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.

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 Committee, Susan decides to hire a consultant to work through the
strategic implications of the changing business environment. Hopefully, by
looking at the problem from 40,000 feet, she and her managers can develop a
better idea of the challenges the newspaper faces. Once these challenges – and
their sources – are understood, the newspaper can develop strategies to deal
with them.
You have been hired as the consultant. Your job is to put together a consulting
report of 10-15 pages (typed single spaced with 12 point font). The report’s goal
is to offer the management of The Chronicle Gazette a strategic vision of where
the newspaper publishing industry stands today and where it is headed over the
next decade. You also need to propose strategies the newspaper can investigate
to survive in the new business environment. Structure your presentation so that it
can be used by Susan’s team as a roadmap to putting together a detailed
strategic plan.

Sample Outline of the Consultant’s Report
You have latitude in how you present your report. Following is an outline of an
approach that would meet the requirements of this assignment. Feel free to
adopt it or to pursue a different approach.
1. Introduction – goals of the report
2. State of the newspaper publishing industry today
2.1.Data on declining circulation and revenue
2.2.Status of newspaper leaders, e.g., New York Times, Wall Street Journal
3. Why newspapers are facing declining circulations and revenues
3.1.External assessment
3.1.1. Economic forces
3.1.2. Social, cultural, demographic, and environmental forces
3.1.3. Political, governmental and legal forces
3.1.4. Technological forces
3.1.5. Competitive forces (e.g., Porter’s model)
3.1.6. External Factor Evaluation (EFE) matrix
4. Internal assessment
4.1.Organizational processes and structure
4.2.HR capabilities
4.3.Financial position
4.4.Marketing/sales capabilities
4.5.Operational capabilities (e.g., How efficient are we? How effectively are
we adopting new technologies?)
4.6.Our strengths and weaknesses as a publisher
5. How companies in the publishing industry are adjusting their strategies to
cope with the challenges (provide at least three examples)
6. Steps The Chronicle Gazette might take in order to deal with the challenges
6.1.Short-term steps
6.2.Long-term steps