4. • Bloomberg Terminal (“The Bloomberg”) is a
core business and money-generating
product
The Company and Its Business
5. 1. Bloomberg’s media
products and their role in
the company business
2. Bloomberg News:
“News that move markets”.
Finance information 24/7
Employs more than 13 000
people in 185 locations
globally
Services 174 countries
5000 original articles daily
Source: Bloomberg.com
6. • Bloomberg is a growing company
• Operating profits
2006 – annual revenue $1.5 billion
2011 - annual revenue $7 billion
2013 – about $8 billion annually
315,000 terminals sold worldwide
(by the end of 2012)
• 85 % from terminal sales
• Terminal subscription $20000 per
year
Bloomberg’s Performance on
Market Competition
Source: Gustin (2013) TIME Business & Money
7. • Michael Bloomberg, MBA in Harvard
University
• 1981 - Innovative Market Systems
(IMS)
• 1986 - Bloomberg LP
• 1988 - 5,000th terminal installed, a
financial data industry leader
• 1990 - Bloomberg Business News
with a six-person team, based in
New York, editor-in-chief Matthew
Winkler
• 2010 - 20th anniversary, 146
bureaus in 72 countries, > 2,300
journalists and multimedia
professionals
Milestones in History
Sources: Funding Universe (1998), Business Insider (2013)
9. • Data breach scandal at
Bloomberg L.P.'s news division:
Bloomberg reporters had
extended access to data about
individual customers' terminal
usage
• Publicly revealed by the New
York Post on May 10, 2013
The Crisis' Triggers
10. • Viewed customer
information included:
what functions they
used on the Terminals
who was logging in
and at what time
what they asked the
help desk for
Source: Horowitz, 2013
11. Bloomberg's culture
Journalists considered to be representatives of the Terminals
Michael Bloomberg in 1997: “Most news organizations never connect
reporters and commerce. At Bloomberg, they're as close to seamless
as it can get” (as cited by Geller, Huffington Post, 2013)
Bloomberg's goal
To be the most influential news service in the world
Innovative ways to recognize customer needs, wants and trends
quickly
Reasons for the Crisis'
Emergence
Source: Geller, Huffington Post, 2013
12. • Impacts on Bloomberg's business environment and
partnerships
Breach of trust with customers
Several investigations against Bloomberg regarding possible misuse of other
customer Terminal's confidential data
No significant Terminal subscription fallout:
“[The Terminals] are prized as windows to information that
can help brokers keep or lose fortunes” (Geller, 2013)
Company's transparency, reputation and business culture came into question
• Reactions by Bloomberg's management
Public apologies
Immediate restriction of reporter's access to the confidential data
Initiation of 2 independent reviews on internal standards
Major Consequences
of the Crisis
Source: Gustin, TIME, 2013; Bloomberg.com, 2013a
13. Several improvements according to the reviews'
recommendations:
New positions at governance level: chief risk and
compliance officer
Ongoing periodic independent reviews on internal
compliance controls
No extended access for Bloomberg reporters
Enhanced training programme for employees
New positions at editorial level: Independent Senior
Editor and Standards Editor
Current Status of the Case
Source: Bloomberg.com, 2013a; Bloomberg.com, 2013b
15. • Bloomberg strives to have a flat organizational design with
few levels of hierarchy:
• No private offices or enclosed meeting rooms
• All employees sit in long rows of identical, terminal-laden desks,
including the Editor-In-Chief
• Employees do not stay in any one position for too long and do not
have official titles.
• Managers are constantly rotated between different departments
• Employees are evaluated entirely on their performance. This allows
for them to move vertically, horizontally, and diagonally throughout the
firm
Bloomberg’s Organizational
Structure
Sources: Bothra et al., 2008, Round Table, 2008,
16. Organization Configuration
1980 1990 2000 2013
•Michael
Bloomberg's
role
•Entrepreneurial
organization
•Years of rapid
growth and
expansion
•New divisions
and products
•Moving
towards
more innovative
organization
•Over 15 000
employees
•Michael
Bloomberg no
longer active in
the company
•No single type
of organization
configuration
Source: Mintzberg et al., 1998
17. • Bloomberg's strategic apex and middle line work innovatively,
avoids bureaucracy and hierarchies
• Sales division, Speed desk at Bloomberg News - Machine
organization
• Independent divisions for products, independent goals and
processes - elements of diversified organization
• The Bloomberg LP is more of a LEGO than a jigsaw-puzzle
configuration.
• multiple configurations depending on division, department and
time.
A Jigsaw puzzle or a Lego organization?
Despite an innovative culture and complex organizational
structure , Bloomberg has a very clear strategy and all its parts
work collectively to achieve the company's goals.
18. New Energy
Finance
Daniel L. Doctoroff
CEO & President
Executive Committee
COO, Head of Financial Products & Services, Editor-
In-Chief
R&D News & Media Financial Products &
Services
Law
Govern-
ment
Professional
Service
News
Sports
Enterprice
Solutions
Web
&Mobile
Magazines
Business
Week
Television
& Radio
Terminal
Markets/
Pursuits
Peter Grauer
Chairman of the Board
Source: Bloomberg.com, 2013
20. Corporate Management and
the Political Market
Main role of corporate management is to legitimate and secure the role
possibilities of the enterprise, effects influence mainly the political market
Immediate reactions to the crisis were necessary:
•Investigations from U.S. Federal Reserve & Treasury Department
•Critique from European Central Bank and other big clients
To reassure and to regain the trust of partners and influencers in the
political market, the extensive actions were necessary
-> When crisis' effects on the popular market might result in
declining revenues, poor management on the corporate level after
the crisis could lead to legislative and normative restrictions
-> In worst case scenario might result in bankruptcy
Source: Alm & Lowe, 2001, Gustin, TIME, 2013
21. Actions taken on Corporate Management level
•Immediate damage control PR: Public apologies in public and in
person
•Independent reviews
•Results and recommendation published
•Enhancing the company's governance framework (Risk and
compliance responsible)
•Approval for continuous periodic reviews
The Crisis' impact on Political Market
The actions taken were considered sufficient, no
significant penalties or further conflicts occurred
Source: Bloomberg, 2013a
22. • Internal implications:
Decisions /actions are aligned to support Bloomberg's core business:
Selling more Terminals
Reporter's access possibilities as intended strategic approach from
the beginning
• “The concept of reporters working hand-in-hand with the sales
team served as a centerpiece to Mr. Bloomberg’s vision” (Chozick,
New York Times, 2013)
Need for internal process innovation to regain customers' trust
New CEO and 100-day-strategy at Bloomberg Media Group
Strategic Management and
the Open Market
23. External implications:
Second strategic focus at Bloomberg: Innovative
technology for its Terminals' systems
Increased pressures from competitors (Thomson
Reuters, Dow Jones) with new Terminal replacement
strategies
Dependence of open market on popular market
highlighted
Source: Alm & Lowe, 2001
24. Bloomberg's revealed strategic objectives:
Strategic decisions set a direction
Clear plan of actions to hold leading position
No real strategic turnover at Bloomberg after
crisis
Weaknesses regarding approaches to Terminal
sales and high investments in the media division
Bloomberg needs to find a clear direction in
innovation
Source: Mintzberg et al., 1998
25. Two aspects of product and business
management
The Terminal - main product
All the media products:
Magazines, TV, radio, Mobile etc.
Two approaches to Popular market:
Terminal subscribers - main target
group, most of the profit
All the subscribers and consumers
of the Bloomberg media products
Business Management and
the Popular Market
Source: Alm & Lowe, 2001
26. The public apologies and other damage control actions
were needed
to regain trust of Terminal subscribers
to convince the readers, viewers and listeners of the produced
content and its reliability.
First priority was to minimize the terminal subscription
fallout, however...
Customers consider Terminal use vital for their business
Customers locked in long term contracts
Barriers of exit, excellence of the product
No big changes needed, once "the dust settles", main
product remains the same
Source: Geller, Huffington Post, 2013
27. • Media products facing heavy competition, losing credibility
might be fatal
• BusinessWeek - Forbes, Fortune
• CNBC and Fox Business winning Bloomberg TV
• Financial Newspapers - Wall Street Journal, Financial Times
• The unique strategy of Bloomberg effects the business
management and the popular market:
The main focus at Bloomberg is to sell the Terminals, and as long as the
Terminal subscriptions are not declining, the effect on the media product
level might stay small, the audience of media products are a secondary
target group
Crisis Impact on the Popular Market
Source: Porter, 2004
28. • Main impacts on the internal level:
New positions created, e.g. Chief Risk and Compliance Officer
Rotations:
previously Special Adviser to the CEO, Editor-at-Large at Bloomberg
News Clark Hoyt Independent Senior Editor
previously Executive Editor for Bloomberg News in Europe, the Middle
East and Africa Tim Quinson Standards Editor
Relations between journalists and commercial departments changed
Managerial skills exercised: communicational organizational
• Why changes have been made?
Operational Management and
the Professional Market
Source: Bloomberg press release (2013), Lowe (2013)
29. • Lost access to the client
private data = lost
influence on the
professional market
• New strategy of making
news?
Impacts on Professional Market
31. No “real” crisis for Bloomberg in the short-
term
Reasons:
1. Core business is Terminal sales: uniqueness of the Terminal service
2. Fast and active response to the crisis by Bloomberg's management
3. Barriers of exit for the Terminal's customers
Long-term impact:
– Loss of time advantage in news gathering ↔ Competitive advantage
– Questionable “final” cut of connections between reporters and sales
department
Source: Mintzberg et al., 1998
32. • Alm, Ari, & Lowe, Gregory F. (2001). Managing Transformation in the Public Polymedia Enterprise:
Amalgamation and Synergy in Finnish Public Broadcasting. Journal of Broadcasting & Electronic Media,
45(3), pp.367-390.
• Bloomberg.com (2013a, August 21). Bloomberg Releases Report Following Client Data Review. Press
release. Retrieved October 20, 2013, from http://www.bloomberg.com/now/press-releases/bloomberg-
releases-report-following-client-data-review/
• Bloomberg.com. (2013c). Bloomberg Facts. Retrieved November 9, 2013, from
http://www.bloomberg.com/now/bloomberg-facts/
• Bothra, Aditya, Gandhi, Vishal, Profeta, Mike, Rewari, Rajeev, Tripathi, Shankar (2008, February 22).
Organizational Analysis: Bloomberg LP. The Round Table. Retrieved November 2, 2013, from
http://roundtable.typepad.com/round_table_blog/2008/02/organizational.html
• Geller, Adam (2013, May 16). In Bloomberg Uproar, Ethics Flags For New Media. Huffington Post.
Retrieved. October, 18, 2013, from http://www.huffingtonpost.com/2013/05/16/in-bloomberg-uproar-
ethi_n_3284025.html
• Gustin, Sam (2013, May 14). What Bloomberg’s Snooping Scandal Says About Wall Street’s Culture. TIME
Business & Money. Retrieved October 20, 2013, from http://business.time.com/2013/05/14/what-
bloombergs-snooping-scandal-says-about-wall-streets-culture/
Sources:
33. • Funding Universe (1998). Bloomberg L.P. History. From: International Directory of Company
Histories, Vol. 21. St. James Press. Retrieved November 2, 2013, from
http://www.fundinguniverse.com/company-histories/bloomberg-lp-history/
• Horowitz, Alana (2013, May 11). Bloomberg Terminal Spying Targeted Ben Bernanke, Tim Geithner:
CNBC. Fox News (vía Huffington Post). Watched September, 20, 2013 at
http://www.huffingtonpost.com/2013/05/11/bloomberg-terminal-spying-bernanke-
geithner_n_3260559.html
• Lowe, Gregory F. (2013). Lecture on Strategic Management and the Open Market, University of Tampere.
• Lowe, Gregory F. (2013) Lecture on Corporate Management and Political Market, University of Tampere.
• Lowe, Gregory F. (2013). Lecture on Operational Management and Professional Market, University of
Tampere.
• Mintzberg, Henry (1989) Mintzberg on Management: Inside Our Strange World of Organizations. NY:
Hungry Minds Inc.
• Porter, Michael (2004) Competitive Advantage. NY: Free Press.
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