WEEK 2 / ASSIGNMENT 1: THE NEW YORK TIMES
Over recent years, the New York Times focused primarily on their strategy to: transform and rebalance their business by product fiscal management, strengthen the focus on the core of the business, and to prioritize the building of their digital perspective in order to pursue new opportunities for growth. Although the NYT were able to successfully identify the steps needed in order to achieve improvement in their company, it is apparent that the NYT was unable to implement these strategies – that is, according to recent years. Ultimately, the NYT’s current business model is failing to adapt to the external environment in their industry. More specifically, due to the unpredictability of the consumer environment and economic conditions, the NYT have been experiencing annual decreases in their financial statements. From 2010 to 2012, the NYT experienced a decline in their operating cash flow ratio from 15.4%, to 14.5%, to 13.8%, respectively. Annual revenues experienced similar declines, highlighting that if the NYT were to continue to commit to their current business model the company will experience unstable business conditions, especially if more of their target consumers utilize the internet and other technologies in order to keep up with current news and events. Ultimately, the NYT’s current business model does not compliment their strategies for success in the future.
It is important to understand that the revenue stream from advertisements is declining, which resulted in the NYT’s inability to maximize their profits from advertising. Moreover, there is an evident relationship between NYT’s advertisements and subscription fees/ circulation since circulation has been increasing annually. In fact, in the year-end of 2012 circulation revenues surpassed advertising revenues due to the significant growth in digital subscriptions; approximately 668,000 consumers subscribed to the NYT’s digital products. Due to the challenging business environment and