Nama : Najmalinda Zenitha NIM : 1101002030 Case 2-1 Encyclopedia Britannica Inc. (A) 1.

Describe the strategy and tactics of EBI as of 1990 EBI as of 1990 use the business unit strategy. Business unit strategies deal with how to create and maintain competitive advantage in each of the industries in which a company has chosen to participate. As we know that the mission of EBI is becoming the premier source of knowledge. So, EBI do every way to extended it market. We could see from the tactics that EBI use like door to door, talking with individuals and families, persuading them to invest in EBIs voluminous storehouse of knowledge. These ways successful to make many parents believe that if their children use this book, it will give many advantages. Here, EBI has the competitive advantage. Moreover, EBI always try to make a new thing like entered a new digital age and continue with electronic age. 2. Why was EBIs business model so successful for more than 200 years? Because EBI has a competitive advantage, so they can maintain well what they have accepted. Thus, EBI always make a new innovation. First, hires several notable scientist and scholars. This will make the EBI trustworthy and authoritative like their brand representative. Then EBI try to enter the digital age when it offered an electronic version to business users of Lexis-Nexis, an information retrieval service of Mead Data Central. Then, the company moved further into the electronic age when it published Comptons Encyclopedia on CD. Even they moved door to door, talking with individuals and families, persuading them to invest in EBIs voluminous storehouse of knowledge. In every strategies, EBI has a clearly target, so they can be more focus to reach their target. 3. How vulnerable was this model in the early of 1990s? During the early 1990s, the software giant Microsoft decided to enter the encyclopedia market. Microsoft licensed material from Funk and Wagnalls Encyclopedia which sold its sets in supermarkets, added some public-domain content, and released it on CD-ROM in 1993. Whereas EBI still in their electronic age, even EBI is still moved door to door, talking with individuals and families, persuading them to invest. This is so vulnerable, because if EBI doesnt make a breakthrough , Microso ft will take over their market as a premier source of knowledge. 4. Should EBI respond to Microsofts moves? If so, how should EBI respond? Why? Yes, EBI should respond to Microsoft moves. EBI should do the industry analysis or solely competitor analysis. EBI should think about innovation again so their market still can be reached.

5. What control systems would you recommend for EBI so that the company can understand the potential for transforming its business model? As we know that there are four control systems a. A detector A device that measures what is actually happening in the process being controlled b. An assessor A device that determines the significance of what is actually happening by comparing it with some standard or expectation of what should happen c. An effectors A device (often called feedback) that alters behavior if the assessors indicate the need to do so d. A communication network Devices that transmit information between the detector and the assessors and between the assessors and the effectors EBI should have at least these four elements to understand the potential for transforming its business model. Case 2-2 Encyclopedia Britannica Inc.(B) 1. How effective was EBIs response to the threat of the digital revolution? EBIs response to the digital revolution was not at all effective. EBI responded by: a. selling its Compton unit for $ 57 million b. publishing the entire text of encyclopedia on a 2 CD set and offering 3 yr 2 workstation license to businesses only for $ 2100 c. making no changes in the consumer market. EBI created the encyclopedia CD rom for the consumer market. The company offered the CD free to consumers who bought the print set (which cost Britannica about $200-$300 to produce compared to $1.50 for a CD ROM ) however the company charged $ 995 if the customer wanted just the CD but still annual sales and revenues continues to slide. Britannica was available online to university faculty and students at a price of $2000 per year but the moderate families opted for the less expensive Microsoft CDs. Thus EBIs response was ineffective. 2. What strategy should Jacob safra follow to get EBI back on track? EBI can be brought back on track by reducing the subscription fees. It also needs to change its model and bring about bundle pricing for example offer a lower price when multiple items are bundled together. A subscription base pricing where an annual fee

for unlimited access is charged can also be incorporated. It can also incorporate a strategy where base product is free but advanced products are charged. Time base pricing is another technique that can be incorporated. Also Britannica should go for a site offering selective search engine targeting high quality web sites. All these efforts can bring Britannica back on track. 3. What would be your recommendation for control systems for EBI? EBI should go for value chain analysis so as to analyze cost revenue and assets in each activity which in turn would help to achieve cost cum differentiation strategy. As EBI falls in the category of BCG model EBI should try and increase its market share. Its should use cost reduction techniques such as reducing the cost of advertising, R&D and sales force and it should go for online advertising. EBI should do proper industry analysis as it faces severe threat of substitutes, intense rivalry among the competitors and the threat of new entry.

Case 2-3 Encyclopedia Britannica Inc.(C)

1. Evaluate EBIs Internet Strategy and tactics EBI launched a new internet service at www.britannica.com. The company planned to earn revenues from advertising, including sponsorships for topical features called Spotlights, and a percentage of goods sold through ecommerce. Unlike EBIs subscription service, which tapped the 231-year old archives and was marketed primarily to schools and libraries, the new Web site targeted Internet users more broadly, and included links to more than 150,000 approved Web sites. EBI also began negotiations with partners to furnish information and services to the site such potential partners included Amazon.com and bn.com. Well try to cut through the clutter of the Web, give you information you can depend on, and not force you to become an expert on how to search the Web. Britannicas site wont be elitist but wont be for everybody. Were looking for people with a certain kind of intellectual curiosity.- a spokesperson said. Sales from Britannica Store, the online outlet for EBIs products and tie-ins gave additional revenues. These included CDs, DVDs, reference books, clothing, and a variety of science and nature products chosen for their educational and entertainment value

The general lack of control was caused because they failed to do a adequate control to anticipate what would happened to the website in the event that visitor would amount of the numbers it did. There were two people responsible for this; one was the chief executive Don Yaniass for not controlling and anticipating the critical control points of the company and being too slow to incorporate Britannica into an online world. If he would have done this , perhaps the amount of people visiting the website would have gradually increased allowing the technical supporters of the site to concurrently fix the problems that he site might have had. When they finally did incorporate themselves , it had been so anticipated by people that they all bombarded a site that was not prepare to handle this kind of crowd because when they designed the site there was no precise emphasis on timeliness among other things. Also the chiefs technical officer did not make the proper arrangements to ensure get better grades that the website would be prepared in the event of a situation like this, so he also is to blame. Britannica applied a feedback control as their first attempt at the website failed. They redesigned their website making sure that a crash would not occur again. The website was 2 to 10 times faster than be for which was able to withstand a surge of people and still function properly. They understood the economic feasibility of outsourcing. This would be more costly, but it obviously weighed against the benefits. The new website this time applied a feed forward approach by not only making the website more efficient to the amount of people who were visiting presently, but it made it powerful enough to handle a bigger crowd , like in the case of the Supperball where the site functioned to perfection. The website was timely, accurate, the chief executives accepted that the control was needed integrating the performance with the needs. They did not seem to lack anything.