Strategic assessment - wealth creator magazine Free Essay Example

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Strategic assessment - wealth creator magazine

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Maintain the Status Quo and current direction of the publication as it appears to be successful and keep expanding into new states and territories. So far the magazine reaches Queensland, Victoria and New South Wales.

Sell the magazine to a larger publisher whilst it is still achieving growth in a mature and declining category. There will come a point when the magazine will no longer be able to achieve growth and will experience a downturn in sales as the trend in the declining category indicates.

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With this in mind the owners should look towards their exit strategy in order to recoup their costs and make a profit from the enterprise.

Evaluate the opportunity of an Initial Public Offering. Floating the magazine may be a good idea whilst it is performing well and achieving growth.

Invest into other magazine categories that are experiencing growth and use the experience they have built with WCM to grow the company. This is currently proving successful with the recent launch of HLF magazine dedicated to health, lifestyle and fitness, a growing interest to Australians.

Recommendations:

Option Benefits Limitations

The strategy is currently working and therefore less work in terms of preparation to implementing an alternative strategy.

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In addition, market size would be increased by expanding into new states and territories. Does not take into account future implications of operating in declining magazine category.

Will allow investors/owners to realise a return on their investment and free up funds so they can invest in other projects that may have higher returns.

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Relies on the interest of larger publishers that may not be attainable.May not get the best return possible.

Will allow investors/owners to realize a return on their investment and provide the company funds to pursue other investments/products and achieve growth. Reduces the risk of the owners. Expensive to prepare the company for an IPO and involves a lot of work.

Increased market size and product range, diversifying the risk of the company across many publications. Provides a greater opportunity to cross promote and increase brand awareness for individual products.

Gives greater leverage when negotiating for distributors and retailers. Expensive to start up a new magazine and relies on greater resources especially personnel. The company may become too large to manage especially with relatively little publishing experience. Comparison of Benefits: Therefore considering the above benefits of the options, Option 3 appears to be the best as it will give the investors an opportunity to realise a return and will provide the company funds to pursuer other investments/products such as Option 4.

Option 1 although currently successful, is short-sighted in terms of not taking into account the negative trend in the business investment magazine category. Furthermore, Option 2 may be difficult in terms of finding a buyer and achieving the best price for the business. Comparison of Limitations: The above limitations also imply that Option 3 is optimal as both Options 3 and 4 would involve higher expenditure however the end outcome is more desirable.

Moreover, Option 1 is more a short-term strategy and overlooks future complications, and Option 2 relies heavily on a third party with greater bargaining power. Recommended Option: Thus the best option for the owners/investors of WCM to pursue would be option 3, float the company on the stock exchange. Contingency Alternative: In the event that option 3 is not possible, WCM should look towards option 4 however establish new products over a longer period of time when capital inflows allow.

Strategic assessment - wealth creator magazine

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