Business News
Bertelsmann Sets Strategic Course for the Years Ahead
Thursday 13. September 2012 - Four strategic priorities: Strengthen core businesses, digital transformation, growth platforms, and regional growth
New lines of business planned
International management meeting in Gütersloh
Over the next five to ten years, Bertelsmann will be reshaped into a faster growing, more international, and digitally leading company. The Bertelsmann Executive Board presented a strategic course to this effect to 500 of the Group’s executives at an international management meeting in Gütersloh on Wednesday and Thursday. The new strategy agreed by the Executive Board, Supervisory Board and shareholders is comprised of four strategic priorities: strengthening the core businesses; digital transformation; establishing and building growth platforms; and regional growth by expanding operations in emerging nations and the U.S. The funds needed for putting this strategy into practice will come from operations and a mix of debt and equity. In addition to organic growth, some major acquisitions and strategic partnerships are also planned.
“Our business environment is changing more rapidly than ever before, driven by megatrends like digitization and the globally growing demand for education and outsourcing,” Bertelsmann Chairman & CEO Thomas Rabe said to congress participants. “Bertelsmann is actively seizing the opportunities that arise from this. We have a strong foundation to build on: good market positions, high yields and excellent management teams. We have first-class content, which gives us a valuable asset in the digital realm as well. We create an audience of millions for producers, authors and advertisers and are an innovative service partner for major customers in the IT and Hightech industry. However, at this point Bertelsmann is growing too slowly. We want to accelerate the pace, advance the transformation to digital more aggressively, and devote more attention to the faster-growing regions.”
At the congress, 16 key strategic initiatives were presented tying into the four strategic approaches. In particular, they involve the further strengthening of the content businesses through investments, as well as the retention of creative talent and the leveraging of opportunities for consolidation, combined with a clear aspiration for leadership. The transformation to digital will be advanced by expanding the e-book business, video-on-demand offerings, digital brand extension and “verticals” as well as digital ad sales. Specific growth platforms – rapidly growing businesses with global potential – include Arvato’s BPO business (services for e-commerce and the IT/Hightech industry, risk management and collection), Fremantle Media’s international TV production business, Content Rights Management (especially BMG), education, data services for business clients, business information, and Bertelsmann’s global digital media funds, which already have more than 50 shareholdings around the world.
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Regional growth will be focused in China, India and Brazil. Bertelsmann also plans to further strengthen its position in the U.S., which is still the world’s biggest and most innovative market.
Simultaneously with the realignment of its business, Bertelsmann is launching an initiative to further strengthen the digital expertise of its management, a sponsorship program for more diversity in the Group’s top executive level, and new incentive schemes that reflect the new strategic long-term goals.
“We are making a lot of adjustments and are laying the foundation for the revenue and profits that Bertelsmann will generate ten years from now,” said Rabe. “Bertelsmann combines the resources of a global media and services company with the advantages of a ‘small company feeling’ and the entrepreneurial and creative freedom that comes with that. This company therefore offers an ideal home for creative and entrepreneurial talents who want to put their business ideas into practice with a powerful partner. We will make sure these strengths are more visible internally and to the outside from now on. Our shared goal is to reshape Bertelsmann along clear, measurable guidelines in the next few years – and in doing so, to open a new chapter in this company’s success story.”