Question

In the new environment, which two of Porter's five forces are critical to New York Times?

Analyze them, and suggest what New York Times must do to manage those forces.

Answer 1

Porter’s Five Forces

It is an analysis tool that uses five industry forces to determine the intensity of competition in an industry and its profitability level. The five forces are

1. Bargaining power of supplier
2. Bargaining Power of Customer
3. Threat of New entrants
4. Threat of substitute products
5. Competition in the industry

About New York Times

The New York Times is an American newspaper based in New York City with worldwide influence and readership. It was founded in 1851 and this paper ranked 18^th in the world by circulation.

So two forces which are critical to New York Times are

1. Threat of Substitute Products
2. Competition in the Industry

Let’s discuss them.

Threat of Substitute Products

Well, as I have mentioned that New York Times was established in 1851, but today w living in 21^st century and there are huge changes in generation, habits, life styles. Today newspaper is not only the medium to know about news or acquire knowledge. There are many alternatives to get the news or know what is happening in the world.

What makes it possible? “Technology”.

Today there are blogs to read and gain knowledge with the help of technology. Today you have news apps to notify you what is happening. Even just say whatever you want to know to google assistant and you can listen to the news instantly. This is possible because of technology. No one has time to read newspaper today.

Today videos are preferred by most of the people. The reading habits of people have decreased. People are loving video contentment’s. YouTube is taking the industry to a next level where you can get the news within a second you want.

So these substitutes of newspaper are a great threat to New York Times.

Competition in the Industry

This is the other thing which New York Times must take into consider. Some of the big names of its rivals are CNN, Bloomberg, TimeInc, The Economist, Financial Times.

Though there are no threat of new entrants, the existing competition is increasing. Each of the rivals are closely monitoring each other’s performance and newly innovated products. So New York Times is facing a tough competition from its rivals in terms of innovative ideas, research ideas and digital ideas. Additionally pricing pressures are there which can’t be ignored. So growing competition favored by technological advancement is a big concern for New York Times.

STEPS TO BE TAKEN BY NEW YORK TIMES

1. It should update itself with the latest technology.
2. It should increase its presence in digital space and invest in digital media and marketing.
3. It should try to create innovative products or segments so that it can attract new customers.
4. It should closely observe the market shares of its rivals and keep a close eye in their strategic moves.
5. It should invest in research and data analytics to know about its customer’s choices and preferences. It will help to recognize “what is your audience want from you?”.
6. “Quality is the King”. It should focus on quality news so that it can raise the standard.
7. It can focus on mergers and acquisition of small media agencies to strengthen its position. In today’s world company are following “combine and rule” concept.