Problem Solution: Harrison-Keyes Inc.

Problem Solution: Harrison-Keyes Inc.

University of Phoenix

MBA 590: Strategic Implementation and Alignment

Dr. Jay Deb

Introduction

Harrison-Keyes is at a pivotal point in the company’s history. It must decide what strategy will carry it into the future and mitigate the current circumstances that are pervasive in the industry.

Background

Harrison-Keyes was founded in 1899. It came to profitability by publishing well known authors. As time progressed, the company felt that it needed to shift its focus. In the 1950’s H-K moved to business, scientific and technical information content. In addition it has spread into journals, professional and consumer books, textbooks and other educational materials. Within their library of content they have over 22,000 titles and add 2000 new titles every year.

Currently they are facing similar problems as other publishers. Big box retailers are dominating the market. This has caused independent retailers to struggle or fail. As a result distribution channels are consolidating and reducing profits. In addition, large retailers are offering a generous return policy which effecting profits further.

As a result of stagnate situation of the publishing industry; Harrison-Keyes has hired a new CEO Meg McGill. Based on industry review Mrs. McGill has developed an e-publishing strategy. Harrison-Keyes also believes this to be a sound strategy because rivals have also adopted it. Unfortunately, for H-K, they have been quick to implement their digital strategy.

In trying to implement their strategy H-K has faced some problems. William X. Harper, a best selling and Pulitzer Prize winning author has not accepted this as a viable strategy for his books. He is so intolerant of the strategy that he has spoken out in different venues. Inside sources have leaked to the media problems with foreign vendors, technology and implementation issues that are plaguing the launch of McGill’s strategic initiative. Further Wall Street analysts have placed a hold recommendation on H-K stock.

H-K is also facing technical problems with the development of the program. First the foreign program vendor, Asia Digital, is difficult to communicate with. This has caused unforeseen delays. Further H-K has realized unforeseen costs with the distribution of the digital material. Specifically, $ 250 thousand for hardware and $75 thousand in software upgrades.

Issues, Challenges and Opportunities

H-K is facing some specific issues that will prevent it from being successful with their digital strategy. First, author retention is crucial for any publisher. The company must have content the consumer desires in order to stay profitable. Second, if H-K is able to retain their talented author, they must protect the copyrighted content to prevent piracy, maintain profitability, and royalties. Third, they must control the project costs. As with any new strategy it takes time for the audience to adopt. Therefore it is crucial to make the project profitable as early as possible. Fourth, H-K has a decreased market share. As a result they could be losing the prestige and power of a large organization.

The challenge with piracy is the not the elimination of such events, but to limit their ability to effect royalties and profits. Next, if H-K is not able to maintain their talented pool of authors, they will find it difficult to sell any new content. If the company wants to be a leader must continue to have the content that makes it a leader in their category. If this is not addressed it could affect the company as a whole. Another challenge will be to keep the costs of the project under control. If the project costs exceed the original projections significantly the payback period could exceed the useful life of the project.

By addressing the piracy issue effectively H-K could attract other authors thus increasing its content library. In addition, having great content would also help to increase market share and profitability. Another financial consideration is H-K’s ability to effectively work with Asia Digital to maximize current investments and deliver profits at the lowest cost possible.