case study the new york times group’s response to the challenges posed by technological...
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CASE STUDY CASE STUDY
The New York Times The New York Times Group’s response to the Group’s response to the
challenges posed by challenges posed by technological technological
transformation and transformation and economic crisiseconomic crisis
EXERCISE EXERCISE Analyze the core resources that a firm Analyze the core resources that a firm has at its disposal and its strategic has at its disposal and its strategic intentintent
Basic bibliography:Basic bibliography:Hamel, G. and Prahalad, C. (1994) Hamel, G. and Prahalad, C. (1994) Competing for the Future.Competing for the Future.
Boston: Harvard Business School Press.Boston: Harvard Business School Press.
Mintzberg, H. (2000) Mintzberg, H. (2000) The Rise and Fall of Strategic Planning.The Rise and Fall of Strategic Planning. London: Prentice Hall.London: Prentice Hall.
Porter, M. (1985) Porter, M. (1985) Competitive Advantage: Creating and Sustaining Competitive Advantage: Creating and Sustaining Superior Performance. Superior Performance. New York: Free Press. New York: Free Press.
Thompson, A. and Strickland, A. (2001) Strategic Management. Thompson, A. and Strickland, A. (2001) Strategic Management. Concepts and Cases. New York: McGraw – Hill.Concepts and Cases. New York: McGraw – Hill.
After Months of Tension, Globe Votes on Cuts
John Blanding/The Boston Globe
Michelle Bezanson and other employees rallied April 24 to try to save the paper.
The NYT GroupThe NYT Group
(1) (1) The New York Times Media GroupThe New York Times Media Group, which, which includes The New York Timesincludes The New York Times (“The (“The Times”), theTimes”), the International Herald Tribune International Herald Tribune (the “IHT”),(the “IHT”), NYTimes.com and related NYTimes.com and related businesses;businesses;
(2) T(2) The New England Media Grouphe New England Media Group, which , which includesincludes The Boston Globe (the “Globe”), The Boston Globe (the “Globe”), Boston.com, theBoston.com, the Worcester Telegram & Worcester Telegram & Gazette (the “T&G”), theGazette (the “T&G”), the T&G’s Web site, T&G’s Web site, Telegram.com and relatedTelegram.com and related businesses; andbusinesses; and
(3) T(3) The Regional Media Grouphe Regional Media Group, which , which includes 14includes 14 daily newspapers in daily newspapers in Alabama,Alabama, California, Florida,California, Florida, Louisiana, Louisiana, North Carolina and South Carolina,North Carolina and South Carolina, their their Web sites, other print publications andWeb sites, other print publications and related businesses.related businesses.
(4) (4) The About GroupThe About Group consists of the consists of the Web Web sites of About.comsites of About.com ConsumerSearch.com,ConsumerSearch.com, UCompareHealthCare.com and UCompareHealthCare.com and Caloriecount.comCaloriecount.com and related businesses.and related businesses.
(5) Other interests(5) Other interests ( (aa Canadian Canadian newsprint companynewsprint company, , a 17.75% a 17.75% interest in New Englandinterest in New England Sports Sports Ventures, LLC Ventures, LLC --“NESV”“NESV”--, which owns, which owns the Boston Red Sox, Fenway Park the Boston Red Sox, Fenway Park and other realand other real estate, approximately estate, approximately 80% of New England Sports80% of New England Sports Network Network --the regional cable sports network the regional cable sports network thatthat televises the Red Sox gamestelevises the Red Sox games- - etcetc))
EmploymentEmployment
The New York Times Media GroupThe New York Times Media Group:: 33..222222
New England Media GroupNew England Media Group:: 1 1..989989 Regional Media GroupRegional Media Group:: 1 1..828828 About GroupAbout Group:: 215 215 Corporate/Shared ServicesCorporate/Shared Services:: 411 411
Total:Total: 77..665665
Economic results of New York Times Group (in million dollars)
2005 2006 2007 2008 2009 2010
Revenues 3231 3290 3195 2940 2440 2393
Operating costs 2912 2996 2928 2783 2308 2137
Economic results before taxes 408 -552 185 -72 4 177
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2005 2006 2007 2008 2009 2010
Revenues Operating costs Results before taxes
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NYT Boston Globe
Average daily circulation
Change of the average daily Change of the average daily circulation betweencirculation between 2010-2005 2010-2005
ΝΥΤ:ΝΥΤ: - 20,2% - 20,2%
Boston Globe: -45,8%Boston Globe: -45,8%
Revenues (in million dollars)
2005 2006 2007 2008 2009 2010
Advertising revenues 2139 2154 2047 1771 1336 1300
Circulation 874 890 890 910 937 932
Other 218 249 258 260 168 162
Total revenues 3231 3290 3195 2940 2440 2393
News Media Group 3187 3210 3092 2925 2319 2257
About Group 44 80 103 115 121 136
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2005 2006 2007 2008 2009 2010
Advertising Circulation Other Total revenues
Advertising revenues of News Media Group (print and
electronic editions – in million dollars)
2005 2006 2007 2008 2009 2010
National 948 938 946 858 668 664
Retail 500 495 452 398 301 277
Classified 590 579 489 358 214 191
Other 59 65 64 50 38 39
Total 2097 2077 1950 1664 1221 1171
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2005 2006 2007 2008 2009 2010
National Retail Classified Other Total
Analysis of operating costs (in million dollars)
2005 2006 2007 2008 2009 2010
Raw materials 321 331 260 251 166 160
Wages & benefits 652 665 647 621 525 498
Selling, general & administrative costs 1379 1398 1397 1328 1153 1054
Depreciation 135 162 190 144 134 121
Other 424 439 434 439 330 303
Total operating costs 2912 2996 2928 2783 2308 2137
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2005 2006 2007 2008 2009 2010
Raw materials Wages & benefits Selling & adm. CostsDepreciation Other Total operating costs
CORPORATE STRATEGIESCORPORATE STRATEGIES
Our results in 2010 reflect our ability Our results in 2010 reflect our ability to manage the business during a to manage the business during a period of transformation for our period of transformation for our industry and amidst uneven industry and amidst uneven economic conditions. economic conditions. We anticipate We anticipate that the challenges we currently face that the challenges we currently face will continuewill continue, and we believe that the , and we believe that the following elements are key to our following elements are key to our efforts to address them.efforts to address them.
Extending the reach of our brandsExtending the reach of our brands
Because of our high-quality content, Because of our high-quality content, we believe we have very powerful we believe we have very powerful and trusted brands that attract and trusted brands that attract educated, affluent and influential educated, affluent and influential audiencesaudiences. We are addressing the . We are addressing the increasingly increasingly fragmented media fragmented media landscapelandscape by building on the by building on the strength of our brands, particularly strength of our brands, particularly The Times.The Times.
Strengthening our digital businessesStrengthening our digital businesses
Our goal is to Our goal is to grow our digital grow our digital businessesbusinesses by broadening our by broadening our audiences, deepening engagement audiences, deepening engagement and monetizing the usage of our Web and monetizing the usage of our Web sites. We are pursuing a sites. We are pursuing a multiplatform strategymultiplatform strategy across our across our Company with new digital products Company with new digital products and new platforms, such as mobile, and new platforms, such as mobile, social media networks and reader social media networks and reader application products.application products.
Restructuring our cost baseRestructuring our cost base
Over the past few years, we have Over the past few years, we have focused on realigning our cost base focused on realigning our cost base to ensure that we are to ensure that we are operating our operating our businesses as efficiently as possible, businesses as efficiently as possible, while maintaining the quality of our while maintaining the quality of our journalismjournalism and achieving our long- and achieving our long-term strategy.term strategy.
BASIC BIBLIOGRAPHYBASIC BIBLIOGRAPHY
New York Times Corporation: New York Times Corporation: Annual Annual ReportsReports, 2005-2010, 2005-2010