AGORA SA CASE STUDY

Analyze the print industry. Analyze the interactive industry. Is the dynamics favorable to Agora or rather unfavorable? Polish market of the main daily newspapers:

Sales of daily and weekly newspapers in the period January-December 2010 to the same period of 2009. Selected dailies: Dziennik Gazeta Prawna, Fakt, Gazeta Wyborcza, Rzeczpospolita, Super Express, and weeklies: Gazeta Polska, Go Niedzielny, Newsweek, Polityka, Przegld, Przekrj, Angora, Tygodnik Powszechny, Wprost.

Conclusion: The most profitable is the clarity, addressing important issues and focus on the analysis of the facts, as did the record-holder, the Gazeta Polska. Obtained a 100% increase in sales eclipsing rivals, the closest of the Angora Tygodnik Angora recorded 11% growth. Dealing with important social problems helped a Gociowi Niedzielnemu maintain steady growth throughout the year. Sales growth of Tygodnik Angora, which makes reprints from other newspapers, can be explained by decline readership of dailies (Angora selects what they consider more interesting articles from the past week). On the increase in sales following his appointment as editor in chief by Tomasz Lis, can also be explained by increased expression of the weekly (he started strongly support the government line).

In the years 2006-2010 Agora Group's activities were under pressure of competition, particularly in the segment of paid dailies. Implementation and execution of effective marketing strategy for "Gazeta Wyborcza", consisting of lowering prices and consistent and innovative marketing activities, allowed the Group to return to high levels of financial ratios and profitability, and strengthen the position of "Gazeta" on the market for newspapers in Poland. The financial results and market all projects Agora in 2010 testify to their normal operating foundations, and a number of multimedia projects implemented during this period, their growth potential and unique competence of the team of the Group.

What could be the possible strategies of Agora for these new forces reshaping the News Industry? Media market undergoes a dynamic phase of change. Increasingly blurred boundaries between media, categories and segments. There are new services, and customers can choose from a huge and constantly growing number of bids. Using media, profile sites are changing and become more popular and dedicated to a narrow audience. This situation is reflected in the model behavior of advertisers who are increasingly willing to allocate their budgets in the profiled media offerings, such as TV, thematic channels, Internet announcement vortals or specialist magazines. This trend applies to all media except for outdoor advertising, the extent of which remains massive. The technological revolution in the media is also a way and quality of the distribution of resources. The Company expects that within a few years and the increasing digitization of media penetration of broadband will open up new opportunities for traditional media ventures, as well as entirely new areas of activity.

Implementation of development strategy the Agora is assumed to increase the scale of enterprises and accelerate the growth and diversification of revenue sources in the direction of the electronic media. The main area of Agora strategy is Poland, but the company intends to participate more intensively in the changes in the media markets in neighboring countries (in this example, the Ukraine). Management aspires to expand the revenue sources of the Company in such a way that in 3 years the majority came from activities not related to the issuance of newspapers. This objective envisages more aggressive approach to the acquisition, exploration and dynamic networking (including capital) with external partners, and greater acceptance of risk in the evaluation of investment objectives. In the opinion of the Management Company today financial resources, combined with a more flexible approach to the methods of financing development activities (including the possibility of increasing the credit line, or an additional issue of shares) is a favorable condition and necessary for the implementation of the plan development.

Does the introduction of Fakt by Axel Springer pose a real threat to Agora? Fakt, lauched in October 2003 by German-based Axel Springer Verlag AG, was Agora major challenger. Fakt Springer`s biggest undertaking in Poland, echoed german Bild`s successful formula and within two months from the launch date became Poland`s leading daily newspaper. Fakt positioned itself in-between Rzeczpospolita and Gazeta Wyborcza at the high end and Super Express at the low end, although it tended to be viewed more as low-end tabloid then a serious newspaper. Springer carefully prepared the launch of Fakt, paying particular attention to the editorial content, positioning, timing and price. Since October 2003, the date of its launch, Fakt had been steadily increasing its market share in the Polish daily newspaper market gaining a broad number of readers and advertisers. Within two months, Fakt became Poland`s best-selling daily market leader. The position of Gazeta Wyborcza was also weakened by the presence of the new competitive daily. Its circulation decreased and required additional effort to maintain current levels. The introduction of "Fakt" strongly declined the position of Gazeta Wyborcza on newspapers market.

Why does Agora want so much a tabloid? Tabloid is a newspaper issued in the format of about 37-40 cm x 27-30cm approx. Small format is provided as a convenience of the reader. Tabloid is directed to a mass audience that moves by public transport. The main aim of this type of press is to reach the widest possible circle of readers, for this tabloids are characterized by low price, simple language, the dominance of image over substance. Because of easy language tabloids are addressed to low educated reader that does not require information from newspapers, but the easy sensationalism illustrated with numerous photographs. These photographs often show shocking scenes and are imbued with eroticism. In particular, much attention is paid to them or the stars of the sport, generally well known to the reader. Should be added that tabloids describe fictional stories and often refer to emotions, provoke, and exceed the standards of journalism. Attribute of this type of press are often crosswords and competitions such as scratch cards. In 2005 on the Polish market, there were two tabloids: Super Express and Fakt. Introduced in October 2003 Fakt, well promoted with the appropriate price, quickly became the market leader. Market of colored dailies with wide, easygoing recipient and attractive position for advertisers seemed to be a good target, so Agora decided to enter own tabloid.

What are the major reasons of the failure of the acquisition of Super Express? In June 2005 Super Express was up for sale. The tabloid had been under strong pressure from Fakt and suffer declining sales and audience. Agora was interested in this transaction, but there was too much imprecision details. Super Express had two owners. 50%-owner was ZRP (Polish United Entertainment Companies) and 50% of Bonnier. Agora didn`t know if it will be able to buy all the newspapers and only 50% of the shares. The potential sales price was not disclosed too. Besides, in 2005 Agora had been secretly planning the launch of new, daily newspaper which could be in competition to Super Express and Fakt. And it was the main reason that Agora decide to not buy Super Express.

What is the impact of the Free Newspapers like Metro on Agora? The free newspaper is aimed at the general public in metropolitan areas and is published on weekdays. They have a comparatively cheap distribution system, mostly through the local public transport system, although some alternative ways of distribution exist. Copies are also distributed in office buildings, shopping malls, hospitals, and university campuses. Free papers have a small editorial staff and is financed by advertising. Free dailies have proven to be attractive to a younger audience. The readers of the free dailies are likely to be new readers, young people who did not read a newspaper before, although some substitution is possible. Metro is polish daily, distribute in biggest cities for free of charge. Average daily sales declined to 399 thousand copy and its third polish daily with reading at the level of 3,4% ( 1,0 million person ) Metro is attractive partner for advertisers, due to precise reaching target, define groups and biggest networks of distributions in Poland. Clients of Metro have possibility to announce in two ways in one time: in paper edition of newspaper and in internet. Metro offer attractive package, as e.g. Metro-net.fm, financially attractive advertising in newspaper, radio and Agoras internet portals. Since 2009 Metro offers mTarget. It is direct marketing and media ambient, custom publishing projects, organization of mini events and packages of target distributions.

Is a license for a Television, a question of survival for Agora? Agora plans to continue to actively development related to strengthening the competitive position of all its assets. The Company is aware that due to the slower growth in spending on paid advertising in newspapers and on the continuing strong competition in this market Agora must also look beyond the developmental directions publishing market. The Agora's ambitions to enter the market, says the media for years, but these plans were stopped for a long time the Rywin affair. Experts have no doubt, to continue of growth, Agora needs a television, because the press market is getting slow and is going to die. In the current situation of the company should not have problems with accessing the TV market. First, digitization will expand the market, and secondly Agora plans is promoted by the political context.

What is the main competitive advantage of Agora? Gazeta Wyborcza is a great example of putting the knowledge and skills, because the configuration of resources and skills in core competencies of the company, Agora could build a competitive advantage. Agora has competitive advantages like printing houses. It is a barrier to entry for a daily newspaper in which the lack of facilities such services. It is impossible to start with a newspaper with a circulation of 800 thousand a day without a printing houses, and printing continues to build at least two years, because so many are waiting for machines that are made to order. Agora's strategic assets are intangible, the employees of the company.

What are its core competencies if it does have some? Agora is building a competitive advantage, putting the quality of the offers for our readers, listeners and Internet users. The company never positioned as a "cheap alternative". Most of the competencies that they possess as a business, it powers the members of their team. Agora invests in humans professional development, to the benefit of both parties. They have some valuable assets, but I believe that the main competitive advantage is a team of people working, in other words human resources in Agora.

How bad is the situation of Agora? Agora and its flagship daily Gazeta Wyborcza experienced difficult times in the past few years, especially in 2004, its circulation was falling and was forced to lay off employees, which have been affected by the climate in the company. Agora experienced difficult times in the past few years, especially in 2004, its circulation was falling and was forced to lay off employees, which have been affected by the climate in the company. Moreover, the market has entered a new newspaper Fakt with great success, although not threatened with ads, but clearly undermined the dominant position of Gazeta Wyborcza. In addition, the whole Rywins affair and its related investigation, which revealed a contact manager with politicians of the left, cast a shadow over Agoras reputation.

Possible Scenarios for the future Agoras program of action - nearly every employee will be owned by Agora incentive plans, motivation programmes for journalists or serial allocator shares to employees. Here, everyone depends on to the company fared best. They invest in their strong competencies beyond the Polish, and will look for investment opportunities in the areas where Agora has the experience and know-how. When they find them, Agora could start business from day to day. They will find another way to build audio-visual resources and expertise, thus preparing for the future. Agora will be interested in large acquisitions, strategy development supplemented by a second direction, which they call the strategy of building with Lego bricks. This is will be done by placing the larger whole of the smaller elements by combining organic projects of joint ventures, partnerships and smaller acquisitions. They have to build a variety of services, which together create value. The purpose of Agora is the entrance to the forefront of the Polish Internet.