The Economist – Case Solution

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The Economist Case Answers

1. What are the key trends and issues facing the Economist?

Like the newspaper industry, magazine publications are not immune to changes that affect readership. The emergence of technology and social change urge the Economist to respond and adapt.

The Economist’s managers viewed the internet as both a challenge and an opportunity for the magazine. They wanted their Web division to supplement or grow independently rather than cannibalize their print edition.

The team identified the web as a stimulating, lean-forward experience while the magazine as a lean-back, leisurely activity. Thus, it took a brilliant approach to incorporate exclusive features on its website, such as the “Economist Debate,” to increase readers’ engagement.

The debate often invites accredited experts to participate in multifaceted topics. The Economist created an incentive for readers to keep purchasing the print version and simultaneously use the web to join in intelligent discussions and connect with like-minded people. Thus, the internet has generated another revenue stream and created more value for the magazine.

But it also poses new threats to the magazine. E-readers can deliver the immersive experience that only a physical magazine can bring to a reader. With their anti-glare, e-ink, and natural feel, they become a direct competition with the print edition.

The Economist also identified The Week and the Huffington Post as noteworthy online competitors. They are aggregators, ones that legally glean their content from another news source without payment under the doctrine of fair use. By doing so, they can cut down personnel costs and still provide the readers with “short, witty, informative” information.

As for social changes, the Economist has ingeniously identified the emergence of Mass Intelligence, a movement where the public becomes more interested in reading challenging and intellectual information on politics, economics, science, and art.

Many people regard the magazine as a symbol of intellectual curiosity, so reading its magazines would improve their self-image. The magazine enjoyed an increase in readership due to Mass Intelligence due to broader readers’ demographics.

The magazine repositioned to move towards curious readers, not just professionals. The emphasis on psychographic segmentation would help the Economist to monetize this trend.

2. Why is the magazine publication able to outperform, though many of its peers are languishing?

The Economist performed incredibly well even in cyclical downturns, surpassing their counterparts in terms of revenues and number of subscribers.

Whereas most publications acquiesced to the consumers’ predilection for short and simplified articles, the Economist has been…