Roberts Media PLC Question
Q4) Using all the information available to you, complete the following tasks. • Analyse the key arguments for and against Harry Gardner’s proposal. • Make a justified recommendation on whether you think that the Directors of Roberts Media plc should accept Harry Gardner’s proposal. (34 marks)
Harrys proposal to move to a digital only market has many advantages and disadvantages. Firstly the market RM are currently operating in is dealing which lead to them seeing profits fall by 12% last year. If these trends continue RM will its eventually struggle to operate and may even begin to make a loss. The new market Harry is suggesting is in fact growing rapidly with a predicted rise in digital subscriptions from 3-10million in the next 2 years (333%) as consumers are switching from print magazines to digital due to the growth of tablets,phones and laptops. The company has also carried out some market research on a small sample group of 300 women. Their research showed that 60% (180) of the group would be willing to pay at least £5 for the magazine monthly which would hopefully indicate larger revenues being generated by the company especially if the number of subscribers increases inline with the market growth trends. If RM make the change early they will hopefully be able to benefit from first mover advantage where by the company will be able to generate a large market share in the growing market due to being one of the first companies operating in it. This will allow them to attract more customers and advertisers which will further increase returns.
Harry is also changing the content of the magazine slightly making it more appealing to a wider range of women meaning the potential customer base is larger. He also has previous experience in these area’s such as celebrity gossip which may benefit the company due to potential contacts and strategies which he knows will work well.
Although Harry has experience of this market the rest of the companies employees
Harrys proposal to move to a digital only market has many advantages and disadvantages. Firstly the market RM are currently operating in is dealing which lead to them seeing profits fall by 12% last year. If these trends continue RM will its eventually struggle to operate and may even begin to make a loss. The new market Harry is suggesting is in fact growing rapidly with a predicted rise in digital subscriptions from 3-10million in the next 2 years (333%) as consumers are switching from print magazines to digital due to the growth of tablets,phones and laptops. The company has also carried out some market research on a small sample group of 300 women. Their research showed that 60% (180) of the group would be willing to pay at least £5 for the magazine monthly which would hopefully indicate larger revenues being generated by the company especially if the number of subscribers increases inline with the market growth trends. If RM make the change early they will hopefully be able to benefit from first mover advantage where by the company will be able to generate a large market share in the growing market due to being one of the first companies operating in it. This will allow them to attract more customers and advertisers which will further increase returns.
Harry is also changing the content of the magazine slightly making it more appealing to a wider range of women meaning the potential customer base is larger. He also has previous experience in these area’s such as celebrity gossip which may benefit the company due to potential contacts and strategies which he knows will work well.
Although Harry has experience of this market the rest of the companies employees