Roberts Media PLC Question Essay

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Q4) Using all the information available to you, complete the following tasks. • Analyse the key arguments for and against Harry Gardner’s proposal. • Make a justified recommendation on whether you think that the Directors of Roberts Media plc should accept Harry Gardner’s proposal. (34 marks)

Harrys proposal to move to a digital only market has many advantages and disadvantages. Firstly the market RM are currently operating in is dealing which lead to them seeing profits fall by 12% last year. If these trends continue RM will its eventually struggle to operate and may even begin to make a loss. The new market Harry is suggesting is in fact growing rapidly with a predicted rise in digital subscriptions from 3-10million in the next 2
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Their skills and expertise in the print market which has previously won awards are potentially going to be lost by changing markets. Not only this re-training might be required which will cost the company a lot of money.

Harrys strategy involved getting rid of the print works and distribution network as they are surplus to requirements. Although this will reduce wage costs and increase ROCE which is an objective of the business, redundancies cost money and with the long serving nature of the work force de-motivation could occur between the surviving staff as long time friends may lose their jobs. 75% of the staff at the company are part of a trade union compared to an industry average of 50% who are not afraid of taking action. Unrest between the staff could lead to industrial action such as strikes which not only create bad publicity for the business but costs RM money as production could be delayed or even halted.

The change in market will cause some old customers to be lost who don't want to read a digital magazine or don't have the ability to. for this reason a launch campaign will be required to attract new customers which will increase the amount of money spent on marketing and might not be viable depending on their budget.

The strategy also plans for relocation of the business to Manchester. The new location is smaller and also cheaper. It also plans to encourage employees to work from home which should also further reduce costs and

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