Usa Today General Environmental Analysis free essay sample

General Environmental Analysis Macroenvironmental Factors The macroenvironmental factors that will affect USA Today are namely economic, social, political and technological. 1. Economic The economic environment for USA Today were relatively unstable due to the rising costs of newsprints in the mid 2000s. As printing cost is one of the major cost of newspaper, the rising cost in printing have definitely affect USA Today and its survival. This means that USA Today have to find solutions to solve the rising cost problem and its has taken several measures. It raised its single-copy price from 65 cents to 75 cents which results in a significant increase in revenue without any effect on its overall paid circulation. this shows that readers of USA Today have a high purchasing power and the demand for newspaper is inelastic, that is regardless of the economic performance, people will still read newspaper and there is very little impact on the newspaper industry on political policies. Another economic factor that will affect USA Today is the high level of competition. This is because there are a substantial number of big firms competing with USA Today. These big firms have resources and some are popular among USA Todays target market, therefore, it may force USA Today to be more aggressive in 2. Social Environmental issue 3. Political In the 1990s, the airline deregulation had led to a large decline for air tickets, inducing a swell of business travel. This benefited USA Today who had already unearthed the business travellers that others had stumbled upon. However, there is also negative impacts on USA Today. First, it had go into direct competition with the Wall Street Journal. Moreover, with number of business travellers increasing, the business travellers market may become more attractive resulting more firms which are previously not targeting on business travellers to come into the competition. 4. Technological Due to technology advancement in the 1990s, USA Today has implemented the necessary technology to allow advertisers to transmit copy electronically 24 hours per day as well as making production totally digital. This have aid USA Today to deliver more up to date news than its competitors making it more competitive. Today, due to the technology advancement of Internet and other means of media that provide information such as smart phones, newspaper circulations have been declining. Although USA Today have begin to partner with companies on the leading edge of wireless technology and made use of information-distribution technologies such as electronic paper (e-paper), it is not enough. This is because, other direct competitors like the Wall Street Journal and indirect competitors like smart phones are already doing it or it is easy to imitate. If there is no further technology advancement in newspaper, it may mark the end of the newspaper business. Technology is one of the most crucial factor for the survival of USA Today as people today can obtain information from various media. And with the changing demographic of new generation being more tech-savvy, it is inevitable that the traditional newspaper has become less appealing. The U. S. newspaper industry had not been growing. Industry faces a number of issues such as down soaring newsprint prices and declining advertising dollars, decline in number of printed news readers. Based on statistical records, there is an increase in growth of news consumers who source for news in other areas of distribution such as Television, Radio and Internet. These issues lead to closure of newspaper organizations, bankruptcy or cutbacks. USA Today introduces both the print version and online version of USA Today. USA Today’s has two direct competitors, namely New York Times and Wall street Journal. Competition is increasing as these direct competitors provide similar product and services to the similar range of audiences. Each organization provides timely and relevant newsprint and online news coverage and has been finding ways to differentiate its printouts and services in hope to capture more readerships. Aside from the competition of newsprint, competition also surfaces from USA Today’s indirect competitors. These competitors come from companies outside the industry. For instance, NBC news, ABC, CBS and also satellite radio providers such as XM and Sirius. Changes in macroenvironment affect the industry heavily. Economic issues Newsprint costs are getting higher. This causes the industry to fall into cost cutting situation or under heavy debts. Cost cutting may be in terms of human or material resource which may lead to unemployment and recession. Technology Advancements As technology advances, it offers more options for consumers to access news and new coverage. More and more readers switch from reading newspaper to reading news online therefore marked a decline in newspaper circulation as people uses internet to get timely news and information. Although this is a threat to newsprint, it has however brought in new opportunities for organizations in industry to maintain and increase amount of readership. It is an alternative source of communication channel and transaction. Development of new technology allows customization based on customer’s needs. Distributing of news via wired and wireless devices helps the newspapers to deliver news in a cost-efficient, customizable and useful ways. Socialcultural Trends Studies have shown that overall newspaper readership is declining. One major reason comes from the changing demographics of the readers. As supported by the Newspaper Association of America, newspaper readership is strongest among aged 65 and older, about 70 percent of the people in this age group read newspaper. However, only 50 to 60 percent of the baby boomers, aged 40 to 59 years old, read newspapers. Eventually in the oncoming 10 to 30 years, newspaper will lose readers. Hence newspaper producers have to target into new segments and make changes or addition to newspaper content to suit the interest of the new segments. Different segment of market have different demographic and lifestyle. For instance young consumers, young people spend less time with the newspaper, more tech savvy and spend more time using the computer. Young people are also more interested in sports, comics and entertainment news. Thus Industry players have to do a market research in order to ensure news content fits he interest of the targeted segment in order to attract them to reading newspaper. The governmental policy and copyright law could aid the insutry. For instance, block aggregators from posting links to their copy, and can require readers to register or subscribe to access their websites. Possible governentment policy include relaxing antitrust policy, tightening copyright law, providing general supp ort for the practice of journalism by increasing funding for the Corporation for Public Broadcasting (CPB) or similar public programs or helping newspapers reorganize as nonprofit organizations. ttp://www. readership. org/consumers/data/consumersmedianewspapers. pdf http://www. fas. org/sgp/crs/misc/R40700. pdf Market Analysis The Market In the early 1980s, the typical reader turned out to be a professional, about 40 years old, well educated with an income of about $60,000 a year. They are also a news or sport junkie. With this, it show that the readers are the baby boomer with relatively high income, therefore, price of newspaper may not be a major determinants to them at that time. The market today has an average age of 46 years old with an average income of $91,210. Most of them work in middle to upper management positions and are often purchasing decision makers for their offices and households, technological junkies, and sports fans. From the 1980s to today, the readers of USA Today have remain as a sports junkie, therefore, it shows that sports news section is important. By comparing the characteristic of reader in the 1980s and today suggest that the target market of USA Today has not change much but it is uncertain if the characteristic will remain similar in the near future. Increase in price of USA Today, sale did not drop - reader is loyal, price is not a major determinant. If USA Today have changed its publication to online, most of the of the readers will not be affected since most of them are technological junkies. It will also not cause any inconvenience for most of them as eighty-six percent of print and online readers combined own a computer, and most of those have Internet access. Is the market geographically concentrated- no, because got distribute regionally. The market segment can be easily identified, however the strategies that USA Today had used to increase its popularity among the younger generation is not good enough as it is easy for competitors to imitate.