Strategic Management of The Sydney Morning Herald

This report provides a strategic market analysis of The Sydney Morning Herald, including a PESTLE analysis, Porter's five forces analysis, and SWOT analysis. It also discusses the key challenges facing the newspaper.

Running Head: STRATEGIC MANAGEMENT 1
Strategic Management
Name:
Institution

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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

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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.

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Social factors
Every society has its own cultural practices. The social factors can help the Sydney
Morning Herald understand the way of operations in regards to the preferences of the
community. Demographics is a social factor concerned with the population. Australia is a young
country with vast population growth, the Sydney Morning Herald can use this growth to acquire
a new target market (Carson, 2015). The education level in Australia is high and the newspaper
can use this to acquire new talents and produce more resourceful contents. The gender roles in
the Australian market are evolving and the newspaper can take advantage of this and address
various gender roles in their articles (Ho, 2014). There is also an upward growth of media outlets
in Australia. Both the traditional media forms and social media are growing. The newspaper can
take advantage of this and position itself strategically.
Technological factors.
Technological growth is disrupting the supply chain of the Sydney Morning Herald by
providing greater access to information and means of distributing the information. This growth
has resulted to need for protecting patents and intellectual property of the newspaper against
copyrights infringement and cyber-attacks (Vogel & Güttel, 2013). Additionally, technological
growth gives the newspaper the opportunity to tap into new forms of information distribution
such as social media.
Environmental factors.
Consumer awareness of environmental sustainability has necessitated the newspaper to
adopt new strategies for increasing sustainable practices. The customer expects the Sydney
Morning Herald to adhere to environmental regulations (Wright, Paroutis & Blettner, 2013). The

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Australian government has also developed strict guidelines for the management of waste
necessitating the newspaper to evaluate its practices. Renewable technology is a global trend and
the newspaper has to find a way to ensure energy efficiency in its operations.
Legal factors
Legal factors that impact Sydney Morning Herald include law protecting intellectual
property, employment laws, business laws, environmental laws and health and safety laws. It is
expected of the newspaper to ensure they comply with these laws for an effective business
operating environment.
Porter’s five forces analysis
This is a framework that analyses the holistic industry strategy of an organization. This
strategy will focus on how the Sydney Morning Herald newspaper can achieve a sustainable
competitive advantage.
The threat of new entrants
New entrants in the media industry come with challenges such as new ways of doing
things, reducing costs, lowering pricing strategies and offering new strategic positions to the
consumer. Sydney Morning Herald can curb the threat of the new entrants by being innovative,
building the economies of scale and investing in research and development (Buxel, Esenduran &
Griffin, 2015). However, the Sydney morning Herald faces the low threat of entry as the
company is dynamic
Bargaining power of suppliers.
Australia media sector has a lot of suppliers. This limits their bargaining power as it is
easy for print houses such as the Sydney Morning Herald to switch between suppliers. The

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products are also standardized and are not differentiated creating a weaker power for the
suppliers. This has enabled the newspaper to negotiate prices between the suppliers because the
switching cost is low.
Bargaining power of the buyers.
The Sydney Morning Herald has been in the Australian market for a long time. The
newspaper, therefore, has built a strong customer base, consequently reducing the bargaining
power of the buyers. There are challenges that face the newspaper such as highly differentiated
products from the competition such as the News Corp (Simon, Fischbach & Schoder, 2014). The
newspaper can counter the challenges by rapidly innovating as per the advancement in
technology, and introducing new products in their product mix (Wirth & Bloch, 2014).
Additionally, the Sydney Morning Herald can take advantage of their economy of scale and sell
their product at a low price to low-income buyers in order to attract more customers.
The threat of substitute product
The advent of technology has produced new ways of the distribution of information such
as social media platforms. The threat of substitute product facing Sydney Morning Herald is high
especially from online platforms such as Twitter and Facebook as they are increasingly
becoming modes of passing information. Additionally, the advent of smartphones has facilitated
the need for online newspapers modes. Consumers, especially the millennial prefer to read from
their phones, tablets or personal computers.
Competition rivalry
Sydney Morning Herald operates in a very competitive environment from other media
outlets such as The Australian, The Age, and The Daily Paragraph. Each newspaper firm has its

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own strategy with its operations being highly differentiated (Dobbs, 2014). This further increases
the level of competitions as the firms are running head-on into each other.
SWOT analysis
This analysis looks into both the internal and external factors that affect the operations of
a business. Internal factors are the strength and weaknesses while the external factors are
opportunities and threats. The strength of The Sydney Morning Herald includes a strong
distribution network. The newspaper has established itself in the Australian market based on its
many years of operations (Trigeorgis & Reuer, 2017). It has therefore acquired strong means of
placing the product into the market. Another strength is the quality of the staff. The newspaper
attracts high talent of qualified reporters and editors. This ensures high-quality content.
Additionally, the newspaper has a good presence in Australia enabling it to cover all major news.
The weakness of The Sydney Morning Herald is a limitation of the network to expand globally
due to policies and guidelines (Phadermrod, Crowder & Wills, 2019). Another weakness is that it
faces a lot of criticism when it makes mistakes due to its brand reputation. The opportunities that
exist for the newspaper include the generation of revenues by venturing into the online platform,
venturing into the international space and improving advertisement through the online channels.
The threats that face The Sydney Morning Herald are increased competition from other media
firms, negative reviews from critics and lawsuits and litigations.
Challenges facing The Sydney Morning Herald
Some of the key challenges affecting The Sydney Morning Herald include the threat
posed by online digital platforms such as the BuzzFeed and the Huffington Post, which have
disrupted the protections once afforded by geographic allocation. The readers are now able to
access news from all around the world just by a click of the button. These have affected the

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number of subscribers and advertisement for the newspaper. Another challenge is the increasing
competition from other newspapers (Doyle, 2013). The newspaper business in Australia is
increasingly becoming very competitive with firms highly differentiating their product to achieve
a competitive advantage. Many of the newspapers are venturing into digital platforms to
establish a niche with the millennial. The onset of digital platforms has also increased the cost of
operations for The Sydney Morning Herald and has also resulted in redundancy.
Conclusion
The foregone strategic analysis represent some factors that impact the operations of The
Sydney Morning Herald. The PESTLE analysis has looked into the macro-environmental factors
that affect the operations of the newspaper. Porter’s five forces analysis the industrial factors
while the SWOT analysis looks into the internal and external factors affecting the business. This
analysis enables an organization to position itself strategically in the market for the achievement
of the competitive advantage. The analysis, such as Porter's five forces, can result in generic
strategies that may result in product differentiation that improves the position of the product in
the market. The Sydney Morning Herald can evaluate these strategies and come up with
solutions that will guarantee their competitive advantage.

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References
Buxel, H., Esenduran, G., & Griffin, S. (2015). Strategic sustainability: Creating business value
with life cycle analysis. Business Horizons, 58(1), 109-122.
Carson, A. (2015). Behind the newspaper paywall–lessons in charging for online content: a
comparative analysis of why Australian newspapers are stuck in the purgatorial space
between digital and print. Media, Culture & Society, 37(7), 1022-1041.
Doyle, G. (2013). Re-invention and survival: newspapers in the era of digital multiplatform
delivery. Journal of Media Business Studies, 10(4), 1-20.
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
Greco, M., Cricelli, L., & Grimaldi, M. (2013). A strategic management framework of tangible
and intangible assets. European Management Journal, 31(1), 55-66.
Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), 6478-6492.
It’s official: Most Australians now visit news or newspaper websites. (2019). Retrieved from
http://www.roymorgan.com/findings/7595-top-20-news-websites-march-2018-
20180524052
Paltridge, T., Mayson, S., & Schapper, J. (2014). Welcome and exclusion: an analysis of the
Australian newspaper’s coverage of international students. Higher Education, 68(1), 103-
116.

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Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based
SWOT analysis. International Journal of Information Management, 44, 194-203.
Simon, D., Fischbach, K., & Schoder, D. (2014). Enterprise architecture management and its role
in corporate strategic management. Information Systems and e-Business
Management, 12(1), 5-42.
Solved : Nine Entertainment SWOT Analysis / Matrix. (2019). Retrieved from
http://blueoceanuniversity.com/frontpage/swotcoanalysis/179-nine-entertainment
Sydney Morning Herald SWOT Analysis | Competitors & USP | BrandGuide | MBA Skool-
Study.Learn.Share. (2019). Retrieved from
https://www.mbaskool.com/brandguide/media-and-entertainment/6458-sydney-morning-
herald.html
Tonts, M., & Taylor, M. (2013). The shifting geography of corporate headquarters in Australia:
A longitudinal analysis. Regional Studies, 47(9), 1507-1522.
Trigeorgis, L., & Reuer, J. J. (2017). Real options theory in strategic management. Strategic
Management Journal, 38(1), 42-63.
Vogel, R., & Güttel, W. H. (2013). The dynamic capability view in strategic management: A
bibliometric review. International Journal of Management Reviews, 15(4), 426-446.
Vogel, R., & Güttel, W. H. (2013). The dynamic capability view in strategic management: A
bibliometric review. International Journal of Management Reviews, 15(4), 426-446.
Wirth, M. O., & Bloch, H. (2014). Industrial organization theory and media industry
analysis. Journal of media Economics, 8(2), 15-26.

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Wright, R. P., Paroutis, S. E., & Blettner, D. P. (2013). How useful are the strategic tools we
teach in business schools?. Journal of Management Studies, 50(1), 92-125.

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Appendices 1.
Strengths, Weaknesses, Opportunities and Threats.
SWOT analysis is a methodological tool designed to help maximise potential and manage risks to your
campaign.
SWOT is about making better decisions, both large and small. It can help you determine the efficacy of
something as small or something large.
The SWOT matrix:
Questions that flow from your SWOT analysis:
 How might you take the opportunities you have identified?
 What do the weaknesses you have identified mean for Professionals Australia?
 How do you propose to guard against the threats you have identified?
 Can you move things from weaknesses to strengths?
 And can you move things from threats to opportunities?
 How does this tool help you make decisions about priorities?
("Solved : Nine Entertainment SWOT Analysis / Matrix", 2019)

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Appendices 2.
SWOT Analysis of Sydney Morning Herald with USP, Competition, STP
(Segmentation, Targeting, Positioning) - Marketing Analysis
Go to:
 Strengths
 Weaknesses
 Opportunities
 Threats
Sydney Morning Herald
Parent Company Fairfax Media
Category Daily Broadsheet Newspaper
Sector Media & Entertainment
Tagline/ Slogan High Standards of Journalism
USP
Oldest continuously published newspaper in the southern
hemisphere
Sydney Morning Herald STP
Segment English reading population
Target Group Professionals, students and politicians
Positioning No political bias towards any party
Sydney Morning Herald SWOT Analysis
Strengths Below is the Strengths, Weaknesses, Opportunities & Threats
(SWOT) Analysis of Sydney Morning Herald. Strengths are:
1. “Earth Hour” changed the face of newspaper into responsible
enterprise

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2. “Campaign for Sydney” engaged huge participation
3. Strong network distribution across Sydney Australia
4. High quality of reporting from reporters
5. Good presence in Australia covering all major news
Weaknesses
Here are the weaknesses of Sydney Morning Herald :
1.Distribution network limited internationally to expand
2. Being a big brand, sometimes faces criticism due to negligible
mistakes
Opportunities
Following are the Opportunities of Sydney Morning Herald :
1.Can generate more revenues online by entering into
partnership with other websites
2.Introduce innovative features which grab attention with less
criticism
3.Improve the sales by marketing on large scale via Internet
Threats
The threats of Sydney Morning Herald are as mentioned :
1.Increasing competition from other newspapers
2.Parodies and negative reviews act as a roadblock
3.Lawsuits can be filed for misrepresentation in an form
Sydney Morning Herald Competition
Competitors
Below are the 3 main Sydney Morning Herald competitors :
1.The Australian
2.The Daily Telegraph
3.The Courier-Mail
The brandguide table above concludes the Sydney Morning Herald SWOT
analysis along with its marketing and brand parameters. Similar analysis has
also been done for the competitors of the company belonging to the same
category, sector or industry.
("Sydney Morning Herald SWOT Analysis | Competitors & USP | BrandGuide | MBA Skool-
Study.Learn.Share.", 2019

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Appendices 3
Australia’s Top 20 News websites – visitation in an average four weeks
over 12 months to March 2018
("It’s official: Most Australians now visit news or newspaper websites", 2019)

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Appendices 4
Australia’s Top News websites by Generation – 12 months to March
2018
("It’s official: Most Australians now visit news or newspaper websites", 2019)