Business Policy and Strategy : The Chronicle Gazette

BUSINESS POLICY AND STRATEGY

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................3
2. STATE OF NEWSPAPER PUBLISHING INDUSTRY TODAY.............................................3
2.1 Data for declining revenue and circulation............................................................................3
2.2 Status of newspaper leader....................................................................................................5
3. REASONS BEHIND DECLINING REVENUES AND CIRCULATIONS OF NEWSPAPER5
3.1 External Assessment..............................................................................................................5
4. INTERNAL ASSESSMENT.......................................................................................................8
4.1 Organisational structure and process.....................................................................................8
4.2 HR capabilities.......................................................................................................................8
4.3 Financial Position..................................................................................................................8
4.4 Marketing\ sales capabilities..................................................................................................8
4.5 Operational Capabilities........................................................................................................8
4.6 Strength and Weakness as a publisher...................................................................................9
5 STRATEGIES COMPANIES ARE INCORPORATING TO COPE WITH CHALLENGES
OF PUBLISHING INDUSTRY......................................................................................................9
6 STEPS CHRONICLE GAZATTE CAN TAKE TO DEAL WITH CHALLENGES..................9
6.1 Short term steps.....................................................................................................................9
6.2 Long term steps......................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

1. INTRODUCTION
Business policies are the set of guidelines which governs actions of organisation whereas,
business strategies are referred as statements which are set by firm with the motive of sustaining
competitive advantage and meeting customer expectations. The present study is based on The
Chronicle Gazette which is a leading newspaper in metropolitan area. The report will outline
data to support to decline in circulation and revenue of publishing company and will support
with present status of newspaper leaders like Wall street Journals and New York Times. Further,
in report will identify factors which are influencing growth of firm with the help of internal and
external assessment. In last, study will summarize by outlining strategies and steps which can be
incorporated by firm to deal with challenges of publishing industry.
2. STATE OF NEWSPAPER PUBLISHING INDUSTRY TODAY
2.1 Data for declining revenue and circulation
The increase in cable and internet news has transformed services of publishing industry.
The cable news network and bloggers are cover stories very quickly and offers free access to
global news (Chyi, Lewis and Zheng, 2012). Services of newspaper advertisers are lured away
by internet ad networks. The changes in preferences and access to services has led to decline in
revenue and circulation of publishing industry. As per Sparks and et.al., 2016, fall in circulation
started during mid- nineties and has fallen more than 3rd and ad revenue of circulation has fallen
by 20 % from past 10 years. In accordance with this, it can be said that revenue of publishing
industry has fallen by half. On the other hand, advertising revenue for 2010 decrease by 26 %
that is to $22.28 billion. Yeung, 2015, outlined about Next magazine which failed to differentiate
in its offerings in comparison on free online content and had experience sharp decline in
circulation. As per management of next media, average circulation per issue of magazine is of
about 60, 000 copies which denotes 15 % fall as per earlier year. Further, absolute level of
increase in paid daily circulation peaked till 1987 and has declined by around 40% since then
because emergence of internet. Moreover, the gross revenue of newspaper advertising increased
till 2005 and declined by 50 % till 2013. It was evident that average newspaper advertising
revenue accounted for 82 % but by 2013 the proportion is down by 62 %.
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Figure 1: The newspaper publisher revenue
(Source: Is the Newspaper Industry Dying? 2018)
Figure 2: US Newspaper publishing industry performance
(Source: Is the Newspaper Industry Dying? 2018)
In accordance with above illustration, it can be said that the circulation of weekdays fell by
7 % over a year till fourth quarter of 2015 whereas drop in circulation of Sunday was by 4 %.
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The fall in circulation caused slump by 35 % in revenue of American newspaper publishers in
2016.
2.2 Status of newspaper leader
New York Times is an American newspaper which was ranked 18th by circulation in
world and 3rd in US. In accordance with newspaper crisis, around one four papers in the country
are down (Tracy, 2019). Therefore, print advertising revenue of New York Times fell by 16 % in
2016 which led to drop of 9 % in total advertising revenue. Further, print advertising revenue for
quarter of 2016 declined by 20 % (Ember, 2017). With the steady decline in subscription to
newspaper the company has started adding to online subscribers to grow is digital advertising.
However, digital advertising revenue rose by 6 % in 2016 due to which company managed
earning of $209 million. Also, the company added 514,000 digital subscribers in the same year.
Wall street Journal is countries largest newspaper with respect to newspaper circulation
but the company experience slight decline in circulation during mid six months 2011. As per
International Business Machines Corp. revenue of publishing company fell 3.5% in the fourth
quarter of 2018.
3. REASONS BEHIND DECLINING REVENUES AND CIRCULATIONS
OF NEWSPAPER
3.1 External Assessment
3.1.1 Economic forces
Economic factors are the major factors affecting the newspaper industry. The inflation
rate, exchange rate, consumer spending etc. are the major points of consideration for the
Chronicle Gazette's. Other forces include economic stability in the country, cost of production,
overhead expenses and several other aspects. Moreover, it is also important to look into the
consumer spending rate to predict the future growth prospects of the company.
3.2.2 Demographic, environmental, cultural and social forces
Social and cultural factors play a major role in the success and failure of a product.
Therefore, it is important to understand their buying behaviour, attitude and values. It is essential
to identify the demographic of the target customers such as their gender, age, level of education,
financial capacity and power structure in the society in order to make better decisions.
Environmental factors had an adverse effect on the newspaper industry because for
producing one ton of printing paper approximately 24 trees need to be cut thus newspaper
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industry has affected environment in a negative manner. Also, with the increasing awareness
about environment and climate change, people have started to reduce the use of traditional
newspapers instead they prefer reading news through digital medium. Therefore, it is imperative
for The Chronicle Gazette's to plant more trees and use recycled paper in order to not only
protect the environment but also to enhance their business image.
3.2.3 Legal, political and governmental forces: The legal factors can impact the company's
performance in the long run mainly because of increasing use of digital media therefore it is
important for a company to protect their intellectual property rights. This can help the company
in reducing theft and will also give them competitive advantage. Other legal laws include
discrimination law, employment law and harassment law in order to ensure smooth working of
their organization.
Political factors include government policies, tax rates, tariffs, stability, corruption,
minimum wages and other government policies that can affect the performance of The Chronicle
Gazette. It also includes freedom to perform their duties and publish news without government
intervention.
3.2.4 Technological factors: In this rapidly changing world, it is important for every company
to use latest and modern technology if they wish to achieve competitive advantage. The main
reason behind decreasing sales of the Chronicle Gazette's is the use of obsolete technology by
them. The newspaper company must shift its business to digital medium if they wish to
overcome their competitors. Also, use of digital medium will not only improve their customer
base but also reduce their fixed cost as it is comparatively cheaper than traditional medium.
Furthermore, it will lead to increase in profit share of the company.
It is mandatory for every company to adopt changes in order to grow efficiently and
effectively.
3.2.5 Competitive forces (Porter five forces): Porter's five forces are important as they help a
company in achieving competitive advantage by using business strategies. Porter's five forces
include
 Threat of new entrants: Entry of new players into the print industry is a major threat for
the Chronicle Gazette's, therefore it is important for them to offer unique services at
digital as well as traditional platform to increase their market base. The organization can
also build economies of scale to reduce their fixed cost.
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 Bargaining power of Suppliers: The newspaper company can use their brand image to
negotiate and bargain with their suppliers. Also, it is important for them to communicate
with different suppliers and finalize the one that offers them the best deal. It will reduce
the cost of the company and maximize their profits.
 Threat of substitute products: Substitute products possess a big threat for the company
as they provide the similar services therefore it is important for the newspaper company
to focus on improving their services according to the market needs and also reduce their
total cost by performing operations of sale.
 Power of customers: Customer is the king of the market and if any organisation wishes
to succeed then it is important for them to satisfy customer needs which can be done by
providing them good quality services, authentic news at competitive prices. Also, it is
essential to identify their needs and wants and then develop a product/service
accordingly.
 Competition in the industry: The reduced cost of production and lower pricing strategy
has further increased the competition in the industry. Moreover, the rivalry among the
existing players is also very tight therefore it has become necessary for The Chronicle
Gazette's to analyse their competitor’s strategy, market shareholding and other business
moves.
33333 Externals Factors Evaluation Matrix
Opportunities weight rating Weighted score
To diversify their business
online which will help them in
reducing their cost and also
increasing their customer base
30.00% 5 1.5
To expand its services globally
via traditional or digital
medium.
10.00% 3 0.3
Threats
Increasing competition from
new players at a reduced price
40.00% 8 3.2
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is a big threat for the company.
Absence of intellectual property
right and copyright mark is a
big threat to company's policies
and increases the chances of
theft of information.
20.00% 4 0.8
TOTAL WEIGHTED SCORE 100.00% 20 5.8
4. INTERNAL ASSESSMENT
4.1 Organisational structure and process
The company follows hierarchical organisational structure where the senior management
takes all the important decisions and then they are communicated to middle level and lower level
management. It follows vertical communication.
4.2 HR capabilities
The Chronicle Gazette recruits and selects its employees on the basis of their past working
experience and their research skills as well as overall knowledge about the world. The company
further provides them proper training and development in order to improve their skills.
4.3 Financial Position
The company used to be a market leader but with the increasing competition it has lost
35% of its market share whereas the advertisement revenue has reduced by 28%. This is major
threat to the company and can affect their performance if they do not take necessary actions.
4.4 Sales capabilities
The company operates in Hong Kong and has a paid circulation of 225,000 newspapers per
day.
4.5 Operational Capabilities
The Chronicle Gazette has huge operational activities as they have been in the business for
a very long time.
4.6 Strength and Weakness as a publisher
The major strength of the company is that they are very experienced and have established
brand image of themselves over the past years. The company also has experienced employees
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under their belt which can give them competitive advantage. The weakness of Chronicle Gazette
is that it resists to change which can be harmful for them as it has led to reduction in their market
share incessantly.
5 STRATEGIES COMPANIES ARE INCORPORATING TO COPE WITH
CHALLENGES OF PUBLISHING INDUSTRY
One major strategy which can be adopted by news publishing companies can focus on Cost
Cutting in which publishing companies can focus on reducing cost of circulating and
production. This will include reducing quantity and quality of printing newspaper. Also,
company can focus on moving to cheaper regions like sub-urban premises from city centre
locations (Siles and Boczkowski, 2012). In accordance with this, publishing firm can also focus
reduces number of employees and tehri wages specifically journalistic staff.
Another strategy news publishing companies can implement to cope with challenges of
digital era can be Changing Journalism. As per this companies can focus on launching on
edition of newspapers. This approach will helps publishing company in gaining attention of large
audiences (Chyi and Tenenboim, 2017). Also, the companies will be able to provider reader
access to global information and instant report to invalid facts. The approach can be successful as
it empowers public to control news.
6 STEPS CHRONICLE GAZATTE CAN TAKE TO DEAL WITH
CHALLENGES
6.1 Short term steps
For short run that is to control decline in circulation and revenue, The Chronicle Gazette
can aim at cutting cost of publishing services. Cost control is a continuous process which starts
from annual budget and therefore as per this organisation can aim at minimizing quantity of
production and circulation. This will help in preventing waste and will support cost efficiency.
6.2 Long term steps
Adding online subscription can be long term growth step to for The Chronicle Gazette, to
cope with decline in print advertising. For managing this strategy for long term publishing
company can make use of metered model which aid in converting 10 % of digital audience into
sub scribers. As per the model The Chronicle Gazette will have to offer free article every month.
This will help in leveraging data and aid publishers in making data driven decision which in turn
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helps in optimizing traffic and revenue (Digital subscription strategies: Key insights from over
500 publishers, 2018). Thus, as per this focus of journalist of The Chronicle Gazette will be on
creating content as per readers preferences and value.
CONCLUSION
From the above report it can be concluded that in order to make The Chronicle Gazette
successful it is important the newspaper company adopts to changes effectively and efficiently.
Also, the company must overcome their competitors if they want to become market leaders
which can be done by adopting low cost strategies and diversifying their business on digital
platform. Digital platform will not only reduce their cost but also improve their speed of service
and make them successful in the long run.
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REFERENCES
Books and Journals
Chyi, H.I. and Tenenboim, O., 2017. Reality check: Multiplatform newspaper readership in the
United States, 2007–2015. Journalism Practice. 11(7). pp.798-819.
Chyi, H.I., Lewis, S.C. and Zheng, N., 2012. A matter of life and death? Examining how
newspapers covered the newspaper “Crisis”. Journalism Studies. 13(3). pp.305-324.
Domingo, D. and et.al., 2018. Participatory journalism practices in the media and beyond: An
international comparative study of initiatives in online newspapers. Journalism
practice. 2(3). pp.326-342.
Edge, M., 2014. Newspapers' Annual Reports Show Chains Profitable. Newspaper Research
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Papacharissi, Z. and de Fatima Oliveira, M., 2008. News frames terrorism: A comparative
analysis of frames employed in terrorism coverage in US and UK newspapers. The
international journal of press/politics. 13(1). pp.52-74.
Siles, I. and Boczkowski, P.J., 2012. Making sense of the newspaper crisis: A critical assessment
of existing research and an agenda for future work. New media & society. 14(8). pp.1375-
1394.
Silinevicha, V. and Kalinina, K., 2017. THE DEVELOPMENT OF THE EVALUATION
SYSTEM OF FACTORS, INFLUENCING ON THE ORGANIZATION FOR THE
PREVENTION OF RISKS OF ITS ACTIVITY IN THE MARKET IN ANY FIELD OF
ACTIVITY, USING PEST--ANALYSIS. Professional Studies: Theory &
Practice/Profesines Studijos: Teorija ir Praktika, (18).
Sparks, C. and et.al., 2016. The impact of digital media on newspapers: Comparing responses in
China and the United States. Global Media and China. 1(3). pp.186-207.
Online
Yeung, S.C., 2015. Why print media in Hong Kong is entering an ice age. [Online]. Available
through: < http://www.ejinsight.com/20150717-why-print-media-hong-kong-is-entering-
ice-age/ >.
Is the Newspaper Industry Dying? 2018. [Online]. Available through:
<https://knoema.com/infographics/nnetwzf/is-the-newspaper-industry-dying>.
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Ember, S., 2017. New York Times Co.’s Decline in Print Advertising Tempered by Digital Gains.
[Online]. Available through: <
https://www.nytimes.com/2017/02/02/business/media/new-york-times-q4-
earnings.html>.
Tracy, M., 2019. A Paradox at the Heart of the Newspaper Crisis. [Online]. Available through:
< https://www.nytimes.com/2019/08/01/business/media/news-deserts-media-
newspapers.html>.
Digital subscription strategies: Key insights from over 500 publishers. 2018. [Online]. Available
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key-insights-from-over-500-publishers-ff229cac7895 >.
New York Times PESTLE analysis. 2019. [ONLINE]. Available through
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