A Pest Approach for the Newspaper Industry in the Developed Economies - Essay Example

? Seminar Word Count: 2,070 Executive Summary The work at hand is a business report with fundamental views as to why the newspaper industry in the developed economies faces challenges but not in India. PEST analysis, SWOT analysis and Force Field analysis were initiated to establish a remarkable point. The major findings reveal that though there are many potential reasons to consider why the newspaper industry slows down in the developed countries, it is the existence of the Internet linked to commercial purposes which promotes the driving force against the popularity of the traditional newspaper. This business report further illustrates the idea that studying the business environment can help in the actual planning and decision-making activity. This is evident in the case of SWOT analysis and Force Field analyses, both are important for actual decision-making technique. Furthermore, highlighting the case of ‘The Guardian’ and the actual scenario in the newspaper industry in the developed economies will help us understand more about the potential impact of the mentioned analyses. Table of Contents Executive Summary 2 Introduction 4 Findings 4 SWOT Analysis of ‘The Guardian’ 5 Description of Lewin’s Force Field Analysis 7 Force Field Analysis of the newspaper industry in the developed economies 7 Description of the Indian newspaper industry 7 Conclusion 8 References 9 Introduction The newspaper industry especially in the developed countries is going through a remarkable change. There are factors that can help explain this change. Although the period of change has taken its place in the developed economies, the story is quite different in India. To deal more of this, the following points are included in this business report. Description of a PEST analysis, its purpose and the business benefit. A PEST analysis for the newspaper industry in the developed economies. A SWOT analysis of the British newspaper “The Guardian”. Description of Lewin’s Force Field Analysis. A Force Field Analysis for the newspaper industry in the developed world concerning the use of the Internet. Description why the Indian newspaper industry is not facing the same challenges as those in the developed economies. Findings This section has six essential parts in order to address the points presented above. Description of PEST Analysis. PEST analysis is essentially part of every planning activity, as its sheer purpose is to consider Political, Economic, Socio-cultural and Technological changes in the business environment. This even leads to a high level of decision-making capability or reasonable decisions of the manager, as there will be exposure to probable changes prevailing in the business environment. These changes will therefore help the business world to find ways and means in order to create the remarkable opportunities linked to them. This leads the business world to consider PEST analysis as a management tool that is capable to give smart management and advanced warning of threats, pushing the yellow button to consider finding the right alternative courses of actions to take and outlining the best moves to do to change path if it is necessary. With this, the employment of PEST analysis will be able to guarantee at some certain level the ability of the business not to fall into serious mishaps, but rather a more meaningful view or approach of the new business environment. With the serious challenge linked to the prevailing changes that the newspaper industry in the developed countries is facing today, a PEST analysis is necessary to plan for the necessary courses of actions before things might be too late. PEST analysis for the newspaper industry in the developed countries. The online article, ‘Who killed the newspaper’ reveals some insightful information concerning the probable reasons why the newspaper industry in the developed countries is facing a significant challenge at the moment despite its success in the past years. a. Political. It is revealed that newspapers have the primary control of the political power that the businesses or even government may eventually possess and vice versa. As noted, Washington Post was able to bring down President Nixon and this led to the capability of the newspaper industry in the developed economies to hold governments and companies to account (The Economist, 2013). In addition, political parties draw in a large number of readers with respect to their political beliefs such as in the case of US Presidential election in 2008, leading to the success of newspaper industry in the past (The Economist, 2009). b. Economical. Financial crisis was one reason why the newspaper industry in the developed countries experienced a heavy financial lost, as with this they faced high copy prices, loss of advertising and drops in circulation. Considering that classified advertising is what greatly sustains newspaper industry from the start, the advent of the Internet for online promotions and ads reduced the industry’s income by a staggering 70% of their ad revenue (Editor and Publisher, 2009). However, the Internet may somehow replace what has been lost (The Economist, 2013). c. Socio-Cultural Environment. Online news articles move to an upward spiral on the Internet. This is evident from the emancipation of social networking sites, which allows a fast-paced circulation of online news. A low internet subscription cost and search engines have changed people’s views and their value of the print as they can surf the internet faster for the news and is more accessible and easier than getting the actual print. According to the Pew Research Center (The Economist 2009) different age groups specifically ages 18 to 24 have become interested in the news however virtually and a threat is that newspaper prints will not be made in the future, as the news will be on technology. d. Technological. Here is where the big change or turn of event for the newspaper industry in the developed economies started. Every household almost has access to the Internet where it has become easy to browse and read online news articles. In fact, newspapers such as the Times, The Financial Times and the Guardian have now created online versions and updates throughout the day on their websites and allows one to keep up to date with the news throughout the day instead of waiting for the next day’s print. Therefore, the technological revolution has changed reader’s habits of newspaper and their demands for the prints, which result to a drop in printing papers and in advertisement revenue around 23% in 2008 according to the Newspaper Association of America (The Economist 2009). Based on The Economist (8th December 2012) “Revenues of newspapers continued to fall, dropping to $34 billion last year in America – only about half of what they were in 2000”. SWOT analysis of the British newspaper ‘The Guardian’. STRENGTHS OPPORTUNITIES There are three editions of ‘The Guardian’, UK, US and Australia; these are highly developed countries with many online readers (The Guardian, 2013). There are many options to choose online via ‘The Guardian’ website starting from News down to Job related contents (The Guardian, 2013). The News section has various articles from A to Z and even in other field of knowledge like Science, Politics, World, Women, Society, Law and more; the options are simply diverse (The Guardian, 2013). Fresh and updated information. ‘The Guardian’ simply corresponds to the traditional newspaper, but there is a touch of innovation on its part by going online, which means more direct access to a wider audience. A remarkable credibility for ‘The Guardian’. Opportunity to acquire online ads and sponsorships from third parties, as potential sources of additional revenue. Opportunity to help the environment in its preservation due to less employment of the natural resources. The ability to reach the entire world via online, which means a much wider scope of coverage for ‘The Guardian’. Recognition from various parts of the world. WEAKNESSES THREATS Almost the same style with other same online publishers (The Guardian, 2013) Relatively poor placement of the ads of the sponsors (The Guardian, 2013) Too many information to read that may look a little mess up, but it is just a matter of excellent arrangement of everything like what Yahoo does. Website design requires more enhancements. Threat to ‘The Guardian’ is the existence of other online publishing companies with the same target audience, contents and style. Socio-political threats Other online publishers that may encourage sponsors to make them the first priority rather than online current affair publishers like ‘The Guardian’. Description of Lewin’s Force Field Analysis. Lewin’s Field Force Analysis is a decision-making technique and allows one to make a choice by evaluating the forces for and against a change and helps one to explain the logistics behind the decision. There are two functions, which are; one can choose whether they wish to go ahead with the transition, which can increase your chances with the success by strengthening the forces that encourage change or weakening those against it. A Force Field Analysis for the newspaper industry in the developed world concerning the use of the Internet. Here are some significant points to consider concerning what forces driving the newspaper industry down in the developed world concerning the use of the Internet. DRIVING FORCES RESTRAINING FORCES The use of the Internet. Many people starting to rely on the Internet in their daily activities. Sponsors are finding the opportunity to generate more revenue via online, because of the wider coverage, cost reduction and opportunity to drive customer satisfaction (Rust et al., 2005). Establishment of social networking media via Internet (Heidemann et al., 2012). Cheaper articles via online. More updated technologies to keep the people browse on the Internet anytime. People’s socio-cultural acceptance of the advantages they can get from some major online activities. A relatively lower price for newspapers and other related articles will restrain the newspaper industry to go down. Driving down the price or cost for advertising in the traditional newspapers will compete with the current online activity of the virtual newspapers. The conservative approach to consider that it is more efficient to read traditional newspapers compared to its online version. Dynamic promotion of the traditional newspapers will increase its potential to recover from a poor performance today against its online counterpart. Description why the Indian newspaper industry is not facing the same challenges as those in the developed economies. India is the largest consumer of Newspapers. According to the World Association of Newspapers more than 107 million daily newspapers are circulated in India in 2009. Print Media in India are accounted for 45% of total ads spend and this clarifies that media are read. Here are the reasons as to why India’s newspaper industry is not most likely to go the same challenges as that from the developed countries is experiencing today. (1) This is because the Internet and broadband use in India is below 2% compared to countries such as the US which has the usage of 90%. The low use of broadband means less digital competition to printed papers. (2) Another reason is that only 35% of Indian Internet users visit newspaper websites, which is around 67% in the US. (3) Additionally the advertisements post available employment and services acquiring more readers to get the newspaper, as there is a want for employment. In 2011 advertising expenditure for print media was ?1.74bn, it is predicated to continue to raise an annual rate of 10% between 2011-2014. (4) Another reason that India’s newspaper industry does not face the same challenges is that the price of the newspaper is low, which means a middle class household could buy up to 3 or 4 newspapers, but in America and the UK the price is a tenth more higher. Conclusion With series of analyses just being showcased in the work at hand, the following concluding remarks are highly relevant as to why the newspaper industry in the developed economies slows down but not in India. The ultimate culprits are the major changes happening on the online world. There are many opportunities that the Internet can provide, both for the target audience or customers and the business entities. Unfortunately, the Internet has become widely integrated with the business world in the developed economies compared in India. In the developed economies, many online newspapers have established their place on the Internet, providing a competitive edge over the traditional newspaper industry. In general, online activities can provide a substantial opportunity for the business entities as far as profitability is concerned. References Heidemann, J., Klier, M., & Probst, F. (2012) ‘Online social networks: A survey of a global phenomenon’. Computer Networks 56(18), 3866-3878. Rust, R. T., Kannan, P. K., & Ramachandran, A. D. (2005). ‘E-Service: The Revenue Expansion Path to E-Commerce Profitability’. Advances in Computers 64, 159-193. The Economist (2013) Who killed the newspaper? [online] available from [26 October 2013]. The Guardian (2013) Official Website [online] available from [26 October 2013]. Read More