18 (1.1) Part 1 Introduction to Strategic Management STRATEGY IN ACTION Strategic Analysis at

Question: 18 (1.1) Part 1 Introduction to Strategic Management STRATEGY IN ACTION Strategic Analysis at Time Inc. Time Inc., the magazine publishing division of media con- glomerate Time Warner, has a venerable history. Its maga- zine titles include Time, Fortune, Sports Illustrated, and People, all long-time leaders in their respective catego- ries. By the mid-2000s,See the answerSee the answerSee the answer done loadingWrite down five key take away from this case.

Show transcribed image text1) In the early 2000s, Time Inc. enjoyed the strength of strong reporting and powerful brands. However, it had a serious weakness of having an editorial culture that underestimated the benefits of the web publishing. 2) This…View the full answerTranscribed image text: 18 (1.1) Part 1 Introduction to Strategic Management STRATEGY IN ACTION Strategic Analysis at Time Inc. Time Inc., the magazine publishing division of media con- glomerate Time Warner, has a venerable history. Its maga- zine titles include Time, Fortune, Sports Illustrated, and People, all long-time leaders in their respective catego- ries. By the mid-2000s, however, Time Inc. recognized that it needed to change its strategy. By 2005, circulation at Time had decreased by 12%; Fortune, by 10%; and Sports Illustrated, by 17%. opportunities on the Web, started with merging the print and online newsrooms at People, removing the distinc- tion between them. Then, she relaunched the magazine’s online site, made major editorial commitments to Web publishing, stated that original content should appear on the Web, and emphasized the importance of driving traffic to the site and earning advertising revenues. Over the next 2 years, page views at People.com increased fivefold. An external analysis revealed what was happening. The readership of Time’s magazines was aging. Increas- ingly, younger readers were getting what they wanted from the Web. This was both a threat for Time Inc., since its Web offerings were not strong, and an opportunity, be- cause with the right offerings, Time Inc. could capture this audience. Time also realized that advertising dollars were migrating rapidly to the Web, and if the company was go- ing to maintain its share, its Web offerings had to be every bit as good as its print offerings. Ann Moore, the CEO at Time Inc., formalized this strat- egy in 2005, mandating that all print offerings should fol- low the lead of People.com, integrating print and online newsrooms and investing significantly more resources in Web publishing. To drive this home, Time hired several well-known bloggers to write for its online publications. The goal of Moore’s strategy was to neutralize the cultural weakness that had hindered online efforts in the past at Time Inc., and to redirect resources to Web publishing. An internal analysis revealed why, despite multiple attempts, Time had failed to capitalize on the opportuni- ties offered by the emergence of the Web. Although Time had tremendous strengths, including powerful brands and strong reporting, development of its Web offerings had been hindered by a serious weakness-an editorial culture that regarded Web publishing as a backwater. At People, for example, the online operation use to be “like a distant moon” according to managing editor Martha Nelson. Managers at Time Inc. had also been worried that Web offerings would cannibalize print offerings and help to accelerate the decline in the circulation of magazines, with dire financial consequences for the company. As a result of this culture, efforts to move publications onto the Web were underfunded or were stymied entirely by a lack of management attention and commitment. In 2006, Time made another strategic move designed to exploit the opportunities associated with the Web when it started a partnership with the 24-hour news channel, CNN, putting all of its financial magazines onto a site that is jointly owned, CNNMoney.com. The site, which offers free access to Fortune, Money, and Business 2.0, quickly took the third spot in online financial Websites behind Yahoo! finance and MSN. This was followed with a redesigned Website for Sports Illustrated that has rolled. out video downloads for iPods and mobile phones. To drive home the shift to Web-centric publishing, in 2007 Time announced another change in strategy-it would sell off 18 magazine titles that, while good per- formers, did not appear to have much traction on the Web. Ann Moore stated that going forward Time would be focusing its energy, resources, and investments on the company’s largest and most profitable brands: brands that have demonstrated an ability to draw large audi- ences in digital form. It was Martha Nelson at People who, in 2003, showed the way forward for the company. Her strategy for over- coming the weakness at Time Inc., and better exploiting Source: A. Van Duyn, “Time Inc. Revamp to Include Sale of 18 Titles,” Financial Times, September 13, 2006, p. 24; M. Karnitsching, “Time Inc. Makes New Bid to be Big Web Player, Wall Street Journal, March 29, 2006, p. B1; M. Flamm, “Time Tries the Web Again, Crain’s New York Business, January 16, 2006, p. 3. Analyzing the industry environment requires an assessment of the competitive structure of the company’s industry, including the competitive position of the com- pany and its major rivals. It also requires analysis of the nature, stage, dynamics, and history of the industry. Because many markets are now global markets, ana- lyzing the industry environment also means assessing the impact of globalization on competition within an industry. Such an analysis may reveal that a company Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. 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