Newspaper Industry in the Developed Economies - Essay Example

? NEWSPAPERS INDEX Topic Page Number Introduction 3 2. PEST Analysis: Definition, Purpose and Business Benefit 3 3. PEST analysis for the newspaper industry in the developed economies 4 4. SWOT analysis of the British newspaper The Guardian 5 5. Lewin’s Field Force Analysis 6 6. Field Force Analysis for the newspaper industry 7 7. Reason behind Indian newspaper industry is not facing the same 8 challenges as those in the developed economies 8. Conclusion 9 9. References 10 1. Introduction: With the continuous evolution of electronic and digital media as well as more and more expansion of internet across the world mainly in developed countries, the importance as well as existence of the newspaper is now started to downgrade rapidly. Although there are certain number of people, mainly of older age who still believe in reading newspaper for getting updated about what are happenings in and around the world the present generation of youth as well as people who remain busy in their respective jobs prefer internet or web to get updated about the news. The news brings about conflict, create difference of opinion among people which help them in a way to figure out what is right and what is wrong. The newspaper is a way by which people can gather information about what is happening all across the globe. In the era of technological advancement newspaper still have its importance as in the developing and developed countries people still have to rely on print media to get details about the happening across the world. But, in addition to that in the developed countries, print media have to come up with new innovative ideas to survive as the internet is more of a common thing in those countries, so dependency on the newspaper in now reducing in those countries. 2. PEST Analysis: Definition, Purpose and Business Benefit: Generally PEST analysis associated with the external factors that affect any company’s overall performance. According to Analoui & Karami (2003) PEST analysis is associated with four different external parameters which affect any organization’s overall performance. These four different parameters are political, social, economical and technological. Out of these four parameters the political parameter is not in the hand of the organization but rest three parameters can be controlled by the organization itself. According to them, these four factors differ in different countries but a proper PEST analysis always helps an organization perform better in the competitive world (Analoui & Karami, 2003, 74). According to Kotler (1998), PEST analysis is a productive strategic tool for analyzing market growth or decline, business situation, potential and course for operations. According to his analysis, PEST analysis is helpful because there are continuous changes taking place in the society which creating an uncertain environment and also have its impact on the performance of the organization. The use of PEST analysis is helpful for the organization in strategic planning, developing its marketing strategies, for business development as well. 3. PEST analysis for the newspaper industry in the developed economies: With the continuously developing technologies and availability of internet facilities in almost every household of the economically developed countries, it is a crunch time for the print media to look closely to their marketing, promotional strategies and if needed have to make necessary changes. Political aspects: From the very beginning newspaper plays an important role in setting up the political mode of any civilization. By virtue of the reports published in newspapers regarding different political party’s agenda, thought process people decide whom to choose or support. On the other hand, political situation of any country also help the newspaper industry to blossom. Stable political condition, freedom to express views, access to all political parties and leaders, support from them at the crunch time all help the newspaper industry to do its job effectively that is providing good and true state of the country. The stable and fare political situation, with rights to express one’s view help the newspaper industry in the developed economy to maintain a steady growth rate (Kramn enburg, 2001, p.60) Economical Aspects: Developed countries have a strong and stable economical condition. Hence all the newspaper organizations are able to grow along with the developing economy as there are no such financial stresses for them. Sufficient supply of money, high expense capacity of the general people helps the organizations to publish various types of news paper, along with supplementary magazines which helped them to grow their revenue. According to Kranenburg(2001), Revenues and costs both these factors play a vital role in deciding the autonomous survival opportunities of individual newspapers companies. After, World War II, the total production expenses of newspapers have increased dramatically. In this developed countries, government provides sufficient financial support to the small newspaper organization to ensure that they were able to continue their business (Kranenburg, 2001, p.65). Social aspects: High degree of literacy rate among the people, there eagerness to know about the happenings around the world, ability to understand the positives o daily news paper reading- all these social parameters help the newspaper industry in the countries with developed economy to grow their business. Stable social structure, along with that special emphasis of the newspaper industry to gather all kind of social news in order to keep people remain updated also a key factor behind the success of the print media in the developed economy (Kirchhoff, 2009, pp.1-2). Technological aspects: Due to strong economical condition, first world countries are more swift and proactive in accepting any kind of technological development. Starting from the invention of computer up to high end printing machinery all these are easily adopted by the newspaper industries of the economically developed countries. As a result they also able to cut down the production cost of the publication which intern helped them to gain in profitability. With the invention and rapid expansion of internet, online volumes of the newspaper are now also available for the readers of the developed countries which also helped them to increase their customer base. According to the study of Evertt (2011), in present decade newspaper industry used up maximum benefit which they can get from the technological advancement. His research also pointed out the fact that almost 64% of people believe that newspaper industries using the technological development effectively (Evertt, 2011, pp.103-105). 4. SWOT analysis of the British newspaper The Guardian: SWOT analysis is one of the key methods of analyzing the current position of any organization across the industry. SWOT analysis deals with four key parameters of any organization; these are Strength, Weakness, Opportunity and Threats. Here we discuss about the SWOT analysis of one the world’s most renowned newspaper, The Guardian. . Strength: The Guardian has a huge customer base in the world. It is third largest in terms of online readership. High quality of reporting is one of the greatest strength of the newspaper. Experienced reporter and coverage of stories all across the globe helps it to be one of preferred choices of the readers. Diversification of reporting style, providing additional magazines also helped the newspaper gain market share. Weakness: It took time to change with the time as for a longer period of time it remains constant with its old style of news coverage. From the time of initiation, The Guardian is not a big sailing newspaper in the UK, as most of its customer base is in the USA. Less home customer base is the main weakness of this newspaper. Old school of thought dominated the way of news representation. As a result comparatively younger newspaper organizations were able to beat The Guardian in terms of sales volume in the UK. Opportunity: With time, the newspaper has been able to change itself to compete in the market and is printed in more attractive manner. Organizing customer fare, customer interaction and several other promotional activities are helpful for them in order to reach more number of people. With the increasing literacy rate in the developing countries, The Guardian now can look to capitalize on the new market. Threats: The biggest threat of the company is the rapid progress of Internet all over the developed countries. Increasing use of social media, blogs, mobile internet, all affecting the popularity of news paper industry. People get less time to sit and read newspaper with the continuously increasing work pressure. For them using the Internet or mobile to access the news is much easier (Kirchhoff, 2009, p.5) 5. Lewin’s Field Force Analysis: Field Force analysis is a well known management process which was developed by the Sociologist Kurt Lewin in the year 1951. Singh (2009) in her book has discussed in detail about this model. According to this model, there is a state of equilibrium between driving and restricting forces in any organization’s performance. According to this model, driving forces encourage the upwards or positive movement of the organization where as the restricting forces are responsible for downward slope. In his point of view, the driving forces are logical, positive, and economic in nature whereas the restricting forces are emotional, illogical, and social or psychological in nature. This model has 3 different steps. These are unfreezing, moving and refreezing. Unfreezing: Reducing strength of forces which maintain current equilibrium Moving /changing: New organizational values, attitudes and behaviors to help move the organization forward. Refreezing – Stabilizing after the changes have been made so that there’s a new equilibrium. From the above analysis, it is very clear that to make any changes in an organization one has to view this as a multi stage process where each of the above three steps having same degree of importance. Lewin’s Force Field model is a very simple model and therefore all the organization uses this model in order to incorporate basic changes in their process. However as this model does not consider several important issues therefore more advanced model is necessary for the company’s to address all its problems (Singh, 2009, pp.30-31). Process flow of Lewin’s Force Field Model: Old State -------------------Unfreeze----------------Change---------------Refreezing----------------New state 6. Field Force Analysis for the newspaper industry: If we analyze the implication of newspaper-broadcast cross ownership rule then, it is very clear that Field Force analysis is a key to figure out the changes that the print media needed to combat this rule. This rule was implemented in the year 1975, and according to this rule no single company can own both print and digital media in a region. With large number of leading newspaper organizations have protesting this rule, a report submitted by the commission regarding this cross ownership ban pointed out a serious aspect. According to them, there was every possibility that with the growth of internet and different other new media it was necessary for both print and digital media to think beyond. They have tried to figure out answers of some critical questions such as whether the existing rule was necessary or not to protect diversity of viewpoints, whether the combine operation of newspaper and media provide more efficiency for the organization or not (Gomery, 2002, p.5). If one analyzes this problem in light of Field Force model, the existing model in newspaper organization can be considered as the old state of organization. Now, the factors which may help the sector to grow are diversity of news, type of presentation, innovativeness, impartiality in presentation of news, experience of the journalist etc. Whereas the restricting forces are like free economy, advertisement specific approach, looking more into commercial news rather than focusing on delivering news that really matters for the common man. To solve this, the news paper organizations have to unfreeze the negative matters and have to ensure that these are not coming in their way of performance. They have to ensure that, in the continuous dominating world of digitalization and internet, to maintain the dominance or to maintain the legacy they have to cancel out the negatives which are affecting them and outshine them behind in comparison to internet/digital medium. After removing or identifying these negatives, newspaper organizations have to designed or manipulate necessary changes which are required to keep up the pace with the ever changing world. In order to achieve that they have to look for changing the way they prepare and present the news in newspaper, standard of article/reports, as well as have to look for attractive marketing strategies as well as promotional activities to reach out more number of people across the developed countries. After adopting these changes, now these newspaper organizations have to be in a mode of continuous evolution of these changes as with every passing year technology and digital media growing rapidly which make the print media to face its toughest competition. 7. Reason behind Indian newspaper industry is not facing the same challenges as those in the developed economies: In the economically developed countries, with the development of digital media and continuous use of internet, the traditional newspaper industry is now facing a big challenge. But in India, with the increasing literacy level as well as increase in the spending power helped the newspaper industry to grow rapidly over the period of last 10 years. According to South (2010), Indian newspaper industry have grown 40%(in terms of publication) in a 5 year span from 2005-2010, and in terms of revenue, it is just behind China, with a total revenue of US $ 3.8 billion(at the end of 2010), a jump of 13%, compared to 2005. According to his review, in India, only 7% household have access to internet , therefore a large number of people are still rely on the print media to get the news. Apart from that the usage of internet in India is more young people and youth oriented, who makes out around 40% of total population. Rest still considers the news paper as a better option to remain updated. That is why, Indian news paper industry despite the growth in economy as well as increase in the literacy rate still not affected that much as the other developed countries (South, 2010). 8. Conclusion: At the end, one can conclude by saying that, although the newspaper is still a integral part of the developing countries and act as a key in distributing news all across the country, but with the continuous development in technology as well as growing economy it is not far away that like the develop countries, all the people will start using internet in other parts of the world. So, the newspaper organizations have to think out of the box to maintain their existence and be profitable in the world which is set to be dominated by the technological innovation. References Analoui, F, Karami A., (2003) Strategic Management in Small and Medium Enterprises, Cengage Learning EMEA, Douglas, G., (2002), The FCC’s newspaper-broadcast cross-ownership rule, Washington D.C Economic Policy institute Everett, C.E. (2011), Transformation of Newspaper in the Technology Era, The Elon Journal of Undergraduate Research in Communications, 2(2), pp.102-115. Kirchhoff S.M. (2009), The U.S. Newspaper Industry in Transition, Congressional Research Service Kranenburg, H.L.V,(2001), Economic Effects of Consolidations of Publishers and Newspapers in The Netherlands, The Journal of Media Economics, 14(2), 61–76. Singh K., (2009), Organisation Change and Development, India, Excel Books, South D., (2011), Development Challenges, South-South Solutions, DS Consulting Read More