EPublishing Strategic Plan Briefing

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E-Publishing Strategic Plan Briefing

• Harrison-Keyes Publications, Inc.

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Executive Summary

• Harrison-Keyes is facing increasing industry
  consolidation and competition leading to
  declining sales, market share and profitability.
  This document presents an innovative strategy to
  counter these long-term trends by entering into
  the world of 21st century publishing
  e-Publishing.

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Company Background

• Harrison-Keyes was founded in 1899. In the early
  years, the company was best known for the works
  of literary giants. By the mid 1950s,
  Harrison-Keyes was established as a leading
  publisher of business, scientific and technical
  information.
• Harrison-Keyes is a global publisher of print
  products, specializing in scientific, technical,
  and business books and journals professional and
  consumer books and textbooks and other
  educational materials for undergraduate and
  graduate students as well as lifelong learners.
  Harrison-Keyes has approximately 22,700 active
  titles and publishes about 2000 new titles each
  year.

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Company Background

• The company provides "must-have" content to
  targeted communities of interest.
• Harrison-Keyes deep reservoir of quality
  content, constantly replenished, offers a
  tremendous source of competitive advantage.

5
Company Background

• With about 3,500 employees worldwide,
  Harrison-Keyes has operations in the United
  States with sales offices in Europe, Asia, and
  Latin America
• Approximately 40 of the company's revenues are
  generated outside the United States.

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Vision Statement

• Our vision is to be the world's most dynamic
  publishing company, packaging innovative
  information solutions essential to communities of
  interest

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Mission Statement

• Our mission is to provide essential information
  and insight that enable individuals, markets, and
  societies to perform to their full potential.
• We achieve growth by
• Being essential to markets
• Providing leadership in the diverse markets we
  serve
• Generating consistent revenue and profit growth
• Providing a superior return to our shareholders

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Values Statement

• The following values help Harrison-Keyes achieve
  its mission and vision
• Excellence
• Integrity
• Fairness
• Communication
• Cooperation
• Courtesy
• Cooperation
• Innovation

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Internal Environment

• Loyal, dedicated staff (avg. tenure 7 years)
• 3,500 employees, located in the US with foreign
  sales offices in Europe, Asia and Latin America
• No subsidiaries, three key divisions trade,
  consumer, academic
• Vast experience in publishing

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Internal Environment

• Fiscal year end December
• Previous year sales (mil) 2,091.0
• Two years ago sales (mil) 2,229.2
• Sales growth (6.6)

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External Environment

• Declining profitability of print markets due to
  declining market share of independent booksellers
  (down 12 from 50 to 38 of the adult trade book
  sales in the decade between 1992 and 2003).
• Rise of big box discounters have decreased our
  margins even further.
• Several notable book distribution facilities have
  gone out of business, forcing us to pick up slack
  in our own distribution facilities
• Traditional book return policies have been
  onerous
• Industry consolidation through mergers and
  acquisitions (e.g. HarperCollins purchased by
  News Corp)

12
External Environment

• Technology is making print content more
  accessible to customers worldwide and is adding
  value for them by delivering it in interactive
  and/or fully searchable formats. Our major
  competitors have already jumped on this bandwagon
• Example Approximately 25 of Blanchard Sons
  global revenues are currently Web-enabled they
  expect to increase that figure to about 40
  within the next three years.
• Non-publishing companies have launched e-Books
  initiatives adding more competition to an already
  crowded market

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Strategic Objective

• To launch Harrison-Keyes into the era of 21st
  century publishing and increase profitability and
  market share by launching an e-Publishing
  initiative
• Convert selected print titles to e-Books format
• Dual-publishing of all new titles to both print
  and e-Books format
• Eventually publish some titles only in e-Books
  format
• Sell e-Books directly from Harrison-Keyes website

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Financial Projections

• Projected sales Year 1 32M (projected expenses
  6.5M)
• Based on conversion of current best sellers
  list to e-books format and extensive marketing
  campaign
• Projected sales Year 2 65M (projected expenses
  8.9M)
• Projected sales Year 3 102M (projected expenses
  13.8M)
• ROI 401.72 in year one

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Projected Cash Flow
Note See Pro Forma Cash Flow spreadsheet
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Major Plan Goal and Implementation

• Create e-Publishing divisional unit
• Champion Meg P. McGill, CEO
• Select divisional head
• Staff unit
• Develop implementation plan, e.g.
• Develop detailed budget
• Research and acquire technology
• Research and acquire suppliers
• Train divisional staff
• Align organization for new venture

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Critical Success Factors

• Employee buy-in
• Author cooperation
• Consumer buy-in
• Successful marketing campaign
• Successful implementation of new technology
• Digitizing the books most likely to sell
• High quality of any vendors or suppliers we use
• Selecting the appropriate e-Book technology for
  the specific book and target audience choice is
  plain PDF (e.g. turning print book into computer
  file using the Adobe PDF portable digital
  format) or using one of the multimedia options
  (e.g. animation, audio and/or video)
• Market penetration via e-Bookstores (e.g.
  Amazon.com)

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Controls and Evaluation

• Steering committee oversight
• Development of achievable milestones
• 32M sales figure must be achieved within six
  months of implementation to go forward (outside
  deadline is one year)