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The Crisis at Encyclopeadia Britannica

The Crisis at Encyclopeadia Britannica. The timeline of key events. 1983 EB develops sales response to user queries about electronic encyclopedia 1985 Microsoft approaches EB for partnership and is turned down 1989 Compton CD unveiled 1991 Peak EB sales 1993 Encarta rolled out

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The Crisis at Encyclopeadia Britannica

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  1. The Crisis at Encyclopeadia Britannica

  2. The timeline of key events • 1983 EB develops sales response to user queries about electronic encyclopedia • 1985 Microsoft approaches EB for partnership and is turned down • 1989 Compton CD unveiled • 1991 Peak EB sales • 1993 Encarta rolled out • 1994 EB rolls out eb.com for libraries • 1994 EB on CD-ROM rolled out • 1996 EB sells to new owners

  3. The sales organization • Commissioned sales • Only on leads • Shared revenues with managers/sales people • What type of person was good in this role? • Outgoing • Believed in product. • What else? • What does one say to customers who inquire about electronic encyclopedia?

  4. Talking points for sales • Technology = complex & useful things that are not possible to deliver. • Also note the use of the word “vs” in the title. Why are EB & the PC in a contest?

  5. Skunk works • A small technical project for a new product • Usually important to the future of the firm. • Organizationally distant from core operations of firm. • Often hidden from most employees. • Sometimes protected by administrators. • The CD-ROM encyclopedia at MS • The CD-ROM at EB • The Britannica Online

  6. Does the encyclopedia on a CD enhance or destroy EB knowledge? • Component knowledge • Layout and framing • Text • Sounds, links. • What else? • Architectural knowledge • Distribution. • Reputation. • Relationships w/authors. • Upgrade cycles. • What else?

  7. Was management myopic? • Did management see something coming? • Turning down MS in ‘85? • Compton CD ROM? • EB online? • Develops good technology, but the rolling out of technology presents challenges. Why? • Why was Encarta successful in market? • Long development w/few resources. • Selling text? • Selling splashy graphics? • Distribution, installed base? • What else?

  8. Aligning for one market, not necessarily another • How did Britannica’s alignment w/one mkt oppt’y help/hinder its transition into next one? • Brand. • Text. • Attitudes. • Feeding a sales force. • Short term focus on revenue. • Upper management priorities. • What else?

  9. Factors that shape crises • Attitudes and belief systems interfere w/formulating a foresighted plan or strategic response • Often somebody sees what is coming, but few big companies have monolithic vision. Disputes interfere. • Cooperative deals b/w leading incumbents & those with new technologies become difficult b/c no agreement about the future, so not easy to reach a deal. • Delay taking action to protect existing assets/operations. • When are events more severe for incumbent? • Assets do not retain their value moving from old to new… • New market takes long time to adjust… • Entrant are moving quickly… • More than one entrant moving in a “wave” of entry. • Much tougher when strategic priority in one market conflicts with that in another…

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