Charlie Chen | Student ID: 00004301 | April 15, 2014

Australia Public Library Challenge Analysis and

Strategy Recommendation MANAGERIAL MARKETING 24800

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Contents

Part One ................................................................................................................... 2

BACKGROUND OF AUSTRALIA PUBLIC LIBRARY ............................................. 2

THE ENVIRONMENTAL/SEGMENTATION ANALYSIS......................................... 3

ENVIRONMENTAL ANALYSIS OF THE SECTOR ................................................ 4

GEOGRAPHIC AND DEMOGRAPHIC FACTORS ................................................. 4

ECONOMIC (INTERNAL AND EXTERNAL) FACTOR ........................................... 5

REGULATION/LEGISLATIVE ENVIRONMENT ..................................................... 5

TECHNOLOGICAL ENVIRONMENT ..................................................................... 5

SOCIAL/CULTURAL ENVIRONMENT ................................................................... 6

MARKET ANALYSIS & SEGMENTATION ............................................................. 6

Generation X, Y and Z ........................................................................................ 6

Generation X ....................................................................................................... 6

Generation Y, Echo Boomers or Millenniums ...................................................... 7

Generation Z ....................................................................................................... 7

Aging/Disabled members of society .................................................................... 7

COMPETITOR IDENTIFICATION AND STRENGTH ANALYSIS ........................... 8

SWOT ANALYSIS OF THE SECTOR .................................................................... 9

STRENGTHS ...................................................................................................... 9

WEAKNESSES ................................................................................................... 9

OPPORTUNITIES ............................................................................................. 10

THREATS ......................................................................................................... 10

OUTLOOK FOR THE SECTOR ........................................................................... 10

Part Two ................................................................................................................. 12

Identify possible alternative value proposition ...................................................... 12

Analysis of Alternative competitive positions ........................................................ 13

recommended compatitive positions .................................................................... 14

suggested action plan .......................................................................................... 15

Conclusion ........................................................................................................... 16

References: ............................................................................................................ 17

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Part One

In this section, the author focuses on the background data, sector history and

situation analysis of the public library sector. The author will do his best to let the

audience to be well aware of the challenges the public library sector is facing,

therefore, appropriate changes have to be undertaking.

BACKGROUND OF AUSTRALIA PUBLIC LIBRARY

Public libraries in Australia were established by the nineteenth century Australian

colonial (state) governments as part of a wider set of liberal institutions advancing

human capital and social progress. Public library services are delivered by a variety

of administrative arrangements. These ware varied both between and within each

State and Territory, ranging from services wholly delivered by the State/Territory

through to services wholly delivered by Local Government (Waller & Mcshane 2008).

In a broad aspect, the public library is for everybody. It is a resource for each

individual and group in the society. It is a multi- purpose service, meeting different

needs in different ways.

We believe the public library should be a resource to be used by people, one that is

built on three pillars of equal importance:

• It is a resource for Information and Learning for the community

• It is a resource for Culture and Imagination

• It is a knowledge resource for Children, Young people and Elders.

The author believes that

There is a public need for open and democratic access to the world of

information, whether in written, spoken or electronic formats.

There is a need for a community-based service to support literacy and

reading, particularly amongst young people.

The library service should equally meet the needs of all users, whether they

are researching particular subjects, casually browsing through the available

resources or simply using the library as a quiet place to read or study.

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Our familiarity with libraries is partly due to their availability. In Australia, they are to

be found in every major suburb. Public libraries are a part of the community.

We believe the role of libraries should continue to evolve. The public library service

should act as knowledge and educational resource, run programs of outreach and

participates in partnerships with other social groups.

THE ENVIRONMENTAL/SEGMENTATION ANALYSIS

In the new global economy, where knowledge is the key resource, the quality of the

nation’s human resources is critical to ensure its workforce competitiveness. The key

to prosperity in the knowledge economy is for people of workforce to make intelligent

use of information. Learning must span all over their working lives.

Figure 1: library as one among the many information sources

(Source: First Monday, Volume 13, December 2008)

Humans being have never experienced such high degree of relying on information

as we have now. Almost every element of our daily activities is relying on the

information we have obtained. However, most people have experienced a certain

degree of difficulties in accessing the vast amount of available information (online,

offline), not only due to cost but also due to a lack of awareness of the possibilities

offered by the information society and due to a lack of information-handling skill.

Public libraries, locally organized and locally accessible, are very well placed to

provide the support that people will need in a knowledge Society. With its tradition

and ethos of universal access to its collections, the thrust of public libraries input to

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this new society will ensure the knowledge will be fairly distributed to public and to

ensure we do not have people who can be classed as information rich and others

who can be classed as information poor because of their social status.

Public libraries need to be ready, however, to adapt themselves to the opportunities

and requirements of this new society. Public libraries are concerned with the uses of

information, with access and with democratic participation and countering social

exclusion.

ENVIRONMENTAL ANALYSIS OF THE SECTOR

Although there are those who argue whether a sustainable and bright future exists

for public libraries in the face of technological changes. For most of us library is a

meeting place, place to gain, reflect and share knowledge from early years of our

lives. We also believe public libraries may also very well become essential

collaborative spots for civic engagement and adaptive community learning.

GEOGRAPHIC AND DEMOGRAPHIC FACTORS

According to the Australian Bureau of Statistics (ABS) 2003-04 report, at the end of

June 2004 there were 532 local government library organizations operating from

1,716 library locations throughout Australia.

There are few different operating models of Australia public libraries:

Centralized: The acquisition, cataloguing and processing of all library stock were

generally the responsibility of the state library or a single government department,

while individual library locations were responsible for service delivery. (South

Australia, Western Australia, Tasmania and the Australian Capital Territory operated

under this model);

Coordinated: Each library location was responsible for the total provision of library

services, receiving support from state and local governments in the form of

subsidies, grants and materials. (New South Wales and Victoria operated under this

model);

Centralized/Coordinated: A combination of the above two models was utilized.

(Queensland and the Northern Territory operated under this model).

The study also suggested that SA for example had the largest number of library

visits and loans per person combined with the fact that SA has the largest internet

station exposure. That could be potentially due to the fact that people access largely

information online and they use their local library as the hub for online access.

Already, libraries are evolving into decentralized civic service centers, staffed with

capable knowledge workers who help users to deal with various information related

challenges. The ability of libraries to survive and thrive in the future will depend on

the ability of professional librarians to adapt, innovate, and lead their noble

institutions beyond traditional models into a new world of civic service delivery.

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ECONOMIC (INTERNAL AND EXTERNAL) FACTOR

Economic impact on the public sector in general is quite significant given that it

largely depends on government policies and budgets. We could probably note that

during the economic downturn the use of public libraries could increase due to the

various reasons such as free internet access, increase in number of people

undertaking training to up-skill or enter a new job market.

At the same time with continuous growth and development of digital forms of media,

online services and online collaboration public libraries are facing enormous

challenges in those battle grounds.

The development of digital economy drove the marginal cost for many forms of

information to zero, which were the foundations of the argument for ongoing funding

for public libraries. On the other hand, growing cost for other digital data services

such as primary online databases is so high that partnerships with private players

are considered the only viable option to provide on-demand database access.

REGULATION/LEGISLATIVE ENVIRONMENT

There is very little impact of the public libraries from legislative and regulation

perspective even though public sector generally is very heavily regulated.

The only critical part would be from a public funding perspective and new policies

associated with budget distribution within public education sector. the author

suggests that these factors are rather economic than pure legislation driven due to

the fact that economic environment both locally and globally shapes government

funding policies and budget distribution.

TECHNOLOGICAL ENVIRONMENT

A number of studies have been conducted to establish the impact of the technology

and associated change on public libraries sector. An Australian study undertaken for

the Libraries Working Group (Mercer, 1995) found that 53% of non-library users and

90% of users would automatically use the library as the first point of reference if they

wanted to find something out. On the contrary some other studies suggest that

people would rather use internet then consult their local library. We can see the

noticeable trend of increasing using popular internet sources rather than relying on

traditional library resources.

There is an increased pressure to reinvent themselves (public libraries) online with

use of social media to reach younger generation. Some public libraries actively use

blogs and web-based information seminars and podcasts to appeal to the target

market and web audience. At the same time while new forms of technologies open

up new ways of engagement between libraries and users they reshape traditional

library service offerings and question resource-intensive activities such as

cataloguing and referencing.

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SOCIAL/CULTURAL ENVIRONMENT

We have found that the social environment is largely connected with technological

development and e-demands both of government and members of the public. We

can see the shift in ways government to interact with community members and

general public. The clear shift is in favor of so called “e-government” which consists

of a range of online based interactive services that replace agency branches and

physical involvement to provide a particular service. At present public libraries serve

as the main social institution that ensures access and provides assistance with using

e-government services. The main challenge remains in the “digital divide” space

between those who use internet and those who don’t know how. Given aging

population and a number of barriers such as poverty, education, luck of internet

access at home, disability or location the educating role of public libraries have

significantly increased. Jaeger(2012) in his research have found that if public

libraries had no free access to the interned as well as educational facilities, e-

government services would not be available to most members of general public. That

allows us to come to a conclusion that it is critical to public libraries to have free

internet facilities and qualified stuff to assist the growth and development of online

based government services.

MARKET ANALYSIS & SEGMENTATION

Form public libraries user perspective in a global scale, we could identify a number

of market segments:

Generation X, Y and Z

William J. Schroer provides a primer on the identification and description of the

population cohorts in this planet agreed upon by demographers and market

researchers.

Generation X

Born: 1966-1976; Coming of Age: 1988-1994; Age in 2004: 28 to 38; Current

Population: 41 million

Sometimes referred to as the “lost” generation, this was the first generation of

“latchkey” kids, exposed to lots of daycare and divorce. Known as the generation

with the lowest voting participation rate of any generation, Gen Xers were quoted by

Newsweek as “the generation that dropped out without ever turning on the news or

tuning in to the social issues around them.”

Gen Xers are arguably the best educated generation with 29% obtaining a

bachelor’s degree or higher (6% higher than the previous cohort). And, with that

education and a growing maturity they are starting to form families with a higher level

of caution and pragmatism than their parents demonstrated. Concerns run high over

avoiding broken homes, kids growing up without a parent around and financial

planning.

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Generation Y, Echo Boomers or Millenniums

Born: 1977-1994; Coming of Age: 1998-2006; Age in 2004: 10 to 22; Current

Population: 71 million

The largest cohort since the Baby Boomers, their high numbers reflect their births as

that of their parent generation. the last of the Boomer Is and most of the Boomer II s.

Gen Y kids are known as incredibly sophisticated, technology wise, immune to most

traditional marketing and sales pitches...as they not only grew up with it all, they’ve

seen it all and been exposed to it all since early childhood.

Gen Y members are much more racially and ethnically diverse and they are much

more segmented as an audience aided by the rapid expansion in Cable TV

channels, satellite radio, the Internet, e-zines, etc.

Gen Y are less brand loyal and the speed of the Internet has led the cohort to be

similarly flexible and changing in its fashion, style consciousness and where and how

it is communicated with.

Generation Z

Born: 1995-2012; Coming of Age: 2013-2020; Age in 2004: 0-9; Current Population:

23 million and growing rapidly

While we don’t know much about Gen Z yet...we know a lot about the environment

they are growing up in. This highly diverse environment will make the grade schools

of the next generation the most diverse ever. Higher levels of technology will make

significant inroads in academics allowing for customized instruction, data mining of

student histories to enable pinpoint diagnostics and remediation or accelerated

achievement opportunities.

Gen Z kids grow up with a highly sophisticated media and computer environment

and more Internet savvy and expert than their Gen Y forerunners

Aging/Disabled members of society

Such segment would require significant investment in resources to accommodate

their needs. Public libraries would have to focus on educating and training staff

members to provide both online training and user support to elderly and disabled

members of society.

From customer focus perspective, public libraries should consider strategies in

attracting the entire “family” unit and welcome both teenagers and kids despite the

social perceptions of them being “difficult and have attitude problems” (B. Hull, 1999,

2003). Educating from early age on the benefits of books and the role of libraries in

general will assist not just in securing the next generation of visitors and users but to

promote right image of public library as social, cultural, technological and both

personal and professional development hub that is affordable and supportive.

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COMPETITOR IDENTIFICATION AND STRENGTH ANALYSIS

Figure 2. Competitor identification

(Source: Larry N. W., 2009, ’Competition for Library Service)

There is no doubt competitors of public library are far more superior and hundred time

better (if not thousands) from information storing and retrieving perspective. There are

more and more information resources born with digital format. The traditional library

has lost its ground in terms of store and retrieve information.

However, there are five strengths which public library service have:

1. It acts as a resource for information and learning, as a resource for culture and

the imagination

2. Public libraries as a resource for information and learning for disadvantaged

community.

3. The public library bridges information gaps by providing accurate and up-to-date

information for every- day living and problem solving and by providing a

continually updated collection of reference works, in print and electronic form. It

assists the development of its local community by providing information for

business, and for community development, linking up, where relevant, with

national and international information providers.

4. The public library can focused on providing information of local government’s

activities and initiatives as well as updated information of local community.

5. The library supports adult learners and education generally. In particular it

supports action for adult literacy, supports adult independent learning, and

supports persons undertaking distance education in practical ways by providing

information, course materials and study space. It also assists people to develop

the skills they need in a fast changing world, enhancing reading skills, ICT

literacy, and general self-directed learning.

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SWOT ANALYSIS OF THE SECTOR

Figure 3. Public library SWOT analysis

STRENGTHS

Location and condition of the buildings which enable them to be hubs of the

community

Ability to provide an inclusive services such as book club, wine club, public

discussion forums popular and well attended event program (i.e. cooking classes,

etc. kids book excursions) and distance education support

Support of local council in particular projects and initiatives

Able to provide face to face customer service

Strong community engagement and strong partnerships with internal services and

external organizations leverage the buildings

WEAKNESSES

Unable to generate sufficient income to support itself

Book and magazine collection obsoleted very quickly in digital age and high cost of

keeping them

Lack of well training staff to meet customer demands

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OPPORTUNITIES

Should able to subscribe high quality and expensive online data bases to leverage

the new technologies to attract new customers and expand the reach in the broader

community

Promote public library as public gathering space and provide venue service to co-

locate council services as part of council’s extended customer services strategy, as

well as hosting book club, public discussion forums popular and well attended event

program (i.e. cooking classes, etc. kids book excursions) and distance education

support

It may be feasible to be an early adopter of new technologies and introduce these

into the community with courses like “learn to tweet “or the equivalent. Being an

early adopter of the capability to print purchased eBooks is another example. Early

adopter of the next technology or bandwagon may lead to an extension of services

such as new technology “latest smart phone or e-reader promotion and the like”.

There is the opportunity to select and training staff based on their entertainment

value – where “cheery” staff add value to the overall experience of using a library,

something akin to the Virgin or Southwest airlines experience.

The opportunities for marketing campaigns are rewarding, customer expectations of

libraries are very basic and as libraries add new services these exceed customer

expectation and would receive a positive response.

THREATS

Requirements to make budget savings in an increasingly difficult economic climate

Maintaining the relevance of libraries to the local community

Libraries support eServices will potentially cannibalize our own policy for Bodies

through the door. Dependence on eServices will open opportunities for new entrants

to easily surpass and undercut the libraries eServices with substitute products.

Withdraw or reduction of public funding and the move to a coasted model will

undermine the free and community services. Potentially purely web based

competitors can undercut the cost of eServices. Already existing rivals such as

bookstores, other libraries, eServices, Internet café’s.

Library ownership is with the local council who are cash poor. It is a proposition for

the local council to sell the library buildings and offer the library as an eService. We

believe public libraries offering eService are simply not enough, there must be

significant added value beyond provision of eServices.

OUTLOOK FOR THE SECTOR

The Australian public library has a belonging to a few industries, but mainly a mix of

education and public services industries. The outlook of each of these industries on

their own is not was has been analyzed here, rather the firms or Australia’s public

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libraries themselves. Australian public libraries have been changing over many years

and this does not look to slow in the future.

Utilizing an external analysis tool, the PEST analysis, we can take a view on the

outlook of Australian public libraries.

Figure 4. Public Library PEST Analysis

Political, legal and economic trends have highlighted the at risk implication of financial

pressure and uncertainty. With government spending being cut on some public services,

taking a view on public library spend is important. Overlaying the Australian economic

cycle and understanding the government’s role in funding will be a key determinant to the

end strategy taken and in turn the outlook of the firms.

Social and demographic changes will play a stronger influence on the outlook of

Australian public libraries. Identified through a PEST analysis we see a real need for

public libraries to be able to adapt to customer needs. This adaption process must have

foresight and be agile to accommodate very fast changing needs of its customers. The

trends identified can allude to both positive and negative implications for library usage

itself, however the main out-take from this analysis is the need for adaptability to change.

With the demographic make-up of the country changing, social media becomes part of

everyday life, and lifestyle changes meaning an older, learning society the interaction

with todays and tomorrows public libraries will change.

Technology changes are highlighting an increase in indirect competition to Australian

libraries. Search engines are becoming stronger and provide a replacement to some of

the libraries capabilities. Research, journals and other academic records are now readily

available in electronic form and reduce again the need to enter the library in its current

form. Being known as a place to interact and work with others is also having its

implications with the technological advances in online communication tools such as

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interactive workspaces and video conferences. All of these are examples of indirect

competition of public library capabilities.

Part Two

In this section the author evaluated the alternative value proposition of public library

in information era and provide strategic recommendation based on previous (part

one) analysis.

IDENTIFY POSSIBLE ALTERNATIVE VALUE PROPOSITION

Figure 5. Public Library demand analysis

Despite huge shift of accessing information online, there are still large demand of

public library service from community perspective. Above diagram illustrated the

value positions which public library has which digital format information society are

lack of.

Many public library start transforming themselves from traditional bookshelf business

model to value add on public service business model.

In UK, Some of the public libraries leveraged their rich in local culture and physical

close to local community to provide unique service. One of very good example is

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Cork City Library. It organized adult book club for people with love of reading and a

member of library staff acted as a facilitator.

It was a very successful initiative. It has attracted more and more local people from

different ages and social background back to library and built strong relationship with

local community.

ANALYSIS OF ALTERNATIVE COMPETITIVE POSITIONS

Public library’s core capabilities

competitive advantage

Enable to deliver specific service in the marketplace

Free community space

Physical space, facilities, located in the center of the local area

Face to face meeting, reading group Social gathering and author promotion, etc.

Trained and motivated staffs

Local time zone and direct services

Expert advice and other tailored services

Public Learning space for disadvantaged people

Multiple culture awareness and tolerant

Close the gap of social injustices

Early child education

Learning and playing space

School children book excursion

Able to collaborate with local Schools and universities

Ability to obtain funding from local/federal government

Subscribe high quality online data base for student and researchers

Table 1. Strategic Position Analysis

Public library is the ideal place for people from different social status to interact each

other without consider their difference from culture and economic status perspective.

Public library is the perfect space to host group activities. Public library should

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partner with best seller book authors, cooking show producers, public health

professionals to have multiple focus groups and encourage people from different

ethnic background and social status come together and interact each other. Such

group activities will improve local community’s social inclusion, ethnic cohesion and

even personal emotional health of individuals.

With digital information explosion every few years, it often cause a big gap for

general public to catch up with the new technologies. Well trained staffs of public

library and local council’s IT professionals are valuable resource in order to help

general public to close this gap.

With sufficient funding, local libraries able to update their IT equipment which will

enable them to provide hands on learning environment for general public.

Local public library is the excellent institution to provide rich information resource

(books. Magazines, audio/video Medias, online access, etc.) for nearby primary and

secondary schools. The author has found that local public libraries become very

popular as self-learning and social gathering places for teenagers in recent years.

In 2010, UK Culture and Leisure survey found 73% of people ether agreed or

strongly agreed that libraries were “an important part of the community” 58% thought

they gave young people places to go and thing to do, 21% said that their visit on that

day of library had helped them to develop or to learn a new skill (Library Strategy,

2012-15).

RECOMMENDED COMPATITIVE POSITIONS

Figure 6. Public Library Fit/Attractiveness Analysis

Public libraries are holding its unique position in the society. It is a guarantor of

information hub accessed by general public without discrimination of culture, ethnic,

finance status. It has rich legacy contents in the past. In the information explosion

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era, it should gradually evolving itself to become gateway and hub of new digital

format of information.

The public libraries should position itself as a center of collaboration between local

government, local community, local business and local education institutes form

knowledge sharing and information exchange perspective.

The public libraries should become a community based service to support literacy

and reading/writing for young people (there is increasing young people only read and

write on face book or twitter).

The public libraries should be the source specific services for disadvantaged people

from information collaboration and exchange perspective.

The public libraries should act as information and educational resource and run

regular programs (book readings, cooking class, etc.) to attract people to collaborate

each other

The public libraries should be the popular space for young people to share

information learn from each other. This will encourage them to leverage public

libraries as a hub for their lifelong learning in the information age.

SUGGESTED ACTION PLAN

Figure 7. Public Library Value proposition matrix

The public Libraries should leverage its core competitive advantages to transform

and reposition themselves in this new information collaboration orientated society.

Digitized 85% paper based legacy books, recording documents, old papers

and magazines for easy keyword search.

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Create national library database for sharing digital formatted library contents

across the country.

Partner with e-book and other digital publishers and subscribe best seller e-

books, digitized new papers, magazines.

Partner with educational institutes, research groups and commercial

companies to provide high quality online database subscription for

researchers and high school/university students and teachers.

Provide meeting facilities for local government policies’ forum discussion,

debates, and other community meetings

Hosting book clubs, cooking club, wine club and other specific interesting

subject group activities

Encourage local primary and secondary schools to leverage library facilities,

(i.e. books, multiple media information resource, free wifi, meeting room with

projector and sound system)

Provide meeting space for local government town hall meetings

Partner with radio stations and TV station to broadcast group activities

Leverage internet and IT resource of libraries to stream group activities to

YouTube and broadcast them globally.

Partner with university to have virtual since expeditions.

CONCLUSION

The public library need to make sure it services the public well. The stakeholders of

public library should have sound understanding of how the ecology and economy of

society has been changing. In this report the author has brief described some of

those changes and challenges they brought to the traditional business model of

public library.

The author has noticed there are many studies on how general public is interacting

with digitized information access technologies, there is still lacking of research on

their impacts on value proposition of public library for the communities.

This report has articulated the unique and distinctive value proposition of public

library for the general public and recommended its stakeholders re-evaluate its

institution goals and to develop service orientated strategy in order to meet the

societies’ rapidly changing environment.

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References:

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http://www.pla.org.au

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http://www.socialmarketing.org/newsletter/features/generation3.htm