MÄLARDALENS Högskola
Department of Business Studies and Informatics
EX0010, Scientific Method and Undergraduate Thesis in Business Administration

Strategy on Multiple Channels
Customer Relationships as a driving force for a multi-channel strategy: 
a view on today and tomorrow at Vestmanlands Läns Tiding

by

Manja Ledderhos

Table of Content

1. Introduction ... 1
1.1. Background ... 1
1.2. Problem Area ... 2
1.3. An option to face the Problem of Uncertainty ... 3
1.4. Company Vestmanland Läns Tidning, Västerås (VLT) ... 3
1.5. Reasons for the Selection of the Company ... 4
1.6. Organisation of the chapters ... 4
1.7. Aim of the Paper ... 5
1.8. Research Questions ... 5
1.9. Delimitation ... 5
1.10. Target group ... 5
1.11. Disposition ... 6

2. Methodology ... 7
2.1. Systematic Research ... 7
2.2. Scientific and Methodological Approaches ... 7
2.3. Induction / Deduction / Abduction ... 8
2.4. Data collection ... 8
2.4.1. Secondary Data ... 9
2.4.2. Primary Data ... 9
2.4.2.1. Surveys and questionnaires ... 9
2.4.2.2. Interviews ... 9
2.5. Qualitative method ... 10
2.6. Validity and Reliability ... 11
2.6.1. Validity ... 11
2.6.2. Reliability ... 12

3. Description of VLT ... 13
3.1. Company information ... 13
3.2. Company situation ... 13
3.3. Company strategy ... 14

4. Guideline through the analytical chapters ... 15
4.1. Connecting links between chosen theories ... 15
4.2. Organization of the analytical chapters ... 16

5. Analysis of the RM at VLT ... 17
5.1. Introduction ... 17
5.2. External RM ... 18
5.2.1. The Augmented Service Offering ... 18
5.2.1.1. Theory ... 18
5.2.1.2. VLT and the Augmented Service Offering ... 19
5.2.2. Adaptation - following customers′ requests ... 20
5.2.2.1. Theory ... 20
5.2.2.2. Adaptation at VLT ... 21
5.2.3. Branding ... 21
5.2.3.1. Theory ... 21
5.2.3.2. Branding at VLT ... 21
5.2.4. CRM: a RM Tool ... 22
5.2.4.1. Theory ... 22
5.2.4.2. CRM at VLT ... 22
5.3. Internal Marketing ... 23
5.3.1. Theoretical Aspects ... 23
5.3.2. Internal Marketing at VLT ... 24
5.4. Impact of Information Technology on RM ... 24
5.4.1. General Aspects ... 24
5.4.2. Impact at the Newspaper Business and thus at VLT ... 25
5.5. Summary ... 26

6. Multi-channel Strategy ... 27
6.1. Lead In ... 27
6.2. Change to a Multi - Channel Strategy ... 27
6.2.1. Strategic Change ... 27
6.2.1.1. Theory ... 27
6.2.1.2. Application ... 28
6.2.2. Internal Structure ... 28
6.2.2.1. Theory ... 28
6.2.2.2. Application ... 29
6.2.3. Multiple Channels ... 30
6.2.3.1. Theory ... 30
6.2.3.2. Application ... 30
6.3. Summary ... 31

7. Recommendations ... 32
7.1. Adaptations ... 32
7.2. Customisation ... 32
7.3. Databases ... 33
7.4. Layout of the website ... 34
7.5. Profit on multi-channels ... 34
7.6. General Recommendation for the management group ... 35

8. Scenario Technique as a strategic tool for VLT ... 36
8.1. Basics for the tool: Scenario Technique ... 36
8.1.1. History ... 36
8.1.2. Scenarios - definitions and goals ... 36
8.2. Method to create scenarios ... 38
8.2.1. Preparation ... 38
8.2.2. The funnel Model ... 39
8.3. Application of the Scenario -Technique at VLT ... 39
8.3.1. Analysis of the task ... 39
8.3.1.1. Theory to the technique ... 39
8.3.1.2. Practical Application at the Newspaper Company VLT ... 39
8.3.2. Analysis of the Environment ... 40
8.3.2.1. Theoretical Aspects ... 40
8.3.2.2. Practical Application at the Newspaper Company VLT ... 40
8.3.3. Projections ... 41
8.3.3.1. Theoretical Aspects ... 41
8.3.3.2. Practical Application at the Newspaper Company VLT ... 41
8.3.4. Combining Alternatives and Creating Scenarios ... 45
8.3.4.1. Theoretical Aspects ... 45
8.3.4.2. Practical Application at the Newspaper Company VLT ... 45
8.3.5. Analysis of consequences and scenario transfer ... 48
8.3.5.1. Theoretical approach ... 48
8.3.5.2. Practical Application at the Newspaper Company VLT ... 49
8.3.6. Analysis of disturbing events ... 50

9. Conclusion ... 51
9.1. Sum up ... 51
9.2. Personal opinions ... 51

List of Graphs ... 53
List of Tables ... 53
List of Abbreviations ... 53
Reference List: Books and Articles ... 54
Reference List: Internet ... 57
Exhibit 1 Summary Interview 1 ... I
Exhibit 2 Summary Interview 2 ... III
Exhibit 3 Summary Interview 3 ... IX
Exhibit 4 Questionnaire for the Management Group ... XIII
Exhibit 5 Evaluation of information channels media ... XX

1. Introduction
In this chapter I would like to present the background of my thesis. Moreover Idescribe the problem area, introduce a tool for the future analysis, describe the selection of the subject and highlight the aim and the research questions of my work. Finally, delimitations and the target group as well as the disposition help with an understanding of the structure and possible application of this paper.

1.1. Background
In today’s world, companies are part of a complex environment, and to cope with uncertainty is the main problem of strategic management.¹ At the latest with the change from seller to buyer market in the 70s, companies cannot see themselves apart from their surroundings, and no company exists in isolation. A world has emerged in which converging technologies and markets, swirling competition, and innovation can outdate established industry structures overnight.²

In the past, the world of business was neatly divided into primary, secondary and third sectors while today, the third sector cannot be seen apart from the others. Service becomes more important as time perceives.³ This orientation leads companies into the understanding that interdependencies with their customers determine the organisation, in which resources, activities and actors are linked to each other.⁴ The focus on customers grants at least some stability in the fast changing environment of companies.⁵ However, the customers react to environmental changes and put challenging demands on their suppliers. Especially new information technology is a driving force for relationships⁶ but asks for the demanding task to contribute information on multiple channels at the same time. The Boston Consulting Group (BCG) notes, “the online channel has a profound influence on consumer’s behaviour”.⁷ Especially the internet has revolutionized customer relationships and “the revolution is far from over”⁸.

Businesses have become more multifaceted through the developments in the information and communications technology – the internet, mobility and multimedia.⁹ Many authors see a digital revolution taking place today¹⁰ and stress that this is a driving force behind many changes in companies.¹¹ Businesses cannot afford to ignore digital influences and have to make it a leading priority during the next half-decade.¹² Therefore the terminology “Multichannel” seems to be “one of the hottest topics in Europe” where different alternatives of channels should lead to a cohesive whole.¹³

When the “digital revolution” is considered in the strategy of companies, planning tools of the past decades seem not sufficient, and even misleading. While changes in the technology are certain, their exact form is unclear.¹⁴ In those dynamic conditions, managers need to consider the environment of the future, not just of the past¹⁵ and the emphasis for planners should change from forecasting to foresight.¹⁶

1.2. Problem Area
The media industry is one of those that was most affected by technological innovation in the 90th.¹⁷ Especially for the Newspaper companies around the world, the “digital revolution” has an important impact on their strategy. Though they were pioneers in cyberspace¹⁸ - 5000 newspapers had an internet edition in February 2002 worldwide¹⁹ - it is still not clear, what impact technology will have on the traditional channels and especially on the newspapers.

In the past, newspaper companies have been able to adjust to new media. Alves refers to this as “mediamorphosis” and explains that newspapers have learned to adapt and survive new technologies in the past.²⁰ Ippen agrees and points out that bad prognosis for the future are nothing new to newspapers and that when radio and TV gained popularity, it was falsely proclaimed the end of newspapers, as well.²¹ Maybe panic concerning the new media is a false alarm and the digital revolution is an opportunity for traditional media.

However, it can be argued that the changes in the digital revolution can only be rivalled by Gutenberg’s invention of the printing press in the 15th century²² when the impact is evaluated closer. An integration of different channels seems possible and the question why traditional media is separated²³ might be reasonable. Why should newspaper not come “in a magical, paper-thin, flexible, waterproof, wireless, lightweight bright display, Negroponte, outspoken director of MIT’s Media Lap, asks.²⁴ In his opinion “early in the next millennium mass media will be redefined by systems for transmitting and receiving personalized information and entertainment. The digital planet will look and feel like the head of a pin.”²⁵. Especially the declining readership 26 and the increasing number of customers that substitute newspapers with the internet are an alarming signal to many news-companies.

[...]

1 Johnson / Scholes, p. 82

2 Goshal / Batlett / Moran, p. 13

3 Norman / Ramirez, p. 9

4 Ford (1998), p. 76-79

5 Donaldson, p. 10

6 ibid, p. 42

7 http://www.bcg.com/media_center/media_press_release_subpage50.asp. (2003-04-27)

8 http://www.wincor-nixdorf.com/static/onlinereport_eng/report02_02/title.html (2003-04-27)

9 Johnson / Scholes, p. 445

10 Weil / Vitale, p.1; Johnson / Scholes, 10; Slywotzky / Morrison, p.4

11 Johnson / Scholes, p. 10

12 Slywotzky / Morrison, p.4

13 Schultz, p. 10

14 Schwarz, p.5

15 Johnson / Scholes, p. 83

16 Ringland, p. 46

17 Saksena / Hollfield, p. 76

18 Alves, p. 65

19 http://www.editorandpublisher.com/editorandpublisher/business_resources/mediastats.jsp (2003-04-27)

20 Alves, p. 65

21 Ippen in http://www.bdzv.de/veranstaltungen/archiv/2001/reden/ippen.htm (2003-04-27)

22 Alves, p.69

23 Nielson in http://www.useit.com/alertbox/980823.html (2003-04-27)

24 Negroponte, p. 152

25 Ringland, p. 41

26 Molloy in http://www.newsandtech.com/issues/2002/11-02/pt/ptcontents.htm (2003-04-27)

27 Ringland, p. 45