An 18% cost savings was achieved through management delayering.
Becoming Number One
As ad revenues and readers shifted away from print newspapers, the UK’s Daily Mail and General Trust quickly saw an erosion of profits. Instead of merely protecting the value of its content and brands, the company opted to become more diversified in order to dominate its space.
DMGT has long been an influential global media company. As the digital age dawned, the publisher had 80% of its business vested in print newspapers. It knew it needed to quickly adapt and grow revenues by moving into adjacent areas, including digital, B2B, and international.
In 2010, the company was realizing rapidly diminishing newspaper margins. If officials didn’t take action, 29% of DMGT’s revenues and 45% of its profits would be at risk by 2015.
Corporate leadership recognized they needed to make a fundamental shift in the company’s business model to survive in the digital economy. They turned to BCG to help enable a strategic turnaround. This effort would effectively manage and shape the traditional core business. It also would refocus the company’s B2C assets on international and digital growth and diversify into additional B2B platforms, such as subscription-based media.
Building a Digital Advantage
DMGT officials had a large vision. Our experts helped bring it to fruition with a customized turnaround strategy that:
- Created a burning platform. To effectively identify the best way to boost declining ad revenue, BCG helped the company gauge changes in customers, assess the competitive landscape, and benchmark performance.
- Developed options and investment priorities. BCG defined the company’s aspirations and analyzed DMGT’s portfolio. That fueled a strategy to extract maximum value from or discontinue various businesses.
- Freed up cash through cost-cutting and efficiency improvements. Simply by delayering management, the firm achieved an 18% cost reduction, as well as improved decision-making. It also divested non-core and failing assets.
- Increased execution certainty. BCG recommended a set of major program management and leadership buy-in and accountability initiatives. Performance measures were also cascaded throughout the organization, and an automated dashboard was set up to provide real-time access to key performance metrics.
- Invested in key success factors to gain and maintain competitiveness. By doing this across strategy, people, culture, technology, and operations, DMGT was able to build digital advantage against both traditional and new competitors.
Pulling Ahead of the Competition
As a result of its proactive move and BCG’s program management and restructuring support, DMGT has become a digital media powerhouse, outstripping its UK and US competitors.
Its MailOnline site has enjoyed a rapid growth in traffic to become the world’s most-read online newspaper. The company has transitioned its portfolio from 80% print newspapers to 75% B2B assets, with the latter accounting for a 75% share of operating profits. It has also integrated social media into as many products as possible, which has strengthened its market perception and brand and increased opportunities for customer engagement.