Professional accounting skills for business decisions - Essay Example

Introduction South York Shire Newspapers PLC is an old company that has developed over the years to become one of the biggest publishers of newspapers in the region. The newspaper is a merger of five old newspapers and provides news to the different regions in Sheffield. An analysis of the case study reveals two major themes as the cause of the decline of the financial performance of South York Shire Newspapers PLC, which is falling demand for newsprint and the use of obsolete technology in the firm.

These two factors combine to reduce the overall effectiveness of the company in terms of profitability, which is supposed to increase with the use of better technology. The pressure on the sale of newsprint began more than 10 years ago with the decline in the production of morning newspapers. This forced the major printing houses to focus on the printing of only evening newspapers. This change in consumer interest has been due to a change in editorial approach that reversed previous negative trends in this sector.

However, this has led to companies rejecting the printing of morning newspapers. The demand for newspapers is also determined by the region. The second factor is that the increase in popularity of other mediums of communication such as the television, which have severely reduced the demand for newsprint and newspapers. The preference of the television over the printed newspaper is mainly due to the speed at which news is transmitted by television. The consumers tend to demand higher overall quality, quicker production of news and a wide range of other topics.

The newspaper is also faced with the increasing demand for other news mediums, a situation that has been survived only by the relative size of the newspaper. The second theme evident from the reading is the use of a blend of new and outdated technology for the production process. Recent trends in the newspaper industry have introduced new machinery mainly centered on integrated computer and production abilities. The use of this blend has changed the working practices of the company, for example, by eliminating the need for centralized news gathering, editorial and production functions.

This has also changed the production and newsgathering process utilized by the company and hastened the newspaper production process. However, the current situation indicates that this new technology has only been partly implemented in the newspaper, which leads to the substandard utilization of the available resources. The use of the machinery at maximum capacity sometimes leads to breakdowns, which affects the revenue collection process. The advertising revenue in the region is also dictated by the trends evident in the national and regional level.

For example, the current state indicates that, as advertisers currently prefer the use of multi-colored advertisements, which are a cause of concern because of the use of combined printing technologies. The revenues from the newspaper are also an area of concern because of the appearance of free soft news mediums like free newspapers. The management in the newspaper is also concerned because of the rumored production of a free weekly publication.