Pearson PLC “Always Learning” Angela Elkordy Dr. Newell, 614 Growth Strategies 1

The Organization Established in 1844; S. Pearson & Son (Construction) Global company over 70 countries, 48,000 employees $6.1 billion in sales (2012), with $ Pearson PLC (1998) consists of 3 main divisions: Education Consumer Publishing Business Information 2

The Organization: Financial Times Group Business publications Financial Times Economist FT Press (books, texts, ebooks) Business intelligence Analysis Video, podcast Business community Blogs, forums 3

The Organization: Pearson Education Pearson Education Pearson School (PreK-12) Higher Education Assessment and Information Schools (Connections) Technology platforms & tools International English language learning Professional Credentialing 4

The Organization: Penguin Random House World’s largest trade publisher (global) 10,000 employees, nearly 250 imprints, and a global reach, (Random House’s strength in Latin America with Penguin’s hold in India and China) 15,000 new titles a year, about one-quarter of the world’s English-language books 5

The Organization: Pearson Brands 6

The Organization: Pearson Brands 7

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Internal Analysis: Strengths Size (market share) Strategy of continuous growth through acquisitions Market penetration (segmentation) Market expansion – new markets, global opportunities Vision and capacity to transform the company to a global, digital enterprise Diversification Leadership / agility / ability to pivot based upon performance Assets 9

Internal Analysis: Weaknesses Vulnerable to technology changes in publishing industry Primarily English language focus Diversification requires corresponding knowledge base to manage and grow Changes in education industry, especially national and state standards (K12), impacting Professional and Assessment branches (Government/ Regulatory) Changes in professional credentialing Intellectual property concerns in some global markets (not adequately protected by law) Fluctuation in foreign currencies and markets 10

Internal Analysis: Competencies Responsiveness Market conditions Customers Opportunities Product alignment (vertical and horizontal) Example: K-12 curricula, assessment, technology platforms for product delivery, teacher resources – even schools! Diversification to create product families 11

External Analysis: Competitive Analysis Nearly 50% of U.S. schools use at least one of its student curriculums, instructional management, or financial software packages. It’s also the largest provider of educational assessment services and solutions. Internationally, it’s ahead of the trend towards independent accreditation via EdExcel, the UK's largest body offering academic and vocational qualifications India, it runs Tutorvista, a network of English Language coaching centers for Indian students that also provides remote tutoring to 10,000 students around the world FastCompany: Most Innovative Companies of 2012 ( innovative-companies-2012-industries-top-10-education) innovative-companies-2012-industries-top-10-education 12

External Environment: Competition 13

External Environment: Competition 14

External Environment: Relationships Control over public education Pearson presence, profits, contracts Pineapple Gate: “Teachers, parents and education experts all chimed in. Nobody liked the talking pineapple questions. The Daily News, which broke the story, corralled “Jeopardy!” champion Ken Jennings, who concluded that “the plot details are so oddly chosen that the story seems to have been written during a peyote trip.” Gail Collins, “A Very Pricey Pineapple” (New York Times) 15

External Environment: Substitute Other testing services – which may not be aligned to curriculum Competitor products 16

External Environment: Ease of Entry Very difficult, except in niche markets Supporting and buying Ed. Tech start ups 17

External Environment: Government Regulation Professional standards for certification or courses of study Educational standards in K12 and professional contexts Regulatory environment – Ofqual investigation Intellectual property 18

External Environment: Role of Technology Ubiquitous Transitioning to a digital company (began in 2007) 19

External Environment: Social Changes Learning -- how we learn in a digital age Individualized education Globalization -- Transition to digital publishing company Decreased emphasis on textbook products Accountability – adaptive assessments for example Changes in the workplace (skills and training) Efficacy – program to assess Pearson learning materials 20

Growth Strategies: Strategic Mergers Penguin Random House.Penguin Random House May

Growth Strategies: Savvy Risk Awareness & Analysis 22

Growth Strategies Acquisitions: Technology 23

Growth Strategies: Business Incubator /Accelerator 24

Growth Strategies “Reinventing” themselves by reorganizing Switching direction to optimize opportunities in emerging markets and trends Strategic partnerships (support Inkling with McGraw Hill) 25

Growth Strategies: Effectiveness How effective have they been? Very! 26