USA Today: A Case Analysis
Executive Summary/Introduction
Since it made its debut in 1982, as the first national general-interest daily newspaper in the United States of America, Allen H Neuharth’s brainchild, USA Today, achieved rapid success due to its innovative format (Ferrell & Hartline, 2013). US Today is the leading print newspaper, with more than 1.8 million daily papers in circulation. Similarly, US Today’s site is the most frequented internet site, both for news and information. Nevertheless, US Today and other newspapers have been experiencing falling revenues and increased costs lately, due to cultural and technical changes. For US Today to remain relevant, the newspaper should continue to deliver innovative content while continuously adapting its marketing strategies to the continuously shifting needs of the market.
Identification of the Problem
US Today and other newspapers have been experiencing falling revenues and increased costs lately, as a result of acute cultural and technical changes. Since 2005, both print and online advertising revenues have declined by about 51%. The hard-hit segment is in fact classified advertising, which has declined by over 71% in a period of only about six years (Ferrell & Hartline, 2013). The rapid decline in classifieds advertising has been attributed to the emergence of sites like Craigslist, which provide free hosting for ads. Advertising revenues had been declining long before the notorious 2008/2009 recession. However, the soft ad market that characterized the automotive, retail and employment sectors in the economic downturn further aggravated the decline in advertising revenues. Evidently, 2008 and 2009 went into history as the worst years in the newspaper industry; advertising revenues have continued to decline today, leveling up at 7.3% in 2011 (Ferrell & Hartline, 2013). The high cost of newsprint has also been a major cause of concern for newspapers; for instance, the typical cost for every ton of newsprint spent had gone up by nearly 13% in 2011. While numerous newspapers have since closed down due to increasing costs, others have reduced publication days, lay off employees, reduced salaries and adopted an online-online format. The rise in technology has also triggered a significant decline in newspaper circulation with people increasingly using the internet and other news sources to get instant news and information around the clock. This is part of the wider cultural trend that is contributing to the decline of the USA Today and all other newspapers.
Situation Analysis (SWOT)
From the US Today Case Study, it is evident that the Nation’s Newspaper not only has strengths and opportunities at its disposal, but is also a vast range of weaknesses and threats that impede its longer term profitability and survival in the highly complex and fast changing global newspaper industry. This section attempts a comprehensive analysis of both the micro and the macro environmental factors determining US Today’s present position using the SWOT analytical tool; this will cover the strengths, weaknesses, opportunities and threats facing the company.
Strengths
US Today enjoys a strong brand reputation, particularly due to its pioneering innovative format that established it as a leading print newspaper with over 1.8 million daily circulation; the newspaper has cut a niche for itself among the achievement-oriented market segment. Precisely young, well-educated Americans who are always on the move but still care about current events have found the paper most interesting because of its cutting-edge news that is not only enlightening and enjoyable to news leaders and attractive to advertisers, but also informative to national leaders. The newspaper’s unique design and formatting including extensive use of briefs, columns, secondary headlines, subheads and informational graphics, among others makes it ideal for time-pressed readers; the newspaper’s motto “An economy of words. A wealth of information” (Ferrell & Hartline, 2013), perfectly fits its design. The newspaper’s customer-centered approach to design and content has enabled it to foster positive relations with its vast range of readers. The newspaper communicates with all its readers at a personal level, quickly, clearly and directly both in an upbeat and in a positive way. US Today’s features such as use of colorful photos, graphs, and charts make it appealing to many readers, thereby giving the newspaper a strong market presence due to its wide circulation. US Today remains to be the most trusted and reliable newspaper of all times, given its long standing history of reputable news reporting. Furthermore, the newspaper’s online website remains one of the top internet sites for news and information. The newspaper has significantly diversified itself through partnerships that seek to expand its reach; for instance, in the 2008, the newspaper ventured beyond daily news into retail locations and television.
Weaknesses
Even though the US Today print Newspapers have the highest circulation, its digital platform has not been very successful. For instance, US Today’s 116,000 digital subscriptions have trailed both the Wall Street Journal’s 552,000 and the New York Time’s 807,000 digital subscriptions (Ferrell & Hartline, 2013). Similarly, US Today faces stiff competition in online information distribution via television and magazine sites, as well as through blogs and podcasts. The entry of numerous internet-based companies such as Yahoo! and Google into the advertising market has greatly narrowed the newspaper’s online advertising revenues. Hard economic times often has a direct impact on the travel industry, and this always reduces the sale of newspapers in hotels. Furthermore, the newspaper has suffered negative criticism from people who consider it to be promoting cheap journalism, despite its reinvention to include serious journalism. The newspaper’s television channel has not received higher ratings while critics have given it lower ratings for not meeting viewer’s news and information needs.
Opportunities
US Today has numerous opportunities it can leverage in its external environment, to yield more value for its consumers; the newspaper has opportunities in the form of partnerships with many online websites such as Amazon. Through these partnerships, US Today will be able to provide free or discounted kindle to paid subscribers. This will enable the agency to provide news and information to its subscribers at considerably reduced costs. US Today also has opportunities in the form of its good customer relationships that formed the foundation for its innovative customer-oriented design features and content. In that respect, the newspaper can utilize its customer relationships to deliver more personalized news and information in a clear, upbeat and positive manner to its customers. Furthermore, US Today’s most valuable resource is its innovation capacity. The newspaper can utilize constant innovation to provide more valuable news and information to its highly diversified segments of readers. Continuous research and design efforts can restructure the newspaper significantly, thereby making it much easier to read and simple in design for its varied readers. Other opportunities for US Today exist in terms of the fast growing newspaper reading population, particularly in the overseas newspaper markets; the newspaper can take advantage of the increasing newspaper market population to extend their global reach.
Threats
The US Today faces critical threats to its longer term profitability and survival, including tough competition from its longtime rivals such as the New York Times and the Wall Street Journal. The other major sources of news and information posing the greatest threat to US Today’s survival in the US newspaper market include cable Networks, national terrestrial and satellite radio providers, internet sites such as Yahoo! and Google as well as blogs such as the Huffington Post.
Organizational Objectives
US Today’s objective is to attain a 25 percent increase in online advertising revenues in 2015, through innovative solutions and site redesign, to offset the decline in its print newspaper advertising revenues. The Newspaper also targets to obtain a 30% increase in its print newspaper revenues by the end of the year, through expansion of its print newspaper market reach. The newspaper aims to achieve a 20% decrease in printing costs over a period of six months from June 2015, by venturing beyond daily news into other segments such as retail locations and television.
Analysis of Alternatives
US Today’s first alternative is to continue innovating to deliver news and information in more personalized, clear, upbeat and positive way. This will be advantageous because it will enable the newspaper to retain its present readership. Furthermore, product and service innovation will enable the newspaper to appeal to a new breed of readers while widening its market reach. Most importantly, this alternative will enable the newspaper to remain ahead of competition. Nevertheless, product and service innovation may not only take longer time to achieve, but it may also be extremely costly for the newspaper thereby defeating the initial sense of curbing the rise in printing costs. The newspaper may also consider exploiting its use of value-added strategies in the production of products and services for its diversified markets. The advantage of this approach is that it may promote a wider distribution of the newspaper’s content while ensuring continued product differentiation. Eventually, this alternative will give the company an edge amid intense competition. However, the disadvantage of this alternative is that it may not offer a solution to the problem of increasing printing costs and it may not be sufficient for meeting the increasingly diversified individual news and information needs. The other alternative is for the newspaper to adapt its marketing strategies to the continuously shifting needs of the market; this will enable the newspaper to remain relevant to the newspaper market. Most importantly, this alternative will enable the newspaper to respond to reader’s views while maintaining its quality brand reputation. Unfortunately, this alternative will be expensive to implement and it may also be time consuming in the longer run. Nevertheless, this alternative may be very effective in the long run, especially in view of the increasing segmentation of the readership population.
Recommendation
Insofar as adapting to the rapidly evolving media consumption patterns is concerned, US Today has to effectively address all its present challenges including the emergence of new technologies, changes in readership, as well as the ever rising printing costs. The most viable alternative for US Today is for it to adapt its marketing strategies to the continuously shifting needs of the market, to cater for its highly diversified readers. The increase in digital options provides immense opportunities for US Today and other newspapers to extend their circulation by appealing to unique market segments. The newspaper can exploit digital technologies to expand its reach to both new customers and mediums respectively.
Implementation Plan
The recommendation will be implemented in three simple steps, ranging from the short to the medium to the long-term periods:
- In the short term period (within one month), a market needs assessment will be conducted
- In the medium term period (within four months), the Sales Manager will determine and gain approval for a revised marketing strategy
- In the long term period (within seven months), the Sales Manager will integrate the new marketing strategy in distributing the newspaper’s products and services
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