BCG matrix - production model

by Gorbatchov 4 Replies latest jw friends

  • Gorbatchov

    Today I read some old MBA stuff on my bookshelf. One of it is about the BCG matrix.

    The matrix indicates the state of an business (merely production). If you place the in the BCG matrix, the result will be "dogs", sometimes more friendly called "pets".

    A business in the category "dogs / pets" is to be sold off / liquidated soon.

    That's what we see at this moment by the wtbts / They have no growth and no cash flow.

    The cashflow from the selling of buildings is a one-off benefit.

    It's a decline business. They are liquidating the old production model, the printing business.

    The status of the organization today could be the Cash Cow state at his last, with the continuously milking of money, cash and assets and in a transformation to a "dogs / pets" fase, when the organization has retreated into the hills of the Hudson area.

  • joe134cd
    I think in another 50 years from now it will be reduced to a web site.
  • shepherdless

    I have been thinking about this a lot. Publisher numbers aren't growing, but they are holding steady. There may be an avalanche of child abuse claims coming, but judging from the way Watchtower is handling it, they seem to have their head in the sand. And yet they are laying off staff, stopping construction and begging for money.

    My theory is essentially that the business model is broken, and Watchtower has not found a new one yet. The way I see it there are three time periods:

    (1) Beginning to 1990

    (2) 1990 to mid 2000's

    (3) Mid 2000's to the present.

    In brief and crude summary:

    (1) Beginning to 1990:

    The business model up to 1990 is explained in the following link:

    Essentially, thanks to free labor in production, free labor in distribution, a large captive market, economies of scale, and tax free status, they were able to make large profits even though they only received a small amount for each magazine. $1,780,000 per week in the early 1980's according to the above article.

    (2) 1990 to mid 2000's:

    In January 1990, the US Supreme Court handed down the decision, California Board of Equalization vs. Jimmy Swaggart Ministries. This had a significant effect on the business model, as explained in the following link:

    Essentially, Watchtower became more dependent on donations, but the donations were still for practical purposes linked to magazine placement, book and CD sales etc. So the Watchtower's income was perhaps less certain, but it was still essentially a publishing house.

    (3) Mid 2000's to the present:

    Since the mid 2000's more and more people obtain their information over the internet. All media business have suffered. Print media in particular has been devastated. Magazine sales have plummeted. Print media have often responded by shortening their newspapers and magazines, not to save paper, but (according to someone I knew in the industry) because market research people were tending to spend less time reading print media and lengthy publications were suffering the most. Watchtower has also shortened its magazines, but about a decade later than other print media.One of the common tactics print media has tried to survive is by morphing into internet media. That is what Watchtower appears to be trying to do. However, other internet media generates income through advertising. Watchtower can't do that.

    It seems to me, Watchtower is in a bind. Watchtower can't stop the expensive printing presses, because it needs handouts for the ministry. Going door-to-door (itself an outdated sales model) won't work with showing a publication on a tablet. And if the publishers can't hand magazines out, because people no longer read magazines, then Watchtower receives less "donations" for the magazines.

    So my theory is that Watchtower's major source of income has dropped off dramatically in the last few years, and there is no prospect at the moment of that reversing.

  • Gorbatchov


    I have the following addition:

    Printing will be outsourced to:

    1) rank and file JW at home PC for the internal documents

    2) commercial printing company's for PR documents like invintation and tracts.

    The next decades they will hide with a small staff in the Hudson area and do the global internal communication with high speed internet connections.

  • slimboyfat

    Intersting posts. I think shepherdless gives a good summary of the situation. A complicating factor is what role property has played and will play in their business model. The current leaders appear a bit clueless. There is no one with the business acumen of Knorr to come up with bright ideas. They just seem to be selling off the assets and cutting back in order to stretch things out.

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