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

Bachelor Thesis, 2003

82 Pages, Grade: A (ECTS Credits) , VG (Schwed.)


Table of Content

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

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

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

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

5. Analysis of the RM at VLT
5.1. Introduction
5.2. External RM
5.2.1. The Augmented Service Offering Theory VLT and the Augmented Service Offering
5.2.2. Adaptation - following customers’ requests Theory Adaptation at VLT
5.2.3. Branding Theory Branding at VLT
5.2.4. CRM: a RM Tool Theory CRM at VLT
5.3. Internal Marketing
5.3.1. Theoretical Aspects
5.3.2. Internal Marketing at VLT
5.4. Impact of Information Technology on RM
5.4.1. General Aspects
5.4.2. Impact at the Newspaper Business and thus at VLT
5.5. Summary

6. Multi-channel Strategy
6.1. Lead In
6.2. Change to a Multi – Channel Strategy
6.2.1. Strategic Change Theory Application
6.2.2. Internal Structure Theory Application
6.2.3. Multiple Channels Theory Application
6.3. Summary

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

8. Scenario Technique as a strategic tool for VLT
8.1. Basics for the tool: Scenario Technique
8.1.1. History
8.1.2. Scenarios – definitions and goals
8.2. Method to create scenarios
8.2.1. Preparation
8.2.2. The funnel Model
8.3. Application of the Scenario -Technique at VLT
8.3.1. Analysis of the task Theory to the technique Practical Application at the Newspaper Company VLT
8.3.2. Analysis of the Environment Theoretical Aspects Practical Application at the Newspaper Company VLT
8.3.3. Projections Theoretical Aspects Practical Application at the Newspaper Company VLT
8.3.4. Combining Alternatives and Creating Scenarios Theoretical Aspects Practical Application at the Newspaper Company VLT
8.3.5. Analysis of consequences and scenario transfer Theoretical approach Practical Application at the Newspaper Company VLT
8.3.6. Analysis of disturbing events

9. Conclusion
9.1. Sum up
9.2. Personal opinions

List of Graphs

List of Tables

List of Abbreviations

Reference List: Books and Articles

Reference List: Internet

Exhibit 1 Summary Interview 1

Exhibit 2 Summary Interview 2

Exhibit 3 Summary Interview 3

Exhibit 4 Questionnaire for the Management Group

Exhibit 5 Evaluation of information channels media

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 relationships[6] 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 today[10] 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 “Multi-channel” 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 past[15] 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 cyberspace[18] - 5000 newspapers had an internet edition in February 2002 worldwide[19] - 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 century[22] when the impact is evaluated closer. An integration of different channels seems possible and the question why traditional media is separated[23] 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.

The strategies of traditional newspaper companies change and the opportunities and threats mentioned above, play an important role. The moves to the Information Society start to change the patterns of work. With the increased power of the individual, companies need to act according to the demands of the customers.[27] The New York Times Publisher Arthur Sulzberger, Jr. notes that “newspapers cannot be defined by the second word – paper; they’ve got to be defined by the first – news” where multiple channels need to be integrated.[28] The task is not easy and even problematic but seems necessary to gain from the developments of the environment today.

1.3. An option to face the Problem of Uncertainty

The classical school of strategy suggest a rational approach towards strategy with tools such as the break-even analysis or sensitivity analysis to structure uncertainty and plan the future.[29] However, newspaper companies cannot predict, how the future will develop on multiple channels and need other tools to plan their strategy.

The Scenario Technique is a method to order hypothesis that managers make of the future and can be suggested as a useful tool to work with the future. Scenarios deal with two worlds: the world of facts and the world of perceptions inside the heads of decision makers”[30]. It shows a consistent view of what the future might turn out to be.[31] Barry Minkin says that

“an epic transformation of my worlds has already begun. By 2005, Iwill be in the middle of a number of transitions of which the outcomes are highly uncertain…. The emergence of information economies raises fundamental questions about economic activity, growth and wealth.”[32]

Since sharing and debating of scenarios improves organisational learning by making manager more perceptive about the forces in the business environment[33], the technique is appropriate to analyse changes in the world of technology and to be ready for implementing them.

Yet another advantage of the scenario technique is that the strategy of today can be critically observed. This is true for every company but especially valid for newspaper companies that face especially high uncertainties through their dependency on technology.

1.4. Company Vestmanland Läns Tidning, Västerås (VLT)

VLT is the leading local newspaper company of Vestmanland, a region in Sweden. Ihave contacted this company because they are greatly influenced by the changes of the “digital” revolution.

VLT works with the multi – channel approach. Today, they are serving their customers already on two channels – the internet and the traditional paper edition of the newspaper. Their internet channel has steadily improved as the company constantly adds knowledge in the new technology. Aware of the opportunities and threats of the environment, they are still in the process of identifying new mediums such as mobile phones to reach the customers with their news.

Strategic change is not an easy task and will be interesting to evaluate with this company. Parts of the changes at VLT have already taken place when the internet grew in importance. The developments go on and future flexibility and willingness for change need to be motivated. This is possible through the scenario-technique the way it is mentioned above.

1.5. Reasons for the Selection of the Company

We chose the company VLT because they are a company that is highly influenced by technological change. Through the many developments concerning multiple channels in the last few years, the difficulties of implementation have already shown and will be evident in the future.

The company is open to recommendations and searches for ways to improve their strategy. They made clear that my research is of value to them. The assurance of assistance through interviews, discussions and a survey with the management group influenced my decision.

VLT can serve as an example for many other local companies worldwide. Again, this makes research in the area of the multi-channel strategy interesting, applicable and may also serve as a help to start research for other newspaper companies.

1.6. Organisation of the chapters

The paper has a relatively complex structure. After the methodology, it starts with a description of the company VLT. Than, a more detailed guideline for the analytical part is given.

The present situation of the multi-channel strategy at VLT is emphasised upon and stands in the centre of the analysis of VLT today. The reasons for this focus are found with the importance of customers - an issue that is focused on first in the analysis with the RM approach since it is a prerequisite of the multi-channel strategy. Technology has an influence on both RM and Multi-channel strategy and is highlighted in each of the two chapters. Precise short term recommendations are drawn from the argumentation of today’s situation.

Through the scenario-technique, covered in the last analytical chapter, it becomes possible to look at opportunities in the remote future and this will lead to additional recommendations that are more general.

1.7. Aim of the Paper

The aim of the paper is to analyse, in which scientific context a newspaper company like VLT can fulfil the demands of customers. Challenges to implement those demands on multiple channels will be shown and an analysis of future options with the tool of the scenario techniques will be analysed. Another goal is to find managerial implementation valid for the company VLT to satisfy customers.

1.8. Research Questions

The following questions will be covered in my paper:

1. In how far does VLT follow the RM Approach?
2. Is today’s Multi-Channel Approach of VLT appropriate and what are the actions that VLT should take on to improve it now ?
3. Which actions are necessary for VLT according to the results from the application of the Scenario Technique, to fulfil in the demands that customers place on them in the remote future?

1.9. Delimitation

The topic would also make it reasonable to look at supplier relationships and evaluate chances of the network approach connected to this in order to integrate multiple channels. Idecided to delimitate this because the subject, stated in the aim is already complex.

It is not a goal of the paper to question the validity of RM in general. This is true because RM is broadly accepted in the economy and academic discussion. Also, multi-channels as tools of RM are discussed because the company of my choice uses it already. Whether this approach should be furthered will be shown through the future evaluation.

Our work can be applied to different companies especially in the media industry. Since Iare focussing on technological influences on the distribution of products to the customer, the paper is not as applicable for companies that are less dependent on technological change than the media industry is.

1.10. Target group

The target group of my thesis is mainly the management group at VLT since they make decisions according to subjects that Ievaluate. Also, Ihope that other newspaper companies will be encouraged to look closer at their strategy after reading my paper. Last, business students might use my analysis as bases for new research because technology is ever changing and leaves always room for additional research.

1.11. Disposition

The first chapter comes to an end now and contains the background and the problem area concerning the movement of digital technology, shows connection to newspaper companies and introduces a tool for evaluating future events. my company choice was motivated. Furthermore selection of the subject, aim, research questions, delimitations and target group are part of the chapter

The second chapter, Methodology, describes the methodological approaches, and data collection used for my paper. Iwill explain why Ipreferred certain methods.

The third chapter will introduce my target company VLT. Iwill describe the company, strategy and situation today in order to make closer analysis possible.

The fourth chapter contains a guideline that explains the order and coherence of the analytical chapters five, six and eight.

The fifth chapter explains the importance to satisfy the customer. Recent movements especially concerning technological changes will be evaluated to reason, why a focus on technology is important for newspaper companies. The idea of RM will be covered and one tool of Customer Relationship Management (CRM), namely databases will be mentioned. Also, Iwill analyse, how VLT fulfils the high demands of RM.

The sixth chapter finally deals with the multi-channel strategy. Interesting subjects will be the implementation of change that a traditional newspaper company has to go through and the implications that are necessary in organization and leadership to integrate multiple channels. The application at VLT will also bring us back to the subject of the third chapter when Iexplain how VLT already integrates the customer on multiple channels.

The seventh chapter gives recommendations that result from the analysis of chapter five and six. They are important in the short run and result from my perception of today’s situation at VLT.

The eighth chapter combines ideas of the previous chapters and projects it into the future. Here, the multi-channel strategy of VLT will be covered and different stories will be told concerning the future of VLT as a newspaper company. The scenario technique will serve as a method and frame of those ideas. Key elements that need special attention in the future will be sorted out. In the scenario transfer, recommendations for the long run are given which should encourage further discussion about the subject of the digital influence on the traditional newspaper company VLT, Västerås.

2. Methodology

In this chapter, the authors describe the procedures of the research process used in the study.

2.1. Systematic Research

The increasingly complex[34] nature of business operations and decision making demands a systematic and thoughtful approach. Managerial decision making or problem solving should lead to better results than those decisions made exclusively through intuition or personal likes and dislikes. Managers must have the capability to analyse their situations and to use investigative approaches of decision making and problem solving - and this is true for us as researchers as well.

First actors need to decide what they want to achieve. This is followed by collecting relevant information and facts that can help in achieving the first objective. The information collected needs to be analysed and put into a structure, which helps to achieve a purpose or initiate different actions. This process (deciding what to do, collecting information, discarding irrelevant information, analysing the relevant information and arriving at a conclusion/decision in a systematic procedure) is useful for cumulative knowledge.

The purposes of doing research are multiple, e.g. to describe, explain, understand, foresee, criticize and/or analyse existing knowledge or phenomena in social sciences. The job of a researcher is often that of an observer and each observation is prone to error: therefore, Igo out and research to find a better “truth”.

Research is done to achieve goals, relies on specific methods, is done systematically and involves scientific methods. The conclusions drawn from research lead to new theories and beliefs. In business research the purpose is to understand how and why things happen. The research corrects my misbelieves and provides new perspectives.

2.2. Scientific and Methodological Approaches

In this paper the authors are going to take a phenomenological approach because they use a descriptive methodology for the research design. This is true because the purpose of this paper is to describe and interpret the management of RM and of the Multi-Channel Strategy at a newspaper company.

The choice of the research design is the overall strategic choice, made with the purpose of coming up with an approach that allows for answering the research problem in the best possible way. This choice influences the subsequent research activities; decisions about data collection ways of collecting them. The descriptive research deals with the classification of concepts and produces information. Thus, key characteristics of a descriptive research are structure, precise rules and procedures.[35]

A phenomenological approach implies that the researcher is not independent of what is being researched but is an intrinsic part of it. Observations are part of the process that brings forth the manifestation of what Iare observing. The phenomenology understands that the world is not composed of a single objective reality. In his eyes, it is rather composed of a series of multiple realities, each of which should be understood and taken into account. It declines to explain the world; it wants to be merely a description of actual experience.[36]

2.3. Induction / Deduction / Abduction

In this paper the authors have used abduction and deduction at the beginning of the research process. Literature was researched to achieve and understand about RM, Multi-Channel Strategy and the Scenario Technique. The theoretical framework was than structured according to patterns found in the literature. Drawing future scenarios to build the right strategy for VLT and find recommendations used induction.

In deduction conclusions are drawn through logical reasoning and consequences of a theory are observed. It involves the gathering of facts to confirm or disprove hypothesized relationships among variables that have been deduced from propositions or earlier theories. Induction is the process of observing facts to generate a theory, which leads from assumptions to conclusions. The observed facts are utilized to generate a theory, which is consistent with these facts.[37]

The difference is that by induction facts acquired through observations lead to theories and hypothesis, while deduction (logical reasoning) accepts or rejects the hypotheses. This acceptance and rejection then helps us to explain or predict. Both approaches demand to going beyond statistical significance to systematic theory or study.[38]

Both deduction and induction have different merits and shortcomings and it is therefore recommended to apply abduction, deduction and induction altogether in order to achieve a comprehensive inquiry. Abduction and deduction are the conceptual understanding of a phenomenon, and induction is the quantitative verification. At the stage of abduction, the goal is to explore data, find out a pattern, and suggest a plausible hypothesis based upon other plausible premises. Induction on the other hand is the approximation towards the truth in order to fix my beliefs for further inquiry. In short, abduction creates, deduction explicates, and induction verifies.[39]

2.4. Data collection

In a research two types of data can be used: Primary data, original information gathered throughout observations or interviews for the specific research and secondary data which was collected by others for other objectives.[40]

2.4.1. Secondary Data

The researchers had access to a survey completed in April 2003 about the customer perceptions of the company VLT. The survey was on behalf of VLT and a high number of 6712 customers took part. This survey is applicable to this paper because it covers among other things also the demands of customers and how they use different channels today in order to contact the company. Though the researchers were able to look at the detailed evaluation of the survey, the data is confidential and cannot be presented in this paper. However, some general comments can be made to prove certain points. Yet other secondary material that gives ideas about customer preferences in whole Västmanland comes from the Sifo institute and the researchers had access to their statistics. The institute is accepted and data is trusted with many Swedish companies. More general secondary material comes from books and articles about RM, Multi-channel or Scenario-technique. Some of those cover theories and others give specific clues about the media business.

2.4.2. Primary Data

Primary data arrived from the Interviews 1 – 3 with Ove Fredriksson and the questionnaire to the management group. Surveys and questionnaires

The authors used an analytical questionnaire for the survey of the whole management group at VLT. This questionnaire was used in order to have an overall impression of the strategic direction of the firm and their view on multiple channels. Since the management group decides about the strategic direction, their opinions are of high value for my paper. However, Idid not do individual interviews with each of the managers. This would have been too time intensive. Also, Iwere only interested in general opinions of the management at this point. The survey contained questions that could be answered in a non time-consuming and still representative way. In Exhibit four the structure and context of the questionnaire can be seen.

Analytical surveys can test a theory by taking the logic into the field, e.g. to understand the relationship between accounting control systems and business strategy. The first step in the construction is to specify what type of information is required, to whom this questionnaire has to be sent and what is to be asked. Second it is to consider whether the questionnaire is going to be disguised or undisguised. – how it is to be administered – through mail, personal interview, telephone or combinations. Third step is the construction of individual questions. In a fourth the researchers have to think about, how questions are answered. – e.g. open-ended or closed. Open ended questions may lead to various answers that are not useable. Researchers have to be aware of the type of question so that they can formulate the questions accordingly to expected answers. “Don’t know” or “no comment” answer alternatives might provide an escape route.[41] Interviews

The authors decided to choose the marketing manager Ove Fredriksson as their contact person and interview partner. This is true because he is the manager with the most insight on how to reach customers. A further reason is that he takes part in the coordination and development of the multi-channel strategy at VLT. Together with the CEO, he has had creative meetings where they have discussed the future together. The interviews proved his insider knowledge to the authors. Other managers could have not provided us with such detailed information. The interviews with the marketing manager included both fixed and open questions. In all three cases the authors first sent a survey research interviews to the marketing manager so that he can prepare for the meetings. After the fixed questions, the authors came up with some lead questions for a discussion. The guided tour through the building of VLT by one of the interviews gave the authors a small insight into the organization. The typed interviews as well as the PMs were sent to the interviewee to check whether Ididn’t misunderstood or implement something wrong. The questions as well as the answers of all the interviews can be found in Exhibit one, two and three.

There are two types of interviews that can be used. The first type is a survey research interview with which a standard format of interview is used with an emphasis on fixed response categories, systematic sampling, loading procedures combined with quantitative measures and statistical methods. The second type is an unstructured interview. With this the respondent is given almost full liberty to discuss reactions, opinions and behaviour on a particular issue. Interviewer just give lead questions and answers are unstructured and not systematically coded beforehand.[42]

Interviews provide a more accurate and clear picture of a respondent’s position or behaviour. Interviews can take a longer time than questionnaires and may even require several interviews with the same respondent. In any case, a skilled and cautious interviewer is demanded. A complete understanding of the research problem and the purpose is necessary to be able to search for the right information. The own background may highly influence the interpretations and thereby causes problems of objectivity.[43]

2.5. Qualitative method

For the research of this study the qualitative method is used and involves the examination and reflection on perceptions to get an understanding of social and human activities. The authors interviewed Ove Frederiksson, marketing manager at VLT and handed out a survey to the management group of VLT. For the reason that different opinions on the topic are used, it was possible to follow the ideas of triangulation. Those two things are confirmed through the results of the customer survey that VLT has executed and to which the researchers had full access to.

The researched company was tested at the first contact in respect of whether they consider themselves as providers of services and as multi-channel strategists. (Possible through the scenario technique where different projections of the future should lead to different case studies that should be combined in the strategy.

Qualitative research proceeds from a practical phenomenon and observations to a general level by using inductive reasoning. Its objective is to research the quality of a general phenomenon and to understand, explain and apply it.[44] The qualitative method employs a limited number of observations and tries to explain different aspects of a problem area.[45] Quite often qualitative and quantitative methods are combined because no method is entirely qualitative or quantitative. Historical reviews, group discussions and case studies are mostly qualitative; survey & experiment are usually quantitative.[46]

A historical review describes what happened in the past to understand the present or plan for future (in my case this is e.g. the description of the company). Group discussions initiate meetings with respondents to evaluate several opinions through a discussion (group discussions were part of the interviews). A case study is used in relatively less-known areas, where there is little experience and theory is available to serve as a guide. Intensive study of selected examples are a very useful method of gaining insight and suggesting hypotheses for further research.[47]

Triangulation is a systematic approach to evaluate in how far the data are reliable. It refers to the combination of methodologies in the study of the same phenomenon. This improves the accuracy of judgements and results by collecting data through different methods or even collecting different kinds of data. In many cases, a single method will not be enough to explain or describe a phenomenon. Oftentimes, Ineed to use a multi-method approach to get the whole reality. Triangulation ensures validation and can produce a more complete, holistic and contextual portrait of the object under study. Sometimes it can be difficult to judge if the results from different methods are consistent or not, or if there are contradictory results.[48]

2.6. Validity and Reliability

2.6.1. Validity

With Ove Frederiksson, the marketing manager, the authors think that they have had an adequate conversational partner for RM as well as multi-channels. The authors tried to use relevant methods as well as different sources to collect information to reach a rather valid result that is comparable with the reality. Since VLT has been used as a main source, objectivity can be questioned. Whereas the study group had access to a survey from the outside, interviews to prove internal RM or to examine company customers have not been taken. This is true because to make a survey representative, a high number of questioned people would have been necessary and would have gone beyond the attempt of the C-paper to consult the company on their multi-channel strategy.

Several data in this study is secondary data and the authors tried to consider the issue from many perspectives to reflect a real system. These shows especially in the part of the scenario technique were the broader environment and its change is analysed in detail in order to project in onto the company of VLT.

Validity is the most important criteria used to evaluate research and should indicate how well the research will be accepted by a critical audience of peers and assessors or examiners.[49] Validity in the analytical approach is the extent to which the indicators of a measuring instrument correspond to a definition. This means that validity affects the core of the relation between theory and data. After using a measuring instrument correctly, checking its validity becomes a measurement of the extent to which the results are correct or true. For the interviews it is important to find the right person from the organizations to answer the research questions.[50]

2.6.2. Reliability

The authors attempt to be as objective as possible and should therefore obtain the same results with a repeated data collection. It is possible that various sources of information could give different results to some extent. The authors think that the collected data are relevant enough to be regarded as reliable.

Reliability means that a subsequent researcher repeating the data collection procedures can obtain the same investigation results. Therefore the purpose is to minimise errors and biases within the study. Moreover the results ought to be constant, which means that the same result can be obtained within repeated surveys. This gives an investigation higher reliability.[51]

3. Description of VLT

3.1. Company information

VLT is part[52] of the VLT AB group. Their main product is a successful newspaper that bears the name of the company. VLT works together with various suppliers in order to offer their news. The value chain can be described as well integrated and systems such as just in time can be applied. This responds to the demands of customers where a news provider needs to offer updated information on various news channels quickly.

At the moment, main profits are made in two areas – in newspaper sales and in advertisements (ads). The areas are interconnected where high sales of newspapers attract more advertisement clients. Private people are the target group in the first area of business. With their daily newspaper, the company reaches about 80 percent of the people between 15 and 79 in the region of Västerås. Mr. Fredriksson, the head of the marketing department at VLT explains that this is relatively unique even in Sweden where VLT faces only little competition in providing the public with local news in print. This can be seen as a major strength since customers are not left with too many choices for finding out about local information. National competitors cannot reach into this local niche of the press industry. The second area of business deals with company customers. VLT has the major share of marketing spending for the local market. This is demonstrated in graph one where VLT is compared to their major competitors. my interview partner at VLT guesses the numbers in the graph.

illustration not visible in this excerpt

Graph 1: Sells of ads through different news companies[53]

Still, Mr. Fredriksson points out that the company faces competition and describes this business area as tight. Most of the company customers are local. In certain areas such as jobs, chain stores, travels or cars, the paper works nationwide.

3.2. Company situation

VLT AB is enlisted in the O-list at the Stock Exchange, Stockholm. Their overall situation of the last year is negative. This shows also by looking at the decreasing values of the VLT AB shares during the last year.

illustration not visible in this excerpt

Graph 2: VLT AB at the stock exchange[54]

The advertisement climate is the main reason for this situation. According to information on the VLT AB homepage, advertising investment fell within traditional media by more than ten percent in 2001.[55] This has an impact on the branch office in Västerås as well, where the decreasing number of ads is evident. Whereas a Saturday edition of the paper during 1999 and 2000 contained about 16 to 20 pages of ads for jobs or accommodations, today there are only 3 to 4 of such pages printed. New opportunities for advertisements need to be sorted out in order to keep solid profits, and this will mean a concentration on multiple channels in the future.

In the area of sales to private, VLT is able to keep their strong position through their market dominance in the area of printed news. At the same time technology changes,

especially with the internet influence VLT. Customers increasingly demand information on multiple channels. Here, VLT faces more competition especially from the Aftonbladet. Again, CRM on multiple channels is necessary to ensure loyal customers in the future.

3.3. Company strategy

VLT is mainly guided through a management group where leading managers and staff from the seven departments namely editorial, sales to private, advertisement, marketing, crontolling, human resources and production get together on a regular basis. They form a strategy and budget for a time frame of one year. The main goal is to find a strategy that responds to private and company customer needs through a good integration of suppliers. Only a superior product would lead towards solid profits. In order to follow this approach, the mother company VLT AB defines its business concept as the activities “within the media sector with a focus on the local newspaper industry, printing operations and electronic media”.[56]

The new economy, especially the internet plays a role for VLT and is acknowledged as an important channel in the company strategy. At the moment, the internet page of is a free service and an important feature to build the company brand. In the future, the strategy will lead towards the offer of an additional paid service on the internet. Multi-channels are a dominant area for VLT’s strategy with which the company wants to respond to the technological changes of the future in order to face the upcoming situation with customers.

4. Guideline through the analytical chapters

This guideline chapter is supposed to make the structure of the analytical chapters concerning VLT even clearer through the demonstration of the links between them and an explanation of the organisation.

4.1. Connecting links between chosen theories

This study is concerned about the problem how a newspaper company like VLT can manage the future. As the future is determined by today’s situation it is a prerequisite to analyse its current context. The following text refers to my model pictured in graph three.

Due to the fact that there was a change from a seller to a buyer market, starting after the oil shock in the 70ies the customers generally gained in importance, and today companies perceive this power even more. That is the reason why the main focus of a company has to be on customer demands. Still some companies have profit as their main strategic focus. That is only possible if companies have high market power and customers has no/less alternatives. In the media business, customers have several possibilities to consume news. Since they can choose their news provider freely, it is important to create loyalty and to integrate customers into the company. RM offers some ideas on how to do this. At the same time it stresses that external marketing with its tools (e.g. branding or adaptation) is not enough anymore. Also, employees have to be seen as customers so that they provide a good treatment of customers. This is the reason why internal marketing activities as well gained in importance and need to be covered in this paper.

Customer demands are not stable and change all the time for several reasons. A main influence comes from advancing technologies, as it was observable with the internet in the last decade. An important issue of companies is therefore, how these technological changes influence customer behaviour and how these changes have to be considered in the company. For the media business this means that the presentation of news has to be re-evaluated. The integration of different channels for the news delivery becomes a major subject. That is true for the presence and will gain importance in the future.

After media companies have analysed this customer approach and how they serve them on various channels today, there is the need to project today’s demands into the future. Since the past decade has shown that many technological issues are not foreseeable with mathematical or statistical methods (such as the trend exploration), it is important to choose a creativity method to gain a better insight into possible changes of the future. Therefore the Scenario Technique becomes more important for companies.

To sum up, one can say that companies deal with a changing environment and it is difficult to put influential factors into a simple picture. After long discussions of the authors, they agreed that today’s main focus of newspaper companies should follow customers’ requests and those are connected with advancing technological possibilities. This interplay results in a multi-channel strategy, which means that customers have to be served on various channels. Further, the big question mark for companies is the future and its developments. It cannot be predicted or forecasted and an evaluation demands an analysis of the main influential factors.

The above described coherence between the RM-approach, the multi-channel strategy and the scenario technique is shown as in the following graph:

illustration not visible in this excerpt

Graph 3: Coherence between the approaches

4.2. Organization of the analytical chapters

The main building blocks for VLT’s multi-channel strategy are “technology” as well as “customers” and those two factors influence one another. Since customer focus gains in importance, the authors decided to start with the analysis of customer preferences and how they should be dealt with in chapter five. To respond to customer demands, a multi-channel strategy is required and is dealt with in chapter six. In both chapters the influence of technology is highlighted. Chapter seven draws recommendations about the near future that resulted from the previous chapters, where the present situation of the company was analysed. How strategy will develop in the remote future is analysed with the tool of the scenario technique in chapter eight. Through the scenario transfer recommendations for the remote future are given.


[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] (2003-04-27)

[8] (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] (2003-04-27)

[20] Alves, p. 65

[21] Ippen in (2003-04-27)

[22] Alves, p.69

[23] Nielson in (2003-04-27)

[24] Negroponte, p. 152

[25] Ringland, p. 41

[26] Molloy in (2003-04-27)

[27] Ringland, p. 45

[28] (2003-04-27)

[29] Whittington, p. 58

[30] Schwarz, p. 37

[31] Ringland, p. 40

[32] ibid, p. 40

[33] Johnson / Scholes, p. 107

[34] Ghauri /Grönhaug / Kristianslund, pp. 5 - 7

[35] Ghauri / Grönhaug / Kristianslund, pp. 26 - 29

[36] Remenyi / Williams / Money / Schwartz, pp. 34 - 35

[37] Ghauri / Grönhaug / Kristianslund, pp. 8 - 9

[38] Ghauri / Grönhaug / Kristianslund, pp. 8 - 9

[39] Yu, p. 7

[40] Ghauri / Grönhaug / Kristianslund, pp. 54 - 57

[41] Ghauri / Grönhaug / Kristianslund, pp. 60 - 61

[42] Ghauri / Grönhaug / Kristianslund, p. 64

[43] Ghauri / Grönhaug / Kristianslund, pp. 65 - 66

[44] Ghauri / Grönhaug / Kristianslund, p. 84

[45] Ghauri / Grönhaug / Kristianslund, p. 95

[46] Ghauri / Grönhaug / Kristianslund, p. 86

[47] Ghauri / Grönhaug / Kristianslund, p. 87

[48] Ghauri / Grönhaug / Kristianslund, pp. 93 - 94

[49] Remenyi / Williams / Money / Schwartz, p. 114

[50] Arbnor / Bjerke, pp. 232 - 233

[51] Yin, pp. 33 - 37

[52] Exhibit 1 - 3

[53] Exhibit 2

[54] (2003-04-27)

[55] (2003-04-27)

[56] ibid

Excerpt out of 82 pages


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
Mälardalen University  (Department of Business Studies and Informatics)
Scientific Method and Undergraduate Thesis in Business Administration
A (ECTS Credits) , VG (Schwed.)
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ISBN (eBook)
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785 KB
Strategy, Multiple, Channels, Customer, Relationships, VESTMANLANDS, LÄNS, TIDING, Scientific, Method, Undergraduate, Thesis, Business, Administration
Quote paper
Manja Ledderhos (Author), 2003, 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, Munich, GRIN Verlag,


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