Encyclopedia Britannica, Inc. (A)
• In 1768 Colin Macfarquhar and Andrew Bell publish what they called a “Dictionary of Arts and Sciences” - Encyclopedia Britannica, Inc (EBI). Its mission was ‘ serving society’s need to know’. By 1815, when the fifth edition was published, the set had ballooned to 20 volumes from earlier 3 volumes.
• Throughout the 19th century and into the 20th, when the company was purchased by Americans and moved to the U.S., EBI continued to enhance its reputation as the premier source of knowledge. The company recruited notable scientists and scholars, including Thomas Malthus, Sigmund Freud, and Marie Curie, to contribute. It expounded upon such cutting-edge topics as taboos, anarchism, ether, and Darwin’s theory of evolution. As demand mushroomed, it hired a permanent editorial staff and began printing—and updating—annually.
• In 1943, William Benton extended the company’s global reach and expanded its product line, acquiring in the process Compton’s Encyclopedia and dictionary publisher G. & C. Merriam.
• In 1981, EBI entered the digital age, it offered an electronic version to business users of Lexis-Nexis
• In 1989, the company moved further into the electronic age when it published Compton’s Encyclopedia on CD and the target audience was schools and libraries. Still in the same year, the company boasted 2,300 sales.
• EBI moved door to door, talking with individuals and families.
• By 1990, the company’s sales revenues hit a new high—$650 million, and the 32-volume set remained the standard to which other encyclopedias around the world aspired.
• During the early 1990’s, the software giant Microsoft decided to enter the encyclopedia market. Microsoft released it on CD-ROM in 1993, the product, called Encarta.
• Many computer manufacturers simply gave it to buyers of their computers as it was sold at less than $100.
Discussion Questions:
1. Describe the strategy and tactics of EBI as of 1990?
-EBI was formed in Scotland during “information age”. EBI continued to enhance its reputation as the premier source of knowledge. The company recruited notable scientists and scholars. EBI offered electronic or digital version of the product only to business users and refuse to offer its products to non-business users such as schools, libraries, and the users with individual interests. But later EBI expanded its market share by making schools and libraries as the main target by offering Compton’s Encyclopedia on CD. EBI using marketing strategies from door to door (door to door), talk to the whole person or family, then attempt to influence or encourage them to invest in the Encyclopedia Britannica which is the storehouse of all science. The implication can be seen in the company’s sales revenues that reach $650 millions.
2. Why was EBI’s business model so successful for more than 200 years?
-From the EBI’s history, we can see that EBI created solution by knowing the market’s needs. Start with the ‘information age’ EBI understand the insight that people will soon need information, so EBI came up to provide it. Encyclopedia is an expensive product, not all people can buy it. EBI understood this situation and soon offered a weekly installment to ease the consumers. After all, EBI did it very well by always watching the situations and conditions that happen in the market and EBI always looking for some ways to give the best solution.
3. How vulnerable was this model in the early 1990’s?
-The product of EBI is encyclopedia in book form. Of course this form has two main weaknesses. Firstly, it is hard to edit the information in the book if there is a mistake(s). Secondly, the information never stop, there will be so many new information originating. And EBI doesn’t really keep attention on this, and this vulnerability attacked soon by Microsoft with its CD-ROM encyclopedia that easy to edit and add and was cheaper too.
4. Should EBI respond to Microsoft’s moves? If so, how should EBI respond? Why?
-Seeing the lower price and the ease of reaching the product that provide by Microsoft’s Encarta, EBI should respond to Microsoft’s moves. If EBI don’t do that, maybe EBI will soon loss its customers. The easy way to respond Microsoft is by releasing a CD-Britannica, but still EBI has to maintain on its encyclopedia books because not everyone able to buy a computer too at that time. After all, research the market (consumers and competitor’s moves) and knows the potential matter inside the company itself are important things to do, so EBI can make the right strategy to defend its position in the market.
5. What control systems would you recommended for EBI so that the company can understand the potential for transforming its business model?
-A control system is way(s) that is created to control the activities of an organization. Before EBI control the system, firstly EBI has to make the strategy formulation in transforming its business model. To make the right strategy formulation, EBI ought to see the internal and external factors faced by EBI at that time and EBI should forecast every possibilities that would happen in the future for each strategy that EBI’s going to take. After the strategy formulations created, EBI should make a right and tight system to control the implementation of those strategies. 