Metro_News_and_Porter

Market and submarket profitibilty analysis Existing Competitors Metro is an international firm publishing specific papers for their operating markets. As we showed in Chapter 3, their competitors are local and do not operate on a global scale like Metro does. Every market has a different amount of competitors, mostly depending on the scale of the market. If you would brake down every market (100+) metro operates in to all the competitors they have you would get in the hundreds of competitors and it would be to many to handle. So competitors will have to be broken down by their specific market. Anyhow, competition in the market of (free)newspapers is huge. As described in chapter 3 competition can be approached as a whole by the use of general strategic groups appearing in generally most countries. Strategies and product offerings usually don´t differ much to that of Metro and mostly similar product offerings are found. Most free newspapers have similar strategies and usually do exactly the same. Every competitor want´s to reach as many daily readers as possible. They´ll adjust their content over time to achieve this. In the end this means that most free newspapers offer very similar papers. Nearly all competitors rely on advertising and reaching a specific reader contributes to high margins. It´s easy to exit a market for metro as they don´t have very strong commitments to distributors and consumers. They only operate small local offices with limited staff as much of their content is written globally for all copy´s of their paper Potential Competitors To enter the market of free newspaper is a complicated process and requires a lot of investment. The largest barrier is to built an editorial staff. Most other activities like printing and distribution are outsourced, if available in the market. Again, the thread of potential competitors depends on the market Metro operates in. Metro introduced their free newspaper in Mexico city recently and was the first to do so. No competition exists and the market is only just developing. As the market for free newspapers develops and grows in Mexico City, new entrants will rise to take their market share. In the Netherlands, where free newspapers have been around for a while the market has developed. Metro has about 1.8 million readers daily and about three competitors. To enter the Dutch market would mean that you would take a share of the other existing newspapers who have built a solid reputation and product with a loyal amount of readers. Competition is very intense where in Mexico city there is none. The market share a new entrant may achieve will probably be to small to be profitable. Substitute Products As we showed in chapter 3 many other forms of news exist. Free newspapers like Metro took and are taking a large share of daily (intellectual) press. Newspapers like the New York Times are trying to innovate (See market trends later in this chapter) on their product to regain market share but don´t really appose as a serious thread. Specialized MAgazines as described in chapter 3 don´t appose as a serious thread either mostly because they offer a very different product and operate in a very developed market. The only real thread from a substitute comes from the internet, as more and more people, mostly in developed nations, have reach to mobile internet. With a low carbon footprint, people can now reach all the information that is available any time. For commuters, Metro´s largest segment, mobile internet provides all the information they wan´t at hand. Metro has a website too, but competition is intense. Customer Power When it comes to free newspapers two Customers can be defined; the readers and advertisers. The readers of Metro, pick up a metro during the day because they are interested in the contend of information Metro has to offer. They wan´t to know what´s going on in certain areas like entertainment and global news and pick Metro instead of the other free newspapers because Metro fits their likes the best. Metro will have to be in touch with what their readers wan´t to know because if they don´t they´ll switch to other free newspapers or maybe even to other forms of information like magazines. The more people will read Metro, the more revenue they´ll get from their advertisers. The advertisers in sense ´pay´ for Metro´s paper. It is their only source of revenue. Metro needs their advertisers more than anything. In the recent recession many companies saved costs by cutting back on advertising thus hitting Metro. Metro will have to do their best to get their advertisers message to their readers to keep them satisfied. Supplier power The biggest cost of one metro newspaper is the paper and ink it exists of and the distribution around the cities they operate in. This is mostly done by other companies, Metro´s suppliers. These companies usually serve a variety of customers like other newspapers perhaps and thus have a relative power to influence prices. Metro is probably to big for their suppliers to influence prices. Other suppliers like presses and distributors might exist in a market, but not many making it easier for suppliers to influence prices.