Deck 12: Section 2: The Hard Lesson of Business: Change or Vanish

Question 1

What stage of the lifecycle is the newspaper industry in? Please explain and justify.

Answer 1

The newspaper industry is in the decline stage as sales have begun to fall and they are now losing a lot of money. The following typically causes the decline stage:
1) Changes in demographics
Most people under 60 are more likely to look for news through electronic devices. The number of people who still like to read the hard copy of a newspaper is dropping constantly.
2) Shifting consumer tastes and needs
A greater focus on environment is causing a shift away from hard copy print. By going "paperless" we are saving trees and doing our part to help out the environment.
3) Technological substitution
This is the main reason for the decline of the newspaper industry. As a result of technology the Internet is gradually replacing the newspapers. With Google and Yahoo people are able to find the news they are looking for free of charge. Sites like Kijiji and Craigslist are replacing classified ads in newspapers. We no longer look for coupons in newspapers because there are so many deals being offered through companies like Groupon. Not only are these sites taking the place of newspapers but also because of technology the news is far more accessible. We get Groupons in our email. We can access email on our smart phones as well as news and weather reports.

Question 2

What strategies are available to the newspaper industry for dealing with declining sales, and what do you recommend?

Answer 2

1) Maintain a leadership stance
The newspaper industry could try to push through this decline with the hopes that eventually people will come back to the hard copy print. They could also hope for other newspapers to exit and therefore have less competition.
2) Pursue a niche strategy
Newspapers could focus on one particular niche or market and gear the entire paper to that market. By zeroing in on one area they may be able to remain afloat.
3) Harvest Profits
The newspaper industry could attempt to squeeze as much profit from its industry by drastically reducing its cost. GIVE US AN EXAMPLES - IE DOWNSIZE, RFEDUCE PRINT RUNS, FIRE SOME STAFF…..
4) Exit Early
BUSINESSES IN THE newspaper industry could sell off THEIR assets and exit the industry recouping as much money as possible.
5) Consolidate
Newspaper could consolidate and have one newspaper for a much larger geographic area. By consolidating the industry would stand a better chance of surviving this decline.

Question 3

How is the newspaper a victim of the paradigm shift?

Answer 3

The term paradigm refers to our set of beliefs or mental framework for understanding how the world operates. You might also think of a paradigm as our theories, our assumptions, our beliefs or customs. So, how does this apply to our example of the newspaper industry? You might consider the newspaper industry as being prisoners of their old paradigm-they could not conceive of the industry as ever changing, so it was the old, traditional format of news that would always dominate the market. However, the industry did, in fact, experience a paradigm shift brought about by the internet, which did adapt its thinking to recognize new consumer tastes as well as shaping tastes. The paradigm governing the rules of the news industry changed, but for too many years the newspaper publishers thought they could play the game by the old rules, based on the old paradigm. Consequently, they were victims of failing to adapt to changing conditions, failing to shift away from their old paradigm.