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Key Topics
- Requirement
- Solution
- 1.0 Introduction
- 2.0 State of the newspaper publishing industry today
- 3.0 Why newspapers are facing declining circulations and revenues
- 4.0 Internal assessment
- 5.0 How companies in the publishing industry are adjusting their strategies to cope with the challenges
- 6.1 Short-term steps
- 7.0 References
Requirement
Business Policy and Strategy Case Study Assignment
Solution
1.0 Introduction
In the major metropolitan area, The Chronicle Gazette is a leading newspaper for many years. It has almost 225,000 customers, and the circulation of the newspaper is paid. The sale of the paper has been declining over past few years which is impacting the revenue of the newspaper because the revenue is declining. Thus, the management of the newspaper publishing has realized that they should find a new way of maintaining their business.
The purpose of this report is to offer and develop a strategic vision for the management of ‘the Chronicle Gazette’ related to its position in the publishing industry today and the path it can follow to continue its journey over the next decade. The report will be formed by analyzing the current state of the publishing industry and by determining the problems that it is facing in the current scenario. The causes of the problems will also be determined along with its influence on the newspaper industry. After this, the external and internal assessment will be done to find the reasons due to which the newspaper industry is facing the decline in the circulations and decline in revenues too. Finally, the way in which Chronicle Gazette adjust their strategies to deal with the challenges will be discussed and accordingly the steps that it should take to deal with them will be suggested.
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2.0 State of the newspaper publishing industry today
2.1 Data on declining circulation and revenue
In a major metropolitan area, the newspaper Chronicle Gazette is a leading newspaper which is circulated to almost 225000 customers. For a long time, this industry has been dying. The columnist Eric Zorn of Chicago has stated that the demise of this industry has come (Barnhurst, 1991). This newspaper industry has been vulnerable due to the attacks on the internet, television, radio, etc. It was reported by the newspaper association of America in 2009 that the total revenue of advertising that is collected has fallen sharply from almost $54 billion to $37 billion (Barnhurst, 1991). It has also been reported by the Audit Bureau of Circulations that the circulation of the newspapers has dropped by 10.6% (Chen, 2009).
Due to these declining figures, there are many companies of newspaper publishing who have shut their printing editions and they have laid off their employees. Also, the closure happened due to the contradicting economic recession and the internet competition.
2.2 Status of newspaper leaders, e.g., New York Times, Wall Street Journal
In the country US, the top 25 newspapers reported a fall in their circulation. It was reported by ABC that their weekly circulation was dropped by 23% (Chen, 2009) in San Francisco Chronicles in 2009 from the past years. A similar case was with the Washington Post that observed a decline of 13%. The USA Today fell to 13.6%. Though The Wall Street Journal was the most widely sold newspaper, and it was not affected much by the decline, but the company's expectations about the decline were there but still, it helped the print media to offset the decline. But, the New York Times declined to 8.5% during the weekdays and almost 5% during the Sundays (Cho, 2006).
3.0 Why newspapers are facing declining circulations and revenues
There are many factors that are causing the decline in the industry that includes the external factors, economic conditions of the technology, country, state, political scenario, social factors, etc. these factors have a connection with the external factors and with the abilities of the company or the organization.
3.1 External assessment
3.1.1 Economic forces
The economic depression has caused suffering to the newspaper industry. The major decline in the advertising revenues has been caused due to the global financial crisis (Daft, 2010). The main sources of income for the newspapers are the subscriptions by the readers and the advertisements. But, due to the economic downturns, these two things got adversely affected and hence the sale of the newspapers. Price strategy was implemented in the hope of sustaining the newspaper companies. The prices of the newspapers rose. For example, The Chicago tribunal increased its price to $1 (Cho, 2006). But, the decline continued to happen in the circulation, subscriptions, and the revenues. For a long time, the market expectation of the newspapers was not met, and the situation scared the investors, the project capitalists and potential buyers of the newspaper. In the end, drastic changes due to the economic situation made these companies reduce the amount they were willing to pay for the marketing activities.
3.1.2 Social, cultural, demographic, and environmental forces
The lifestyle and behavior of the newspaper readers are affected by the social factors. The globalization has invented the internet and developed the technology, so almost all the people have easy access to the internet that gives them high- speed internet connections. The smartphones used by the people gives them easy access to the news and the current events. Also, the information is easily available and freely accessible from any place and anytime on the internet. The promotions that used to happen in the print media are now happening on the online websites in a much cheaper and convenient way (MacKenzie, 2010). The people can also access the global culture and the world information from the internet. Lastly, the efficient use of paper for saving the environment has caused concern for the people, and they are preferring to use the online sources rather than obtaining the printed news.
3.1.3 Political, governmental and legal forces
With the continuous decline in the industry, the companies’ are following the cost-cutting methods and the other possible methods for saving themselves. But, these have the impact on the journalism and the democracy in the country. There are views that the newspapers are the source of profit trust and they have a backing of the rich patrons (Parr, 2010). These also rely heavily on the sales and the advertisement for earning revenue. So, the freedom of speech and the other media rights will have an impact when the number of competitors will rise and later the national development of the newspaper will be undervalued.
3.1.4 Technological forces
The development in radio technology, television, the internet etc. has a major impact on the performance of the newspaper industry. This has caused a behavioral change in the customers, readers, and the advertisers. These were the chief source of the revenue for the newspaper companies. The medium of accessing the news has been changed from the published news to the radio and the television channels (Thomas, 2011). With the help of the internet, any news can be accessed from anywhere, and the information can also be retrieved from any source. Due to the extensive use of the internet, the advertisers have shifted their focus of publishing advertisements. They now look for the online channels of promotion and thus the revenue for the newspapers from the advertising has declined too.
3.1.5 Competitive forces
When the current firm in an industry starts earning more profits, there are many new firms that enter the newspaper industry. But the economic profits are earned when the returns from the industry are more than the profits that are accessible from the substitute investments. It is difficult to enter the industry because the current firms have advantages of lower cost of production but the new forms do not have these advantages. So, when the additional copies of the newspapers are printed, the average cost of production has to be considered. If this cost is declining, it means that the companies are benefitting due to economies of scale. This could be achieved only by daily subscriptions of the newspapers, and they reach to the minority groups. Then, the cost of starting the newspaper inductee is also very high. So, this is another barrier in this case. They will face the high cost of operation; promotion cost will be high too, and they will have to face stiff competition from the various existing newspaper channels.
3.1.6 External Factor Evaluation (EFE) matrix
This matrix is useful for the strategists who want to summarize and access the information about the economic, social, environmental, demographic, political, legal environment, etc. The total result which is obtained from this matrix is the overall effort of the performance of the newspaper company while handling the various opportunities and handling the different threats in the environment that are related to the improvement in the current performance for achieving the competitive advantage (Kirchhoff, 2009).
4.0 Internal assessment
4.1 Organizational processes and structure
In the current organization i.e. The Chronicles Gazette, only Susan is responsible for the innovation and the product development. She has all the relevant knowledge which is required to enhance the product. The organization for The Chronicles Gazette is functional. Here, the motive of the people is to make their department superior, and they are not concerned about the overall enhancement of the company. This causes major conflicts among the departments and the innovation and goals achievement is hampered.
4.2 HR capabilities
The Chronicles Gazette is the first rated newspaper. Thus, the HR capabilities are high. The reading skills and the knowledge of the writers are very good (Schonfeld, 2009). The resources are valuable for the company, and they focus on giving the audience a unique and different content that can help them to think, relate and gives them a perspective on the happenings of the world. The company has achieved many rewards for its articles. Thus, there is no doubt on the HR capabilities of this company.
4.3 Financial position
There are huge numbers of customers that are served by The Chronicles Gazette. Thus, this shows that the industry is capable and it is leading in the newspaper industry. The company has been earning huge revenues, and the return on profits is also huge. But, the changes at the micro and the macro level have been affecting The Chronicles Gazette. It is facing various risks due to this. The changing requirements and the preferences of the readers that are moving them away from the newspapers are causing pains to The Chronicles Gazette. Also, the relation of the promotions and the advertisements of the companies and The Chronicles Gazette are getting adversely affected.
4.4 Marketing/sales capabilities
The Chronicles Gazette has been successful in connecting with and communicating to its readers. Thus, the newspaper has successfully carried out its operation till now. It has created and developed a strong bond with its people, and the advertisers. Both of them are the sources of revenue for the company. The print media is very much different from the online media because of the fact that there are different forms of contact with the competitors who are capable of affecting the entire process of achieving the goals and the objectives.
4.5 Operational capabilities
The Chronicles Gazette is familiar with the various processes, procedures and the aspects of the supply chain and value chain. Thus, The Chronicles Gazette has achieved the network and the connections with the various stakeholders. They are important for the achievement of the outcome of the product. Stakeholders are involved in the process of planning, writing the content, advertisements, etc. but, due to the online channel, this can be changed.
4.6 Our strengths and weaknesses as a publisher
The ability of The Chronicles Gazette to connect with the customers is the primary strength of the newspaper industry. The marketing process and the quality of the articles or the products can help the market places of the newspaper. The whole newspaper process pertains to the capability and the qualifications of the writers and the editors. The other staff members are also involved in this. Thus, this requires the use of technological resources, like the advent of the internet and the mobile devices.
5.0 How companies in the publishing industry are adjusting their strategies to cope with the challenges
Since the micro and the macro environment is changing for the newspaper industry, therefore, most of the companies are implementing the various strategies so that they can maintain their competitive advantage. In this way, they can maintain their position in the market by earning more revenue and increasing their circulation, even if the newspaper industry is declining.
The printed circulation can be maintained by the newspaper by using the existence of the supplies in the industry. The non-core competencies can be outsourced like the printing activities and the IT (Oh, 2013). Thus, the performance of the supplies can be improved, and the industry can run in a more stable manner. Newspapers not only compete with the print media, but they also compete with the other sources of information like the radio, TV, magazine, Internet, etc. the current materials can be upgraded for printing the newspapers and the quality of the printing can be improved too. The ink can be used of good quality so that the newspapers are printed in good quality, and they give good reading experience.
The most effective strategy in his industry is that the news is given to the people without the paper content. The industry can use online websites, mobile applications, etc. for delivering the content to the people. Thus, the internet can be used for communicating with the existing and the new audience; the revenues can be earned again, and the advertisements can also be displayed. The access to the news via the internet has enabled people to use the information easily and free of cost. This has given the companies a new way of generating the revenue for themselves. Then, the micropayment system is also getting implemented that is able to extract per month from the readers (Deveson, 2009). Th8us, people, can overcome the changes in the culture, demography, economy easily. The Internet is such a source of information which can be used by the people of all the age groups, so no segmentation and targeting are required here. Even during the economic downturns, the purchasing behavior of people will not affect the sale of news online. The paper is saved hence the environment sustainability is not affected. Similar is the case with the applications that can be run the mobile phones, gadgets, etc.
When the customer base of the newspaper industry is regained and maintained (Genesove, 1999), they will be able to regain the trust and the interest of the advertisers. The completion with the online resources of the information will become fair, and the ability of such industries to compete will increase too. The extinction of the industry can be avoided with these strategies and the initiatives.
6.0 Steps The Chronicle Gazette might take in order to deal with the challenges
There are some factors in the internal and the external environment of The Chronicle Gazette that influence the strategic changes in the companies in the newspaper industry. The factors also make the company focus on the various short and the long term steps that it plans to take for improving its performance.
6.1 Short-term steps
Firstly, the newspaper should search and inquire about the needs of the customers, and the availability of the technology in the current market. In this, the company needs to investigate and assess the way in which the community use and perceive the technology as the use of gadgets and the connections of the internet. Then, the company needs to develop and launch their website that will enable it to go online. By the online launch, it can advertise the things in the broad and the wide market. Then, another way of making the company popular is Twitter. The traffic towards the source of news can be driven using the Twitter.
6.2 Long-term steps
In the long term, the company should process the actual implementation and the launch of its website. The initial marketing will be done, and the technology will be introduced to the customers. The implementation of the website has to be focused so that the actual service and the product can be offered to the customers. The website should have an option for the customers with which they can personalize their page as per their requirements. For example, they can change the color, background, font, etc. This aspect is useful for the improvement in the usability of the website. If this feature is provided to the customers, then even the physically disabled people like the people with color blindness can use it. The number of mobile gadget users is increasing so the online framework is required to be created which can be accessed by the mobile users. This will also help in focusing on the overall development and design of the website. This will offer not only high resolution, but also the light weighted interface for the mobile users.
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- Barnhurst, K.G., and Wartella, E., 1991. Newspapers and citizenship: Young adults' subjective experience of newspapers. Critical Studies in Media Communication, 8(2), pp.195-209.
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Chen, S., 2009. Newspapers fold as readers defect and economy sours. CNN. com, 19.
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Cho, H., Martin, H.J. and Lacy, S., 2006. An industry in transition: entry and exit in daily newspaper markets, 1987–2003. Journalism & Mass Communication Quarterly, 83(2), pp.381-396.
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Daft, R.L., Murphy, J. and Willmott, H., 2010. Organization theory and design: Cengage learning. Inc., Hampshire.
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Deveson, M., 2009. Crisis in the US newspaper industry. Research source: http://news. bbc. co. uk/1/hi/world/americas/7913400. stm, March3.
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Genesove, D., 1999. The adoption of offset presses in the daily newspaper industry in the united states (No. w7076). National bureau of economic research.
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Kirchhoff, S.M., 2009. The US newspaper industry in transition. Congressional Research Service. CRS Report for Congress.
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MacKenzie, I., 2010. English for Business Studies Student's Book: A Course for Business Studies and Economics Students. Cambridge University Press.
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Parr, B., 2010. The Dire State of the Newspaper Industry. Mashable: The social media guide.
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Schonfeld, E., 2009. The wounded US newspaper industry lost $7.5 billion in advertising revenues last year. Tech Crunch.
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Oh, H., Animesh, A. and Pinsonneault, A., 2013. For a Fee: The Impact of Information Pricing Strategy on the Pattern and Effectiveness of Word-of-Mouth via Social Media.
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Thomas, D., 2011. Covering Terrorism: Examining how US newspapers have reported on these incidents.
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