The National Geographic Society Harvard Case Solution & Analysis

The National Geographic Society (Abridged)

Introduction

National Geographic Society (NGS) was founded in 1888. It is a non-profit organization of science and education. Around 360 million people reach at National Geographic Society every month. NGS has been investing into scientific research and exploration. 9000 scientific researches had been funded by the mission program department. Mission department had also managed 400 scientific field researches. At NGS, major ideas came from mission department. Competitive advantage of National Geographic Society is to relate scientific components with inspiring stories.

Editions in 33 languages have been published by National Geographic Magazine (NGM) and were circulated in more than sixty countries by 2010. English version was also provided for more than 200 countries. Readership rate grew from 30 million to 40 million in 2009. Second largest magazine readership title was held by National Geographic Magazine. National Geographic Magazine’s 20% income was generated from advertisement and 80% was generated from membership. 12 million unique visitors visited NGS website per month.

Issues at National Geographic Society

Fahey has figured out many issues at NGS. He wanted NGS to remain in the industry for the next 110 years. For this purpose, a new mission was developed in 2004. In that mission statement, differentiation was their main focus. NSG’s mission was to discover as well as to inspire people. There was a purpose behind every story telling.

There was no collaborative structure at NSG. Managers wanted to increase sales of their business unit. In addition, there was no coordination among different departments at NGS. Global Media Group (GMG) brought them onto the same page and presented NGS as a global brand. Leaders were judged on the success of their department rather than NGS as a whole.

Printing industry was suffering. Revenues from consumer magazine had dropped from $23 billion in 2004 to $20 billion in 2009. $18 billion revenue from print market was projected for 2013. Another issue was that advertising revenues came down by 30% to 40% in the last few years. Circulation of National Geographic Magazine (NGM) had declined from 7.3 million in 2000 to 5.2 million in 2009. It was also projected that magazine advertising expenditure would not increase from 2008 expenditure level.

Another issue was that NGS did not have enough funds to invest as compared to their competitors. Their competitors like Disney and Viacom had enough resources to invest. Many distribution channels were available for NGS but they did not have enough resources. As a result, NGS was forced to cut prices and fired their employees.

Another issue of NGS was that the attitude of their employees was not as good as it should be. They were not supposed to take risk. There were unclear promotion standards. Staff was highly frustrated at NGS. Another issue was from member’s side. They considered their membership as magazine subscriber instead of society member. Only 23% members had a feeling of belonging.

With the evolution of technology, e-commerce has gained important role in today’s business. Companies that have not changed to current scenario are facing many challenges. E-commerce has changed the way of doing business for many companies. Many companies have been affected from e-commerce for example print media. Print media revenue has downward trend. Companies need to adopt changes in their organization. Digital media also helps companies to engage with their customers. NGS has another issue of not giving incentives to their employees.

E-commerce was one of the options that Fahey was considering. He wanted to hire an e-commerce executive. NGS wanted to increase their revenue that was declining for last few years. New e-commerce executive would report to whom? That’s the question that Fahey had in his mind. Another issue of NGS was that every business unit had its own website. Most of the products were interactive; therefore, NGS just needed to have to a forceful strategy...........................

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In January 2010, John Fahey, President, CEO and Chairman of the Board of Trustees' Executive Committee in Washington, DC, the National Geographic Society (NGS), to decide how best to organize the 121-year mission driven organizations to accelerate the world of digital convergence and reduce sales of the magazine. Historically supporter of evolutionary change, he sees a radical step: creating a senior position responsible for the coordination of e-commerce web offers and advocacy in various divisions of the Company, the transition of NGS many disparate and independent direct mail efforts more comprehensive and strategic e-commerce strategies, and use NGS relationship with its members, is now defined as a magazine subscribers, because the subscription comes with society membership. finishing touches to the post and its reporting mechanisms has led to considerable debate within the organization, and Fahey is torn about how to proceed.
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by David Garvin, Carin-Isabel Knoop Source: Harvard Business School 20 pages. Publication Date: January 3, 2011. Prod. # : 311002-PDF-ENG

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