Chicago Tribune Business Analysis

1330 Words3 Pages

Critical Issues

· What business the newspaper should be in?

· How should the newspaper position itself in the new media industry?

· Should it continue provide news to readership or should it be e-commerce business with news being just one of its many products?

· How to build a comprehensive one-stop shopping without substantial deviation from its mission of providing news content to the masses.

· How to deal with increased competition from companies such as Yahoo, AOL, and Microsoft?

· How to best serve its Chicago based readership in a complex environment where competitors were emerging from nontraditional sectors of the community?

· How to take advantage of the alliances Tribune formed with other technology companies in order to differentiate itself from its competitors?

· How to develop new and innovative products for the online environment quicker and achieve economies of scale

5 Force Analysis

Buyers (moderate)

· Many website and e-commerce buyers

· Buyers do not have substantial bargaining leverage

· Individual buyer volume is minimal as the buyers are the individual website users

· Buyer information is widely available

· Buyers have moderate brand identity to news sites and e-commerce sites

· Buyers are extremely price sensitive

· There is no threat of backward intergration

· Moderate differentiation of products (news delivery methods and practices vary by competitors)

· There are many substitures available (Yahoo, Microsoft, AOL, NY-Times, etc…)

Suppliers (moderate)

· There is moderate bargaining leverage as advertisers have many options for advertising online

· Volume (amount of hits/users on the website) is extremely important to advertisers

· There is moderate threat of backward integration by advertisers (i.e. real estate companies developing their own websites for advertising purposes)

· There is strong presence for susbsitutes, marketers have many ways of advertising on the web

Rivals (strong)

· The internet is extremely saturated and there are many companies providing similar services

· Customers are not bound to specific websites and are able to switch at no cost

· Moderate levels of product differentiation (many websites offer similar news content and shopping opportunities through different delivery methods)

· Very high fixed costs with economy of scale resulting in high entry costs

· Exit barriers are moderate (computer equipment could be adapted for different use)

· Industry growth is moderate

· Switching costs are virtually non-existant

· Brand identity is low

· Diversity of Rivals is moderate (each website tries to differentiate itself from the rest)

New Enrants (moderate)

· Virtually any media company can enter/exist the market

· Moderately easy access to inputs (news is public domain)

· Expected retaliation from existing members is moderate, depending on the size of the entrant

· Lack of patents, but some proprietary knowledge exists

· Equipment is specialized, but can be converted for other use

Substitues (strong)

· Large number of substitute products

· Product demand is highly affected by the price (most people will not pay for news content)

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