer
 insights to
create unique
value
propositions.
Organizational Shared values, beliefs, Strength: Continuously evaluate and adapt
culture and norms that guide Fosters organizational culture to align with
behavior collaboration strategic objectives and changes in the
and competitive landscape.
innovation.
Weakness:
May hinder
change and
adaptation.

Q.10 How do competitive rivalry, competitive behavior, and competitive dynamics affect
the Heise Medien
Competitive rivalry, competitive behavior, and competitive dynamics have a significant impact
on Heise Medien.

Competitive rivalry refers to the intensity of competition between companies in the same
industry or market. Heise Medien faces high competitive rivalry in the digital media industry,
with several established players like Axel Springer, Burda, and Hubert Burda Media competing
for market share. The intensity of competition can lead to price wars, aggressive marketing
tactics, and increased pressure to innovate and stay ahead of the competition.

Competitive behavior refers to the actions that companies take to gain a competitive advantage
over their rivals. Heise Medien's competitive behavior includes a focus on providing quality
content, leveraging advanced technology, and building a strong brand image. Additionally, the
company has been investing in diversifying its revenue streams and increasing its digital
presence to remain competitive in the changing media landscape.
Competitive dynamics refer to the ongoing interplay and interactions between companies in a
market. Heise Medien must carefully navigate the competitive dynamics of the digital media
industry, including mergers and acquisitions, changing market trends, and the emergence of new
competitors. The company must remain agile and adaptable to remain competitive in the face of
these changing dynamics.

To succeed in the face of these challenges, Heise Medien can implement several strategies, such
as developing innovative products and services, focusing on niche markets, creating strong brand
differentiation, forming strategic partnerships and collaborations, and investing in research and
development. Additionally, the company can focus on building a strong corporate culture and
retaining talented employees to maintain a competitive edge. By effectively managing
competitive rivalry, behavior, and dynamics, Heise Medien can position itself for long-term
success in the digital media industry.

Q.11 What is the market commonality? What is the resource similarity of Heise Medien?
Market commonality refers to the degree of overlap or similarity between the markets that two or
more companies are competing. In the case of Heise Medien, the company operates in several
markets such as publishing, events, and online media. Therefore, its market commonality with
other companies varies depending on the specific market segment.

Resource similarity, on the other hand, refers to the extent to which two or more companies
possess comparable strategic resources and capabilities. In the case of Heise Medien, the
company's key resources and capabilities include a strong brand image, an experienced
workforce, quality content, and advanced technology. The resource similarity with other
companies depends on how well those companies have developed and leveraged similar
resources and capabilities to compete in the same markets as Heise Medien.

Competitive rivalry, behavior, and dynamics can be influenced by both market commonality and
resource similarity. In highly similar and overlapping markets, competition is typically more
intense and rivalry is more pronounced. Additionally, companies with similar resources and
capabilities may engage in more aggressive competitive behavior, such as price cutting, to gain
market share. Competitive dynamics can be further influenced by changes in market conditions,
technology, or consumer preferences, which can create new opportunities for some companies
while threatening the competitive position of others.

Q.16 Develop a Quantitative Strategic Planning Matrix (QSPM) and recommended

strategy options for Heise Medien Total Weight 1.00. Rating 1to 4

Strategic Alternatives

Strategy Option Strategy Option #2

#1
Diversify revenue
Increased Digital streams
Key Internal Factors Weight
Presence

Strengths Rank (1- Total Rank (1-4) Total

4) Weigh Weig
tage htage
Weight

1. Strong Brand Image 0.25 3 0.75 4 1

2. Experienced workforce 0.25 4 1 2 0.50

3. Quality content 0.25 2 0.50 3 0.75

4. Advanced technology 0.25 1 0.25 1 0.25

SUBTOTAL 1.00 2.50 2.50

Weaknesses

1. Limited market reach 0.15 2 0.30 3 0.45

2. Slow to adapt to new trends 0.15 1 0.15 2 0.30

3. Lack of product diversification 0.15 4 0.60 1 0.15

SUBTOTAL 0.45 1.05 0.9

 Strategy Option# 1 Strategy Option #
2

Key External Factors Weight

Opportunities Rank Total Rank Total

(1-4 Weighta (1-4 Weighta
Weight
ge ge

1. Growing digital market 0.30 1 0.30 2 0.60

2. Increasing mobile use 0.30 3 0.90 1 0.30

3. Diversification 0.30 2 0.60 3 0.90

SUBTOTAL 0.90 1.80 1.80

Threats

1. Intense competition 0.20 3 0.60 2 0.40

2. Technological change 0.20 1 0.20 4 0.80

3. Changing user needs 0.20 2 0.40 1 0.20

SUBTOTAL 0.60 1.20 1.40

The two strategy options we considered in this QSPM table are:

 Increase digital presence

 Diversify revenue streams

Recommendations
Based on the QSPM table provided, the recommendations for Heise Medien would be:

Increase Digital Presence: Heise Medien should focus on increasing its digital presence to take
advantage of the growing digital market and increasing mobile use. This will help them to reach
a wider audience and diversify their revenue streams. They can do this by investing in digital
marketing, improving their website and mobile app, and creating more digital content.
Diversify Revenue Streams: Heise Medien should also focus on diversifying its revenue streams
to reduce its reliance on a single source of income. This can be done by exploring new markets
and products, investing in research and development, and forming strategic partnerships with
other companies.

To address their weaknesses, Heise Medien should:

Expand Market Reach: Heise Medien should focus on expanding its market reach to address its
limited market reach. They can do this by investing in advertising and promotion, expanding
their distribution channels, and exploring new markets.

Adapt to New Trends: Heise Medien should work on adapting to new trends more quickly to
address its weakness of being slow to adapt. This can be done by keeping up-to-date with the
latest trends in their industry, investing in new technology and innovation, and being more
responsive to customer needs.

Diversify Product Offerings: Heise Medien should also focus on diversifying its product
offerings to address its lack of product diversification. This can be done by investing in research
and development to create new products and services, partnering with other companies to offer
complementary products, and exploring new markets for their existing products.

Q#17 You are also advised to provide strategic suggestions based on all analyses of
current Business models/strategies for future Strategy Actions Options Business models

Based on the analysis of the current business model and strategies, as well as the SWOT analysis
and the QSPM, here are some strategic suggestions for future strategic actions and options for
Heise Medien:

 Emphasize digital transformation: As the media industry continues to evolve, it's

important for Heise Medien to stay on top of the latest trends and technologies. This
includes investing in digital transformation initiatives that will help the company stay
competitive and adapt to the changing landscape. This could include developing new
digital products and services, improving the user experience on digital platforms, and
leveraging data and analytics to make better business decisions.
 Continue to focus on product quality and innovation: Heise Medien's success is based on
the quality of its products and its ability to innovate. To maintain its competitive
advantage, the company should continue to invest in research and development, as well
as in the people and processes that drive product quality. This could include developing
new products and services, improving existing ones, and investing in new technologies
and talent.

 Strengthen strategic partnerships: As the media industry becomes more complex and
competitive, it's important for Heise Medien to leverage the expertise and resources of
other industry players. This could include forming strategic partnerships with other media
companies, technology companies, or other relevant organizations. By working together,
these companies can share knowledge, resources, and expertise to drive innovation and
create new opportunities.

 Develop a more diversified revenue stream: To reduce dependence on advertising and

subscription revenue streams, Heise Medien should look for new ways to generate
revenue. This could include developing new products and services that generate revenue
from other sources, such as e-commerce or sponsored content. It could also include
developing new revenue models, such as pay-per-use or membership-based pricing.

 Expand into new markets and customer segments: Heise Medien should explore
opportunities to expand into new markets and customer segments. This could include
targeting new demographics or geographic regions or developing new products and
services that appeal to different audiences. By expanding its customer base, Heise
Medien can increase its revenue potential and reduce its dependence on any one segment
or region.