NYTS Internal Analysis Research Paper

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New York Times

Leadership and Culture

The New York Times has a corporate culture based around a tradition of excellence. As the "newspaper of record," the New York Times has long been considered a leader in the industry, capable of setting trends and innovating. At the same time, the Times Company is also fairly conservative, because of its tradition of excellence. There is an expectation within the company of being the best. Integrity is held in utmost regard. These philosophies are incorporated in the company's "Rules of the Road," which include the usual components of integrity, creating shareholder value, good corporate citizenship as core values. Innovation and collaboration are among the traits in the rules of the road, in addition to customer service, respect, challenging oneself -- basic frameworks enshrined in strategy to various degrees (New York Times website, 2010).

Culture is not, however, specifically cultivated at the company as a source of competitive advantage. There is no mention of corporate culture in the annual report, for example, where many firms trumpet their culture as something that sets them apart. In part, this is because the culture is long-established and well-ingrained. There is a proportion of union workers at the Times as well, and that creates a degree of separation between the workforce and management, perhaps contributing to a more conservative atmosphere.

As with every other company in modern America, the New York Times embraces diversity. This is inherent in the fact they are based on New York, where it would take a specific effort to reject diversity. The company maintains a diversity officer in order to promote diversity programs as well, and hires contributors from a wide range of backgrounds to lend diversity to their content offerings.

Organizational Structure

The executive team at the New York Times Company consists of Chairman A. Sulzberger Jr., President J. Robinson, Vice Chairman M. Golden, CFO J. Follo, Corporate Controller R. Benten, Corporate Development Senior VP J. Lessersohn, HR Senior VP T. McCarty, Digital Operations Senior VP M. Nisenholtz, CIO J. Siebert, General Counsel K. Richieri. S. Heekin-Canedy is the president and general manager of the New York Times; C. Mayer is the President of the Boston Globe and there are a handful of lesser vice-presidents as well (2009 New York Times Annual Report).

The structure is based around two core products, the New York Times and the Boston Globe. The digital component is integrated, since there are other properties such as About.com in addition to the online versions of the two papers. The other executive functions are overarching, and there is some indication of overlap between these functions and the New York Times newspaper itself, since that represents the bulk of the company's business.

Value Chain Analysis

There are several components to the value chain -- infrastructure, inbound logistics, operations, outbound logistics, sales and marketing, service and procurement. The New York Times excels at a number of these in order to maintain its leadership position. The infrastructure at the Times is a support structure, but beyond the corporate culture does not make or break the organization. The culture is the one component of the infrastructure from which the Times derives excellence. Despite the weak tone of the company's description of its culture in the "Rules of the Road," the commitment to integrity and excellence permeates the entire organization. Times employees are genuinely committed to upholding the company's position as the best. This attracts top talent, and it allows the Times to execute on strategies that are geared towards a leadership position. The Times' brand strength -- its reputation -- is another component of the company's infrastructure that has been built over the years. This lends the Times brand instant credibility in its endeavors, something that facilitates building out a leadership position.

The inbound logistics is perhaps the strongest component of the New York Times value chain. While newspapers come on newsprint or over the Internet, ultimately the product is the content. The New York Times has cultivated what is probably the best roster of reporters, writers, columnists and bloggers in the industry. As a result, the Times has assumed a leadership position in content, living up to the sobriquet of "the paper of record." This has driven strong growth, allowing the Times to be on a path to becoming not just the leading American newspaper but the global English-language standard in the industry. The content driver readership, which in turn drives advertising, and it puts the Times in the unique position of actually being able to charge for the news (Sherman, 2010).

Operations is geared towards efficiency at the Times. Despite its leadership position, the Times still operates in a struggling industry where cost control is a necessary element of survival. This is particularly true of the company's print business, but is also true online, where high traffic volumes may allow for economies of scale but they also create a high cost structure that must be controlled.

Outbound logistics is a unique opportunity for the Times. It has generally focused on two forms -- print and Internet. With the print format, there are two areas of strength. One is cost control in the New York area, where the paper circulates some 900,000 copies per day. The other is distribution beyond New York. Online outbound is more complex. The Times operates some 50 websites. It is going to begin charging for its flagship site in 2011. As well, the Times has in recent years increased the number of content partnerships, such a recent deal with Zagat and Foursquare to disseminate Times food-related content to a broader audience (Wortham, 2010) or their earlier deal to make forays into radio (Sanders, 2004). The use of such licensing and partnership arrangements helps the Times derive greater value from its content by improving distribution.

Sales and marketing remains critical to the Times, as it requires not only sales of its content, but sales of its readership as well to the advertising market. Whether sales is a unique competency of the Times or not is debatable, but the company has had significant success in sales due to the strength of its brand and the high level of circulation and online readership. Service in an ancillary function, from which the Times can derive some degree of customer satisfaction, but service is not an important part of the New York Times value chain. Procurement can give the company cost benefits. The importance of procurement to the Times is exemplified in the fact that they have a Vice-President of Forest Products. Clearly, obtaining a reliable supply of newsprint at a good cost is an important component of the Times' value chain.

Resources, capabilities and core competencies

The primary resource that the New York Times leverages is its content. The company develops the content with the help of its editorial staff and with the help of a strong brand that attracts writers. Ultimately, it is this supply of high quality content that creates a feedback loop with respect to attracting quality content. The brand also attracts circulation and online readership, which creates another feedback loop in that the audience attracts top content contributors as well. The audience also attracts advertisers.

Beyond content, the Times has strong capabilities in online media development, in forming partnerships and joint ventures, in distributing print newspapers and the sales and marketing function. The company's economies of scale in production give it strong capability with regard to procurement as well, something that can lend it competitive advantage in an industry where cost reduction is one key to success.

The Times has three core competencies from which it drives its business. The first is editorial, which has resulted in the creation of a world-class content base that forms the underlying basis of most of the company's revenues. The Times has fostered a specific editorial culture, based on its corporate culture of excellence and integrity, that permeates the editorial staff. The second major core competency is in online development. The flagship website is a rare profitable newspaper website, although perhaps it cannibalizes the print edition. The Times has nearly 50 other websites as well. This gives the company a more diversified base on sites from which to draw advertising revenues and from which to direct traffic back to the flagship sites. Despite some past failures, the Times is close to finding a solution to monetize its online competencies in a sustainable manner. The third core competency is in brand development. Maintaining a strong brand is not easy, particularly in a struggling industry. The Times has made an active commitment to retaining its journalists and columnists at a time when other newspaper industries are cutting those positions and relying increasing on wire services and syndicated content. This, along with key legal developments, has eroded editorial diversity in the industry in recent years (Martin, 2008). Despite this broad industry trend, the Times has fostered a differentiated strategy by maintaining and even strengthening its editorial diversity in recent years.

Financial Analysis

The New…

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