Introduction
Over the years as technology has improved so has the various means and methods of communication. For example, the earliest form of communication utilized by what can be described as a “modern” society were letters that often took weeks or even months to reach their destination. This was followed by the development of the telegraph, which vastly improved the time in which messages were sent yet came at an equally vast cost.
It was only through the development of the modern-day telephone and telephone networks that communication between individuals located hundreds if not thousands of miles away became more convenient and more popular. At the present, the internet has become one of the dominant means of communicating ideas wherein access to the latest styles, trends and events are quite literally at a person’s fingertips.
There are millions of websites and blogs, billions of articles and trillions of data snippets all devoted to providing information to an average internet user. While such a development has greatly enhanced the means by which people obtain information this has as a result adversely impacted the hardcopy information industry.
With more and more content being freely available online most individuals choose the convenience of the internet over the costs and inconvenience involved in having to buy a physical copy of information they can easily get through online digitized content. The reduction in the amount of subscribers to the Chronicle Gazette is a manifestation of this trend at work and is indicative of the fact that hardcopy versions of written content are increasingly being overlooked in favor of their much cheaper and far more accessible digital versions.
For example, The advantage of eBooks over actual hardcopy books is the fact that supplies will never run out, they can be gained almost instantaneously, they are cheaper as compared to regular books and with the iPad’s large screen reading them has never been easier. It must be noted that the use of eBooks has as of late been gaining rapid popularity with various book publishers opting to place a large percentage of their current lineup of books in eBook formats.
This has resulted in a sudden surge in eBook readers being available in the market today, such as Amazon.com’s Kindle eBook reader. While it may be true that the iPad and other eBook readers also have a far higher price tag as compared to buying a normal book at a department store, the fact is that such readers can hold hundreds if not thousands of eBooks within their hard drives with the user eventually making up the difference in the amount paid for such books through their far cheaper digital versions.
Variations of this particular application of technology can be seen through the use of the New York Times of digitized version of its newspaper, which can be subscribed to by literally anybody can be accessed from anywhere around the world that has a working internet connection.
When combining the trend in the digitization of books, magazines and newspapers as well as the increasingly prevalent use of the internet as a primary source of information and communication, it comes as no surprise that the subscriptions of the Chronicle Gazette are going down.
Such a situation is not isolated to the case of the Chronicle Gazette alone but is actually endemic within the newspaper publishing industry as a whole with many local newspapers closing down due to lack of subscribers. Based on what has been presented in this so it can be seen that with advances in technology comes the potential for advances in communication as well.
Unfortunately such advances could adversely impact industries that have entrenched themselves so much into a particular way of operations that they are unable to deal with these subsequent changes in their business environment and wind up closing down.
As such, this paper will examine the various processes, operational strategies and possible methods of restructuring that will be necessary in order to resolve the current problems of the Chronicle Gazette. It is expected that by the end of this report and effective strategy plan could be developed that would result in the reinvigoration of the company’s aging business model.
Recommended Operational Strategy
Developing New Business – Innovation and Application
Thamhain (2005) indicates that research and development into new ways of producing and utilizing technology is one of the practices most often seen in technology-intensive enterprises (Thamhain, 2005). This is due to the fact that technology has as of late been under a constantly accelerating level development and as a result has enabled new players to enter into markets whereas in the past distinct barriers to proper entry would have been present (Thamhain, 2005).
As such failure to sufficiently innovate along with new technological trends and products can be thought of as a failure on the part of the managerial practices at a company since being able to anticipate trends and use them to either reach greater market penetration or keep the company relevant to consumers is a necessity in today’s technology-intensive market economy.
One way of seeing this particular concept in action is to examine the case of Netflix and Blockbuster in order to see an example of the effect of proper/ improper managerial practices in dealing with new trends and how it impacts the consumer market share of a company. From the early to late 1990s Blockbuster was a dominant force in the video rental industry with 3,645 stores across the U.S. and a market share of 90% of the industry it was in.
Unfortunately, while the Blockbuster business model was successful for several years the fact remains that aside from adding video game rentals to its product lineup the company never truly innovated its business model especially when taking into consideration the growing move towards widespread internet usage within domestic households within the U.S. which were the primary consumer segment of Blockbuster.
By the mid 2000s a new company, Netflix, entered into video rental scene wherein through the use of an online website for video rentals and a mailing system where consumers could have DVDs delivered to their doorstep and deposit the envelopes that came with the DVDs in order to return the rented videos back to the company resulted in a widespread shift from Blockbuster to Netflix patronage especially when taking into consideration the cheaper prices Netflix offered due to lower operating costs.
The Netflix business model was faster, more efficient, utilized fewer resources and was more convenient for consumers. In other words the management practices implemented by Netflix is in accordance with what Thamhain (2005) states as technology-intensive enterprises utilizing performance initiatives that place an emphasis on doing things faster, better and with fewer resources.
Looking at the case of Blockbuster, it can be seen that not only did they not even attempt to change their business model, but they never even thought to take into account the entry of new players into the market that may affect their dominant position. As stated earlier due to the rapid rate of technological development the entry of new companies into a variety of markets is easier than ever before.
By not taking such factors into consideration Blockbuster lost its dominant position over a period of six years as evidenced by its plummeting stock value, lower consumer patronage and the fact that it had to close thousands of stores due to operating costs and the fact that few consumers were even going to them.
It is based on this that it can be seen that the development of new business approaches based on current trends in technology as well as innovating current business practices to take into account new consumer trends that have developed as a result of technological innovation as well is an important practice that technology-intensive enterprises should do in order to continue to stay relevant otherwise they may fall into the same predicament as Blockbuster.
It is based on this that the Chronicle Gazette needs to be able to sufficiently innovate its business model in order to keep pace with the rapidly changing landscape that a technology-oriented enterprise finds itself in. It is in this regard that the company needs to perform the following actions:
- Reevaluate its current business model.
- Recreate its current product to match the demands of modern-day consumers.
- Focus on new technology-oriented trends in publishing.
- Develop a means of distribution that utilizes new innovative technological products.
- Create information systems in order to keep pace with the rapid development of news and information that is present on the internet today.
Reevaluating the Current Business Model
When examining the case of the Chronicle Gazette based on the information that has been presented so far it can be seen that its current business model does not keep pace with changes in its consumer environment. As of late, with the current proliferation of online internet usage and the current predilection of users in preferring to consume digitized content instead of printed material, this shows that the current business model of the Chronicle Gazette will not be able to survive in the next few years.
Taking into consideration the fact that consumers prefer digital content, the Chronicle Gazette can thus shift its focus from exclusively providing printed newspapers to providing copies digitized copies of its newspapers to a global audience through subscription-based services that can be implemented through the Apple App Store or through Amazon.com
Shifting to New Consumer Markets
One of the main issues that the Chronicle Gazette has sufficiently failed to address is to expand into new consumer markets. With the advent of the internet and the popularity of digitized content this has enabled publishing companies to reach consumers as far away as Europe and Asia without having to spend significant amounts of money in either arranging for overnight shipping of newspapers or hiring a locally based firm to print and distribute the needed materials.
This was seen in the case of the New York Times, which publishes an online digitized version of its newspaper to a global audience via a monthly subscription fee (Flavián & Gurrea, 2009). This has enabled the newspaper to survive and thrive in a period of decreased circulation and as such is a prime example of what the Chronicle Gazette can do by shifting from its current consumer markets to new consumer markets via the power of digitized content (Flavián & Gurrea, 2009).
Digital Distribution Systems
The best way in order to go down this new path is utilize new methods of online digital distribution. Sites such as Amazon.com and the Apple App store readily allow publishers to distribute their content through their systems, which allows access to the millions of online subscribers within their database (Steinle, 2012).
Since digitized content can be endlessly replicated this allows the Chronicle Gazette to reduce the costs inherent in newspaper distribution while at the same time give it greater access to a potentially huge market for its product.
Another alternative would be for the company to develop its own digital means of subscription distribution thus enabling it to be far more independent in terms of its ability to distribute the type of content the company wants to publish without having to follow the strict guidelines of distributors such as Amazon.com or Apple Inc.
Why is it so essential to develop information systems?
Information systems can be described as the interface between people, organizations and technology enabling the business to accomplish a specific task or action. One example of an information system is the various applications and websites utilized by Amazon in selling products, accepting client payments through credit card processing applications, contacting their warehouses and shipping bought products to the correct addresses indicated by their consumers (Steinle, 2012).
While this is only one example of the plethora of information systems out there what must be understood is that information systems act as methods of integration for a company helping to streamline specific processes so that they can be controlled, influenced and improved when necessary. Developing proper information systems is an essential aspect for a company for without it a company will be unable to properly deal with the buying, selling and the utilization of resources across various locations in the country.
Due to the varied and often complicated nature of company operations it becomes a necessity to streamline and integrate product delivery processes, methods of operation, customer service and various other operational capacities. A company cannot just simply develop and market a product without taking into consideration how best to allocate specific resources in determining where a product needs to go, which branch needs it most, how will product returns be processed and how H.R. services will deal with salaries for the myriad employees within a company.
A company requires an efficient and up-to-date information system in order to integrate the factors mentioned into an efficient and effective operational strategy so as to better serve its clients and reduce the inherent costs of operation. This is especially true in the case of the Chronicle Gazette wherein due to the lower rates of subscription the company has had to operate on fewer funds, which necessitates the need for more efficient processes to be integrated into the company’s operational procedures.
Should the Chronicle Gazette begin to focus on online methods of digital distribution the greater the complications that will arise within it I.T. infrastructure as the company gets bigger. What must be understood is that the larger a company gets the more hectic and haphazard its operations tend to become, especially in instances where its operations are located in different countries (in the case of the Chronicle Gazette this comes in the form of various reporter and news aggregate services that supply the company with information).
Organizations need to understand how to properly allocate resources to specific international locations, how suppliers can be contacted, what are the limits of production on a daily basis and how will each branch location contact each other. In other words, information systems can be classified as solutions to identified problems or necessary methods of integration.
What must be understood is that while managers and CEOs are great at coming up with specific solutions to problems they are lost when it comes to implementing these particular solutions when they require computer programming as one of the factors behind the implementation.
Information systems and information system specialists bridge this gap by being able to integrate the ideas of managers and CEOs into viable technological applications that can be implemented on a company-wide basis. For example, if a company is currently having problems with its archaic method of form-based ordering in order to get products from the warehouse to consumers a manager or CEO would think to implement a faster and better means of getting orders to warehouses without having to rely on someone physically going there and handing them the orders.
They would, of course, think to apply a computer-based system for this particular solution and this is where information systems come in. An information system in this particular situation becomes an applied solution where it is developed in order to help a company resolve a particular problem.
On the other hand if the company was to expand and have a more diverse array of products and factories further development of the initial information systems becomes necessary in order to adapt to the growing needs of the company. It is based on this that it can be seen that information systems act as a necessary method of process integration, which enables a company to do its job better and as such it is essential to have it within a company.
Use of Social Media Platforms
The sheer proliferation of social media platforms such as blogs, wikis and online forums has created an unprecedented opportunity for companies to take advantage of this new social trend in order to promote particular products and services via online social platforms. Nearly 22% of all online activity within the U.S. alone is spent on social networking websites and as such is indicative of the consumer market share that social media platforms could potentially provide to the company should it utilize such a marketing tool.
Furthermore it has been proven using social media programs such as viral marketing initiatives that a certain degree of “hype” can be generated for a particular product or service yet only cost a fraction of a standard advertising campaign.
Thus from a cost-benefit standpoint the utilization of social media platforms as marketing tools is not only advantageous for the company in terms of brand promotion and gaining a certain degree of market penetration into potentially untapped consumer segments but it can do so at a relatively low cost and as such presents numerous potential avenues of approach by which the company can generate consumer awareness of its products.
One way of utilizing social media in advertising the company’s products and services is to create a Facebook fan page for the company in order to help better connect itself with its current customer base. What must be understood is that by creating a fan page this allows subscribed Facebook fans to receive updates from the company in the form of product launch dates, overall product availability, performance and other factors that can contribute to its sale.
In fact a fan page creates a “human” face for the company in that by posting daily news regarding the particular industry the company is in this helps consumers to better understand the company and thus create a greater degree of product awareness, which translates into a higher likelihood of product patronage.
It is also interesting to note that through the fan page the company can also better facilitate particular promotions such as discounts, special contests and other such methods of promotional marketing that are meant to entice greater public interest over a particular product.
Various companies ranging from the alcoholic beverage maker Jack Daniels to the computer manufacturer Asus have Facebook fan pages and this has enabled them to create a larger consumer fan base since instead of the company merely being a nameless entity that consumers buy products from it is subsequently transformed into an entity with particular views, positions on current events and even a sense of humor when it comes to posting its daily wall posts.
It is based on the various perspectives that has been elaborated on that it is highly recommend that the company venture into at least some form of social media marketing in order to better connect itself with its customers.
There is little risk in utilizing this particular marketing tool and the potential rewards are massive in terms of greater brand awareness, better consumer relations and the creation of a particular image for the company that goes beyond merely being a business entity but rather is one connected to an open attitude regarding current events, the needs of consumers and being a company that is modernizing instead of being stuck in the dark ages of consumer marketing.
Marketing Strategies
In some product markets certain types of consumer goods and services require “an extra push” so to speak when trying to conduct normal business operations. In such instances, as explained by Professor John Zang from the Wharton School of Business, “if customers aren’t buying, more often than not it is an indication that a company is targeting the wrong people”.
Taking this into consideration it can be assumed that in cases where a hard to sell product is involved it is not that the company is experiencing a situation where the consumer does not want to be a customer, but rather the company is merely targeting the wrong consumer market.
Targeting the Correct Market Segment
What must be understood is that the ultimate goal of marketing is to be able target products to the consumers who want to buy them. As such, in order to create sales for certain products, what is needed is to examine current market and customers and determine why a product or service is not selling and revise strategies accordingly in order to target the correct market segment.
Zang explains that companies in such situations can approach their relationships with consumers through the use of “a systematic, rigorous process of segmentation, targeting and positioning” which should result in the company being able to determine which consumer segment to approach and how to properly position itself to create sales and maximize profit.
In the case of the Chronicle Gazette, this comes in the form of targeting consumer who wishes for a more “offbeat” version of the news without the strictness of the New York Times and has a considerably more laid back method of presenting the news.
Not only that, the Chronicle Gazette must attempt to target consumer markets that have not been already captured by the New York Times. This can be done by creating various versions of the newspaper with special interest pieces that appeal to only a select segment of individuals (Sohn, 2011).
Changing Selling Strategies
Another aspect to take into consideration is the fact that at times certain products become a “tough sell” as a direct result of consumer objections to the product itself. One case where this is evident is changing consumer attitudes in the U.S. towards the use of gas-guzzling SUVs. From 1995 to the early 21st century SUVs were considered almost the vehicle of choice for a large percentage of families and consumers within the U.S. however, due to increasing gas prices the demand for SUVs has severely plummeted resulting in a significant deterioration the market base for current SUV dealers.
Professor Stephen Hoch of the Wharton school of business explains that in such cases, what is needed is to “frame an offer to get rid of the objection”. This means to create a buying situation where the consumer observes the perks of buying a particular product and neglects to take into account the possible negative implications of the sale.
One strategy advised by Hoch is the use of trade-in discounts when selling particular products such as SUVs, not only does this encourage the sale of SUVs already in stock but it gives the company access to a plethora of models which would otherwise not be available to them giving them the ability to reach a wider consumer base that looks for particular types of SUV models.
Thus, in this particular case the change in sales strategies for the Chronicle Gazette comes in a gradual shift away from its main business of selling physical copies of its newspapers to primarily selling digital editions. This can be done by giving current subscribers special introductory discounts and the chance to win prizes if they choose to shift over to the digital version of the newspaper. Potential new customers of the newspaper will also be given various discounts in line with the length of subscription that they opt to go for.
Proper Pricing
The last approach that should be considered by companies when approaching consumer relationships is to take into account business cycles and market slumps and adjust prices accordingly. As explained by Professor Leonard Lodish of the Wharton school of Business “pricing is a critical element of successful marketing, in good times and in bad and many companies do not focus enough on getting their pricing right”.
It is based on this and the cyclical cycle of business that companies should consider proper pricing strategies when selling particular hard to move products. This takes the form of taking into account the physical value of the product being sold as well as various non-tangible elements that consumers take into consideration before they will be willing to pay for a product. For example, the state of the housing market in the U.S. is at an all-time low however, there are still individuals who are in need of homes.
In such cases, developers need to take into account the physical cost of the home itself and factor in the current housing slump before creating a price range for a particular apartment or home. It is based on this that it can be said that the greater the amount of non-tangible assets that are taken into consideration by the customer before making a purchase the greater the need for companies to fix prices in accordance with what is necessary to sell the product itself.
What must be understood in this particular case is that digitized versions of newspapers can be sold at a far lower price as compared to their physical counterparts. The reason behind this is quite simple, a digital file can be endlessly replicated at no cost while a physical copy needs to take into consideration the price of the paper, ink and labor.
As such, before the Chronicle Gazette releases the digital versions of its paper, the company must first evaluate an effective pricing scheme that takes into consideration the current prices of its competitors as well as what price can be considered fair given the far lower production costs associated with digital content.
Understanding the Wants and Needs of Modern Day Internet Consumers
In his book “The Shallows”, Nicholas Carr presents readers with the notion that the traditional method of reading books, essays and various other written works are superior to what is offered today on the internet. For Carr, the internet is a medium based on the concept of interruption where multitasking and rapid-fire reading is the norm rather than curious oddities. Reading short articles, responding to emails and chatting at the same time has become so ubiquitous with internet usage that most people barely give it a second thought.
On the other hand, as Carr explains, this has resulted in people losing the ability to enter into a slow, contemplative method of thinking normally associated with reading novels in print. A crowding out effect can be seen where people find it harder to concentrate on lengthy articles, books or essays and a growing preference has developed for short rapid-fire articles which can be browsed within a few minutes.
It must be noted that with the development of the internet, people have in effect become able to communicate their ideas to an audience through a massive scale. Blogs, internet article sites and various other online means of posting ideas have become so ubiquitous with modern-day society that it is hard to imagine our current culture without the various articles we read on a daily basis which are a form of communication between a writer and reader in which the ideas they have regarding sports, politics and society, in general, are relayed to us on a daily basis.
While the internet on any given day produces hundreds of thousands of pages of content, easily rivaling and surpassing the traditional publishing world in the amount of material produced however, most of what is actually created is of poor literary quality, incomparable to what is written by professional writers and scholars.
Such a case is similar to the observation made by novelist Harvey Swales in 1951 during the rise in popularity of the paperback novel in which he stated that it could be the start of either an increase in the value of produced material or the inundation of trashy literature into an already polluted ocean of books and novels.
As such it can be said that the traditional method of communicating ideas through journals, books and various other forms of printed media have steadily been replaced in popularity through an apparent flood of literature that does not even reach the same literary heights. For Carr the perceived value of the internet is one of human deterioration where people lose the ability for solitary single-minded concentration in favor of rapid-fire multitasking due to the proliferation of articles that can be easily consumed and read.
What can be derived from this particular perspective is that the lengthy articles often seen in newspapers today are actually no longer compatible with what readers want. “Bite sized” easily “consumed” content is what most people are after and it is based on this that the Chronicle Gazette should adjust the way in which it presents information through it digitized newspapers.
By creating shorter articles yet broadening the number of articles inherent within the newspaper, this will enable the company to not only provide more information in terms of having more topics than an average newspaper, but it will enable it to better conform to the way in which people have begun to prefer “consume” information.
Techniques to Manage Change within an Organization
While this report has so far detailed a variety of different methods and procedures that the Chronicle Gazette can utilize in order to improve its business model, this paper has yet to address what methods will be necessary in order to help the employees and the business culture of the company adapt to the proposed changes.
What must be understood is that aside from implementing changes to a company’s business model in order to improve performance, it is also important to ensure that there are proper methods in place to make sure that there is a smooth transition from doing one form of business to another in order to minimize the possible problems that may occur.
There are 3 techniques that I would like to elaborate on that I believe are important in managing change and are consistent with the principles I chose
Changing Employee Mindsets
One of the first techniques necessary in managing change is to change the way in which employees think about the way in which they work. It is often the case that employees develop a certain mindset regarding work, which makes them far less apt to change when the need arises.
It is based on this that what is needed is slowly change internal company policies and workplace culture so as to make it more amenable to the desired change rather than implement it all at once. This conforms with the first principle of change in which a person is adjusted via a change in the system that they work.
Implementing a workplace culture of open communication
Earlier it was stated that people tend to fear change, while this is true the fact remains that there are actually method of mitigating this. One of them is implementing a workplace culture of open communication, by doing so not only can employee fears be addressed and taking into account when implementing change within the organization but it can be used as way in which to dampen the unforeseen and adverse effects the might happen should change be implemented.
Establish Goals/Purpose driven work
In their study examining employee performance, it was discovered by Bishop (2011) that it is often the case that employees work better and adapt to change faster if there is a given goal or rather their work is driven by a specific purpose. Taking the third principle chosen into consideration it can be assumed that by creating a defined vision by which employees can work towards not only would this result in a smooth transition during change but can actually result in improved employee performance as well.
Problems with Entering into New markets
Brand Recognition
One of the initial problems the company will experience when attempting to enter into foreign markets is brand recognition. Branding is an important aspect of selling products since it is the manner in which consumers differentiate our product from the rest in terms of what the brand represents such as quality, product longevity and popularity. The fact remains that it is likely that there are already well-established brands within the targeted markets with similar product lines as that of the Chronicle Gazette.
This creates a distinct problem when entering into a new market since it is likely that consumers would choose a brand they know and are used to rather than a relatively unknown brand that they have never seen before. Another factor that the company should take into consideration is that our own competitors here in the U.S. may, in fact, be well entrenched within the markets we wish to enter into abroad resulting in the possibility of a price war or a certain degree of difficulty entering into the desired retail market.
One way of overcoming this was actually shown by Wal-Mart when it entered into the Chinese market, what the company did was bring in its own business model into China yet adjusted its product lineup to include local favorites that would be bought by consumers. What can be done in the case of the company is that its own product lineup can be changed somewhat to match the local culture of our desired markets.
This can come in the form of products that conform to an aspect of cultural tradition, local necessity, or basically an aspect related to local popular culture. By doing so not only will the company be able to gain a new market for its products and services, but it will be able to expand its own product line.
Reference List
Flavián, C., & Gurrea, R. (2009). Digital versus traditional newspapers. International Journal Of Market Research, 51(5), 635-657. Retrieved from www.EBSCOhost.com
Steinle, P. (2012). Embracing the Future. American Journalism Review, 34(1), 50. Retrieved from www.EBSCOhost.com
Sohn, T. (2011). DIGITAL PRINTING 101. Editor & Publisher, 144(8), 38. Retrieved from www.EBSCOhost.com