Dr. Eberhard Opl - American Business Media
Dr. Eberhard Opl - American Business Media
Dr. Eberhard Opl - American Business Media
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Cross Border <strong>Business</strong> Models:<br />
The WEKA Group: The High Priest of Self-Copying<br />
Presentation at the ABM Annual Conference<br />
Amelia Island, May 3 rd , 2009<br />
<strong>Dr</strong>. <strong>Eberhard</strong> R. <strong>Opl</strong><br />
WEKA at ABM Annual Conference May 3 rd , 2009<br />
Created by E. <strong>Opl</strong>, April 2009 2007<br />
WEKA Holding
A SUMMARY OF THE WEKA GROUP<br />
<br />
Founded 1973 by WErner and KArin Mützel<br />
Proprietor: Werner Mützel and family (100%)<br />
<br />
<br />
<br />
<br />
The group consists of three self-contained business divisions:<br />
<br />
<br />
<br />
WEKA <strong>Business</strong> Information<br />
WEKA <strong>Media</strong> Group Munich<br />
Creative Design<br />
17 publishing houses (2008) in five European countries<br />
(Germany, The Netherlands, France, Switzerland,<br />
Austria) plus various service and technology units<br />
The group is controlled by WEKA Holding managed by<br />
Werner Mützel and Wolfgang Materna.<br />
Key data of the group:<br />
Staff: 1,219 (2008)<br />
Turnover: ~222 million EURO (2008)<br />
Total assets: ~164 million EURO (2008)<br />
Equity ratio: ~52% (2008)<br />
Werner Mützel<br />
Proprietor of the WEKA group<br />
WEKA head office<br />
in Kissing near Augsburg / Munich<br />
WEKA at ABM Annual Conference May 3rd, 2009<br />
WEKA Holding<br />
2
HOW IT ALL BEGAN …<br />
1973, Kissing, a small town right in the middle of nowhere in Southern Bavaria, Germany.<br />
A young marketing manager from a Munich publishing house has two brilliant ideas:<br />
• Ad financed local information brochures - USP‘s:<br />
• Citizens get useful local information (e.g., opening hours of the municipality, addresses of doctors<br />
or kindergartens, dates of local events, …) for free<br />
• Local business gets a platform for advertising directly in the local target group without wastage and<br />
for a long time (brochures are kept because useful)<br />
• City can present itself as business location and good place to live for free<br />
• Major can present her/himself with a greeting in the brochure (vanity!)<br />
• Always up-to-date technical must-have information: adaptation of the loose-leaf system from the<br />
juridical into the technical field - USP’s:<br />
• Information gathering process changes for the user from “pull” to “push”: new information (e.g.,<br />
changes in law, new regulations, …) comes automatically<br />
• No more need to buy regularly new books and throw away the old ones: loose leafs remain and<br />
are always up-to-date<br />
• Legal security: professional user always has all information he/she is required to have fur sure and<br />
automatically<br />
WEKA at ABM Annual Conference May 3rd, 2009<br />
WEKA Holding<br />
3
4<br />
REVENUE DEVELOPMENT OF WEKA BUSINESS INFORMATION<br />
Strategic<br />
divestments<br />
Bubble burst<br />
and restructurings<br />
Portfolio<br />
clearance and<br />
online-shift<br />
Overstretching<br />
the business<br />
Eastern<br />
Germany<br />
250<br />
Multiplying-<br />
Strategy<br />
200<br />
Acquisitions<br />
150<br />
WEKA at ABM Annual Conference May 3rd, 2009<br />
Formation<br />
of foreign<br />
companies<br />
100<br />
Sales (Mio. €)<br />
50<br />
0<br />
2008<br />
2007<br />
2006<br />
2005<br />
2004<br />
2003<br />
2002<br />
2001<br />
2000<br />
1999<br />
1998<br />
1997<br />
1996<br />
1995<br />
1994<br />
1993<br />
1992<br />
1991<br />
1990<br />
1989<br />
1988<br />
1987<br />
WEKA Holding
EXAMPLES<br />
WEKA’S EXPANSION STRATEGY<br />
Year Country Company Genesis Current Status<br />
1973 Germany WEKA Fachverlage Founded Still active<br />
1978 Switzerland WEKA AG Founded Still active<br />
1979 France WEKA France Founded Still active<br />
1980 Italy WEKA Italy Founded Closed 1999<br />
1983 Netherlands WEKA Uitgeverij Founded Still active<br />
1985 Germany Spitta Verlag Bought Still active<br />
1985 Austria WEKA Austria Founded Still active<br />
1988 Germany DMV Bought Still active<br />
1988 USA WEKA Publishing Founded Closed 1997<br />
1989 Germany WAGO Software Shareholding Sold 1999<br />
1989 Belgium Editions WEKA Founded Sold 2008<br />
1990 France ECPA Bought Sold 2002<br />
1991 Germany DentSo Shareholding Sold 1998<br />
1993 Hungary WEKA Hungary Founded Closed 2000<br />
1995 France Editions TI Bought Still active<br />
1995 Germany Curadata Bought Closed 1999<br />
1995 Hungary Computer Panoráma JV Sold 2003<br />
1996 Poland Lupus JV Sold 2003<br />
1996 Germany Deubner Verlag Bought Still active<br />
1996 Romania Agora JV In Liqudation<br />
1996 France Editions Tissot Bought Still active<br />
1996 Poland Alfa WEKA Founded Sold 2003<br />
1997 Spain Civitas Ediciones Bought Sold 2001<br />
1997 Germany REWI Bought Still active<br />
1998 Germany GWI Bought Still active<br />
1998 Germany Behr's Verlag Shareholding Sold 2006<br />
2004 Germany sirAdos Bought Still active<br />
2005 Germany UB <strong>Media</strong> Bought Still active<br />
2006 France CMT Bought Still active<br />
2008 Austria SBM Austria Bought Still active<br />
2008 Germany Flohr-Verlag Bought Still active<br />
Lessons learnt:<br />
• Market entry strategy<br />
• Minority shareholding usually does not<br />
work for WEKA<br />
• JVs rarely work for WEKA<br />
• Own company foundations mostly work<br />
for WEKA<br />
• 100% acquisitions mostly work for<br />
WEKA<br />
• <strong>Business</strong> model<br />
• Basic WEKA business model works in<br />
Germany, Austria, Switzerland,<br />
France, The Netherlands<br />
• Basic WEKA business model did not<br />
work in Poland, USA, Romania, Italy,<br />
Spain, Belgium, Hungary, …<br />
WEKA at ABM Annual Conference May 3rd, 2009<br />
WEKA Holding<br />
5
WEKA’S BASIC BUSINESS MODEL<br />
1000<br />
1.000<br />
900<br />
250<br />
800<br />
700<br />
90<br />
600<br />
120<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
Total value<br />
of a<br />
subscription<br />
CPO Content Direct<br />
production<br />
costs<br />
220<br />
Indirect<br />
production<br />
costs<br />
40<br />
Distribution<br />
40<br />
Customer<br />
Care<br />
140<br />
Backoffice<br />
100<br />
Gross Margin<br />
WEKA at ABM Annual Conference May 3rd, 2009<br />
WEKA Holding<br />
6
KEY PERFORMANCE MEASURES<br />
Country<br />
CPO<br />
(Costs per<br />
Order)<br />
(€)<br />
Average<br />
Subscription<br />
Value p.a.<br />
(€)<br />
Average<br />
Duration of a<br />
Subscription<br />
(Years)<br />
LTV (Life Time<br />
Value of a<br />
Subscription)<br />
(€)<br />
CPO / LTV<br />
(%)<br />
Germany<br />
130 €<br />
200 €<br />
3,5<br />
700 €<br />
19%<br />
Austria<br />
130 €<br />
260 €<br />
5,3<br />
1.400 €<br />
9%<br />
Switzerland<br />
France<br />
Netherlands<br />
120 €<br />
270 €<br />
400 €<br />
300 €<br />
320 €<br />
470 €<br />
3,8<br />
6,1<br />
3,6<br />
1.100 €<br />
2.000 €<br />
1.700 €<br />
10%<br />
14%<br />
24%<br />
WEKA at ABM Annual Conference May 3rd, 2009<br />
WEKA Holding<br />
7
KEY SUCCESS FACTORS (PORTER, RELOADED)<br />
Customers:<br />
• Objective needs (legal<br />
requirements, information-intense<br />
businesses,<br />
business benefits, …)<br />
• Subjective needs<br />
(security, prestige, …)<br />
• Buying power<br />
• Price sensitivity<br />
• …<br />
Market:<br />
• Number and quality of competitors<br />
• Competition pressure<br />
• Price level<br />
• Substitutes<br />
• Reliability and quality of suppliers<br />
• …<br />
“Local habits”<br />
• Payment behavior<br />
• Acceptance of subscriptions (obligation)<br />
• Adherence to the law<br />
• Product loyalty (or phlegm in cancelling)<br />
• …<br />
Legislator / regulator:<br />
• Degree and level of detail of regulation<br />
• Number of new laws / regulations / norms<br />
and frequency of amendments<br />
• Penalties for neglect of laws / regulations /<br />
norms (juridical / financial)<br />
• …<br />
Publishing house:<br />
• Product quality (meeting<br />
customer needs)<br />
• Marketing<br />
• Pricing<br />
• Customer care, service<br />
• Operations, workflow,<br />
organization<br />
• Cost efficiency<br />
• New product development<br />
• New business development<br />
• Of course: people!!!<br />
• …<br />
WEKA at ABM Annual Conference May 3rd, 2009<br />
WEKA Holding<br />
8
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