Hket Case-Strategy

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1. External factors that have impacted the profitability of the newspaper industry in general and, specifically in Hong Kong, over the last 20 years:

Main factors:-

Economy and government policies-China adopted Open Door Policy for businesses. This promoted foreign trade and economic investment, and led to evolvement of many business start-ups. In 1980s, the economy was booming, Hong Kong became magnet for international trade, with its high GDP growth rate, averaging to 5.2%. With improved income and GDP growth, the quality of life enhanced over years and gave higher purchasing power to citizens. Individuals now could afford to pay for their valued-needs. The real estate boom in 1990s generated a new market segment of property information seekers. The newspaper captured the information needs of the local business community and grew with thriving economy. The recovery of year 2004 economic downturn also created new market opportunities in areas such as employment sector. Newspaper found its way by acting as an information sharing bridge between job-seeker and job-provider. The rebound of HK economy, particularly related to retail, employment, and the stock market-fuelled demand for advertising space.

Users’ behavioral change- As the Hong Kong population became more affluent, leisure, entertainment and consumer goods were sought after. The changed lifestyle resulted in behavioral changes; there were changes in reading habit and interests. Businessmen were seeking credible news, and leisure and entertainment lovers were seeking spicy news. The property marketing boom led to increase in demand for analytical property data. With increased businesses, need for more comprehensive information arose, giving more sections to newspaper for focusing on news issues and angles that would be of interest of professionals, business executives and managers.

Technology and innovation- With new technology and innovation, newer information media came up, affecting the profitability of newspaper in both ways. Era of internet and online media for news arose and affected adversely. Online news seems to be a good substitute to newspapers. The most affected age group of internet was the lucrative 18-35 segment, who responded well to the online culture. A major segment of newspaper market was thus captured. Introduction of Free papers in 1995 changed the face of newspaper industry. In 2002 Hong Kong saw its first free paper. The focus was on low-end market. The young reader base provided an affluent customer target for advertisers. All operating cost could be recovered by advertisements place in paper. This form of newspaper has high potential of profit generation by charging fees to many advertising business entities.

Thus, over the years, Hong Kong has seen changes in economy, public behavior, technology etc that has affected newspaper industries and their profitability.

internet, online media, Free paper

Added value- differentiation…Availability and Productivity and utilization…

Leisure, entertainment publication and programs,
Modernized look-use of over-sized colour photos and more “white space” for more reader friendly appearance Free papers introduction-2002-Reading habit-commuters on their way to school or work-Young base-advertisement-main source of financing-Multiple sections-news from tv/radio/press releases and then condensing of articles-low end focus

Political instance and credibility with readers

2006-Economy downturn and then adv space.(8) and HKET gain (9)-rebound of HK economy, particularly related to retail, employment, and the stock market-fuelled demand for adv space. Diverse portfolio- broad range of publication.

Enrolment income-Demand for self enhancement and development increased.recruitment adv and training divison.

Property information-to satisfy the increasing demand for analytical property data that resulted from the property market boom in 1990s.At the time only raw data was...
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