Strategic Management of The Sydney Morning Herald

Running Head: STRATEGIC MANAGEMENT 1
Strategic Management
Name:
Institution

Strategic Management 2
Table of Contents
Introduction.................................................................................................................................................3
PESTLE analysis of The Sydney Morning Herald..........................................................................................3
Political factors........................................................................................................................................3
Economic factors.....................................................................................................................................4
Social factors...........................................................................................................................................5
Technological factors...............................................................................................................................5
Environmental factors.............................................................................................................................5
Legal factors............................................................................................................................................6
Porter’s five forces analysis.........................................................................................................................6
The threat of new entrants......................................................................................................................6
Bargaining power of suppliers.................................................................................................................6
Bargaining power of the buyers..............................................................................................................7
The threat of substitute product.............................................................................................................7
Competition rivalry..................................................................................................................................7
SWOT analysis.............................................................................................................................................8
Challenges facing The Sydney Morning Herald............................................................................................8
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10
Appendices 1.............................................................................................................................................13
Appendices 2.............................................................................................................................................14
Appendices 3.............................................................................................................................................16
Appendices 4.............................................................................................................................................17

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Introduction
The Sydney Morning Herald (SMH) is an Australian based daily compact newspaper
initially published and owned by Fairfax media before the company merged with Nine
Entertainment company holdings limited in December 2018. The newspaper is currently owned
by Nine Entertainment, with the firm gaining a share of 51 percent and Fairfax media got 49
percent (Greco, Cricelli & Grimaldi, 2013). The Sydney Morning Herald is the oldest newspaper
in Australia having been founded in 1831. It is published six days in a week. It has a couple of
lift out magazines and articles to its name such as the Good Weekend, The Guide, Good Food,
Money, Drive, and News-Review. The newspaper also operates a website, www.smh.com, rated
number 17 of the most visited site in Australia Alexa, attracting over 15 million viewers per
month. This report will consider the strategic market analysis of the Sydney Morning Herald. It
will cover on macro-environmental factors such as the PESTLE analysis, industrial factors in
Porter’s five forces and internal factors in the SWOT analysis of the newspaper. Additionally,
the report will investigate the key challenges facing the newspaper in its operation.
PESTLE analysis of The Sydney Morning Herald
That is a strategic market analysis into the external environmental factors that affect the
Sydney Morning Herald newspaper. PESTLE represents political, environmental, social,
economic, technological, environmental and legal factors.
Political factors
Sydney Morning Herald operates in a dynamic environment where it is highly influenced
by political factors such as government policies. Political factors mostly relate to the nature and
level of intervention of both the local and the national government. These policies play a critical
role in shaping the environment in which the newspaper operates on. Stakeholders in the media

Strategic Management 4
industry including the government, non –governmental organizations, and activist and pressure
groups play a great role in the formulation of policies that run the industry (Vogel & Güttel,
2013). The Sydney Morning Herald, therefore, needs to closely develop a collaborative
relationship with these organizations to contribute much effectively to both communal and
corporate objectives. Regulatory practices hamper the operation of the newspaper as it is
expected of them to comply with a directive from the government and other stakeholders
(Paltridge, Mayson & Schapper, 2014). The government resource allocation framework in
Australia provides an opportunity for the newspaper to thrive catalyzed by the wide acceptance
of these policies in the general population of Australia. Additionally, lower taxation policies in
the media industry in Australia have facilitated SMH to increase its spending in research and
development programs resulting in high-profit margins. However, the local governments in
Australia are formulating ways of considering some taxation policies of Broadcasting and cable
TV networks in order to ensure there is a reduction of the carbon footprint in the media sector.
Economic factors
These factors include the rate of exchange, inflation rate, market conditions, and
economic performance among others. There is efficiency in the financial market in Australia.
The Sydney Morning Herald newspaper can take advantage of this and access the vibrant market
in finances and the availability of liquidity in the equity market of Australia to expand their
operations. However, the volatility in the exchange rate affects both the short term and long term
operations of the newspaper (Tonts & Taylor, 2013). There has been a continuous increase in
the inflation rate in Australia after the great economic recession and this can affect consumer
behavior. The newspaper is also favored by the economic cycles of the Australian market, which
has been characterized by growth and utilization of local resources to meet global markets.