1. Reader’s Digest
Group five

2. Key Term
Mission “we are a global multi-brand and marketing company that educates, entertains and connects audiences around the world. We are dedicated to providing our customers with the inspiration, ideas and tools that simplify and enrich their lives”
-Vision “create the world’s largest multiplatform communities based on branded content”
-Primary activity: produce monthly subscription magazine filled with meaningful stories that are not necessarily news-worthy but memorable
-support activities: maintain a web presence in order to attract younger consumer, control and seek advertisement revenue

3. financial analysis 2007 & 2008 liquidity and solvency ratios of RDA
Current ratio = current assets/current liabilities
2007: : .83
Quick ratio = (current assets - inventory)/current liabilities
2007: : .63
Debt-to-equity ratio = total debt/total equity
2007: : 8.3
Debt-to-assets ratio = total debt/total assets
2007: : .53

4. external analysis Bargaining power of suppliers: low
Intensity of rivalry among competitors in the industry: high
Threat of new entrants: high
Bargaining power of buyers: high
Threat of substitute products and services: high
Bargaining power of suppliers: low
Bargaining power of suppliers: low
Low uniqueness in the services
Threat of Substitute Products: high
Bargaining newer of buyers: high
Low switching cost
High number of buyers, but they are concentrated into very few categories
Big importance of the each buyer categories
Threat of new entrants: high
Costs to enter are little on time and money
Little protection for key technologies
Low product differentiation
Intensity of rivalry among competitors in the industry: high
Numerous of equally balanced competitors
Slow industry growth
Lack of differentiation or switching costs

5. External analysis Stage of industry Decline stage
no assurances that Reader’s Digest will generate sufficient cash flows from operations to fund day-to-day
may result in bankruptcy or liquidation

6. External analysis Demographic Socioculture Political/Legal
Aging population
53 median
Unable to increase advertising revenue: not reached
Socioculture
Greater concern for health and diet
Greater concern for the environment
Political/Legal
Committee of Advertising Code
UK dealing with abusing advertising

7. External analysis Technological Economic Global
Reader’s Digest Korea
Technological
Emergence of internet technology
Wireless technology
Economic
Print is “dead”
Global
Emergence in economies all over the world
Philippines, Malaysia, Canada, Argentina, etc..

8. VRIO Analysis Value: brand value, readers’ foundation
Rarity: one of the most popular magazine around the world
Imitation: long history
Organization: how to organize reader’s digest’s advantages?

9. SWOT Analysis SWOT Best-Selling, Worldwide, Readable, fiction Strength
Other magazines, internet
Weakness
Well developed distribution network, vast legacy, broader base of readers
Opportunity
The popularity is declining, more leisure options, regional language magazines
Threats

10. Reader’s Digest VS competitors
Reader’s Digest strategy
Divesting business
Reconfiguring the RDA web presence
Redesigning the flagship magazine
Continuing global expansion
Launch new magazines
Launch growth initiatives, reduce costs and transform company culture worked in opposite ways with reduced consumer spending and a drop in magazine advertising worldwide
Customer-centered approach
Less advertising money for Reader’s Digest
Horizontal diversification
Related business
Geographic diversification

11. Reader’s Digest VS competitors

12. Firm Analysis Divestitures Sold QSP, Inc. Fundraising business
Taste of Home Entertaining
Books are Fun
Gareth Stevens
World Almanac Education Library
Joint ventures
ChangeOne, online weight loss program
Everyday with Rachel Ray
Acquisitions
In 2000, Reiman Publications
Reduced sweepstakes and magazine sales
Allrecipes.com
Music and Videos
Readers Digest Int.
Food and Gift
Business Growth Rate
Reader’s Digest US
Relative position (market share)

13. Strategic Recommendations
Minimize Reader’s Digest US, Focus on Reader’s Digest International
Increase web presence
PDF version of magazine
Interactive web activities for younger generations
Separate the variety of subjects in Reader’s Digest to different magazine
Health and wellness
Food and entertainment
Personal stories
Increase revenue through advertising is a must

14. Thank you for your patience!
Group five