Page 625 - The Case Lab Book

that they take their business to other suppliers that have a greater reach
and which can reduce their unit costs and increase their revenues.

Minus Costs

Revenue – costs = profit

However, how the firm reduces its costs is extremely important. In the case
of JP it appears that it has attacked its primary cost – staff and substantially
reduced journalist numbers.

Profit

Profit at JP has taken a hammering over the last decade as circulation
figures have plummeted. To some extent JP has tried to grow its way out of
the problem by acquiring more and more titles.

However, this is a strategy which is predicated on selecting the right target,
at the right price and being able to extract cost efficiencies from them.

The problem here is that efficiencies generally have to be long term in
nature without the possibility of destroying the strategy they are supposed
to support e.g. The Newsroom of the Future has the potential for both
success and failure determined to a great extent by its implementation.

The Newsroom of the Future is a laudable concept drawing together the
disparate part of the rapidly changing nature of print media and
restructuring it into a comprehensive online and print media presence.

However, technology change of such a scale requires careful handling and
it is in this area that JP appears to have its main problems.

Journalists generally are employed for their wordmanship and their

investigative abilities. Now their task requirements would seem to be about
fitting square pegs into round holes. Moreover, in order to do this they need
to learn new skills and change their local focus to a national one.