Company and Industry Analysis for the Sydney Morning Herald
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This document provides a comprehensive analysis of the Sydney Morning Herald, including its company profile, market analysis, target market, competition, and SWOT analysis. It also discusses the newspaper industry and advertising trends.
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STRATEGIC MANAGEMENT2 Company and Industry Analysis for the Sydney Morning Herald 1.0 Company Analysis of the Sydney Morning Herald The Sydney Morning Herald is among the newspapers in Australia, having been founded in 1831. Apparently, it is available both in electronic and paper format; with the paper format being published six times a week. In 2013, the Audit Bureau of Circulation’s report on newspaper sales captured the sales of the newspaper for Monday to Friday as being over 130,000 copies and over 220,000 on Saturday. The print version is usually produced with at least one supplement per day, adding immense value to the newspaper. Editorially, the newspaper considers itself as being generally “centrist” as is cited in its editorial on 2004 where it stated: "market libertarianism and social liberalism" constituted the "broad themes" that informed the paper. The newspaper has an ultramodern office with committed staff under the Chief Editor, Lisa Davis. The company has been keen to keep up with the signs of the time and for this reason was one of the first newspaper companies to have a digital version that has a national reach in Australia. The Herald has also strived to continuously upgrade its human resource base on pertinent issues regarding current market trends and therefore the need to continue being market leaders. The company has over the years additionally also invested in modern production equipment to ensure high quality production. With all these factors in place, the company has continued to lag behind the Daily Telegraph, a local rival newspaper, therefore the onus is upon the company to find means of gaining market leadership. This is the main motivation by the company to produce and implement this business plan: to enable the Sydney Morning Herald to gain leadership in the market.
STRATEGIC MANAGEMENT3 2.0 Market Analysis 2.1 Demographics and Segmentation The Herald newspaper circulates in the town of Sydney, Australia. Sydney is the capital city of New South Wales and is the most populous city in Australia and Oceania.. Residents of the city are known as "Sydneysiders". In 2017, the town’s population was at about 5,200,000. (Wheelen et al., 2017). The current market segment that the Sydney Morning Herald Newspaper currently targets is the oldest citizens who have the purchasing power to buy the newspaper in its current printed form. However, due to recent advancements in technologies that have made online newspapers more popular, the newspaper proposes to have an online edition which will complement the printed edition and hence increase the scope of the newspaper. In the process, the Sydney Morning Herald intends to capture the middle class market of the city together with a fraction of the youth. 2.2 Volume & Value The current volume of the market is guided by statistics of the readership of the newspaper. In 2013, the Audit Bureau of Circulation’s report on newspaper sales captured the sales of the newspaper for Monday to Friday as being over 130,000 copies and over 220,000 on Saturday.. The national Australian market for newspapers is 15.5m readers (Lasserre, 2017). However, the market and value of metropolitan newspapers including the SMH is captured in the following table:
STRATEGIC MANAGEMENT4 Top 5 Metropolitan Mastheads by Total Cross-Platform Audience (Print & Online) Sydney Morning Herald (SMH) is trailing its local rival, the Daily Telegraph, for the market share of the newspaper readership market in the lucrative market of Sydney. It is also evident that the SMH is the only newspaper with a major drop in readership between 2016 and 2017 of -3.5%. This is a matter of great concern for the management of the newspaper, hence the initiation of this business plan whose purpose is to lay and implement strategies to take over the leadership of the market (Meyer, Neck & Meeks, 2017). 2.3 Potential Customers For a long time, the Sydney Morning Herald newspaper has been targeting the older citizens through its print and online newspaper versions. This is set to change as the newspaper is not shifting its focus to the young working class population of the city, which happens to be mainly tech savvy (Steiss, 2019). The Herald will endeavor to attract this market and meet its needs.
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STRATEGIC MANAGEMENT5 2.4 Market Value The latest sales of the leading nationally and in New South Wales. From the table, it can be estimated that with an estimated price of 3.70, the total market share controlled by the two main newspapers is about 4,132,900 Australian Dollars, while the total market value (including smaller newspapers) can be estimated at 5,000,000 Australian Dollars (Trigeorgis & Reuer, 2017). 2.5 Target Market The target market of the Sydney Morning Herald newspaper under this business plan is the young working class of the City of Sydney. This is because, after years of serving the older, moneyed population of the city, the Herald now seeks to expand its base by targeting the young working class market of this heavily populated city. Emphasis will be on the online version of the newspaper which will be sold at discounted prices in order to bring more readers on board (Michael, Storey & Thomas, 2017). The online version has many advantages over the printed version; the latter version being retained for its current readers. 2.6 Market Need Current trends in readership of newspapers indicate that online readership of newspapers is bound to increase in the foreseeable future. As the world totters towards a paperless reality, it is also time for newspapers to realist that online offerings are the way to go.
STRATEGIC MANAGEMENT6 The above diagram shows that average circulation of metropolitan / national dailies has been steadily falling from 2002 to 2012, and this is a reality that this business plan is alive to the world becoming increasingly technological; it is becoming more fashionable for people seek all their information needs from their gadgets; particularly smartphones, tablets and laptops (Lasserre, 2017).. There is therefore need for the Sydney Morning Herald to aggressively provide information online to the convenience and pleasure of its clientele. Sydney Morning Herald has the competitive edge to deliver effectively as is evident above, whereby our sales surpassed those of the Daily Telegraph our main rival for the first time in many years in December 2018. We have been employing fresh graduates from our media schools and retraining the older staff to be in sync with the times. Additionally, we have been continuously reviewing and upgrading our technology and production techniques to ensure that they are equivalent to the industry’s state of the art and this helps give the company an edge over the competition (Hitt & Duane, 2017).
STRATEGIC MANAGEMENT7 Our main rival, the Daily Telegraph, appears to be focusing on the top cream of the society of Sydney by an analysis of the newspaper’s content. Given the nature of their clientele, they have also not made much headway in having an aggressive online edge (Ginter, Duncan & Swayne, 2018). The other small newspaper (about half a dozen) is of limited circulation within various parts of North South Wales and Sydney, and they do not have the financial muscle to make investments in market driven technologies as we intend to do. This gives the Sydney Morning Herald a head start in scrambling to meet the current awareness information needs of the citizens of Sydney. 2.7 Competition The market in the City of Sydney is made up two main newspapers, the Daily Telegraph and the Sydney Morning Herald, together with six small regional newspapers. The positioning of the competition is captured in the following table. Competitive Analysis Newspaper Company Small Regional Newspapers Daily Telegraph Sydney Morning Herald Revenues 867,100 (combined) 1,957,3002,175,600 Nb. employees36 (combined)13596 SizeSmallSmallBig Price of newspaperLowAverageAverage Quality of newspaperLowHighHigh Investment in new technologiesNoLittle investmentHigh investment Focus on emerging online marketNon-existentMedium investmentHigh investment
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STRATEGIC MANAGEMENT8 Newspaper Company Small Regional Newspapers Daily Telegraph Sydney Morning Herald Market focus Small niche markets Upper middle class Upper middle class and the rich From the foregoing information, the strengths and weaknesses of our rivals are as follows: Small Suburban Newspapers Strengths:small overhead costs, small, loyal customer base Weaknesses:little room for market growth, financial inability to expand operations, low quality productions (Morschett, Schramm-Klein & Zentes, 2015). Daily Telegraph Strengths:Market leader, possession of financial muscle to acquire technology, improves processes, deals with the rich upper segment of Sydney’s society which is financially lucrative (Morden, 2016). Weaknesses:Inability to monitor emerging trends in changes in consumption and adopting to them, inability to invest in staff training, aging editorial and field journalists (Ansoff et al., 2018). The Sydney Morning Herald therefore will seek to capitalize on the weaknesses of its rivals in order to rapidly gain leadership of the market. Some strengths, weaknesses, opportunities and threats of the Sydney Morning Herald are captured in the following table:
STRATEGIC MANAGEMENT9 2.8 SWOT Analysis for Sydney Morning Herald Newspaper StrengthsWeaknesses Proactive management Tech-savvy staff Aggressive market approach Investment in technology Training of staff Young average age of staff Inadequate resources against many competing market related needs Second in market size (i.e. not market leader) Over ambition may lead to lack of focus and hence failure Over reliance on a narrow market segment OpportunitiesThreats Large online market that needs to be tapped Presence of a large upper second class market that could be tapped Chance to become market leaders Bias towards electronic version of newspaper favors current company setup (Rothaermel, 2015). Newspaper market becoming increasingly volatile and unpredictable Technology disruptions may unset the market setup (Frynas & Mellah 2015). Sudden changes in client preferences may upset the company’s operations.
STRATEGIC MANAGEMENT10 References Ansoff, I., Kipley, D., Lewis, O., Helm-Stevens, R., & Ansoff, R. (2018).Implanting strategic management. Springer. Frynas, G., & Mellahi, K. (2015).Global strategic management. London: Oxford University Press, USA. Ginter, M., Duncan, J., & Swayne, E. (2018).The strategic management of health care organizations. John Wiley & Sons. Hitt, M., & Duane Ireland, R. (2017). The intersection of entrepreneurship and strategic management research.The Blackwell handbook of entrepreneurship, 45-63. Lasserre, P. (2017).Global strategic management. Macmillan International Higher Education. Meyer, D., Neck, M., & Meeks, D. (2017). The entrepreneurship‐strategic management interface.Strategic entrepreneurship: Creating a new mindset, 17-44. Michael, S., Storey, D., & Thomas, H. (2017). Discovery and coordination in strategic management and entrepreneurship.Strategic entrepreneurship: Creating a new mindset, 45-65. Morden, T. (2016).Principles of strategic management. NewYork: Routledge Morschett, D., Schramm-Klein, H., & Zentes, J. (2015).Strategic international management(pp. 978- 3658078836). Springer. Moutinho, L., & Vargas-Sanchez, A. (2018).Strategic Management in Tourism, CABI Tourism Texts. Cabi. Noe, A., Hollenbeck, R., Gerhart, B., & Wright, M. (2017).Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education. Renz,O. (2016).The Jossey-Bass handbook of nonprofit leadership and management.London: John Wiley &Sons. Rothaermel, T. (2015).Strategic management. New York: McGraw-Hill Education.
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STRATEGIC MANAGEMENT11 Steiss, W. (2019).Strategic management for public and nonprofit organizations.New York: Routledge.. Trigeorgis, L., & Reuer, J. (2017). Real options theory in strategic management.Strategic Management Journal,38(1), 42-63. Wheelen, L., Hunger, D., Hoffman, N., & Bamford, E. (2017).Strategic management and business policy(p. 55). Boston: Pearson.
STRATEGIC MANAGEMENT12 APPENDICES Appendix 1: Competition between Print and Online Advertising
STRATEGIC MANAGEMENT13 13 Appendix 2: Components of Online Advertising
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