Environmental and Market Changes Driving Strategic Planning in Media Firms

Abstract

Media companies worldwide are struggling to understand and adjust to wideranging external and internal changes that are altering modes of production, rapidly increasing competition, eroding their traditional audience and advertiser bases, altering established market dominance patterns, and changing the potential of the firms. The need for media companies to understand and adjust to the new conditions grows daily because such changes can lead to failure of both existing and new products and, ultimately, lead to the loss of value or collapse of firms. This chapter explores a range of broad influences that are driving change in the media industries and requiring companies to alter existing strategies and develop new strategies to survive and grow in the coming years. The forces can be conceptualized as four types of influences that are external and internal to media firms (Figure 1). Environmental influences represented the broadest changes in the nature of society and environment for all businesses. Media-specific policy influences represent changes in way media are regarded and controlled in society. Market specific influences related to factors changing specific markets of firms. Firmspecific influences relate to factors within firms that are inducing changes. The influences portrayed in grey in the graphic conceptualization (Figure 1) reflect concerns related to those of the external environment school of strategy that began in the 1980s and was highly influenced by Porter (1980, 1985 and 1990). They focus on broader factors that externally provide competitive and comparative advantages and constraints. The firm-specific influences shown in white in the figure reflect internal factors related to company capabilities, competencies, and needs that reflect the concerns of the resource-based school of strategic thought (Wernerfelt, 1984; Prahalad & Hamel, 1990; Barney, 1991; Miller & Shamsie, 1996). The influences that are forcing change on media companies are requiring them to engage in significant strategic thought and strategy development. This need is particularly challenging because the majority of media companies are smalland mid-sized enterprises who have traditionally produced a single product or service that has had a relatively long life cycle.

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