Strategic Planning at Chronicle Gazette - Report Example

Strategic planning at chronicle gazette Your ID Number of the Assignment Introduction goals of the report The Chronicle Gazette is one of the leading newspapers of United State. Its customer base is around 225,000. In the recent years this newspaper is experiencing reduction of its revenue and customers. The goal of this report is to develop effective strategy plans for the company which will help it to anticipate the changes of the environment and prepare the firm to deal with these factors. Development of strategy plans helps in negotiating difficulties in business environment. In the modern time the development of internet industry disable the publishing industry. Different types of publishers like trade book publishers, textbook publishers, and magazine and newspaper publishers all are affected by this change. The major challenges these publishers are facing is that earlier all the information are only available only to them but now these are freely accessible to public by through internet. Almost each and every information and data are available in the internet which reduces the sale of publishing companies. The strategies need to be developed for overcoming the challenges. Moreover for the global recession there is a major decline in the advertising revenue. The publishing and the cost of the newspaper have increased. The people are reluctant to pay less so they uses internet which is available at a cheap price. The main goal of this report is to increase the circulation and the profit of The Chronicle Gazette. A detailed analysis of the company and the newspaper industry of US will be provided in the strategic planning process of The Chronicle Gazette. 2. State of the newspaper publishing industry today The products of the newspaper industry are monthly, daily, weekly newspapers. In U.S there are approximately 2000 publishing companies generating revenue around $30 billion. The revenue of this industry are generated mainly by subscriptions and advertising. The leading companies operation this business in US are The New York Times Company, News Corporation, Gannett Company, The Washington Post Company, Tribune Company and Hearst Corporation. The daily circulation of total number of newspaper in this country is around 50millions. The country’s national economy is the main driver of this industry. The overhear cost of the publishing companies are fixed. So their sales drive the profitability of the companies. In the recent time the sale of newspaper has decreased a lot for the high usage of internet. The cost conscious readers prefer internet that print media. The global economic shifts have created an adverse effect on the newspaper industry of US (Henry, 2003). Many newspaper publishing companies have started publishing their news in the online news sites. The publishing companies are not in a profitable condition. So they are implementing different cost cutting measures. 2.1. Data on declining circulation and revenue The newspaper industries have faced a decline of 2% in 2012. This industry generated revenue of $38.6 billion in 2012 which comparatively less than 2011. In 2011 the industry generated $39.5 billion revenue. The advertising revenue also faced a decline of 6% in 2012. Newspaper industry generated revenue from many other categories which are also not growing (Wintzer, 2007). Therefore the publishing companies have initiated various new sources like doing digital consulting for e commerce and local business which contributes some amount of money in its revenue. In the present scenario the composition of the newspaper revenue are made up of 8% revenue from the new sources, 27% from total newspaper circulation, 8% from print, 11% from digital advertising, 8% from direct marketing and niche publishing and 46% from advertising. 2.2 Status of newspaper leaders The New York Times is a leading news paper company of US. It is facing a tough business condition. For the decrease of its revenue its share price went down to $ 5 per share. The dividends of the company are suspended. The firm leased its headquarters for its financial crisis. It sold its preferred shares for having cash infusion. The company New York Times is suffering from huge debt and cash crunch which is threading the company’s position. The Wall Street Journal also faced the same problem (Wilkinson, 2002). But this company has realized the important role of internet in the publishing industry. The company publishes their news online but not for free. The company publishes different types of news and charges its readers for niche financial and business news. The online edition of this newspaper attracts many customers and increases traffic in its website. This modern business structure helps the company to generate more revenue. 3. Reasons for declining circulations and revenues of newspapers 3.1. External assessment The development of internet and its intensive use by the people have created a dramatic impact on the publishing industry. All the news and information published in the newspaper are easily available in the internet. U.S is experiencing a shift in the newspapers customer base. The global recession had created a negative effect on this business. The circulation figures affect the source of income of the publishers (Fink, 2005). 3.1.1 Economic forces The price of the newspaper has increased significantly in the U.S market where as internet is available at a low price. This decreases the customer base of the newspaper companies. Advertising cost of print media has also increased in the market of US. Therefore the companies are not willing to advertise its product much in the newspaper. These two major factors have a huge contribution in the deterioration of the economic condition of the industry (Dess, Lumpkin and Eisne, 2008). Another important factor is for economic recession the allocation of budget for advertising has been restricted which decreases the revenue of this industry. 3.1.2. Social, cultural, demographic, and environmental forces The young generation is much interested in online sources rather than print media for getting various information. The various news materials available in the online sites meet the needs of the young people. Video contents attached with the news in the online sites helps attracting the readers (Potter, 2005). Moreover newspapers are not accessible from any places and at any time which is constrain of this industry. US are facing a reduction in the percentage of the adult readers and woman readers who used to read newspapers daily. In the globalization era more emphasis is given on the protection of environment so majority of the newspaper companies are using recycled material to publish 3.1.3. Political, governmental and legal forces In the recent decades the political parties do not provide strong support to newspapers. They spent there of money a time for doing their online promotions and campaigns. Through internet maximum readers can be reached to the political parties prefer this mode of communication (Paul, 2008). 3.1.4. Technological forces Technological advancement has contributed in the change of delivering and receiving news. The increase of mobile technology and internet changed the business pattern. This industry has adopted new business models for technological progress. 3.1.5. Competitive forces The competitive environment of the newspaper industry has changed the concept of the publishing industry (Hennessey, 2004).  Different internet companies have attracted the readers with by providing g various features which takes the readers away from newspapers. For the increase in traffic in the online sites the companies advertise their products on internet rather than newspapers. There is a high chance starting newspaper business into the US market with innovating strategies. The bargaining power of the suppliers is also high as they can influence the manufacturing price by charging high. There is a strong threat of substitute product like internet and television. The bargaining power of the buyers is moderate and depends upon the reader’s demographic distribution. In the US market many newspapers company prevails. Therefore rivalry is strong. 3.1.6. External Factor Evaluation (EFE) matrix Weight Rating Weighted Score Opportunities in online Increase in customer base 15% 5 0.75 Reaching maximum customers 10% 6 0.6 Increase in revenue 25% 1 0.25 Threats in print media       rise in the publication price 10% 6 0.6 increase of internet usage 20% 3 0.6 loss of customer base 12% 2 0.24 tough competition 17% 4 0.68         Total weighted Score 100%   3.72 4. Internal assessment 4.1. Organizational processes and structure The newspaper company The Chronicle Gazette is facing many problems mainly for its insufficient distribution channels. The organization has not adapted the technological facilities which could have made the company successful in the US market. Executives of the company involves in the decision making process (Hill and Jones 2011).  4.2. HR capabilities The HR capability of the company is very strong. The company has recruited many talented writers for which it has received many awards. The HR activities of the company are driven by the writer’s performance. 4.3. Financial position The revenue of the company is affected for many factors. Its declining volume of advertisement and sales, strong online competition have deteriorated the financial position of the company. After facing these challenges the company is now willing to adopt online business techniques. 4.4. Marketing/sales capabilities The Chronicle Gazette depends on its distribution channel. It focuses only on print media. The company has not analyzed the market of newspaper industry for positioning its business. This is one of the reasons of losing its position in the market. 4.5. Operational capabilities The organization focuses on intensifying their content level like the major players of this industry who are operating their business online. But The Chronicle Gazette faces the problem of not using the advantages of the technology and not involving its business in the new type of newspaper subscription process. That is why the company is unable to attract more customers. 4.6. Our strengths and weaknesses as a publisher The company has many efficient and creative writers which act as a strength factor of the organization. Moreover the organization has the opportunity to explore new market channel of online media. The weakness of The Chronicle Gazette feels hesitate to explore the new market. It views digitalization as a strong challenge. 5. Strategies to cope with the challenges The publishing industry of US is facing many challenges in its business process. For overcoming these challenges the newspaper companies are doing cost benefit analysis of the market. Some of the newspapers are cutting its circulation cost in the remote areas where the revenue generation is low and delivery cost is high. The mixed price strategy is followed by many newspaper company where is provides free and paid content to its readers in online. By this service the newspaper company increases its customer base. Free access to various contents increases traffic in the websites. E subscription of the readers is introduced by The Wall Street Journal. The company has also adopted a new idea in embracing digital media. The journals of this company are present on Apple’s ipad. This helps the company to reach maximum young readers. The Hearst Corporation has made decision of shutting down its business and focusing only on digital media (Ulwick, 2005). 6. Recommended steps for Chronicle Gazette 6.1. Short term steps The short term aspect would encompass different strategies that can enhance revenue margin of the company. It is clearly evident that online platform provides free access to people and this in turn is decreasing profit margins. In order to sustain its revenue margins Chronicle Gazette should focus on gaining attention of business organizations. These organizations usually consider newspapers as a traditional media to advertise. There are advantages and disadvantages associated with this form of media. It can be stated that reducing advertisement fees is a most suitable way to acquire and retain corporate firms. They basically are inclined towards value for money and this might be treated as an opportunity for Chronicle Gazette. The firm needs to alter its business strategy in order to stay competitive in the industry. It is recommended that the management re-design its advertisement policy by charging less fees and meeting customer demand. Advertisements are generally a medium through which a firm can communicate brand message to customers. In present scenario online advertisements are preferred more since ads can be retained for a longer period of time. On the other hand, in comparison to traditional media, online platform charge less fees from organizations. Chronicle Gazette should lower down its advertisement rates and increase on advertisement frequency. This would give them a competitive advantage for short term since more firms might be attracted towards this platform. The firm can even increase on its distribution network in order to reach to a large base of customers. This is a convenient method to overcome present challenges and maintain market position. 6.2. Long term steps Chronicle Gazette is currently facing a tough competition from evolution of online platform. The firm can achieve high profit margins if it focuses on developing its own website. Innovation is the key to success in modern world and firms offering customers’ value can retain its position for long term. Publishing industry is majorly facing challenges from online publishing house. Chronicle Gazette can sustain its current operations as well as enter into digital media. The company is recommended to design a framework so as to enable customers read their newspapers online. It would charge negligible fees from customers mainly those located overseas. This will facilitate the company to gain desirable margins through print media as well as online media. On the other hand, Chronicle Gazette shall gain competitive advantage on basis of online platform. The company can even implement customer loyalty programs by forming a venture with other well known firms. These firms are closely knitted with daily activities of individuals and would even serve as a promotional technique for Chronicle Gazette. Through such loyalty programs the firm can send free newsletters or even gift vouchers that can attract attention of customers. In order to maintain market position the firm needs to be aligned with strategies adopted by competitors. For long term perspective the company can even include some additional sections which need to contain interesting information or data. This might be editorials, stories, critical reviews on specific topics or a section where subscribers can contribute their opinions regarding an alarming issue. 7. Conclusion In the recent years the newspaper industry of US is facing a savior problem of decrease in its revenue and popularity. The Chronicle Gazette is presently facing a bad condition in the newspaper industry of U.S for several internal and external factors. The company has to understand the present technique and demands of the market. The company has to focuses on the capabilities of its operations in its unprofitable operations. The readers demands for relevant news analysis and coverage which that company have to provide for existing in the competition. The organization needs to take quick actions for its smooth process. It should expand its business in the digital media platform. The company should utilize its employee for getting maximum return. Redesigning its distribution and production process will help the company to deliver news of different contents. All these measures will build the company’s strength. This will help the firm to increase its advertising revenue and subscriptions. References Dess, G, Lumpkin, T and Eisne, A., (2008). Strategic management: creating competitive advantages (4th Edition). New York: McGraw-Hill. Fink, B. A. (2005). Market-driven journalism: Creating special sections to meet the reader’s interest. Journal of Communications Management, 9(2) pp 145-154. Hennessey, J. (2004). Global marketing strategies, 6th Edition. Boston: Houghton Miffing. Henry, H. (2003). Newspaper cover prices: Management Behavior in Conditions of Joint Supply. Marketing Intelligence & Planning, 1(1) pp 3-14. Hill, C. and Jones, G. (2011). Essentials of strategic management. London: Cengage Learning. Paul, J. (2008). International marketing: text and cases. New Delhi: Tata McGraw-Hill Education Potter, W.J. (2005). Media literacy. Thousand Oaks, California: SAGE. Ulwick, A. W. (2005). Business strategy formulation: Theory, process and the intellectual revolution. USA: IAP. Wilkinson, G. (2002). Factors affecting newspaper choice. European Journal of Marketing, 6(2): pp 107-116. Wintzer, E. (2007). Global competition and strategic management. Germany: GRIN Verlag. Read More