Declining Circulation and Revenue in Newspaper Industry: A Strategic Analysis

This report analyzes the declining circulation and revenue in the newspaper industry. It provides an external assessment of economic, social, cultural, demographic, environmental, political, government, legal, and technological forces. It also includes an internal assessment of organizational processes and structure, HR capabilities, financial position, marketing/sales capabilities, operational capabilities, and strengths and weaknesses. The report suggests steps that The Chronicle Gazette might take in order to deal with the challenges.

Running head: BUSINESS POLICY AND STRATEGY
Business Policy and Strategy
Name of the Student
Name of the University
Author Note

1BUSINESS POLICY AND STRATEGY
Table of Contents
1. Introduction............................................................................................................................3
2. State of the newspaper publishing industry today..................................................................3
2.1: Data on declining circulation and revenue......................................................................3
2.2: Status of newspaper leaders............................................................................................5
3. Why newspapers are facing declining circulations and revenues..........................................6
3.1: External assessment........................................................................................................6
3.1.1: Economic forces.......................................................................................................6
3.1.2: Social, cultural, demographic and environmental forces.........................................6
3.1.3: Political, government and legal forces.....................................................................7
3.1.4: Technological forces................................................................................................7
3.1.5: Competitive forces (Porter’s 5 forces).....................................................................7
3.1.6: External Factor Evaluation (EFE matrix)................................................................8
4. Internal assessment.................................................................................................................9
4.1. Organizational processes and structure...........................................................................9
4.2. HR capabilities..............................................................................................................10
4.3. Financial position..........................................................................................................11
4.4. Marketing/sales capabilities..........................................................................................11
4.5. Operational capabilities.................................................................................................12
4.6. Our strengths and weaknesses as a publisher................................................................12
5. How companies in the publishing industry are adjusting their strategies to cope with the
challenges.................................................................................................................................13

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6. Steps The Chronicle Gazette might take in order to deal with the challenges.....................14
6.1. Short-term steps............................................................................................................14
6.2. Long-term steps.............................................................................................................14
Reference List..........................................................................................................................16

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1. Introduction
The primary goal of this report will be identify the problems that results in steady
decline of the subscriptions of the newspaper in the metropolitan area that is affecting the
entire industry. The report will provide insights regarding the strategic vision of a company
called The Chronicle Gazette so that it can help them in building a new environment that will
result in earning profits.
2. State of the newspaper publishing industry today
2.1: Data on declining circulation and revenue
In the recent times, it can be seen that most of the professional readers are inclined
towards the internet in getting the news from around the globe. The introduction of smart
phones, easy availability of internet and other devices has allowed the readers in getting all
the information within a short period of time and not depend on the daily newspapers. In the
past years, it has been seen that most of the consumers are not taking the delivery of
newspapers in the morning, as they are getting all the necessary information in their smart
phones (Casero-Ripollés and Izquierdo-Castillo2013).
A survey that was conducted by University of Oxford presented the data that only
around 11 percent of the consumers pay for the news content that is available. This is due to
the fact that most of the news are available online and is free of cost. This has led to most of
the customers shifting from a newspaper to the online base. It was also seen that almost 62
percent people in the United States were addicted to social media to get the latest news
whereas 18 percent of the people started using the social media too often. These studies show
that it has led to the decline in the circulation of paid media and that the circulation of
newspapers declined by around 24 percent (Nielsen 2015).

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The major issues were that it involved huge costs in printing and delivering the
newspapers due to the involvement of high cost in acquiring the raw materials. The growth of
the digital media has led to more number of customers in shifting towards the online media,
as it helps them in getting the information on a timely manner. It is also to be noted that the
consumers get the latest news from the online media, as it gets updated whenever new things
are happening across the globe. The newspapers on the other hand, are printing the news after
a day where the consumers are being informed regarding the information one day after the
incident has taken place (Rothmann and Koch 2014).
Figure 1: Fall in the newspaper firms
(Source: Pattabhiramaiah, Sriram and Sridhar 2017)

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Figure 2: Data showing the use of newspapers from 2017-2021 (predictable)
(Source: Holm, Gunzel and Uhoi 2013)
2.2: Status of newspaper leaders
Most of the leaders in the publishing industry of newspaper have been facing
numerous challenges regarding the decisions that they need to take for their business to
flourish. It has been seen that the cost of raw materials have boosted, which is hampering
their level of profit to a great extent. The leaders are looking for innovations that will help
them in increasing their level of sales and the attraction of the newspapers towards the
customers as well. The use of better level of technologies will also assist them in effectively
publishing the papers so that the customers can be informed regarding the news on an
immediate manner (Karimi and Walter 2015). Wall Street Journal has come up with a
solution of providing the news on the online media for which the customers need to pay a
subscription amount. The major problem that they were facing that most of the consumers
were not complying with the publishing house, as they had other choices from where they
could get the latest news free of cost. This also led to the loss of the company (Villi and
Hayashi 2017).

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3. Why newspapers are facing declining circulations and revenues
3.1: External assessment
3.1.1: Economic forces
The progress in the level of technology has affected the economy of the newspaper
industry to a great extent. The major threat is that the companies who could not cope with the
technological advancements made huge losses in the market share that resulted in increasing
the level of unemployment in countries like Europe and the United States. In the recent times,
it was seen that majority of the companies in the newspaper industry has been facing issues
related reduction in the sale of advertising, higher amount of copy pricing, drop in the profit
margin due to low circulation of the papers in the locality and loss due to classified
advertising as well. The major profit of the company depended on the classifieds that they
used to get, which declined to almost 70 percent. This affected their revenue generation as
well (Kungl and Geefs 2018).
3.1.2: Social, cultural, demographic and environmental forces
The integration of the internet has affected the social factors as well with respect to
the newspaper industry. The companies need to influence the reading behaviour of the
customers so that it can help in increasing the sale of the newspapers. The low cost of
subscribing to the internet has resulted in most of the people switching from purchasing the
newspaper to subscribing to the pages that are available over the internet. This is due to the
fact that the people get the news as it is happening so that they can stay updated (Suijkerbuijk
2014).
The demographic factors has also affected the newspaper industry, as most of the
consumers who belong to the young generation are aware of the latest technologies that allow
them in getting the information from the internet. It is being seen that over the next few years,

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the newspaper readers will decline to a great extent due to the availability of technology
(Kungl and Geefs 2018).
3.1.3: Political, government and legal forces
The changes in the political scenario also hampers the external environment of the
newspaper industry. This is due to the fact that the rate of taxes as well as other allowances
that are being enjoyed by the industry gets changed with the changes in the governmental
policies and regulations. The changes in the government also affects the interest of the
readers towards newspapers due to the type of campaign that is being taken up by the media
houses. The rise and fall of the political parties create a significant impact on the social
environment of this industry as well (Jonkman et al. 2016).
3.1.4: Technological forces
The use of advanced technology such as the internet has helped in developing the
mass communication technique to a great extent. The advent of the internet has gradually
declined the use of print media, as all the information are being available on the websites of
the news company. The progress in the technology has led to the changes in the habits of the
readers, which has affected the circulation of newspaper and a gradual decline in the revenue
from advertisement.
3.1.5: Competitive forces (Porter’s 5 forces)
The threat of new entry in the newspaper industry is low compared to established
media houses. This is due to the fact that they have immense capital to increase their budget
and circulate the newspapers to a larger part of the locality. This will result in increasing the
rate of attraction among the customers. On the other hand, the threat of new entrants for the
small media houses is high, as there are many existing competitors in the market as well as
low capital to invest.

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The threat of substitute in the print media is low, as all the companies are dealing with
printing the news so that the people can read the newspapers. This is due to the fact that the
old and new companies will be dealing with the same materials and the use of printing
technique as well (Krumsvik 2014)
The bargaining power of the customers is low, as most of the newspapers are given at
a low cost to the customers. The major revenue that is generated by the publishing house is
through advertisements so that the burden of cost does not fall on the customers. This has
resulted in giving the newspapers to the customers at a lower cost.
The bargaining power of suppliers is high, as the suppliers control the demand of the
raw materials in the market. This helps some of the large companies, as they have the
resources in influencing the suppliers to supply them the products at a lower rate.
The competitive rivalry among the firms is very high, as all the companies want to
increase its level of sales by selling more number of newspapers in the market. This has
resulted in fierce competition among the publishing houses that are present in the locality
(Krumsvik, Skogerbo and Storsul 2013).
3.1.6: External Factor Evaluation (EFE matrix)
Key external factors Weight Rating Weighted Score
Opportunities
Local coverage 6% 4 0.24
Government support 7% 2 0.14
Mobile gadgets 13% 3 0.39
Internet 10% 2 0.20
Threats
Lack of interest 15% 3 0.45

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Growing
Competition
19% 2 0.38
Economic downturn 15% 4 0.20
Decline in
subscription
12% 4 0.48
Indirect competition 3% 2 0.06
Total 100% 2.54
The EFE matrix can be beneficial in many ways. It is easy to understand so that
employees can get a better idea of the factors that may affect the success of the organization.
It also focuses on the key factors that affect the organization internally as well as externally.
This will help the company in strategizing the major factors so that the opportunities and
threats that are present in the external environment can be reduced to a great extent (Villi and
Hayashi 2017).
4. Internal assessment
4.1. Organizational processes and structure
Organizational process of Chronicle Gazette is easier; as it consists of reporters at one
point and the other end consist of employees who are responsible for searching great news
and writing blogs portraying content with quality information. The content are often well
covered by the employees for which they have been often awarded. On the contrary, there is
an experienced team of members that have been assigned for selling the space of
advertisement (Wheelen et al., 2017). They are the major people who are responsible for
identifying business and incoming of major revenues for the publishing newspaper. All the
processes and structure of the organization are competitive in form and determined.

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4.2. HR capabilities
Publisher- In this the publisher is accountable for managing all the functions processes of the
newspaper in both editorial team and team of business. The major roles and purpose of the
publisher is to supervise financial functioning of the newspaper.
Editor- in this organization the editor is hold accountable for managing all the content of the
editorial part and supervises the financial operation and the manages the cash spent by the
editorial as well as other resources of the newspaper (Wolf and Floyd, 2017). The publisher
and the editor are generally responsible for the same position.
Editorial content editor- the editorial content editor will be accountable for managing the
editorial page as well as the supplementary content along with the op-ed page for the paper.
In this context those paper are the documents that are usually printed on the editorial content
such as letter to the editor, and in that all the columns will be syndicated by the columnists,
local members and outsources senders (Elmes and Barry, 2017).
Managing editor- the management editor is usually appointed to handle and supervise the
daily day production of newspaper and the online content of the newspaper.
City editor: These city editors are appointed to maintain the charge of the copydesk paper.
The city editor covers the area of the news that is usually related to metro area of the
newspaper location. This specific position is the most crucial amongst all the employees for
collecting and evaluating the news that took place in the area (França et al., 2017),
Chief copy editor- the chief copy editor is responsible for maintaining the copydesk. In this
context, the members on the copy desk read stories and other contents from different sections
through the use of internet and ensures they are written from the perspective of the industry
standards (Bocken et al., 2015). The chief copy editor has the authority to take any final
decision of the copy contents.

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4.3. Financial position
The revenues of the Chronicle Gazette are down across broad are that have been
causes by the information related to the company that are now made public in internet. In this
context, the financial position of the newspaper agency is offering a silent alarm with the
falling down of subscription of 38% in the previous 8 years along with the slowdown of
advertisement revenue by almost 28% (Gerow et al., 2015). However, focusing on these
financial figures it can be said that the financial position of the company is in a position of
fluctuation. Therefore, Chronical Gazettes needs to work on the financial revenue and needs
to look for increasing the subscription and find out substitute source of increasing the
revenue.
4.4. Marketing/sales capabilities
The current marketing trend switching towards publication of news and the rest part
of the advertisement and promotion are done through internet websites along with other
interactive media campaigns. However, the sale revenue resources had shifted from copy
newspaper to interned sources in the current years (Govindan et al., 2015). The above figure
of revenue shows that marketing and sales capability of the company is not up to the mark.
Therefore, the teams that are managing the marketing and sales needs to come with different
techniques of sales promotion to sustain the level of subscription and to display the incentives
to the advertisers thereby initiate sales (Cassidy, 2016).
In case of sales the Chronicle Gazette has al sales team that are responsible for
managing the customer advises based on these they have to restructure the sales and make
required investment on the equipment’s. Chronicle Gazette has got high customer base
wherein both the parties needs to keep track of the latest technology (Piercy, 2016). However,
they also have the opportunity to implement other customer segment for broadening the
vision and service base.

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4.5. Operational capabilities
Operational process if Chronicle Gazette can also be observed as the value chain
evaluation to demonstrate the competitive edge of the company. Chronicle Gazette is one of
the leading newspaper company in the metropolitan area of Singapore that have managed to
reach a paid distribution if almost 225, 00 consumers that have ranked amongst the first.
Focusing on the outbound logistic the newspapers are distributed within periodic time to the
retailer and they are also delivered in internet version for the subscriber (Adams, 2015). On
the contrary, the inbound logistic related to the material paper and ink capability are needed
to be delivered to the production factory within a specific tome for reaching in time
production.
However, the operational capacity of the company can be made more effective by using the
internet and email sources for delivering reports as well as photos that are central
requirements for press release for reducing the time as well as cost. In this as0oet, the quality
standard of the reported contents and the advertisement needs to be reviews by the chief
editor prior to process release. They are also needed to be managed in clear flow for each of
the department to avoid the any replication of the task (Serra and Kunc, 2015).
Presently Chronicle Gazette has no operation for the online version of news, IT capacity is
needed to be implemented for which find is required for investments in technologies such as
servers internet and web developers. They also need to consider the security issues as there
are several confidential and private contents that may be easily disposed through internet
sources and other access authorities.
4.6. Our strengths and weaknesses as a publisher
Strengths

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 The company has been running the business by selling the news since a long
period of time.
 The company has effective writers and reporter who are well aware of the need of
the consumers
 Writers working in the company have an efficient flow and flair of putting the
words in their content that give the feel that customers seek for (Serra and Kunc,
2015),
 The newspaper company does not only sell news but they also sell the
standards of living for the customers through the publication of articles associated
with home, living and technological process.
Weakness
 Newspapers have a fixed cost for publication that is hindering the cost of shifting on
the internet resources
 High growing competition from the low cost new entrants
 Lack of understanding about the cultural changes and use of extensive internet
sources
 They have closed the conventional way of running business and shifting towards
online method of news.
5. How companies in the publishing industry are adjusting their strategies to cope with
the challenges
The company Chronicle Gazette has been working in the industry for a long time like the
other company. The company has been facing several difficulties due to increasing
competition from the internet resources that has currently become a most suitable method of

14BUSINESS POLICY AND STRATEGY
news readability. Therefore, considering the current situation of the company there needs to
have secured steps for securing the activities of business and set it back into the success path.
Examples:
1. Two of the major newspaper, such as Detroit news and Detroit press partnered their
operations as their review cost increased due to less production of advertisement
(Serra and Kunc, 2015). However, together they fought against the cist effectives and
managed to reduce the subscription to three days within a week.
2. Catching up the option through an alternative source of news that are accessible on
several wireless devices and emerging business that has been seen but the audiences
and investigative reporting team. For instance Pro Pubic, Kaiser News health.
3. Some of the new paper has delivered print as well as online readership platform.
Amongst these one of the political newspapers named as Politico raised 50% of their
shares from advertisement and frees printing of newspaper while managing 3 million
online subscribers (Cassidy, 2016).
6. Steps The Chronicle Gazette might take in order to deal with the challenges
6.1. Short-term steps
Chronicle Gazette can collaborate with restaurants, clubs and shoe companies as well
as clothing retailer’s fir offering free coupons as a part of complimentary service with the
subscription (Piercy, 2016).
These suggestions may be taken as short term implication for the company while
offering the company to increase the revenue stream. Discount offers will retain and attract
people to buy Chronicle Gazette and they will be receiving sales guarantee as well.

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6.2. Long-term steps
Chronicle Gazette needs to react in a proactive way to improve changing requirements
and start launching online official website. Launching an official online website will help
them to deliver the news to broad numbers of readers while taking the business to a next level
(Piercy, 2016). They will be able to deliver exiting news and publish articles that people are
selling for.

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