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By: Emad Abdalla
Date: December 02, 2015
Analysis of the York Times Strategy

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Executive Summary
The New York Times “NYT” is a global media organisation based in United States and its
business involves newspapers, digital-content businesses, radio stations and other investments.
The organisation has been founded and continuously published since September 1851 and has a
2008 revenue of $ 2.9 billion and 9,346 full-time equivalent employees.
NYT’s key operations include The New York Times, Boston Globe, and The International
Herald Tribune, About.com as well as several non-print media businesses. In addition, NYT
operates several websites, sports network in New England (NYT Annual Report, 2008).
The NYT has a strategic focus on delivering high-quality journalism that attracts and engages
audience across multiple-platforms and that the organisation invests in creating high-quality
journalism to strengthen its global presence as a premier news source.
According to the NYT Annual Report (2013), the organisation’s properties have been awarded
several industry and peer accolades thanks to its high-quality content and trusted brands.
This paper demonstrates the analysis and evaluation of the New York Times strategy and it
incorporates the following:
 Analysis and discussing on the core competences and capabilities of NYT using the
SWOT analysis technique, Value-Based Model and VRIN analysis in order to identify
their effectiveness in supporting the NYT’s success.
 The report outlines and discusses the NYT’s strategic options from 2009 to 2013 and
evaluate the strategy implemented by the NYT.
 The paper involves evaluation and monitoring of the NYT’s strategy through application
of Porter’s Five Forces model and Balanced Scorecard to identify the efficiency and
effectiveness of the organisation’s strategy in achieving its desired goals and results.

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Table of Contents
1. The NYT’s Core Competences and Capabilities.................................................................... 4
1.1. SWOT Analysis................................................................................................... 4
1.2. Resource-Based Model........................................................................................ 6
1.3. VRIN Analysis .................................................................................................... 8
2. The Strategic Options available to NYT............................................................................... 11
2.1. Restructuring Cost-Base.................................................................................... 12
2.2. Strategic Investments ........................................................................................ 12
2.3. Charging-for-Content ........................................................................................ 12
2.4. Rebalancing NYT’s Business Portfolio ............................................................ 12
3. The New York Times’s Current Strategic Position .............................................................. 13
4. Evaluating and Monitoring of the NYT’s Strategy............................................................... 17
4.1. Porter’s Five Forces’ Model.............................................................................. 17
4.2. Balanced Scorecard ........................................................................................... 20
5. References............................................................................................................................. 23

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1. The NYT’s Core Competences and Capabilities
The organisation must possess core competencies to leverage its strategy into competitive
advantage where the superior returns arethe results of gaining and sustaining competitive
advantage through strategy (Rothaermel, 2008).
SWOT analysis and Resource-Based Model will enableidentifying the NYT’s competencies
and capabilities that supported its success.
1.1.SWOT Analysis
SWOT is an effective strategic techniquefor evaluation and managing the internal and
external factors that impact on the organisation (Business Link, 2009).SWOT analytical tool
enables to identify and evaluate NYT’s Internal Capabilities.
 High-Quality Journalism:
NYT’s core purpose is “to enhance society by creating, collecting and distributing high-
quality news, information and entertainment” (Bates, 2009).

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The company is committed to delivering high-quality journalism as the distinguishing feature
of NYT’s offeringstoengage quality audiences which consequently attract quality advertisers.
NYThas capabilities to bring a high-quality content to the Web and its high-quality
journalism has been repeatedly recognized,where in 2007, NYT’s media properties have
been awarded three Pulitzer prizes and in 2008, NYTimes.com won eight Webby awards that
includes “Best News Site” (NYT Annual Report, 2008).
 Strong Market Share:
NYT has a strong marketshare over its competitors and considered largest local metropolitan
newspaper in US and third largest after The Wall Street Journal and USA Today (NYT
Annual Report, 2008).
NYT is sold in more than 53,000 retail locations worldwide and available for home-delivery
in over 340 markets.
NYT is number one among 129 top media properties in reaching US opinion leaders (Erdos
and Morgan, 2008).
 Wide geographical operations:
The company's operations are geographically diversified where the IHT is sold in
approximately 180 countries while The Times, the Globe and other publications sales cover
90 countries (NYT Annual Report, 2009).
NYT’s diversified geographical presence is an advantage to mitigate risks that may arise
from concentrated business presence, in addition to enabling to implement expansion plans
within operating regions as well as nearby regions.
 Name and brand loyalty:
NYT has earned the trust of its readers and audiences thanks to employing professional
journalists for verifying the truth, context and accuracy of news and content (NYT Annual
Report, 2008).

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The companysustains strong brand equity of The Times and The Globe newspapers, which
provides an advantage over its competitors while attracting and serving a wide customer-
base.
NYT is able to deliver a highly loyal and has repeatedly differentiated its offerings from
other competitors throughtrusted brands and highly-loyal audiences greatly prized by
advertisers.
 Strategic Investment Approach:
NYT has focused on strategic investment to develop and expand its business and that the
organisation from time to time evaluates its portfolio for the purpose of decisions-making
with respect to acquisitions or divestitures of capital assets and different properties.
NYT has investments in several joint-ventures that incorporate “49% interest in a Canadian
newsprint company, 17.75% interest in NESV, approximately 80% of New England Sports,
49% interest in Metro Boston, 25% ownership interest in quadrantONE, 40% interest in a
partnership, Madison, operating a supercalendered paper mill in Maine and 50% of Roush
Fenway Racing, a leading NASCAR team” (NYT Annual Report, 2009).
 Research and Development capability:
NYT’s Research and Development is closely aligned with the company’s operating units and
operates as shared services across all of its Websites that ensures immediate response and
practical work effect.
The Research and Development Group enables monitoring changing in media and
technology landscape, anticipating consumers’ preference and devise innovative ways of
customers’ satisfaction (NYT Annual Report, 2008).
1.2.Resource-Based Model
The Resource-Based View provides a model that systematically aids identifying the core
competencies of an organisation as this model deems the resources as key superior of
organisation performance (Amit and Schoemaker, 1993).

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Resource-based model enables to identify NYT’s capabilities and provides understanding on
how NYT achieved Superior Returns by exploiting its internal resources and capabilities.
Resources
• NYT has High-Quality Journalism.
• Ethics in Journalism, Integrity and Credibility.
• NYT has the ability to bring a high-quality content to the Web.
Capability
• NYT’s reach extends nationally and globally.
• The organisation has the ability to reach customers across multiple platforms.
• NYT distributesnews and information overmultiple digital platforms, mobile phones and
other devices.

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Competitive Advantage
• R&D capability to drive innovation.
• Research & Development Ventures.
• R&D Group enables monitoringchanges in media and technology landscape and
anticipating consumers’ preference and devise innovative ways of customers’
satisfaction.
An Attractive Industry
• NYT focusses on technological development in order to provide multiple media choices
for both advertisers and audiences.
• The company exploits new and existing technologies to differentiate its offerings from
competitors.
Strategy Formulation & Implementation
• NYT is using the internet to expand its customer-base and obtain higher market share.
• The company has excellent journalism experiences.
• NYT invests in digital media startups to support innovation efforts.
Superior Returns
• The Times iPhone application has had more than one million downloads since its launch
in July 2008 (NYT Annual Report, 2008).
• NYT has about 75 million monthly page views on mobile due to expansion of its mobile
presence and the content became easily accessible (NYT Annual Report, 2009).
1.3.VRIN Analysis
VRIN stands for valuable Capabilities (V), Rare Capabilities (R), Inimitable Capabilities (I)
and Non-Substitutable Capabilities (N).
Barney (1991) argued that when an organisation possesses and exploits valuable, rare,
inimitable, and non-substitutable resources and capabilities, it will achieve sustainable
competitive advantage and above-average performance.
VRIN analysis enables to indicate the characteristics that are strategically important for
NYT’s resources to provide competitive advantage and support NYT’s success.

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Valuable Capabilities
NYT’s resources are able to bring value to the organisation and thus can be a source of
competitive advantage.
Rare Capabilities
NYT’s resources have to deliver a unique strategy focuses on delivering high-quality
journalism which provides competitive advantages in comparison to NYT’s competitors.
Inimitable Capabilities
NYT’s resources are source of sustained competitive advantages and cannot be copied easily
by other competitors and they are costly to be imitated.
Non-Sustainable Capabilities
NYT’s resources are strategically equivalent valuable resources and can be utilized
separately for strategy implementation.

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It is obvious from the conducted analysis that NYT has core competencies and capabilities
that supported its success till today as a premier global news source.
The next section of this paper demonstrates the strategic options available to NYT over five
years (2009+) that will enable the organisation to overcome the cyclical issues, facing
challenging environment within industry and enables NYT to maintain its global presence.

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2. The Strategic Options available to NYT
NYT suffered continuous decline in the total revenues comparing with the previous years.
The total revenue in 2008 declined by 8% and the organisation made a net loss of $58
million(NYT Annual Report, 2008) as shown in figure-4.
In 2009, NYT has suffered from cyclical issues and environment challenges within the
industry with respect to cutbacks in advertisement budgets, declining of print readership,
switching of customers to online alternatives and long-term liabilities.
NYT needs to implement relevant strategies for five years (2009+) to overcome these issues
and strengthen its global presence as a premier news source.

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2.1.Restructuring Cost-Base
NYTneeds to restructure its cost-base through consolidation of operations, outsourcing of
operations, closure of non-core business, process leaning to save costs including lowering
manpower costs and implementing digital-content strategyto cope with the changes from
print to online alternatives while introducing new services as well as reduction of production
cost and newsprint consumption.
2.2.Strategic Investments
NYT’s diversified geographical presence could enable to mitigate risks associated with the
concentrated business presence and support business expansion nationally and globally.
NYT can invest in digital content initiatives to grow online subscription base which will
enhance the internet business revenues, in addition to acquisitions of internet businesses to
strengthen its liquidity position and in the meantime, the company can obtain sustainable
capabilities via merging with giant companies such as Apple and Google.
2.3.Charging-for-Content
NYT needs to implement a digital strategy that focusses on expansion of customers’ base to
involve younger audiences, rather than the existing customer segment (+65), approaching
new sources for revenues including charging-for-content and decreasing advertisement
spending.
The digital strategy will enable NYT to grow audience online, mobile application and social-
media which improve business revenues.
2.4.Rebalancing NYT’s Business Portfolio
NYT should evaluate its business portfolio on continues basis, make decisions regarding
buying or selling capital assets to reduce its costs while enhancing profitability thus
improving its financial position.
Rebalancing business portfolio will enable managingNYT’sasset portfolio in order to
strengthen its core operations whileintroducing new online services across multiple
platformsand divestiture of businesses that constitute cash drain in order to reduce
outstanding debt balance including short-term obligations.

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3. The New York Times’sCurrent Strategic Position
NYT planned for consolidations of operations in 2007 and early 2008 as a key area for cost
savings, achieving higher earnings and free cash flow. The company lowered the full-time
equivalent employees, reduced news coverage by 5%, lowered demand for materials and
narrowed the newspapers’ size.
The organisation implemented a digital strategy to grow audiences’ online, mobile, social
media and reader application products which resulted in internet business revenues of 14% in
2009 versus 12% in 2008 (NYT Annual Report, 2009).
NYT was one of the first papers to institute a paywall online as a new source of revenuesand
offered a new cut-price internet subscription to customers who don't want to access the full
contents (The Guardian, 2014).
NYT continued with growth of digital subscription base and according to its Annual Report
(2013), “the paid subscribers to digital-only subscription packages, e-readers and replica
editions totaled approximately 760,000 in 2013 achieving an increase of approximately 19%
compared with 2012”.
The advertising revenues continue to decline, however total circulation revenues increased in
2012 comparing with 2011 as a result of growth in digital subscription base and advertising
revenues in 2013 remained under pressure of ongoing secular trends and economic (NYT
Annual Report, 2013)

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NYT’s business, financial condition and prospects were adversely affected since total
revenues declined between 2007 and 2013.
NYT began impairing assets in 2006 in a way to generate future cash flow.The total value
of assets continue decreasing due to the impairment plan adopted by the company to
improve its liquidity position to meet its debts and obligations (NYT Annual report,
2013).

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The main problem of NYT’s strategic investment approach is lack of risk management in
acquisitions’ decisions since some acquisitions proved not to support NYT’s strategy to
achieve the expected investment targets,in addition to integration issues of the acquired
operations which negatively affected the company’s financial position, for example,
acquisition and sale of the Edison, N.J. facility closed in second quarter of 2007 resulting
in a net loss of $41.3 million after tax(NYT Annual Report, 2008).
The long-term liabilities negatively affected on NYT’s expansion and growth plans
which led to impairment several capital assets to improve the liquidity position.
However, the companysucceeded to reduce its total debts and obligations via
implementation of the impairment plan.
Consolidation of operations, divestitures of capital-assets, reduction of staff and
compensations adversely affect the company’s capabilities to retain the key talents which
may affect the quality of NYT’s offerings.

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In next section of this Report, we will applyPorter’s Five Forces and Balanced Scorecard
for evaluation and monitoring of NYT’s strategy to improve the company’s capabilities
to cope with the needs for growth and development.

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4. Evaluating and Monitoring of theNYT’s Strategy
Strategy evaluation is significant importantas it enables identifying the efficiency and
effectiveness of organisation’s strategy in achieving its desired goals.
Porter’s Five Forces model and Balanced Scorecard will enable to evaluate and monitor
NYT’s strategies and improve decision-making which assist the company to continuously
improve its capabilities to cope with theneeds for growth and development.
4.1.Porter’s Five Forces’ Model
Porter’s five forces is an effective technique for strategy formulation via positioning the five
forces before strategy implementation as well as enables evaluation and monitoring of these
forces that determine industry competition during strategy implementation.

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 Bargaining Power of Suppliers
Critical Production Inputs
As inputs of news production are similar, it is easy to match and mix these inputs and that
suppliers have limited bargaining leverage which positively impact NYT and add value.
Volume is critical to suppliers
Suppliers rely on high volume which gives suppliers low bargaining power in case the
producer may reduce the volume and affect the suppliers’ profits and that positively impact
NYT.
Materials (paper/Ink) Suppliers
The secular changes in industry, business closure and low costs of switching business caused
reduction in number of suppliers and that bargaining power of suppliers is moderate which
positively impact NYT.
 Bargaining Power of Customers
Subscribers
Bargaining power of subscribers is high as the customers have multiple ways to obtain news
and in the meantime, the switching costs are low.
Advertisers
Bargaining power of advertisers is high as they have several outlets to advertise their
products/materials.
Bargaining Leverage
NYT provides its customers with high-quality services which deems important for customers
and positively affects NYT since these customers end-up with paying more to retain the
services. There are large number of customers for both print-news and digital-content while
no customer tends to have bargaining leverage which support NYT and add value.
 Intensity of Existing Rivalry
Innovation and Product Differentiation
The rivalry among competitors is high where there are several companies for both print and
online market while innovation and product differentiation is NYT’s key of success.

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Industry Size
NYT has the ability to understand its competitors’ actions which considers one of NYT’s key
success as the large industry size enables multiple companies to prosper which positively
impact NYT and adds to its value for long-term.
 Threat of Substitutes
Substitutes
The threat of substitutes in the industry can be evaluated as high level due to variety of
channels such as television, social media websites, blogs, radio, magazines and platforms.
Quality and Differentiation
NYT has repeatedly differentiated its services with high-quality standards and that customers
are less likely to switch to another competitors, in addition to limited number of substitutes
which positively impact NYT and add value.
 Threat of New Competitors
Capital Investment
Any competitor should invest a lot of money to compete and build a wide distribution
network and such high capital requirements positively affect NYT and supports its strong
presence.
Online Media
As online media includes social media, websites, blogs and other platforms, the potential
entrants is considered high since new entrants don’t need high investment to enter the
market.
Printed Media
There are various competitors within the market but the profit margin is low and that
potential entrants of printed media is low.
Importance of Strong Brand Name
New competitors need to improve their brand value to be able to compete with NYT’s strong
brand name in the industry and this positively affects the NYT.

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Geographic Operations
The wide geographic operations limits the competition since new competitors will have
competitive disadvantages and such limitation positively affects NYT.
4.2.Balanced Scorecard
The balanced scorecard is an effective approach for measuring strategic and financial
performance, tracking achievements, and providing balanced-view of how well the
organization is performing (Lawrie, 2006).
The balanced scorecard is considered asa strategy formanagingorganisation’s performance
and execute its strategies effectively (Kaplan, 2010).
There are four perspectives incorporated into the balanced scorecard:
Financial Perspective

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 Profitability of NYT’s business can be evaluated via the Profitability ratios as relevant
financialindications concerning the NYT’s successto achieve this target such as
Operating Profit Margin and Gross Profit Margin (Atrill and McLaney 2011).
 Assets Utilization can be measured via ROCE as a fundamental indicator for business
performance when establishing targets for profitability as it relates the capital invested to
the generated operating profit (Atrill and McLaney 2011).
 Financial Performance of NYT’s business can be evaluated via the financial efficiency
ratios that are used to measure the efficiency of used resources such as Trade payable and
Trade Receivable ratios (Atrill and McLaney 2011).
 Liquidity is an indicator for survival of NYT’s business to ensure availability of
sufficient liquid resources to meet the company’smaturing obligations such as Acid Test
and Current ratios (Atrill and McLaney 2011).
Process Perspective
 Process improvement enables NYT to optimize its underlying processes to accomplish
efficient returns and that requires optimal usage of advanced technologies to improve the
quality of services, reach different customers’ segmentations and enhance functionalities.
 The process improvement can be evaluated via the quality, cycle-time, on-time delivery
of the service and its associated costs.
Customer Perspective
 Circulation and advertising revenues can be used as indication for customers’ satisfaction
since these revenues are based on number of digitalsubscriptions and printed copies.
 Circulation and online visitors is another indicator for expansion of NYT’s customer-
base.
 Research demonstrated the importance of customer retention (Heskett et. al. 2006) and
the customer retention is a key measure for maintaining/increasing market share.
Learning and Growth Perspective
 NYT’s learning and growth are reliant on principle sources that involve employees,
processes and systems and that the financial, customer and processes objectives of the
balanced scorecard will reveal a gap between NYT’s exiting capabilities of employees,
processes and systems which require more investment in re-skilling the employees and
enhancement of the processes and systems.

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 Employees’ turnover ratio can be used as an indicator for NYT’s success as research
concluded that high-performance employees’practices increase the organisation’s
profitability and market value whileminimizing the turnover (Batt, 2002).

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