Successful Strategic Transformations in the Media.

Abstract

Digital technologies have transformed the way many media organizations have conducted their business over the past decade. This transformational media context (Kung, 2008; Doyle, 2013; Oliver 2014) raises a number of important questions for media management researchers. Firstly, how have media firms adapted their strategies resources and capabilities in response to the challenges presented by an increasingly digital environment? Secondly, how have these adaptive practices affected corporate financial performance? This paper will present case study findings on how media firm Pearson Plc successfully adapted their strategies, resources and capabilities in a way that has successfully transformed their businesses to the demands of an increasingly competitive and volatile media environment (Picard, 2002; Oliver, 2012). Hensman, Johnson and Yip (2013) described these types of firms as ‘Successful Strategic Transformers’, that is, those firms that have adapted and transformed their organisations to produce long-term superior financial performance. The research used a multi-method approach of content analysis and quantitative financial analysis. Firstly, content analysis of corporate Annual Accounts & Reports examined the strategies and business models that have enabled these media firms to adapt and transform their business to the demands of the digital environment between 1997 and 2015. The content analysis included examining variables such as: business strategies; managerial cognition; research and development costs; product development; investment in people and processes; acquisition of other companies for their capabilities, customer churn and business models. Secondly, Corporate Financial Analysis will illustrate the impact on corporate performance following the adaptation of strategies and business models over time. This paper will close several gaps in media management literature by presenting the findings of primary research, in the form of a longitudinal study, that is both distinctive and insightful in terms of understanding how media firms have adapted their strategies, resources and capabilities to successfully transform their businesses and produce superior corporate financial performance.