Growth Platforms: Great Opportunities
Bertelsmann plans to step up its growth in the years ahead – and designated lines of business fields with great potential, known as “growth platforms,” will play a crucial role. Just four and a half years to become the world's fourth-largest music publisher, with the rights to more than a million songs: That is the success story of BMG Rights Management. At the same time, the music rights company, newly founded in 2008, is a perfect example of how at Bertelsmann small, promising businesses can become mainstays within a short time. Besides BMG, Bertelsmann systematically identified further growth platforms last year – existing and new lines of business that meaningfully complement the portfolio of an international media and services company, and therefore hold great potential for the company’s further development. As different as Bertelsmann’s various growth platforms are, there are some key similarities: All of them must meet mandatory investment criteria. Specifically, these include that they should have an internationally proven and digitally established business model; should operate in markets with high growth potential; are not very cyclical; and are scalable, i.e. their returns should increase along with their size.
Content for television – and beyond
Fremantle Media is already one of the company’s biggest growth platforms. RTL Group’s TV production arm produces popular shows like "The Price is Right" and "Idol" in 22 countries around the world. The strategy is to create content that works in many countries and can be exported. These days, it is important to exploit content not just on television, but also across other sales channels – mobile apps, live events and games significantly increase the value of a brand. Bertelsmann's services division Arvato is home to several growth platforms. It benefits from a globally growing demand for outsourcing solutions. Rising pressure to lower costs and increase efficiency is driving willingness to outsource services in the public and private sectors. The outsourcing of entire business processes to external service providers, known as BPO, is expected to see worldwide growth of more than five percent annually through 2015. Other fields in which Arvato will be more active in the future include the globally booming e-commerce business, and integrated financial services. Arvato will simultaneously continue to expand its offerings for global clients in the IT and high-tech sector.
Education as a growth sector
Demand for higher education - especially for degrees from accredited institutions – is growing constantly. At the same time, digitization ensures that high-quality education can now be delivered online as well. The education segment is of particular importance to Bertelsmann’s growth strategy. In the years ahead, it will be expanded into the third mainstay of an international and fast-growing corporate portfolio – alongside the traditional businesses of media and services. As the education business requires expertise in both content and services, it perfectly matches Bertelsmann’s skills. On this site you will find detailed information on Bertelsmann’s activities in the education sector, which are pooled in the Bertelsmann Education Group.
Investments in new business
These examples show why a significant portion of Bertelsmann’s investment funds will be channeled into such new businesses from now on. Activities in these lines of business will help Bertelsmann to become a faster growing company in the next five to ten years. Sustainable value creation, desirability as an employer, and employee motivation – all of these success-critical aspects are closely linked to a company’s growth profile. Which is why Bertelsmann is fine-tuning a variety of areas.