Subject category:
Strategy and General Management
Published by:
International Institute for Management Development (IMD)
Version: 22.11.2012
Length: 16 pages
Data source: Field research
Abstract
This case study shows the struggle of Brockhaus, publisher of Germany’s best-known encyclopaedia, to survive two major challenges: (1) the advent of digital encyclopaedias marketed on CD-ROM and (2) the rise of on-line encyclopaedias which are accessible free of charge. While Brockhaus was able to successfully deal with the emergence digital encyclopaedias in its war against Microsoft, the company stumbled over the rise of digital encyclopaedias and ultimately had to abandon the market for encyclopaedias which it had dominated for over a century. The case is structured in three sections. Section one describes Brockhaus’ response to the emergence of digital encyclopaedias and identifies the main reasons for why the company was able to successfully deal with this innovation. At the end of section one, participants are asked to analyse (1) the strategic situation Brockhaus faced when dealing with digital encyclopaedias; (2) the actions of Brockhaus in response to the advent of digital encyclopaedias; and (3) the reasons for why Brockhaus successfully dealt with this strategic challenge. Section two contains a review of two theoretical concepts: disruptive innovation theory and the value curve. This theory section should provide the participants with the tools necessary to understand radical innovations and to successfully respond to them. Section three describes Brockhaus’ war against Wikipedia and the actions Brockhaus took to deal with on-line encyclopaedias. At the end of the section, participants are asked (1) to analyse how the strategic challenge brought about by on-line encyclopaedias differs from the challenge resulting from the rise of digital encyclopaedias; and (2) to use the value curve concept to design possible strategies in response to the emergence of on-line encyclopaedias. In a wrap-up following section three, the case describes that Brockhaus ultimately failed at successfully dealing with the emergence of on-line encyclopaedias and had to leave the market.
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Abstract
This case study shows the struggle of Brockhaus, publisher of Germany’s best-known encyclopaedia, to survive two major challenges: (1) the advent of digital encyclopaedias marketed on CD-ROM and (2) the rise of on-line encyclopaedias which are accessible free of charge. While Brockhaus was able to successfully deal with the emergence digital encyclopaedias in its war against Microsoft, the company stumbled over the rise of digital encyclopaedias and ultimately had to abandon the market for encyclopaedias which it had dominated for over a century. The case is structured in three sections. Section one describes Brockhaus’ response to the emergence of digital encyclopaedias and identifies the main reasons for why the company was able to successfully deal with this innovation. At the end of section one, participants are asked to analyse (1) the strategic situation Brockhaus faced when dealing with digital encyclopaedias; (2) the actions of Brockhaus in response to the advent of digital encyclopaedias; and (3) the reasons for why Brockhaus successfully dealt with this strategic challenge. Section two contains a review of two theoretical concepts: disruptive innovation theory and the value curve. This theory section should provide the participants with the tools necessary to understand radical innovations and to successfully respond to them. Section three describes Brockhaus’ war against Wikipedia and the actions Brockhaus took to deal with on-line encyclopaedias. At the end of the section, participants are asked (1) to analyse how the strategic challenge brought about by on-line encyclopaedias differs from the challenge resulting from the rise of digital encyclopaedias; and (2) to use the value curve concept to design possible strategies in response to the emergence of on-line encyclopaedias. In a wrap-up following section three, the case describes that Brockhaus ultimately failed at successfully dealing with the emergence of on-line encyclopaedias and had to leave the market.