Duke University Press
Duke University Press (DUP) publishes journals and books, both of very high academic quality. It is a service organization in many ways, but its product is realized in book and journal form. As such, the organization is an interesting hybrid. You will need to guess on some of the inputs. Examine your answers carefully to see that you are comfortable with your responses.
Organizational Description
Duke University Press is a not-for-profit publisher dedicated to the publication of peer-reviewed scholarly books and journals. It published its first book in 1922. The Press is a semiautonomous unit of Duke University; the Press director answers directly to the university provost, but is not connected organizationally to any other unit of the university. However, the Press is permitted to use the services of general university support departments (e.g., payroll, purchasing, employment).
The Press is unusual among university presses in that it is largely self-supporting. Most university presses receive approximately 10-15 percent of their operating funds as subsidies from their universities. Duke Press receives only 1-2 percent of its operating funds from subsidies provided by Duke University; the remainder comes from revenues generated from the sales of books and journals. For FY 1989-1990, the Press expenses will total approximately $2.8 million.
The Press currently publishes eighteen journals. Journals represent a predictable source of revenues, since subscription levels remain stable or increase slightly over time. Journals are easy to price, because the price elasticity of demand in each market has generally already been determined, especially for those journals that have been in existence for a number of years. There is very little uncertainty in terms of outside competition, since most of the Press journals are aimed at niche markets that may be served by one or two other journals at most. Since the market each journal covers is limited, marketing can be accomplished fairly efficiently through journal-specific direct mail campaigns. The "selling life" of a journal is indefinite because of the potential for renewals, and because each journal is produced continuously for its respective market, it can be constantly developed and refined to better meet the needs of its subscribers.
Books are more problematic. The Press publishes approximately 70 new books per year, and continues to market books produced in previous years if they are still deemed salable. It is extremely difficult to predict how well a new book will sell; this presents problems in pricing because books are priced only to cover fixed and variable costs, not to make a profit. If a book is predicted to sell fewer copies, it will be priced higher than a book that is predicted to sell a greater number of copies.
Questions for Consideration
1. Are there any strategic misfits? How serious are they and do they require management to re-think the strategic situation before considering the best organization for Duke University Press (DUP)?
2. The case discusses both functional and divisional aspects of publishing. Intuitively, do you think that a divisional configuration of journals and books would be appropriate? Did OrgCon give you that recommendation? If not, you may want to do a delta analysis on the size of DUP. Should it operate as if it were a larger organization, how would you support such a recommendation?
3. There are numerous functions in publishing. Do you think a functional configuration would be appropriate?
4. There is some speculation that the publishing world will become electronic and paperless. How should DUP prepare itself for this NEW world?