The Measures Implemented by the Chronicle Gazette in Order to Increase Its Advertising Revenues - Research Paper Example

?Consulting Report Introduction The Chronicle Gazette is one of the leading and popular news papers in US. The news paper has the circulation of almost 225,000 readers. Over the past few years, it has been evidenced that, the organization is facing an effective decline in the revenues and customer base due to increasing dominance of internets, disseminating news and information. The US newspaper publishing industry is going through a complicated stage with declining revenues. Both advertising and subscription revenues have been gradually declining. The major reason for the downfall is that, the customers are surfing internet sources in order to obtain news content for free. The global economic recession has reduced the number of readers and has significantly reduced the advertising revenues. The publishing cost has been increased and major of the newspaper publishing organizations have increased the price level. Therefore, the readers are going for free online news contents. The study will analyze the recent trends in the newspaper industry. Moreover, the study will analyze and evaluate the strategies that have been adopted by the leading organization within the US newspaper industry. The study will provide details of the adopted strategies by the publishing industry in order to overcome the current losses. By implementing internal and external analysis of this industry, the study will reveal the measures to be adopted and implemented by the Chronicle Gazette in order to increase its subscription and advertising revenues. State of the Newspaper publishing Industry Within the US newspaper publishing industry, The Wall Street Journal, The New York Times and USA Today are three leading players. Data on Declining Circulation The Wall Street Journal is the leading newspaper in US considering the daily sales figure. Apart from the US editions, the newspaper also has European and Asian Edition. For the six months till March 31, 2010, the number of daily week day circulation was a base of 2,092,523 readers. On the other hand, for the same period the figure of circulation base has decreased to 1,913,284 readers. New York Times is another leading newspaper within US. The circulation figure of New York Times’ weekday edition has failed by 8.5% to approximately 950,000 subscriptions. Moreover, the study edition of this specific newspaper has failed by 5.2% at end of 2010. USA Today is one of the major daily selling newspapers in US. During the last six months since March 31, the sale of newspaper has declined by 13.6%. Status of Newspaper leaders Recently the wall street journal has accepted an effective price based model of paid and free access in order to overcome these challenges. Now-a-days, they used to publish their news content through online. Several news cover ages including sports news, political news, and entertainment and art news are being available for free to the each and every online reader. The journal has able to attract the focus of potential target segment to the organization website by providing niche news contents. Reason behind Declining Circulation and Revenue An external and internal assessment has been developed in order to reveal the reasons behind declining revenue and circulation of newspaper publication organizations. External assessment This part will implement PESTLE and Porter’s five force model in order to determine the external assessment. PESTLE Analysis PESTLE analysis will determine the impact of political, social, economical, legal, technological and environmental factors on the newspaper publication industry in US. Political Several political parties are influencing and providing money to online sources. Moreover, they are not supporting the newspaper publication companies. Economical Recent recession has affected the buying behavior of customers. Due to low disposable income, people are shifting towards online news contents. Social, Cultural and Demographical Current social trend towards the online news sources, reduced women subscribers and availability of advanced technology has changed the cultural trend of US people. Technological Introduction of media platforms, mobile devices and internet media has influenced the people to read online news contents. It is easily accessible and cost effective. Environmental US government has implemented several laws regarding paper recycling and green environment. The operation cost has increased as the organizations have to follow these rules and regulation. Legal Recently several industry and environmental laws have been implemented by the government. It is necessary for all the organizations to follow this regulation in order to avoid any kind of legal threat. Porter’s Five Force Model This strategic tool will discuss about the impact of several competitive factors on The Chronicle Gazette. Buyers Power The tendency of people in US is changing towards the online news contents. Several online media sources, such as Yahoo, Google are providing online news contents for free access for free access. Therefore, people are getting the news contents on daily basis through these internet sites. Now-a-days the number of traditional newspaper subscriber is gradually decreasing as they are getting the news for free through internet. Thus, it can be said that, the threat of bargaining power of buyers is high for Chronicle Gazette. Suppliers Power Recently several leading news paper organizations are trying to implement online strategy in order to satisfy the customer’s need, grab the potential market share and reduce the operational cost. Therefore, this industry is lacking the availability of suppliers. Automatically, it is feasible that, the cost of suppliers is increasing due to the economic challenges and reduces of subscription number. Therefore, the suppliers are raising their compensations in order to overcome their losses. Threat of Substitute There are several forms of substitutes, such as TV news, Radio news etc. now-a-days, the digital media and online media sources are becoming the popular media of news provider (Cohen, 136). It is evidenced that, TV and radio news are popular among the people over past decades. Still these sources are popular enough. Therefore, it can be state that, the threat of substitute is high for Chronicle Gazette. Threat of New Entrants As it is feasible that, the US newspaper publishing industry is very much saturated and competitive, therefore, it can be state that, it would be very much difficult for the new organizations to enter in this specific industry. Moreover, several legal entry barriers can create huge challenges for the new players. Industry Rivalry There are several potential and leading competitors whose subscription number and advertisement revenue is much higher comparing to the Chronicle Gazette. Moreover, effective marketing and operational strategy and creative and qualitative news contents have posed huge threat to Chronicle Gazette. EFE Matrix An External factor Evaluation matrix is used to determine the external opportunities and threats of an organization or an industry. The following is the example of an EFE matrix for the US newspaper publishers industry. Opportunities Weight Rating Weighted Score Industry Consolidation 15% 4 0.6 Growth in substitute Sector 20% 2 0.4 Online Newspapers 20% 5 1.0 Threats Weight Rating Weighted Score Declining Margins 10% 3 0.3 Economic Downturn 20% 2 0.4 Government Oversight 15% 3 0.45 Internal assessment The internal assessment will highlight the organization’s following inner aspects. Organizational Process and Structure Generally, it is feasible that, major of the leading organization used to divide their organization structure into two parts, such as top management and lower level employees. This strategy actually can harm the business structure of an organization. The management of the organizations should try to motivate the employees to take part in the decision Making process of an organization, this strategy will provide positive business outcome. The employees should take part in the organizational decision making process as this strategy can provide several effective and innovative ideas of execution of operational process and decisions. HR Capabilities Human resource is an important division of any kind of industry or organization. The HR managers used to give important to the editors and the content writer as they are the key strengths of this kind of organization. The organizations should give importance all the staffs within the industry. It is evidenced that, an effective group work can increase them growth of an organization. Moreover, appropriate performance appraisal and reward system will effectively increase the capability of the employees within the organization. Financial Position The recent global economic recession has affected the buying behavior of people. Due to low disposable income, people of US are trying to shift towards the online sources for the news contents. Therefore, this unfavorable economic and social scenario has misbalanced the financial position of major of the organizations. It can be recommended that, they should reduce their operational cost and implement online strategy in order to control the cost and fulfill the current market demand. This will help them to increase their market share. Marketing and Sales Capabilities The organizations used to implement marketing promotional strategy by providing advertisements on the hoarding and billboards. This strategy can easily create brand awareness in the customer’s mind (Kloss, 31). Moreover, organizing school or college events, quiz shows or any kind of political debate can effectively increase the brand exposure. The organizations can implement direct selling strategy, monthly subscription strategy or I terms of new entrants, the organizations can implement free trial strategy in order to increase the sales. Operational Capabilities The news paper publishers used to implement vertical integration process in their distribution papers. Moreover, major of the industries are familiar with the centralized manufacturing and distribution system. This system has helped the organization to keep control over all of the business process. In order to bring efficiency in the business operation process, the organizations are implementing technological aspect in their business process. Moreover, they are tending to implement decentralize process in order to reduce the operational cost. Major of the leading organizations are establishing new websites in order to provide news against free and paid access to the readers. This process has effectively differentiated their business structure than their old process. Strengths and Weaknesses Strengths Weaknesses Loyal and large customer base. Effective advertising base. Significant niche titles. Skilled and seasoned work group. Leading organizations have a strong financial base. High quality and money worth products. Trusted and important information channel. Inflexible and high fixed cost. Lacking the interest of youth market. Revelation to economic cycles by the help of promotion and advertising. Matured and saturated market place with slow growth rate. Lack of digital and technological development. Difficulty in monetizing online products. Strategies to Overcome Challenges The newspaper industry in US is facing several challenges, such as increased operational costs, reduced subscription and readership and huge competition from new media organizations, such as Google, Yahoo and many more (Barth, 65). The Wall Street Journal is one of the leading newspapers in US. Recently, the organization has changed its business model and marketing strategy to overcome the challenges in the newspaper publishing industry. The organization has started to provide online news contents for the readers through their website. It has evidenced that, the e-subscription of this journal has gradually increased. The organization has implemented a mix pricing strategy. There is availability of both free and paid access to online news contents. By implementing this pricing strategy the organization has able to increase its e-readership customer base. Moreover, free access to the popular news contents used to attract more traffic on their specific website. The Wall Street Journal has taken another measure by accepting the digital revolution. The news contents of this journal can be available through several mobile or iPod applications. This strategy has helped the organization to increase its market range and tap the young readers who are technologically confidence (Reddy & Pellegrini, 131). According to the latest updated report, as of 2010, it is evidenced that, the journal has able to sell more than 10,000b subscriptions. Moreover, the organization has able generate 2.4 million US dollar through the iPad application. This online strategy has effectively reduced staff headcount drastically. Therefore, it is feasible that, the online strategy has become cost effective and profitable for the newspaper publishing companies. Steps to be taken by the Chronicle Gazette for Revival The chronicle Gazette should make some changes in their marketing strategy and business model in order to improve its competitive position. The organization needs to understand the current market situation and needs to change its offerings to increase the target customer base. Several key measures need to be considered by the organization in order to increase the advertising and subscription revenues. Short-term Steps Two short term strategic steps have been proposed to the organization in order to improve the current market situation. Online News Contents The Chronicle Gazette should shift towards digitizing process in order to provide the news contents quickly by setting up individual website. Now-a-days, the readers have the access to several leading online sources, such as Yahoo, Google, You Tube and MSN (Dijkman, 79). In this present internet era, the global people tend to read news contents through online media sources. In this present problematic scenario, it is recommended for The Chronicle Gazette to implement online version of the papers with print value edition. Cost Reduction and Increasing Efficiency Due to the global economic recession, the newspaper organizations around the publishing industry in US are making significant efforts to control and cut the business operational costs. Moreover, the organizations need to be encouraged about optimum asset utilization. The Chronicle Gazette should study carefully the operational cost structure. This monitoring strategy will help the organization to reduce its unnecessary operational costs. The cost reduction strategy should not be confined to a specific single function (Fired &Hansson, 99). This strategy needs to be undertaken in all the functional aspect, such as advertising, printing, production, editorial and distribution. The Chronicle Gazette should perform a cost benefit analysis considering each and every operating market. Long-term Steps Two long term strategic steps have been proposed to the organization in order to improve the current market situation. Leaner Corporate organizational Structure The chronicle Gazette should study the organization’s organization structure in order to effectively utilize the human capital in the business practices. All the editorial employees should contribute effectually towards news content creation. The specific roles of every individual needs to be well defined. This will help the organization to achieve its organizational goals and objectives. Moreover, the newspaper should understand the contribution of the journalists. This will help the organization to achieve success (Davies, 121). Last but not the least; this strategy should focus on the efforts of the employees and utilize their skills effectively. Squeeze Digital Platforms There are several leading newspapers within the US newspaper publishing industry are exploring their business model. Moreover, they are trying to be an effective part of digital revolution (Lynn, 85). The Chronicle Gazette should discover new media technologies and platforms in order to distribute its news content. The strategy should focus on younger readers by digitizing its news contents through mobile devices and websites. It could discover the opportunity of distributing important news content through several smart devices, such as Apple’s iPad and iPhone. Works Cited Barth, Stephen. Small Business Management and Legal Structure. Stamford: Cengage Learning, 2009, Print Cohen, Jeffrey. The Presidency in the Era of 24-Hour News. New Jersey: Princeton University, 2012. Print. Davies, Anna. (2012). The Geographic of Garbage Governance. London: Ashgate Publishing, Dijkman, John. (2008). Germany Real estate Yearbook. Berlin: Real Estate Publishers, 2008. Print. Fired, & Hansson, David. Rework: Change the Way You Work Forever. New York: random House, 2010. Print. Kloss, Diana. Occupational Health law. New Jersey: John Wiley & Sons, 2010. Print. Lynn, Jacquelyn. The Entrepreneur’s Almanac. New York: Entrepreneur Press, 2007. Print. Press, 2010. Print. Reddy, & Pellegrini, Luca. Retail and Marketing Channels. London: Routledge, 2011. Print. Read More