MGT195 Term Paper: Strategic Planning at The Chronicle Gazette
Introduction: Problems in Publishing All businesses must be concerned with the rapid pace of change we face today. No company is secure, not even the largest and most profitable. Coping with change has been a business concern since people began doing business. Recall how the arrival of automobiles put buggy whip manufacturers out of business. Today’s pace of change is unprecedented. Consider what has happened in the retailing arena. Online retail sales went from nearly nothing in the mid-1990s to a projected $242 billion in 2010. Traditional retailing stores have been heavily affected. eBay has become a retailing behemoth enabling individuals to buy and sell goods online with total annual sales in the billions of dollars. Or consider the fate of many dot-coms. One of the most spectacular dot-com stories – the rise and fall of AOL – illustrates how technology (telephone-based online computing) created a huge success story, and how technology (Internet email) led to a reversal of this success. A major goal of strategic planning is to anticipate environmental changes (economic, business, political, governmental, social) and prepare the organization for dealing with them. Clearly, in this age of rapid change, all business entities should engage in some measure of strategic planning. Without it, they will have difficulty negotiating today’s turbulent business environment. One industry that is currently suffering the destabilizing consequences of the Internet revolution is the publishing industry. Included here are textbook publishers, trade book publishers, newspaper publishers, and magazine publishers. All publishers are facing serious challenges. Revenues are down across the board. If these challenges are not handled properly, there is a good chance that a large portion of the publishing industry as we now know it will go out of business. One challenge publishers face is dealing with the fact that information traditionally controlled by them is now freely available to the public through the Internet. Not long ago, if a homeowner wanted to place tiles on his bathroom floor, he would purchase a How-to book. Today, he goes online and encounters several sources that show how to lay tile – some even provide a video clip to illustrate the process. As a result, sales of How-to books are plunging.
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Case Study Susan Feinman is publisher of The Chronicle Gazette, a leading newspaper in a major metropolitan area. Her paper has a paid circulation of 225,000 customers. It is a first-rate newspaper and over the years, its writers have won awards for their work. Susan’s big problem is that there has been a steady decline in subscriptions to the newspaper. In the past eight years, subscriptions have fallen by a total of 35%. Because subscriptions have fallen, advertising revenue has also dropped – by 28%. Susan knows that declining subscriptions and revenues are affecting the entire publishing industry. Even the great newspapers – such as the New York Times and Wall Street Journal – are facing subscription losses. The principal cause of The Chronicle Gazette’s problems is the rise of the Internet. With the Internet, people have access to an endless source of news stories – for free! A regular feature of Internet sites like Yahoo, MSNBC, Hotmail and CNN News is up-to-the-minute news accounts, often accompanied by video treatments of hot topics. When major stories break – such as the London terrorist bombings or the Sichuan earthquake – detailed accounts begin appearing on Wikipedia almost immediately, and videos show up on YouTube. Furthermore, by Googling topics, readers can explore interesting stories to whatever depth they desire. Susan is worried that her newspaper will become the 21st century equivalent of buggy whip manufacturers. After several meetings with The Chronicle Gazette’s Executive...