Reader's Digest Association Analysis
DeWitt and Lila Wallace founded reader's Digest Association (RDA) in 1922. Primarily the couple ran it until 1973. After 1984, it was run as a true for profit business and in 1989 the company finally went public. The company was much more profitable under the new professional management. The early 1990's proved to be a stagnant environment for Reader's Digest and other magazines that were sold domestically. Due to these conditions, many publishers began to focus on international markets. The outlook for 1993 at that time was more positive. Average sales for the industry were expected to grow by two percent.1. Focus on serving the customer by providing superior quality service. 2. Recognize and care for employees by respecting, rewarding, and showing commitment to them. 3. Maintain high ethical standards by being a good corporate citizen. 4. Maximize shareholder wealth by being an innovative, results-oriented company. 5. Grow globally primarily through existing product lines. 1. Grow current product lines by expanding customer base in existing markets. 2. Develop new products to market to existing customers. 3. Penetrate foreign markets with current product lines.
The biggest key to Reader's Digest's success has been their innovative marketing techniques. Reader's Digest's extensive customer list contains over half of all the households in the US. With this list and their database center the company is able to track household purchases and preferences. Armed with this knowledge, it can tailor direct mailings to households. This results in the Digest having a very favorable relationship with its customers. RDA is viewed by its customers as a trustworthy company. As such, its sweepstakes a seen in a favorable light. This is not true for many of its competitors. Reader's Digest Magazine is also used as stepping stone in getting households to purchase bigger ticket items. Many of the bigger ticket items, such as series books, have great marketing schemes as well. For instance the first item is free, then additional items are shipped until the order is cancelled. Overall, marketing is the Digest's strongest area, and earns a 4.75. c. Create an interactive Internet edition to attract new readers. Accept International sales of books and music. New magazines from competitors. Although Reader's Digest's financials have deteriorated in many areas, most of these areas are still in good or great shape, especially when compared to Meredith. The only area of major concern is activity. If the negative trends continue in this area, Reader's Digest could find itself at a major disadvantage when compared to its competitors. Since the financials of Reader's Digest only had one major area of concern, its overall score is 4.25. 3. Aging customer base and lack of younger generation interest. d. Divest all current specialty magazines, and do not acquire any new ones. Reject
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Approximate Word count = 1956
Approximate Pages = 8 (250 words per page double spaced)
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