MGT 195. Business Policy and Strategy
Assignment
Note: When
submitting assignments, please follow these instructions:
Document
Structure: The business plan should be submitted in Microsoft Word or RTF
format. They should be professional looking and include a comment block
containing:
•Your Name
•Your Student
ID
•Course
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•Course Name
•Title of the
Assignment
Assignment: 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
How Your Report Will Be
Assessed
The Chronicle Gazette is facing deep trouble. If Susan and
her team do not respond effectively to the challenges the newspaper faces, it
is likely the newspaper will be shut down.
The survival
of The Chronicle Gazette will depend
on a dramatic re-thinking of what it is and how it should operate. Band-aid
solutions won’t work. Survival will require creative ideas. Your consulting
report should reflect creative thinking.
While you
have latitude in determining the details of how you present your report,
ultimately, you will be graded on the following factors. So in writing your consulting
report, write it in such a way as to get high ratings for the questions listed
below.
·
How
well-formulated is the consultant’s assessment of the state of the publishing
industry today, particularly newspaper publishing?
Weak 1
2 3 4 5 Strong
·
How
thorough is the consultant’s review of external factors that bear on the
business (e.g., economic, political, governmental, and social forces)?
Weak 1
2 3 4
5 Strong
·
To
what extent does the consultant’s report reflect a creative and dramatic
approach to dealing with the newspaper’s future direction?
Weak 1
2 3 4
5 Strong
·
To
what extent has the consultant logically linked The Chronicle Gazette’s current state (internal factors) with the
proposed strategic direction the business should follow?
Weak 1
2 3 4
5 Strong
·
How
realistic are the consultant’s recommendations?
Weak 1
2 3 4
5 Strong
·
How
logical and well-reasoned are the consultant’s points?
Weak 1
2 3 4
5 Strong
·
Overall,
how well does the report hang together?
Weak 1
2 3 4
5 Strong
