Metro Newspaper - Case Study Example

Running head: ANALYSING METRO NEWSPAPER CASE STUDY USING STRATEGIC MODELS OF ANALYSIS Metro Newspaper Case Study AnalysisName: University: Abstract Unless the organisation utilizes resources to take advantage of the environmental opportunities, they will remain potential opportunities. The strategic manager should decide the opportunity to pursue the opportunity. It is therefore important to evaluate environment opportunities in relation to the strengths and weaknesses of the organization’s resources, and in relation to the organization’s resources, and in relation to the organizational culture. Opportunities exist only when there is a close fit between environment, values and resources. This paper will identify, explore and discuss the strategic positioning and choice for strategy for the Metro Newspaper case study. In the case Study we will analyse Metro Newspaper using strategic models of analysis. This will be done using strategic model for analysis that includes: SWOT and PEST, Scenario Planning, Bowman’s Strategy Clock, Boston Consulting Group Matrix, Potential Generic Strategy and finally Critical Success Factor Analysis. Strategy Positioning for the Metro Newspaper Metro Newspaper has grown international to a number of countries. They showed a significant growth initially in terms of readership but this began to fall later in the years. Metro was launched in 1995 by Kinnevik group with an intention of finding a lucrative niche in a market which was not dominated. Metro Newspaper will be analysed using strategic models of analysis such as SWOT and PEST, scenario planning and finally critical success factor analysis. SWOT analysis to gauges the degree of fit between the organisation’s strategies and its environment, and to suggest ways in which the organisation can profit from strengths and opportunities and shield itself against weaknesses and threats.1 Whereas SWOT analysis measures a Metro Newspaper business unit, PEST analysis measures its market as it is a framework for reviewing a situation. It is normally used to review a strategy or direction of a company. In PEST analysis, Metro Newspaper should have considered its environment before commencing a marketing process. All aspects of planning in an organisation should have been done by collecting facts in the environmental analysis which should have been done continuously. For the case of Metro Newspaper, they used PEST analysis to understand the market growth because they were aware that Metro free morning newspaper had become very popular and it continued to grow steadily. It is still due to PEST analysis that Metro newspaper came to understand that they launched Kinnevik products with an intention of finding a lucrative niche in a market where rivalry was unlimited. Through PEST analysis, the Metro Times Group was set up by Kinnevik group in 1988 after doing a feasibility study and they became pioneers in the Scandinavian media market. They started a television and media ventures and for them to achieve they organisational goals they assessed the market and obtained benefits from coordination of advertising sales, production, customer services and cross promotion. Due to the fact that Metro newspaper was marketing its products international, they were considering the state of a trading economy in both short and long terms. They indeed considered the level of inflation and employment level per capita, the long term prospects for the economy and the interest rates. The socio cultural factor is also an important factor that Metro newspaper considered while going internationally. The socio cultural factors include the attitude the foreign country would have toward their products, if the language barrier would have any impact in the diffusion of their products in the market and also the population demography. Metro Newspaper considered these socio cultural factors because they ensure they engaged the local people in their firm and also target the young generation in the newspaper by incorporating thing that they like. In SWOT analysis model, Metro newspaper would have used a number of strategies in order to achieve their organisational goals. There should have been well defined organisational objectives which must have been explicated and approved by all participants. The first step should have been performed carefully because failure to identify correctly may have lead to wasted resources and even failure of the organisation. For the case of Metro Newspaper which was started in 1995, they had strength of using an urban transmit system for distributing the free newspaper. Since the advertisers we looking for the demographic make up of the readers and captive nature of their attention, then this became another strength the Metro Newspaper had to woe the advertisers to advertise in their newspaper. 2 To survive the increased competition and the heightened awareness of traditional publishers, Metro Newspaper had to offer a huge discount to the advertisers which left them indebted, cash short and shaken. This is a weakness that brought huge loss and their limited liquidity left them vulnerable and unsure as to the availability of additional financing. 3 For the case of Metro Newspaper, they had chosen free distribution that gave them a hidden advantage which their competitors did not take seriously. This was an opportunity for Metro Newspaper to achieve it objective since it increased the number of ad pages hence their increasing the advertising sales. Another opportunity in Metro case study comes in where Media analyst commented that Metro Newspaper changed the reading patterns of Swedes and that it was all the young people read. This was great opportunity for them since they had incorporated what the young people required thus making the newspaper very popular. 4 For the case of the Metro Newspaper, there was a threat on the competitors when an afternoon edition was launched in Stockholm. This would have provoked a tough competition and the profit margin would have gone down for the newspaper companies in Stockholm. Another threat is revealed when the Norwegian Publisher recognised the unpleasant consequence due to Metro Newspaper strategies. Schibsted, the Norwegian Publisher, launched a free transmit newspaper in Oslo and Metro Newspaper backed that this would have failed its no direct competitor criteria. In Toronto, Metro Newspaper was countered by two local newspapers and constrained by the government so that as to acquire a local partner. This was a threat to Metro Newspaper since it they had no alternative to perform the business solely. The government regulation could not allow Metro Newspaper to do business in a foreign country on solely without partnering with a company of country. (Hill and Westbrook, 1997) When it comes to scenario planning, the model is for learning about the future in which a corporate strategy of Metro Newspaper is to be formed by drawing a small number of scenarios, stories on how the future may unfold, and how this may affect an issue that confronts the corporation. In scenario planning method, we understand the nature and impact of the most uncertain and important driving forces affecting the future of Metro Newspaper. This is a group process which encourages knowledge exchange and development of mutual deeper understanding of central issues that are essential to the future of your business. The main aim for this is to craft a number of diverging stories by extrapolating uncertain and heavily influencing driving forces. These stories, together with the work getting there has the dual purpose of increasing the knowledge of the business environment and widen both the receivers and participants perception of possible future events.5 For the case of Metro Newspaper, in scenario planning, the manager should have identified a people who would have contributed to a wide range of perspective then conduct a comprehensive interviews about how participants see big shifts coming in society, economics, politics and technology. After this, they should have clustered the views into connected patterns and draw a list of priorities. Then, they should have sketched a rough pictures of the future based on these priorities. Then a further detailed impact scenario should be worked out to determine in what way each scenario will affect the organisation. Finally, the scenario should have been evaluated and reviewed after identifying early warning signals. For the case of Metro Newspaper, they would have come up with scenarios and stories and ensure that they do not use them as forecast and avoid treating them as an instructional tool but a strategy formulation. For the case of the CEO of Metro Newspaper, he should have been an experienced facilitator who is capable of putting enough imaginative stimuli into the scenario design. In critical success factor analysis we should develop 5-6 high level goals starting with a vision or mission statement of Metro Newspaper. We should develop a hierarchy of goals and their success factors leading to a concrete requirement at the lowest level of decomposition.6 While using critical success factor model in the Metro Newspaper, we should produces results that express the needs of the enterprise clearly, allows us to measure success and prioritize goals in a sensible way and ensures that the needs of both the user and the enterprise are being met. In Boston consulting group matrix model of analysis, Metro Newspaper generated enough cash and maintained itself by promoting its products aggressively, expanding its market and new product development. In potential generic strategy, a cost leadership strategy can be seen whereby Metro Newspaper outsourced printing and distribution to keep operating cost as low as possible. Metro Newspaper used a competitive advantage in relation to differentiation as the Newspaper perceived an added value on the readers hence a bigger market share benefit according to Bowman’s Strategy Clock model of analysis. The market had grown and there was potential for high profits that induced new firms to enter the market. A point was reached where the Newspaper industry became crowded with competitors and the demand could not support the new entrant in the market. There was a significant growth in Metro Newspaper and due to competition, their business declined later in the years. References Adams, J. (2005): Analyze Your Company Using SWOTs, Supply House Times, Vol. 48 Issue 7, pp. 26-28. Ames, M. and Runco, M. (2005): Predicting Entrepreneurship from Ideation and Divergent Thinking, Creativity & Innovation Management, Vol. 14 Issue 3, pp.311-315. De Witt, B. and Meyer, R. (1998): Strategy: Process, Content, Context, 2nd ed., Oxford: International Thompson Business Press. 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