This report will aim to identify the operations behind what makes Penguin Random House one of the largest publishers within the publication industry, outlining its history, success whilst analysing the strengths and weaknesses it has as a company.
As previously stated in the abstract, the chosen company for this research report is Penguin Random House. Penguin Random House is a company which once existed as two separate entities, Random House and Penguin. Random House was first opened within the 1920s whereas Penguin was established by Allen Lan within 1935, it was not until 2013 both companies made the strategic decision to join forces and thus become Penguin Random House. This merge made both companies one of the biggest sole publication bodies in the world, employing more than over 12,000 individuals all together by 2016. This large growth reflects how fascinating this publishing company is and the growth rate of Penguin Random House is a reason behind why this publishing company was chosen for this report.
Penguin Random House (PRH) publishes books and has a very intriguingly diverse platform of books published each year, from children’s books to adult erotic books, such as Fifty Shades of Grey. The company is very diverse in its publications and has not got a preference to a specific genre. This is why the company has become a global phenomena within the publication industry. By not having a specific set genre, this allows the company to not be restricted within the industry, if they were to sell only children’s fictional novels their revenue would be much lower as that would mean they would have a very specific target market and their ability to expand as a company would be limited.
In terms of revenue, PRH has seen a large increase in terms of net profit and sales. Selling almost over 10,000 books annually, the company’s revenue for 2014 was £3.3bn, an increase of 25.2% from the previous year 0f 2013. This increase is an indication of how the combination of these two companies has led to the envisaged great succession that had been predicted, statistics likewise reflect this. Print sales from this company are also flourishing, The Fault In Our Stars by John Green was a gigantic big seller for the company during the year of 2014 and has generated a fair amount of profit for the company, selling millions upon millions of copies. However on the contrary to the success of paper based publications published by the company, PRH has recently seen a vast decline in global revenue by 10.7%, due to a decrease in e-book sales online (Onwuemezi, 2016) This decrease has now led to the company rethinking and redeveloping their business strategy in order to increase online sales. Thomas Rabe, CEO of Bartelsmann which owns 53% of PRH stated “We recognize that our growth profile has further improved through a series of strategic measures; our new Group structure with eight divisions introduced at the beginning of the year makes this transparent. At the same time, we have become more digital and more international” ( Thomas Rabe, 2016).
Penguin Random House’s approach to solve their decline in e-book sales has some advantages and disadvantages. By introducing new structures into their organisation it will allow the company to identify where their issues are and how they can best improve them for the future of PRH, however this new strategy may also carry negative consequences in the long run. By changing the aim of their strategic measures they are likely to end up doing worse at what their best, which in return will also lead to a decline in sales. This can be avoided however if the company decided to take a trial and error approach, keeping their old strategies and implementing a trial and error system in order to learn how to improve their company’s weaknesses and strengthen their strengths . On the other hand, by becoming more digital and international the company will benefit completely. By advertising better online PRH has the ability to reach millions upon million of potential readers that will generate and interest to their publications, leading to more sales and more readers. Furthermore by going more international, it will enable PRH to develop their demographics and expand their target market, allowing them to generate more profit for their authors and the company itself.
To conclude this report, despite minor declines in online sales of e-books, Penguin Random House is and will continue to be one of the biggest publication bodies in the industry, it is the publisher of many great best selling books, it’s authors winning nobel prize laureates and pulitzer prices, in reference to the abstract, it is a company which values great talent and writing and supports it’s people fully which is partly the reason behind why the company has sold many best selling books within the recent years (penguinrandomhouse.biz, 2015). By PRH changing their online strategy the company is likely to see a drastic increase of interest on their online e-books which will increase the amount of sales which are generated from online. However, the company is still at risk of falling behind other giant companies such as HarperCollins. If the company fails or does not continue to uphold the standard of their company they will be subject to further revenue decline within the near future.
Reference List
penguinrandomhouse.biz. (2015). Facts and Figures. [online] Available at: http://www.penguinrandomhouse.biz/about/factsandfigures/ [Accessed 20 Oct. 2018].
Staff, T. (2012). Penguin and Random House: facts and figures. The Telegraph. [online] Available at: https://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/9640102/Penguin-and-Random-House-facts-and-figures.html [Accessed 20 Oct. 2018].
Calamur, K. (2012). Penguin, Random House Announce Merger. The Two-Way Breaking News From NPR. [online] Available at: https://www.npr.org/sections/thetwo-way/2012/10/29/163898792/penguin-random-house-announce-merger?t=1540567273859 [Accessed 20 Oct. 2018].
Onwuemezi, N. (2016). PRH first-half revenue hit by e-book decline. The Bookseller. [online] Available at: https://www.thebookseller.com/news/prh-revenues-decline-107-383221 [Accessed 20 Oct. 2018].
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