Introduction

Ms. Maria was the production head in the ProTec Publishing house at Tampere, the largest inland city of Finland situated in the southern part of the country [1]. The company produced a journal and a magazine with internal product reference codes PJL140 and PMG120 respectively. PMG120 was produced 12 times a year in monthly production runs and it has far less circulation than the journal. PJL140 was produced quarterly but in larger production runs. It was in March 2024 that Maria was planning production for the next year and called upon a meeting with the sales head Mr. Oliver and marketing head Mr. Johannes. Maria had a tough time in the meeting as both Oliver and Johannes were insisting on changing the printing machine to one with laser technology to improve upon the quality of production and also to change the design of the cover page. They brought up the point of declining sales of PMG120 and linked it to the quality of printing even though the print media had witnessed a declining trend for the last couple of years. They forecasted an annual sale of 12,000 units for PJL140 and 6,000 units for PMG120. 

Business Activities in Finland 

Finland is a small European country with the highest number of companies registered in Services (195,422 companies in total), followed by Finance, Insurance, and Real Estate (160,186) and Agriculture, Forestry, and Fishing (104,788) [2]. According to the report by HitHorizons database, a total ofmore than 700,465 businesses are registered in Finland. This culminates in1.52 percentof all companies available in the HitHorizons database. These Finland-based companies have a share of 1.02 percent of all sales generated by European Union-based businesses and employ 0.45 percent of all EU employees. If someone refers to the Standard Industrial Classification (SIC Code), which is used to assign companies to specific industries, then the top 3 SIC codes for Finland are Real Property lessor; Forestry Services, and Non-classified Establishments (Refer to Exibit 1 for exact percentage).

The service sector is the largest sector of Finland's economy, which contributes 72.7 percent to the country's gross domestic product (GDP); followed by manufacturing and refining[3]. A report by the Finland Central Chamber of Commerce says that though internationalisation came to the Finnish service sector comparatively late whereas the pace of growth had picked up since the 1990s resulting in it being the most contributing sector of the economy[4]. In the 1990s, Finland dismantled a wide range of licensing systems that applied to services[3]. The average size of Finnish service companies has been small, with limited international competitiveness. Market shares of service companies in Finnish ownership have fallen in many business areas. On the other hand, foreign investments have brought international capital and skills in innovation and marketing which were not previously available. Productivity in financial services, telecommunications, and postal services is also at an internationally high level.

Mass Media in Finland

The media industry in general offers a variety of products and services in mass media including publishing media, electronic media, recorded media etc. Advertising, gaming, animation, digital marketing, journalism, and publishing: newspapers, books, journals and magazines, web designing, radio and television production, etc are a few examples. Mass Media in Finland includes a variety of online, print, and broadcast formats, such as radio, television, newspapers and magazines[5]. There are about 600 companies in Finland working in the media industry, which are registered with ‘The Finnish Media Federation’ comprising of four associations[5].‘The Federation of the Printing Industry’ in Finland is an organisation, which takes care of industrial policy interests of printing houses and production companies in the graphic industry. This association works to improve operating conditions for member companies. 247 members are having479 different magazines or electronic publications[5]. The association is represented by public media, trade, organisational media, and customer media. In addition, there is one more association named ‘The Finnish Publishers Association’, which is a cooperation and advocacy organisation for Finnish book publishers. The association works to support its members by developing better operating conditions for its members. In general, mass media industries especially television and book publishing are becoming very competitive, whereas magazines and newspaper publishing were highly concentrated [5].

In Finland, the revenue in the Media market is expected to reach US$3.82bn in 2024[6]. As per analysts of this market, the growth in this sector is steady as there are new ways of consuming media and industry is embracing technological developments. With the emergence of the metaverse, for instance, the Media market is expected to face a completely new dimension that will improve accessibility quotient for consumers and enable new possibilities for consumption. All in all, what can be observed within the Media market is a shift from traditional channels, such as print or non-digital media, to digital forms of media[6]. This effect is expected to become prevalent throughout the entire market and in all regions. However, as per the report on the Finnish Mass Media 2020, published by the Statistics Finland; the value of electronic media (incl. television, radio, Internet advertising) exceeded the value of the publishing industry for the first time in Statistics Finland's calculation. The growth of the mass media market has in recent years centred on electronic media as the publishing industry shrinks[7].The value of the mass media market was about EUR 3.8 billion in 2020[7]. The value of the market contracted by 3.1 per cent or EUR 120 million compared to the year before.

ProTec Publishing Co

ProTec Publishing Co was established in the year 2012 by Ms. Olivia Korhonen, a young graduate of Hanken School of Economics, which is a leading university with 110 years of experience in research and education in economics and business administration[8]. Ms. Korhonen came from a family business background and her great-grandparents establishedan IT company a couple of decades ago. However, Ms. Korhonen had a strong writing and reading acumen and decided to convert her interest in writing and reading skills for a living. But on the same hand, she was sure that she did not want to become a writer but an entrepreneur. Her education from Hanken along with learning at home helped her not only to establish ProTech without any difficulty but also to grow it to a Unicorn in just four years. ProTech has its headquarter in the southwest of Tampere city and has 82 employees as of the current year 2024. ProTec Publishing Co is a member of ‘The Federation of the Printing Industry’ association as well as of ‘The Finnish Magazine Media Association’, which is a forum for cooperation between magazine publishing companies and publishers. In addition, ProTec Publishing Co.is a member of ‘The Finnish Publishers Association.’

Production Planning at ProTec Publishing Co

Maria agreed to discuss the proposal of buying the laser printing machine with Ms. Emilia, the finance head to buy a, Ms Emila suggested her to consider hiring a laser printing machine on rent and see the effect on sales. According to her, if the sales improve then she can put up a proposal to the board for the purchase of a laser printing machine next year.

Maria explores and finds out two options. The first option was to sign an annual contract with LasTech Co based on €10 per machine hour used with no fixed charges at all. The second option was with Spido Printings Inc., where there was a minimum commitment of €50,000 and €4 per machine hour used. Maria tried to understand the cost function and cost criteria under both options. She focused on causality function as well. She had past production and costs data which suggests that the machine hours required for printing one unit of the journal is €4 and for one unit of the magazine is €10, because of the insertion of many coloured pictures, graphs, tables, and designs. The discussion with the executives of Spido Printings suggests that the number of machine hours required will not change but the quality of printing on this new machine. She used machine hours required in total for the budgeted sales for the next year and calculated the total cost of laser printings of both the products of the company. Last year, the total overhead cost was €250,000 when the production of PJL140 required 25 inspections and PMG120 required 120 inspections. These inspections were carried to ensure quality standards and compliance with duly defined product specifications.  After all her homework, Maria ends her day with huge satisfaction.

However, while driving back home she still had the data on her mind which she read through the report on Mass Media published by Statistics Finland/Media Statistics in 2020 (Exhibits 3 & 4). Though Maria felt that she had resolved the issue of laser printing very well, but her mind was still contemplating the relationship of declining sales with the rising adoption of digital media. The situation reminded her of examples, her professors used to quote at her university about those businesses which could not adapt to technological developments and changing needs of customers and failed. These thoughts were very scary while thinking about the fate of ProTec Publishing Co. which was e offering only these two print media products. She was constantly raising a question to herself ‘Does ProTec Publishing Co also need to diversify into electronic media space?’ Was the concern of the sales team about the print quality real or just an excuse? Was the sales team unable to look at the bigger picture of new trends in consuming media? 

End Notes

1. The case has been written using hybrid approach: (i) the secondary data from published sources after due acknowledgment and (ii) the hypothetical business situation on the basis of pragmatic approach i. e. using over two decades of classroom teaching experience of one of the authors.

References

https://energy-cities.eu/members/city-of-tammerfors/

https://www.hithorizons.com/eu/analyses/country-statistics/finland#:~:text=Finland%3A%20TOP%20Industries,%2C%20and%20Fishing%20(104%2C788)

https://en.wikipedia.org/wiki/Economy_of_Finland#:~:text=The%20largest%20sector%20of%20Finland,country's%20primary%20sector%20at%202.9%25.&text=A%20panoramic%20view%20over%20the%20southernmost%20districts%20of%20Helsinki%20from%20Hotel%20Torni.

https://www.tobb.org.tr/UlkeRehberi/Documents/Ulkeler/finlandiya/servicesektor.pdf

https://www.medialiitto.fi/finnmedia/

Grönlund, Mikko, Eli Noam, and Paul Mutter (2016). Media Ownership and Concentration in Finland,Who Owns the World's Media? https://doi.org/10.1093/acprof:oso/9780199987238.003.0004,accessed 28 Jan. 2024.

https://www.statista.com/outlook/amo/media/finland

https://www.hanken.fi/en