Falcon Publishing PDF Print E-mail

J
ane Knight, the strategy consultant appointed by Falcon Publishing to observe and then provide a professional commentary on her client's strategic planning process was facing a dilemma. She had been listening to Managing Director Terry Lindsay's presentation to the management team at the company's annual strategic indaba and was quite horrified by what she had been exposed to. On the one hand she could identify with Falcon's need to formalise a properly structured strategic plan. On the other hand, she was unhappy about the manner in which Lindsay had gone about the process. There were many issues that concerned her, but perhaps most of all, Lindsay appeared to have developed a plan based on little environmental and in particular competitive information, and without the involvement of either his employees or even his customers, in the process. She was convinced that should the proposed plan be implemented, it would fall flat and maybe even prove to be detrimental to the company. With the little time that she had to prepare for the meeting, Knight had put together some background information on Falcon on which she now reflected.

Falcon Publishing is Southern Africa's third largest educational publishing house, with an annual turnover in excess of R100million, and representation in most of sub Saharan Africa. It is an old established company dating back to the Twenties, when Englishman Frank Riverside opened up a one man printing business in Jeppe Street, Johannesburg. As the company grew, it diversified into educational publishing on the suggestion of Frank's wife Molly, who was an English teacher at a local high school. Catering predominantly for White, English speaking primary and secondary schools, the company flourished not only in this country, but also throughout Colonial Africa, where it enjoyed a sound reputation for producing good quality books that covered the curricula of all the educational departments it served.

Since the days of Molly Riverside, who had eventually joined her husband in the family business, there has always been a strong academic influence at Falcon.

With the exception of the finance department, all Board members, senior and middle managers are either former schoolteachers or inspectors. The current Managing Director, Terry Lindsay, is a former English teacher who has been with Falcon for over twenty years, having steadily worked his way up through the ranks. Marketing Director Tony Crookes, a former science teacher, who like Lindsay had also started his business career as a sales representative with Falcon, and through persistent hard work, and further education (apart from his B.Sc he holds the IMM Diploma and is currently completing his MBA at Wits) finds himself being groomed to take over from Lindsay who retires in two years time.

By 1992, it was apparent that the political changes taking place in South Africa would have enormous ramifications for the future of the country's educational system. This did not appear to excessively worry Falcon, because as Lindsay commented during a Board Meeting at that time: ? Falcon has weathered the political changes in other parts of Africa, especially when many countries gained independence from their former colonial masters. I think we can take the changes in this country in our stride. However, that is not to suggest that we must not prepare in advance.?

By the time Nelson Mandela became the country's first democratically elected President in 1994, Falcon had appointed its first Black director, Bongani Mlambo to the sales portfolio, as well as a number of Black sales representatives, whose job it remains to penetrate the various Black segments of the educational market. Initially, this worked very well. However, by 1998 the various education departments had slashed expenditure on books, with the result that for the first time in its history, Falcon had found itself with a market that had not only shrunk, but was also associated with allegations of corruption. Then in mid 1999, market conditions had become so worrisome that Lindsay decided to call Jane Knight a strategy consultant who had run a seminar on strategic thinking for Falcon twelve months earlier. At that time, Mlambo had pointed out that Falcon had no strategy as such, and that in his previous two companies, there had always been a strategic infrastructure which had proved useful in providing everyone in the company with direction. Lindsay had initially rejected the idea on the grounds that Falcon was well established and ?really knows what it is about.? However, after much lobbying from both Mlambo and Crookes, he decided to host a strategy seminar for the entire Board and senior management team. Although the seminar was voted a resounding success, and Mlambo and Crookes were subsequently keen to see a proper strategy in place, nothing further developed, and the idea soon fizzled out.

? Listen Jane? began Lindsay, at their meeting, ? what I want you to do is to attend our strategy indaba which we are taking off site for a couple of days. We feel that we are more than capable of developing a strategic plan without outside assistance, thanks to the wonderful seminar you ran for us last year. We are also anxious to save ourselves a lot of consulting fees, with all due respect to you. Therefore, Tony, Bongani, Mark Fanning our Financial Director and myself have put together a draft strategic plan which I will present to the assembled management team. Your job will be to critically evaluate what we have done and to guide our thinking. Don't pull any punches. Feel free to question anything you want and to contribute as you see fit, from our methodology, to our strategic thinking.?

Now, one week later, at an off site conference centre, Terry Lindsay had been presenting the draft strategic plan to the senior and middle managers of the company. The following diagrams represent the slide show he used as part of his presentation.

Slide One

Mission Statement of Falcon Publishing

Falcon Publishing is committed to serving the educational needs of a changing Southern Africa .

In pursuing this, we strive to:

  • Develop and publish quality educational material.
  • Provide supplementary professional services.
  • Offer a superior distribution facility.
  • Operate in a planned and cost effective manner.
  • Exercise the highest degree of integrity in all our activities .

In doing so, the company seeks to meet the expectations of all its Stakeholders, and aspires to a leading role in educational publishing In Southern Africa.

 


Slide Two

Key Success Factors in Our Industry

  • Availability of books as and when they are required.
  • Timing of publication to meet school terms and needs.
  • Product knowledge of our sales and management teams.
  • Quality Authors.
  • Authors' ability to meet syllabus requirements.
  • Readability of our books.
  • Price/cost effectiveness.
  • Securing approval of education departments.

Slide Three

Long Term Objective (24 Months)

Our objective is to identify those market segments of high profitability and to prepare material for those specific segments in order to position ourselves for a move into the ?top two? educational publishing companies in South Africa, whilst defending our budgeted turnover and gross profit levels.

 


Slide Four

SWOT Analysis

Strengths

Weaknesses

  • A good, experienced management team.
  • Sound knowledge of educational systems.
  • Own supportive companies, publishing in the Zulu, Xhosa and Tsonga languages.
  • Sound knowledge of tendering and contracting systems and methods.
  • Strong contacts within the various educational departments.
  • Our authors and highly respected in educational circles.
  • Strong links with overseas publishers.
  • We lack width in our product range.
  • Poor representation in the Afrikaans market.
  • We have a ?tired? backlist.
  • Inadequate market intelligence systems.
  • Our author care is poor.
  • Unreliable scheduling of production.
  • Lack of co-ordination of the marketing effort.
  • Dependent on outside readers and evaluators for African language texts.
  • The quality of our African language texts could be better.
  • We publish at a distance with respect to production.

Opportunities

Threats

  • Compulsory Education
  • New Syllabi
  • Existing weak primary material.
  • Use of English Language.
  • Modular Publishing
  • Pre ? school and early learning.
  • Publications for libraries
  • Offer training with the product range.
  • Overseas Competition.
  • Increase of niche marketers.
  • Move to tendering.
  • Extension of credit facilities by our larger competitors.
  • Paper shortage.
  • Price ceilings imposed by departments.
  • Aids.
  • Headhunting of our top staff as competition intensifies.

Slide Five

Falcon Publishing's Core Strategies.

  • Pursue a market penetration strategy into the English, African and Afrikaans segments.
  • Pursue a market development strategy into the pre primary and primary schools markets.
  • Pursue a specific market penetration strategy aimed at secondary schools.
  • Development of a visitation programme to all schools to coincide with the market penetration strategy.
  • Formulation and implementation of an author care programme.

Terry Lindsay put down his pointer and beamed proudly at the group of executives in front of him. ? Okay everyone, that is the proposed plan. I would now like to open the meeting up to the floor, starting with Jane.? Said Lindsay. ? Okay Jane. Let's have your comments. What do you think? How have we done??

Jane Knight, took a deep breath, quickly consulted the copious notes she had taken and launched into her response.

 
 
Meet Paul Dorrian
Principal Consultant

Paul has over twenty years experience as a management consultant, and has directed many projects in the fields of strategy, marketing and organisational effectiveness. His expertise has assisted many of South Africa's leading companies across numerous industries and national backgrounds....
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