An Overview of The Sun's Value Chain

The assignment content is a value chain analysis of The Sun, a newspaper company. It highlights the primary and supporting activities involved in producing and marketing their tabloids. The primary activities include inbound logistics, operations, outbound logistics, sales & marketing, and services. The supporting activities involve procurement, technology development, human resource management, and infrastructure. The analysis concludes that The Sun is facing threats, weaknesses, and opportunities for improvement. Recommendations are made to improve the value chain, increase employee efficiency, and expand into emerging markets.

STRATEGIC ANALYSIS OF
AN ORGANIZATION\'S
INTERNAL AND EXTERNAL
ENVIRONMENT

TABLE OF CONTENTS
Introduction......................................................................................................................................4
Procedures........................................................................................................................................4
Findings............................................................................................................................................4
Competitors Analysis...................................................................................................................4
Market Analysis...........................................................................................................................5
Environmental Analysis...............................................................................................................6
Customer Analysis.......................................................................................................................7
Internal Analysis..........................................................................................................................8
Conclusion.....................................................................................................................................11
Recommendations..........................................................................................................................12
References......................................................................................................................................13
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INDEX OF TABLES
Table 1: Porter's 5 Forces Model.....................................................................................................6
Table 2: SWOT Analysis of The Sun..............................................................................................9
ILLUSTRATION INDEX
Illustration 1: SWOT Analysis.........................................................................................................9
Illustration 2: Value Chain Analysis..............................................................................................10
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INTRODUCTION
Strategic analysis basically refers to as the process of developing strategy for the
corporation by doing intense research about the business and its environment which is
prevailing inside and outside the organization (Doole and Lowe, 2008). While doing
strategic analysis various tool and techniques are applied so that effective strategies
can be prepared. Moreover, evaluation of opportunities and challenges are done which
are faced by the company while it moving forward. This report has put its emphasize on
the strategic analysis of The Sun which is national newspaper of UK. It is daily tabloid
newspaper and has a largest circulation in UK than any other daily newspaper. In this
report, various tools have been applied in order to do the strategic analysis of The Sun.
Furthermore, Strategic analysis have been done by using competitor analysis, market
analysis, environmental analysis, customer analysis and internal analysis (Hooley and
et.al., 2012).
PROCEDURES
Strategic analysis of The Sun has been done and to assess the complete
environment various tools have been applied that is SWOT analysis, PESTLE analysis,
Value Chain Analysis, Porter's 5 Forces Model (Layton, 2011).
FINDINGS
Competitors Analysis
The main competitors of The Sun is Daily Mirror and The London Paper which
also sells tabloid. These are the popular publications after The Sun. The largest
publications sold in a day is of The Sun but The London Paper sells weekdays free
newspaper (Nandakumar, Ghobadian and O'Regan, 2011). Moreover, the key success
factors of The Sun in against of competitive capabilities is that this company is highly
competitive and can hold the competition for long in order to acquire the competitive
edge because this firm has good financial strength and provide information which have
been acquired from good sources. Moreover, the market share of the company is
relatively bigger than other two competitors. Further, benchmark set for the sales and
profits are reached but sometimes the inability of employees leads to reduction in
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profits. But other competitors have highly efficient employees which always meets the
target (Parvinen, Tikkanen and Aspara, 2007).
Market Analysis
The Sun is a largest newspaper company which works in a macro environment.
This company operates in a oligopoly market because there are few sellers and large
number of buyers (Doole and Lowe, 2008). The products in this industry are identical
and they have some control over the prices, thus they form collusion so that leader of
the industry determine the prices. To assess the market impact on the company, the
model of Porter's 5 Forces have been applied which are enumerated below:
Table 1: Porter's 5 Forces Model
Forces Impact of Forces Degree of Forces
Bargaining Power of
Buyers
 There are large number of
buyers.
 Switching cost is low.
 High brand recognition among
buyers.
High
Bargaining Power of
Suppliers
 Suppliers are few in number.
 Due to decreasing resources,
suppliers are charging high
prices for supplying.
 Switching cost for the company
is high (Hooley and et.al., 2012).
 Company cannot take backward
integration.
High
Threat of New
Entrants
 High brand recognition of The
Sun.
 Economies of scale are with the
company.
Low
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 Huge capital investment.
 Customer loyalty are high for The
Sun.
Threat of
Substitutes
 Increasing number of substitutes.
 Substitutes available in a
relatively cheaper cost (Layton,
2011).
 Changing demands of customers
have imposed a greater threat of
substitutes.
Very high
Competitors Rivalry  The Sun is a industry leader.
 Market structure is oligopoly and
there are few sellers.
 Due to the identical products,
firms form a collusion.
Very low
Environmental Analysis
Environmental analysis can be defined as an assessment of macro and micro
environment in which company is operating its business. The Sun is carrying out its
business in macro environment and to assess this environment The Sun has to carry
out the PESTLE Analysis which are discussed as follows: Political: The Sun is largest newspaper publishing company of UK and political
factor have a greater impact on the newspaper. If there is any government
changes or any related information about the political world than people will
prefer to read more and more newspaper (Trim and Lee, 2008). Thus, the
political factor affect the companies in positive manner. However, firm has to take
care that wrong information should not get pasted in the publication as politics
may sue them for the same. Sometimes changes in government also imposes
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new policy guidelines on the company and as a newspaper company they have
to follow those guideline. Economical: Financial or economic crisis do not have a greater impact on the
working of a newspaper because during recession and other economic downturn,
people generally prefer to read newspaper for getting more information about the
market (Trim, 2014). But the reduction in advertisement and classified have lower
down its profits. Social: Society and culture have a large impact on the newspaper company as
to changing needs of demographic and changing lifestyles have reduced the
reading perception of customers (Ulph, 2011). Moreover, some prohibited
pictures printed in newspaper are also opposed by the society such as sex
appealing pictures, alcoholic pictures, etc. Technological: Changing technologies such as internet have highly affected the
business of The Sun. excessive use of internet have reduced the habit of
newspaper reading which has highly impacted the sales of The Sun. Legal: There are various laws related to consumer protection laws, employment
laws, competitive regulations, etc. These laws should be taken care by the
company so that legal policies does not affect the business.
 Environmental: This factor has a major influence on The Sun as due to
excessive cutting of trees have forced the company to adopt the alternative
method of making and printing newspaper (Boulton, 2012). Recycling papers
have been produced which adds to the cost of the company and also
Environmental Protection Act have impacted the business of the company.
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Customer Analysis
It is an important aspect of a company's strategic plans because firm's ultimate
aim is to sell the products to the customers and satisfy their needs. There are some key
questions which this company needs to answer for doing the customers analysis which
are covered in a diagram and its discussion has been done.
The customers of The Sun is the people living in UK of age group 18 above
people of any income group (Nandakumar, Ghobadian and O'Regan, 2011). Their are
various groups such as man and women, younger and older people and their choice
differs accordingly that is women ants fashion news and man wants sports news. Older
people like complete piece of news, etc. Moreover, people usually buys it every day and
some people buys it only on weekends. These people buys the newspaper to acquire
knowledge about various sectors such as politics, economic, business information,
fashion trends, sports information, etc. The customers of The Sun read it from internet,
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buys from local stalls and from the newspaper vendors. Lastly, the product is consumed
by the buyer that is they apply those information in businesses, students apply it in their
school and colleges for making projects. Women adopt new fashion trends through this.
Internal Analysis
Internal environment basically refers to as the environment which is prevailing
inside the company boundaries (Parvinen, Tikkanen and Aspara, 2007). There are
various tools which are used for assessing the internal environment of a company. This
is used in strategic analysis in order to assess the capabilities of a company. Some of
the tools used for analysis the internal environment of The Sun are as follows:
SWOT Analysis
(Source: Miller-Merrell, J., 2015)
Table 2: SWOT Analysis of The Sun
Strengths Weaknesses
 Major part of the newspaper is read
by womens.
 This company is involved in many
controversies which has lower down
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Illustration 1: SWOT Analysis

 Largest publications of newspapers
in UK and Ireland and tenth largest
in a whole world.
 Method of presentation attracts the
customers towards this publications
(Trim and Lee, 2008).
its brand value.
 Market share of this company has
went down.
 Less innovative changes in the
company.
Opportunities Threats
 Recognition of brands in an
emerging markets.
 Bring innovations and adopt
technological changes such as
internet.
 Improve sales by doing heavy
promotions through internet.
 Increase in competition from other
tabloids such as Daily Mirror and
Daily Star.
 Higher level of criticism leads to law
suit against The Sun (Trim, 2014).
 Government of UK may introduce
free press which will have a greater
impact on the company.
Value Chain Analysis
Value chain analysis is a useful tool which helps the company to create the
greatest value for the customers. For this purpose, The Sun procure raw material and
then adds value to in order to provide valuable products to them as per their need. In a
value chain there are two types of activities that is Primary activities and supportive
activities which help in adding the value to the product (Ulph, 2011). The value chain
analysis of The Sun is as follows:
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(Source: Value Chain Analysis, 2015)
Primary Activities
1. Inbound Logistics: Raw material is acquired by the company and it manages the
material in an excellent manner. Moreover, firm collect the news and other
related information from good sources and also the journalist visit the places and
confirm the news (Boulton, 2012).
2. Operations: After the procurement of raw data, the employees arrange the data
in an exact format and make an interesting news. It is very efficiently managed.
3. Outbound Logistics: When the printing gets over, the tabloids are sent into the
markets for the sale by using excellent channel of distribution.
4. Sales & Marketing: The marketing of this tabloid is done by the company as a
good source of information and mainly its marketing is done by the way of word-
of-mouth.
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Illustration 2: Value Chain Analysis

5. Services: The Sun regularly takes the feedback from customers about their
newspaper and also takes suggestions for bringing improvement in their tabloid
so that super value could be provide to them as per their needs (Trim, 2014).
Supporting Activities Procurement: For acquiring raw material, company has to arrange the fund and
also for bringing innovation in the machinery, organization has to install excellent
equipments. For procuring raw materials such as wood pulp and data, good
relations should be maintained. Technology Development: Company has adopted better ways such as recycled
papers to reduce the use of wood pulp and excellent machineries so that papers
does not create harm to the environment (Layton, 2011). Human Resource Management: The HR manager of the company manages the
employees in an effective manner. Due to which primary activities are carried out
in an efficient manner.
 Infrastructure: Company's infrastructure is designed so well that company can
perform its business in a better way. Infrastructure will be designed in such a way
that all the operational, assembling, administrative and accounting can be
performed in proficient manner (Hooley and et.al., 2012).
CONCLUSION
As per the above study which is conducted on The Sun, it has been concluded
that company is largest seller of the publications on a daily basis. The competitors are
having more efficient employees which The Sun lacks. Moreover, there are many
threats which company the company is facing which has been assessed in PESTLE
analysis. Further, company has some weaknesses that it is less innovative and are
facing m,any controversies. Also, company sometimes fails to meet the demands of
customers which create major issue for the company. Due to increasing technological
advancement, people's preferences are getting shift to internet which is a serious issue
for the company.
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RECOMMENDATIONS
 The Sun should train its employees so that they can reach its set benchmark in a
most effective manner.
 Company should start publishing its tabloids in an emerging market of Europe
and also it should improve its promotion strategy so that company's sell can be
increased.
 Improvement in value chain should be improved so that better product can be
provided to the customers.
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REFERENCES
Journals and Books
Doole, I. and Lowe, R., 2008. International Marketing Strategy: Analysis, Development
and Implementation. 5 ed. Cengage Learning EMEA.
Hooley and et.al., 2012. Marketing strategy and competitive positioning. Brigitte.
Layton, A. R., 2011. Marketing: is management all that there is?. Journal of Historical
Research in Marketing. 3(2). pp.194–213.
Nandakumar, K. M., Ghobadian, A. and O'Regan, N., 2011. Generic strategies and
performance –evidence from manufacturing firms. International Journal of
Productivity and Performance Management. 60(3). pp.222–251.
Parvinen, P., Tikkanen, H. and Aspara, J., 2007. Corporate strategic marketing: a new
task for top management. Business Strategy Series. 8(2). pp.132–141.
Trim, J. R. P. and Lee, Y., 2008. A strategic marketing intelligence and multi-
organisational resilience framework. European Journal of Marketing. 42(7/8).
pp.731–745.
Trim, J. R. P., 2014. The strategic corporate intelligence and transformational marketing
model. Marketing Intelligence & Planning. 22(2). pp.240–256.
Ulph, C., 2011. Marketing Strategies Used by Intel to Create a Sustainable Market
Position. GRIN Verlag.
Online
Boulton, R. W., 2012. Strategic Analysis Model. [Online]. Available through
<http://www.auburn.edu/~boultwr/html/strategic_analysis_model.htm>.
[Accessed on 15 December 2015].
Miller-Merrell, J., 2015. Applying SWOT Analysis in Recruitment. [Online]. Available
through <http://blog.talentcircles.com/2013/07/applying-swot-analysis-in-
recruitment.html>. [Accessed on 15 December 2015].
Value Chain Analysis. 2015. [Online]. Available through
<http://www.cgma.org/Resources/Tools/essential-tools/Pages/value-chain-
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analysis.aspx?TestCookiesEnabled=redirect>. [Accessed on 15 December
2015].
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