Reader's Digest Case Study

1760 Words8 Pages

Bobby Renner

March 6, 2013


This case analysis is about Readers Digest’s recent struggle to succeed in business. Reader’s digest was the number one consumer of magazines in the US and has struggle in the passed decade after the invention of Internet. They have recently hired a new CEO Mary Burner to help restructure RDA.


* INTERNET- The internet is RDA’s biggest competitor. It offers information of all kinds free of charge to everyone. * Advertising- Advertising is most magazines biggest revenue producer. Advertisements also have a negative effect on readers because they take away from the entertainment provided by RDA. * Net income has been in the negative in 2009,
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* Lastly, customer service! RDA full refunds on returns of products ordered online

Threats: * Reader’s Digest Association’s biggest threat is the Internet. Many domains provide entertainment and information that can satisfy a customer for free. * Social Media! Social media is free and provides news and entertainment all on the same interface.

Porters Five Force Model-

A Threat of New Entrants- There is no big threat in Reader’s Digest industry in regards to printed magazines. Reader’s digest has the ability to overtake almost any magazine that attempts to enter the industry of entertainment magazines in regards to home, health, family, finance, and faith.

The Bargaining Power of Buyers: Buyer’s definitely have a large bargaining power. There power comes from the opportunity to cancel there subscriptions with Reader’s Digest. Reader’s can find the information they need in hundreds of other locations, whether through books or even through free websites. Customer’s will require a high value of customer service and a high quality magazines to keep them entertained and interested in keeping there subscription.

Bargaining Power of Suppliers- Suppliers are almost non-existent in this industry.

The Threat of Substitute Products and Services- Substitute products include the television, YouTube videos, free websites, books, and newspapers.

The Intensity of rivalry among competitors in an industry- RDA’s industry is highly competitive. It is
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