It was the period of the 18th century when the Scotland held to an optimistic belief in the ability of humanity to effect changes for the better in society and nature through the intellectual and scientific goals. And in the era that embraced industrialization, the visionary views of knowledge-sharing through the printed media such as books sparked the idea of partnership of a printer, Colin Macfarquhar, and an engraver, Andrew Bell, to capture and market the knowledge.
Having started with the book of “Dictionary of Arts and Sciences”, the publication of the book was to serve the society’s need for knowledge. Due to the era of the Scottish and European enlightment, the books seem to do very well. It seemed like the timing was right. The first edition that was published in three volumes in weekly installments were sold out quickly. The following editions, were printed and supplied with a lot bigger and comprehensive contents, early success was enjoyed by Encyclopaedia Britannica, Inc.
Provided a good content that supplied the need for scholarly knowledge, the company expanded its sales not only through the Europe, but the company had also managed to penetrate into the North American market. The success of the company had Americans interested to purchase the company, and in the end of the nineteenth century the company was bought by Americans and had to move to the United States.
The company then faced challenge in the digital era of the 1990’s where the company had to face the challenge of the era to sell the encyclopedia in the other form other than the printed one. Having successfully leading the encyclopedia market for more than a decade, Encycopaedia Britannica, Inc. had to rethink their business models due to the challenge from competitors that were competing in the market by providing optical version of the encyclopedia in such a cheaper price.
Later in the internet era, the company had to face another problem where every single thing are available in the internet, and should be available in the internet. Encyclopaedia Britannica, Inc. had to rethink their business models and strategies due to the fact that the company had to compete against companies that offers free encyclopedia-like content such as the Wikipedia.
Looking at the case of the Encyclopaedia Britannica, Inc., I found it interesting to see how the company could do successfully for more than a decade as the company started and sparked a new industry or market categorization. The company also had strong presence to the market, being able to feed the society’s need of the knowledge by the printed media of encyclopedia books which at that time were what society are looking for. The company brought something new by those approach, and due to the success, Encyclopaedia Britannica were able to penetrate international market and they finally had to face challenge due to the changes in the dynamics of the market.
Changes of dynamics in the society force companies to change its nature of business. Some need to adapt to change of society, some need adapt to the change of culture, and some need to adapt to change of technology, and in this case, Encyclopaedia Britannica, Inc. had to face those challenges and had to adapt themselves to the situation.
The Encyclopaedia Britannica, Inc. was doing successfully in the printed encyclopedias for almost a decade. The company charged huge amount of money for the whole volumes back then, due to the value that the company brought, and competition were not a big problem for the company since the company is the leader of the industry. The company then faced the challenge stepping into the digital era where the competitor found a probably a lot more efficient business model so that price offered by the competitors was significantly lower.
Due to those facts, makes it interesting for me personally to look at how the company did not really see the challenge coming where the company tought that they were doing really good and were confident that there was not going to be any competition since they were doing good for more than a decade, which then the company had face the situation that forced them to react and adapt to the drastic change of the market where due to the change, there were a substantial price difference offered by the two company.
The topic would also be an interesting topic and important topic for businesses that are currently operating and doing well. Those businesses needs to look at the changes that might happen. Changes of culture, lifestyle, technology are sometimes unpredictable so companies need to take a look around on what changes might happen in the surroundings.
First published in the middle of the 18th century in Scotland, printed and sold by Andrew Bell and Colin Macfarquhar, The first encyclopedia contained 2,659 pages, including articles borrowed from studies such as Benjamin Franklin (on electricity) and John Locke (on human understanding). And after having good performance on sales up to the tenth edition, the eleventh edition were slowed down due to the World War and the company faced financial difficulty.
The company later sold to the American retailing giant, and re-published the eleventh version in 1915. The Twelfth and Thirteenth editions were published in 1922 and 1926, but these were only the reprints of the Eleventh edition along with supplementary material. Since the publication of the Eleventh edition in 1910, the shape of western society had been substantially altered by the World War I. Sales were good until the great depression comes and harmed the economies around the world, it became a problem that the company would require radically new marketing techniques if it were not to prove a permanent liability.
The company then had their marketing approach restructured and attempted to stop marketing the encyclopedia via the retailer’s outlets and built a sales network thoughout the US to sell the product door to door. Later in the middle of the 1900’s, the company became Encyclopaedia Britannica Educational Corporation in 1966 and eventually expanded into filmstrips, video, and laserdisc technology as well as conventional films and reference books for school markets. Later the company finished the fifteenth edition of the encyclopedia. At the similar timeframe, the company formed Britannica Software and changed later to Compton’s New Media, Inc. as a separate division to work on the design of educational computer programs. And in the early 1990’s the company released the multimedia encyclopedia in a CD-ROM format.
Encyclopaedia Britannica, Inc., now publishes digital products that promote knowledge and learning. It offers curriculum products for schools, language-study courses, online learning services, encyclopedias, and other reference works and language products. The company also provides digital education products for students in the early and middle grades, one of them is Britannica Online for Kids, a research and homework help portal, dictionaries for English-language learners, and other dictionaries. In addition, it offers training, operation, and readiness-management solutions, covering decision-support and optimization needs of defense forces, homeland security units, and first-responder organizations in the civil sector, one of them is Fox, a Web-based training and readiness management platform, and products and services based on natural-language processing of Hebrew and Arabic, including network-based dictionaries and language-search products. Further, the company provides libraries; products for colleges and academic libraries, eBooks, training solutions and enterprise software Morfix, a search engine solution; and information and instructional products that are used in homes, schools, universities, and libraries. It serves its customers in Australia, Brazil, China, India, Japan, Korea, Latin America, the United Kingdom, and international.
In the early 1990’s Encyclopaedia Britannica, Inc. stepped into the electronic age, they marketed and published encyclopedia via their subsidiary, Compnton Encyclopedia in a CD-ROM format. The target market were schools and public libraries, which those institutions needed to pay $750 to have the right to own the CD-ROM. Aside to the CD-ROM encyclopedia format, the company still offered their 15 editions encyclopedia, with 32 volumes in it to families and individuals from door-to-door selling, persuading them to invest to the encyclopedia with a price of $1,500 to $2,000. At the same period of time, Microsoft entered the same encyclopedia market. Microsoft used the licensed material from other encyclopedia company and sold the product in CD-ROM format for less than $100.
Later in the following year, Encyclopedia Britannica responded to the competition by selling and divesting to the Compton division, and sell their entire encyclopedia that was fifteen editions with 32 volumes long into two-CD set alongside with the compatible hardwares that costed businesses for about $3,000 anually. And as for those high costs, Encyclopedia Britannica’s fell, and Microsoft’s encyclopedia, Encarta, became a strong competition. But then Britannica tried to respond with a price plan of free CD-ROM to the customer who bought the whole printed encyclopedia, or charge $995 to the customer who wanted to buy the CD, which was still a lot more expensive than Microsoft’s Encarta.
Decreasing in sales over the years, the company then acquired by Switzerland businessman Jacob Safra, and made drastic changes to stop door-to-door sales, tried marketing CDs through direct mail, and serve a new internet service in 1999. The company launched the service through the Britannica website with five pricing models of :
• Subscription based pricing, for unlimited annual access
• Metered pricing of time spent on the site
• Fee for requested services only
• Product line pricing with basic fee for basic products with extra for other advanced products
• Bundle pricing
The company reinvented their business model. The whole future of the company is based on how they will perform by the interenet based service. Unlike the previous business models that were marketing their products through the schools and libraries, the web-based service targeted a broad range of internet users. The company also partnered with sites such as amazon.com and bn.com.
The company that later renamed itself Britannica.com Inc., generated revienues from their change to e-commerce company. The website continued to promote the tradition of providing knowledge to the society, while their vision of the market switched to the new marketplace of the internet.
The company’s products now varied from encyclopedias, online language courses, kids learning programs, library programs, library enterprise systems, and search engine solutions. The site also offered integrated searching, where each search returned informations from all kinds of sources in one view, including its own database.
In 2012, the company decided to stop all the production of printed material of encyclopedia, switching the basic encyclopedia in a DVD format through Amazon. The company compared itself to the free online encyclopedia, Wikipedia, that has a lot more topics, with a price benefit offered to the customer, which the customer does not have to pay anything to access the Wikipedia pages.
Britannica argued that the DVD is worth the price. The company have backed up with scholarly contributors, editorial processes involved in the making of the encyclopedia, they are all well written, and based to facts and researches, where Britannica argued the data validity that Wikipedia has, regarding to how the free encyclopedia site gathered their information.
“Today our digital database is much larger than what we can fit in the print set. And it is up to date because we can revise it within minutes anytime we need to, and we do it many times each day.” Said Britannica Inc. President.
Based to the change of the change of business model, the Encyclopedia Britannica, Inc., that is now Britannica.com, Inc., changed successfully into the digital products where the company now serve a completely different market segment. The company stayed in the printed encyclopedia for too long and the company should have done better financially if they were adapted to changes quickly.
