Strategic Planning at the Chronicle Gazette

• Introduction

The Chronicle Gazette has a customer circulation of about 225,000 as the publishing leader in the United States (Case, 2016). However, despite the fact that the company has been dominating in the mast for the past few years it has been faced by a drastic decrease in customer base and profits. The decrease is mainly attributed to the rapid prevalence of technology particularly the use of internet which offers the most simplified means of gathering information globally. To most, it is rather saddening that the publishing industry is facing the same changes as experienced by the music industry due to online sites such as YouTube, iTunes and so on. The publishing sector in the United States and globally is going through a rather hard period due to decreased revenues (Case, 2016). For the case of Chronicle Gazette, both its subscription rate and advertising gains have decreased rather rapidly. The rationale behind this trend is because most people are currently engaged in the use of the internet as the main means of accessing news details at ease, fast and free thus creating hesitation for them to make payment on the publishing services.

As per the current situation in the industry, the Chronicles Gazette has consistently dealt with a number of difficulties both, within the external and interior environment which affects the sector’s competitive positions similar to all other firms working within the global scale (Case, 2016). In that, the advancement of technology as mainly affected and altered the public’s behavior and the functioning of individuals especially for those that are attached to news following both in relation to the local and international environments. Thus the main objective of this strategic planning report is to explore the different mitigating strategies that the Chronicle Gazette should adopt in the quest of boosting the newspaper circulation rate while increasing its profits in general. This report will focus on analyzing the newspaper sector in the country by offering information regarding the current state and the probable future. Through this, the company’s management will gain some strategic insights that best offers a description of the current position of the publishing industry and where it is expected to be within the next few years and how sustainability can be acquired (Case, 2016). Also, the report will also be presenting differentiated approaches that can be used by the company for enhanced survival in the new technology environment.

2. 0 State of the Newspaper Publishing Industry Today

2.1    Data on Declining Circulation and Revenue

For the longest time now, different opinions and facts regarding the death of the newspaper industry have been on the rise. However, it is the effort made by the involved companies such as The Chronicle Gazette that seeks to move with the changes that have sustained the industry. The company’s subscription rate dropped by 41 percent along the advertisement earning that decreased by 28 percent (Mitchell, Jurkowitz & Guskin, 2013). As stated by the American Newspaper association the movement of newspaper began to get poorer at the commencement of the 21st century and by 2008 more than 22 percent of the market was no more (Mitchell, Jurkowitz & Guskin, 2013). In regard to the gross revenue, the share has continued to decrease since 1997 on the ground that the advertisers are more interested in internet advertisement based on the associated flexibility, convenience, and zero cost. It is evident that while the newspaper advertisement gains have maintained constant decrease from the time the revenue earned from online advertisement has been rising rather steadily and therefore the advancement of technology is accountable for this loss.

2.2 Status of Newspaper Leaders

Based on the 2009 report given by the New York Times despite the fact that the company’s revenue had risen by about 23.8 percent it is evident that the advertisement gains had decreased by about 25 up to 30.2 percent when equated with those of 2008 (Barthel, 2017). The company in mitigating the risks made the choice on creating more revenue from the internet advertisements display and cost per clicks in addition to relying on different digital platforms.

In addition, from the report offered by the CNN 2016, it is evident that media-based earnings and the operating gains have generally decreased (Chen, 2016). The media industry is one of the leading sectors in economic participation and revenue generation has the highest ability to result in an economic crisis. The data also demonstrates that some of the leading Newspaper companies such as Wall Street Journal (WSJ) have been affected severely which has resulted in the diversification of their services into the internet platform in the quest of improving the advertisement and publishing strategies. This strategy has been an effective one in attracting more news readers and subscriptions. In order to differentiate the operations to fit the digital needs in the modern society, the companies mainly focus on the provision of personalized details to lure certain consumer targets (Chen, 2016). This has also been boosted by the constant enhancement of News articles content and reporting strategies to sustain the acquired loyalty while using convenience and quality as the leading values.

Based on the increasing changes, it is rather evident that the decreasing characteristics of newspaper readership are mainly attributed to the shifting target market likings. In that today, individuals are not only looking for the associated cost but also convenience and flexibility of accessing news are also some critical considerations (Chen, 2016). In fact it is worth noting that publications including newspapers are not mainly intended to reach a certain group of people in the society but the objective is to meet the individual’s informatory needs. As demonstrated by the leading newspaper companies it is not only the newspaper industry which has been affected by this changes but also certain industries such as book publishers and music are experiencing the same challenges as people are more focused on chasing convenience (Chen, 2016).

3.0    Why newspapers are facing declining circulations and revenues

3.1    External assessment

The global economic decline and instability resulted in Newspapers prices decline as the revenue for the participating companies was decreasing rather rapidly. This trend can best be demonstrated by the economic crisis that prevalent in 2008 where the advertising gains had decreased with more than 15 percent where compared to the last year (Chen, 2016).

3.1.1    Economic forces

It is without a doubt that economic factors play part in determining the wellness of any business in different sectors globally (Sridhar et al., 2016). Some of the defining factors in the Newspaper industry include decreased revenue, reduced market share and low circulation. The cost of living in the united states similar to most countries across the globe has increased in the recent years which has resulted in people focusing on settling for the most affordable and basic services. With more Medias such as television, radio, internet and so on being the source of information, the readers find it more convenient to depend on the mediums. In addition, the earned income is only enough to cater for more demanding needs such as education and healthcare as the means of mitigating economic uncertainties (Mitchell, Jurkowitz & Guskin, 2013). In addition supply and newspapers demands are some economic factors that are to be considered given that they not only determine the pricing but also the circulation.

3.1.2    Social, cultural, demographic, and environmental forces

Socio-cultural environments have less to do with the changing trends in the industry and in fact socially individuals are still willing to pay for the services (Chen, 2016). However, social based preferences have changed as individuals are more interested in entertaining stories and for the young generation news can best be accessed from online platforms where entertainment is the highest. Based on recent demographic reports the publications are mainly targeted for individuals of over 50 years given that they are linked with more leisure time and higher connections with reading newspapers on daily basis (Driscoll, 2010). In that the demographics can mainly be divided into those that reads the papers to gain political based insights, knowledge, entertainment and leisure (Barthel, 2017). Socio-cultural factors normally affects the content of the papers as well as the constant research of the needed things to increase circulation including layouts

3.1.3    Political, governmental and legal forces

The political environment mainly plays a huge part in regard to the monitoring of newspaper freedom based on the reported details and trading agreements on national basis. In that based on the set policies then it becomes known on the engagement of the companies in the business world. This is because the reports are to be made within the set guidelines as all operations have to be within the legal provisions.

3.1.4    Technological forces

Technological forces are the leading in regard to their effects on the industry due to the prevalence of the internet and different digital Medias. Living in the contemporary or digital era demands from everyone to integrate with the changes (Chen, 2016). Most of the needed information regarding the universe can be acquired practically from the online platforms. This means that people can conveniently assess information at ease for free. The primary source of revenue for the advertising companies is from advertisement which currently has been subjected to changes due to the rise of internet advertisements. Website and online advertisements have become very popular being the major source of information and thus advertisement revenue acquired from such engines is rising rather rapidly (Barthel, 2017). Most advertisers prefer this digital platforms because of their ability to reach more people within the shortest period for free. In addition, these platforms offers the opportunities for customizing the posts in colorful and preferred options thus enhancing the experience of the readers and building a more digital image.

3.1.5    Competitive forces Porter’s model

New market entrants threats in the Newspaper publishing industry is low to average given that the economies of scale is mainly driven by the market leaders (Grünig & Kühn, 2002). This is because some preferred advertisements brand are only found in the well-known newspapers and never in others. Product differentiation is not applicable in this industry given that news cannot be differentiated but can be created as standard. The primary barrier in getting into the industry is the fact that the needed capital is quite high. In addition, the acquired revenue is low and therefore needs well fueled companies in terms of finances and image.

Customer’s bargaining power is currently high because there are different and more sources where information can be acquired from. In addition, this is a common service which means that the same stories can be acquired from other news publishers (Grünig & Kühn, 2002). Customers have the highest power in the context that they have the capability of forcing products prices to be lowered. Since the switching expenses for them are low companies are forced to settle for standard costs and if the information is not characterized by quality or convenience the customers can move to other providers.

Suppliers bargaining power is average to high because they are highly needed in the provision of important inputs such as ink and papers. The supply sector has a few dominant providers and based on their reliability this helps in the creation of rather strong relationships thus making the switching expenses high. Substitute’s threat is higher because there are different platforms where information can be obtained at ease ranging from the online platforms. The involved cost for shifting to another provider is zero and given that the customers can still read the same information from all other platforms makes this aspect a strong one. Rivalry in the industry is particularly high because since the sector is dominated by a few well-established companies based on the involved risks (Grünig & Kühn, 2002). The companies that operate in the industry are well known and utilizes all their resources in acquiring a more strategic positioning.

4.0    Internal assessment

4.1    Organizational processes and structure

Operational procedures within the company are rather well planned and organized. In that, after the information has been gathering the publication process will mainly incorporate the involvement of different structures such as editing, publishing and so on.

4.2    HR capabilities

The Newspaper Publisher is mainly accountable in regard to different operational processes for the publication within the editorial and operational teams. The publisher is mainly involved in the regulation of the running of the publication process by ensuring there are enough funds for smooth operations (Grünig & Kühn, 2002). On the other hand, the editor in regulating the content to be published in addition, to monitoring budgets and spending in most cases both roles are played by the same person. There is also the management that is involved in controlling publishing and editing activities. Photographers and graphic designers are involved in papers designing and the provision of the needed images for different stories. On the other hand, reporters are assigned the role of gathering news for publication (Grünig & Kühn, 2002).

4.3    Financial Position

The revenue levels for all the involved companies are low which has mainly resulted from the availability of information freely and conveniently from the online platforms. Conventionally news was mainly acquired from selected mediums while newspapers were leading but the trend is long gone.

4.4    Marketing/Sales Capabilities

The current marketing trends have risen mainly relying on advertisement and other entertaining and engaging mediums. The sales rate has dropped as well since people are reading the news online. Based on reports it is evident that the advertising gains have decreased drastically and companies are more focused on online advertisements in the quest for boosting their annual gains. The Chronicle Gazette has created an advertisement platform that seeks to restructure the current investment strategies (Grünig & Kühn, 2002). This means that its sales capabilities are high given that it has already established an authoritative consumer base but technology must be adapted to tap the advertising earnings in the sector since this is the only survival strategy and secure a better future.

4.5    Operational Capabilities

The company’s operational capabilities can best be established by an evaluation of the value chain. Since the company has already established a practical positioning in the market with a high customer’s circulation the company can use the loyalty to strategize its positioning. Accounting on the fact that the company has a reliable logistic system it means that the delivery and distribution of papers can be made more timely. In guaranteeing efficient services the company can mainly rely on online and email deliveries while adhering to quality. Since the company does not offer any online news versions IT capability is needed in funding the operations.

4.6    Our Strengths and Weaknesses as a Publisher

4.6.1 Strengths

The company has created an appealing image in the market which has, in turn, generated loyalty. In addition, the created brand offers it’s an advantage as a well-established and funded company. By offering traditional readership this is a form of products differentiation.

4.6.2 Weaknesses

The company is disadvantageous because it has not yet focused on creating an online newspaper version. Limited funds are also another weakness since the investment to the online platform for the set-up and maintenance is expensive.

5.0    Marketing and selling strategy

From the recent activities that the company has engaged in, it has been able to sell its products by conducting sales within the retail and counter stores which has enabled it to become the newspaper leader in the metropolitan region. Most companies are managing their sales and marketing by integrating online services such as New York Times and Wall Street Journals which has helped in increasing the number of subscribers. This is also involved in the provision of rather appealing headlines and pages layouts to attract more customers. In addition, the companies mainly offer rather customized subscriptions for the clients to settle for what they prefer and eliminated the unneeded content. The discounted subscriptions and free access of up to 20 percent for the WSJ readers have also played part in the success a strategy that Chronicle Gazette can adopt (Barthel, 2017). Online versions are also provided on timely basis day and night which furthers the convenience of the news. Also, the companies are focusing on the customization of their online articles to fit within different demographics (Driscoll, 2010). This is, for instance, the New York Times which has a student version that is not only affordable but highly informative. Such differentiation and diversification measures help in attracting more consumers (Driscoll, 2010).

6.0    Steps the Chronicle Gazette Might Take In Order To Deal With the Challenges

6.1    Short-term steps

Based on the current changes being experienced in the publication industry, Chronicle Gazette should start by creating an online website where the online news version can be accessed. This should involve consuming with an Information Technology profession to settle for the most developed systems (Sridhar et al., 2016). This will help in creating a financial plan that will work to ensure that the company works within its budget limits without affecting other operations. In addition, it should lower thee a number of staffs particularly the elderly ones which will also help in decreasing its operating expenses. Also, it should promote a saving and sales approach while creating discounted services which can be achieved by the introduction of free copies.

6.2    Long-term steps   

In the long-term, the company should focus on restructuring the organization and conducting employee’s evaluation to only retain the most qualified. This should also be followed with a focus on the reduction of the operating expenses with about 10 to 30 percent slowly. Also, services diversification can be crucial in saving the business by investing in graphics such as news videos and increased customization on the online platforms. Innovation is key to the company’s growth.

7.0 Conclusion

It is evident that the publishing industry has experienced a number of changes and challenges due to technology advancement in the recent years. This has led to increased revenue decrease for Chronicle Gazette as the advertisers are shifting the services to the online platforms. To get back the lost market and revenue Information technology investment is a necessity which will help in increasing the company’s survival and sustainability.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Barthel, M. (2017). Despite subscription surges for largest U.S. newspapers, circulation and revenue fall for industry overall. Retrieved from http://www.pewresearch.org/fact-tank/2017/06/01/circulation-and-revenue-fall-for-newspaper-industry/

Case. (2016). Case study: Strategic Planning at The Chronicle Gazette

Chen, S. (2016). Newspapers Fold as Readers Defect and Economy Sours. CNN. Retrieved From http://edition.cnn.com/2009/US/03/19/newspaper.decline.layoff/index.html

Driscoll, E. (2010). The Demographics of American Newspapers. Retrieved from https://pjmedia.com/eddriscoll/2010/2/27/the-demographics-of-american-newspapers/

Grünig, R., & Kühn, R. (2002). Process-based Strategic Planning. Berlin, Heidelberg: Springer Berlin Heidelberg.

Mitchell, A., Jurkowitz, M. & Guskin, E. (2013). The Newspaper Industry Overall. Retrieved from http://www.journalism.org/2013/08/07/the-newspaper-industry-overall/

Sridhar, S., Germann, F., Kang, C., & Grewal, R. (2016). Relating online, regional, and national advertising to firm value. Journal of Marketing, 80(4), 39-55.

Walden, A. (2015). Who reads what? And where? Retrieved from https://www.forbes.com/sites/alanwalden/2015/08/26/96/#4bfba3ef5938