Internal and External Environment Analysis: U.S. Newspaper Industry

This report provides an analysis of the U.S. newspaper industry, focusing on the challenges and opportunities presented by the evolving media landscape. It utilizes PESTEL analysis to examine the political, economic, social, and technological factors influencing the industry's macro-environment, and the VRIO framework to assess the competitive advantages of The New York Times. The report highlights the impact of online media, the decline in print readership and revenue, and the strategies employed by industry players to adapt to these changes. Key aspects include the impact of copyright laws, economic factors like subscription and advertising revenue, social factors like the demographics of readership, and technological advancements such as the Internet. The analysis of The New York Times assesses its valuable, rare, inimitable, and non-sustainable capabilities to maintain its position in the market and overcome competition from online news sources. The report concludes with a discussion of the industry's future and the strategies needed for sustainable growth.

Surname Internal and External Environment Analysis: U.S Newspaper Industry
Internal and External Environment Analysis: The New York Times
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Surname Internal and External Environment Analysis: U.S Newspaper Industry
The newspaper has defined the American journalism for decades, but recently it
struggles to adapt to the new media landscape. The online media has overtaken the news
advertising and news readership thus posing fierce competition to the print media (Pew
Research Center 2016). Most of the players in the newspaper industry have diversified into
this online news segment, as other suppliers are giving them stiff competition because of their
digital news contents (Barthel 2017). For instance, the competitors like BuzzFeed, Huffington
Post, and TV news suppliers are among the established newspaper suppliers through their
websites. The revenue projects show the industry will continue to report a decline in its
revenues (Atrill & McLaney 2011). The PESTEL analysis tool focuses on the macro-
environment that affects the industry thus shaping the competitive landscape.
PESTEL of U.S Newspaper Industry
Political factors
 The industry has fair legal and political restrictions. The copyright laws and
regulations continue to protect the writers as no print media can produce their work
without approval (Pew Research Center 2016). The contents are never restricted
because of the freedom of speech.
Economic factors
 The revenue streams depend on subscriptions and advertisements that depend on the
economy.
 Subscribers and businesses are price elastic (Barthel 2017). With hard economic
times, the subscription level has declined because of decreased readership. The
revenue has fallen to $38.51 billion (NYT 2013).
Social factors
 Subscriptions in the old newspaper industry attract wealthy, educated, and older
customers whose annual income is more than $100,000 (Internet Society 2014).
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Surname Internal and External Environment Analysis: U.S Newspaper Industry
 The industry focuses on the content to appeal to the mass.
Technology factors
 The internet has changed the mass communication model thus affecting the external
environment (Internet Society 2014). The internet has reduced entry barriers thus
increasing the competitiveness (Barthel 2017). The companies require low capital
costs to enter the new market.
 The Internet connection is widespread and readers can easily access and open the sites
where they can read the newspapers (Pew Research Center 2016). The online news
medium seems to have increased the readership across the world compared to the
prints.
VRIO Framework: New York Time
Valuable capabilities
 Maximizes the iPhone users by offering younger readers access to news
 Maximizes the user-generated contents (Barthel 2017)
 New York Times has enough resources including personnel and finance to
maximize the value thus create a competitive advantage (NYT 2013).
Rare Capabilities
 The resources need to deliver high-quality journalism using the unique strategy
including the internet and digital platforms (Atrill & McLaney 2011). This will
give NYT an opportunity to overcome its competitors like WSJ.com, CNN.com,
MSNBC, Google News, Huffingtonpost.com, The Economists, Bloomberg
Business Week, The Financial Times, and Times in the market (NYT 2013).
Inimitable capabilities
 The NYT enjoys the weekly circulation potential because of the total average
circulation of 1,865,318 (Barthel 2017). The status of NYT newspapers is
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Surname Internal and External Environment Analysis: U.S Newspaper Industry
incomparable regarding the journalism reputation and national distribution. The
company used its unique status to raise the cover price to $2.50 because of the
quality journalism (NYT 2013).
Non-sustainable capabilities
 The resources of the company are strategically equivalent to the valuable
resources (Langheim et al., 2014). The company should undertake cost-cutting
strategies including outsourcing functions, consolidating operations, and use an
online business model.
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Surname Internal and External Environment Analysis: U.S Newspaper Industry
Bibliography
Atrill, P & McLaney, E 2011, Accounting and finance for non-specialists, 7th Ed. Pearson
Education Ltd.
Barthel, M 2017, ‘Despite subscription surges for largest U.S newspapers, circulation and
revenue fall for industry overall’, Pewresearch.org, June 1, viewed
<http://www.pewresearch.org/fact-tank/2017/06/01/circulation-and-revenue-fall-for-
newspaper-industry/>.
Internet Society 2014, Global internet report 2014, viewed 4 October 2017,
<http://www.internetsociety.org/sites/default/files/Global_Internet_2014_0.pdf>.
Langheim, R et al. 2014, ‘Smart grid coverage in U.S newspapers: characterizing public
conversations’, The Electricity Journal, vol. 27, no. 5, pp. 77-87.
Pew Research Center, 2016, ‘State of the news media 2016’, PewResearchCenter, June 15,
viewed 5 October 2017,
<https://assets.pewresearch.org/wp-content/uploads/sites/13/2016/06/30143308/state-of-the-
news-media-report-2016-final.pdf>.
The New York Times (NYT) 2013, Annual Report 2013, viewed 5 October 2017,
<http://investors.nytcom.com/files/doc_financials/annual/2013/2013%20Annual
%20Report.pdf>.
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