Environmental Scanning and Industry

Analysis
PRINT MAGAZINE
(Strategic Marketing Management)
Blancaflor, James Krumuel
Cabrera, Jason
Cañete, Ma. Roela Berna
Corcoro, Jessirene
Gacutno, Mark John
Marfil, Lawrence
Mainit, Stella Jean
Parcn, Kharissa Mae
Satsatin, Jaymar
Soriano, Rose Ann

11/07/2020
Philippines Printing Magazine 2

PART 1: PESTEL ANALYSIS

A PESTEL analysis or more recently named PESTELE is a framework or tool used by
marketers to analyze and monitor the macro-environmental (external marketing
environment) factors that have an impact on a company. And, by PESTEL analysis the
Marketers would know the new and updated things in environment or where the company is
located. It also helps the company in understanding the opportunities and risk of business.
It helps to reduce the risk associated with an unfamiliar environment.

1.1 POLITICAL FACTORS

• Print Magazines must know that the Political Risk Can't Be Avoided, But It Can Be
Managed
• They are paying a higher tax on paper industry due to their usage of a lot of paper
• The government wants the printing magazine companies to be more environment
conscious

1.2 ECONOMIC FACTORS

• A recent wave of innovation has fueled changes that causing the printing industry to
be reinvented
• In the new competitive economy, the cycle from production employees to raw
material suppliers. Everyone’s role, responsibility, and relationship are changing to
accommodate the new century in this five-century-old industry.
• Philippines inflation rate is very unstable due to the Covid19 Virus, so it results a
huge impact on every industry
• Newspaper and magazine publishing company are facing major problem on how
they will adapt to the opportunities and challenges by the digital disruption and the
shifting of economic through the years.
• The major difference between print media and digital media is that, more and more
consumers are choosing on getting information on the internet rather than on the
newspaper or magazine.
• Every publication tends to have an economic formula that is slightly different or
extremely different from that of the other publications. Publishers of magazines that
are primarily supported by ad profits tend to give away their publications or charge
very little for them. In these types of situations, circulation can lose money, and the
overall magazine can still be profitable.

1.3 SOCIAL FACTORS

• The Philippines is among Asia’s premier labor markets. The country houses a large
and growing young population with a median age of 23, a vital demographic
advantage that can be leveraged with proper investments in education and
infrastructure.
Philippines Printing Magazine 3

• Employment Rate in Philippines averaged 91.35 percent from 1991 until 2020,
reaching all time high of 95.46 percent in the fourth quarter of 2019 and a record low
of 82.32 percent in the second quarter of 2020.
• In 2018, the market size of magazine advertising in the Philippines was 3.6 % and
has steadily decreased since 2012. The sector only accounted for 0.1% share of the
total advertising market.
• Market growth of magazine advertising from 2012 to 2018 in the Philippines with
forecasts until 2024.
Market growth rate
2024 - 10.8%
2023 - 9%
2022 - 12.4%
2021 - 10.7%
2020 - 9%
2019 - 83%
2018 - 3.6%
2017 - 3.7%
2016 - 3.8%
2015 - 4%
2014 - 4.2%
2013 - 4.3%
2012 - 4.5%

Frequency of magazine usage Philippines 2018

According to a survey conducted by Kantar Media, eight percent of consumers in the
Philippines used magazines to access media within the past 12 months. In the same
survey, 96 percent of consumers have accessed media through television for the
past 12 months.
Magazine usage among consumers based on frequency in the Philippines in 2018
Share of respondents
In the past 12 months 8%
In the past 4 weeks 4%
In the past 7 days 2%
Yesterday 1%
• Out of the 1,200 adult respondents with ages 18 and above, there were 921 or
76.75% say they have read a printed book in the last twelve months while there
1,020 or 84.99% of youth respondents, with ages 6 to 17 years old, say they have
read printed books in the same time period. (Readership Survey 2017)
Philippines Printing Magazine 4

1.4 TECHNOLOGICAL FACTORS

• Technology is the main reason why the industry is slowly dying in this 21st century
• Instead of worrying about the factors of technology, the industry must rather use it as
an opportunity in paying close attention to how their customers are finding their
printing magazines and cater to their behavior.
• In this new normal where everything we do is based online. The printing Magazine
must consider how their website is displayed across the wide variety of devices and
screen dimensions available that their customers could be using.
This pertains to innovations in technology that may affect the operations of the industry
and the market favorably or unfavorably. This refers to technology incentives, the level of
innovation, automation, research and development (R&D) activity, technological change
and the amount of technological awareness that a market possesses.
These factors may influence decisions to enter or not enter certain industries, to launch
or not launch certain products or to outsource production activities abroad. By knowing
what is going on technology-wise, you may be able to prevent your company from
spending a lot of money on developing a technology that would become obsolete very
soon due to disruptive technological changes elsewhere.
Technological factors also have Communication and Internet infrastructure that includes
physical hardware such as telephone lines, cable television lines, satellites antennas,
routers and other devices that controls transmission paths. This also includes software
used to send, receive, and manage the signals that are transmitted.
Technological factors this might also contain access to new technology, innovation
and different research and development activity which helps to boost the internet and
technology that helps people easily. Innovation and developing new products that easily
assist humankind in terms of technology.

1.5 ENVIRONMENTAL FACTORS

• The huge impact in the environment was the spread of Corona Virus and this result a
huge change in the routine of every company. The company must be adaptable in
these changes, because we all do not know that these temporary things might soon
to be permanent things.
• If you’re in it for the right reasons, everything else falls into place.
• Printed magazines use several pounds of paper since every issue they produce
requires several pages.
• In this era where climate, way of life, and issues in the environment change rapidly
they need to find a chance to make a difference but taking advantage of it requires
the ability to look past challenges and see the possibilities that exist. If you’re in it for
the right reasons, everything else falls into place.
• Most magazines do not use 100% recycled paper that is why they are consuming
many trees that is not good to our environment.
Philippines Printing Magazine 5

1.6 LEGAL FACTORS

• Printed Magazines is also bound abide by the legal requirements of that estate or
country. It is more affected by the change of legal requirement of this country.
• In recent years, the Philippine government have made many changes in their legal
and taxation reforms to control the business environment and competition.
Healthcare allowance, employee dividend funds, taxation and other regulating and
business operating requirements have changed the nature of working in the country.
• However, as it is an international company, it has to spend a huge amount of money
to keep its data secured and sources protected. In every country where it is working,
must comply with the legal requirements of doing business and register to copyright
patents.
• The company also need to make heavy investments in Asian markets to build a
proper a legal structure of doing business.
• The Printed Magazine must follow similar legal rules and regulations like any other
business.
• To stay legal, they follow tax restrictions, export restrictions and inflation costs.
They must also maintain workers right, but this becomes iffy when companies have their
products made in foreign countries

Growing Business Succession

closely related to the lack of skilled. Personnel is the growing, but largely unarticulated,
concern of many owners of printing business succession. It is difficult to convince the
next generation to take over the business because working in a printing factory has
been traditionally seen as dirty and dangerous, even if this situation has largely changed
in the modern printing factory.

This perception about printing as an unglamorous career has likely

contributed to the absence of a comprehensive printing course.
ASIAN MARKET IMPORTS OF PRINT

1.7 CONLUCSION/OVERALL ANALYSIS

Well, as we are conducting the PESTEL analysis, we learned that this thing is not a joke.
There are many factors that we need to consider and understand briefly. In this analysis
we find out that the printing magazine in the Philippines is not an easy industry. Just like
any other industry there are also some advantages and disadvantages in it.
So here are my disadvantages: we all know that the printing industry uses a lot of papers
that are not good in our environment that causes a lot of calamities like floods and
landslides. It also requires a lot of money for a company just to produce a new issues;
because they need to make sure that every paper they would use has a good quality,
Limited customer reach, minimal interaction, grabbing customer attention, costs of
advertising, the long lead time required in placing an ad, and the problem of clutter and
heavy advertising competition, and it also causing the consumer to spend their money
Philippines Printing Magazine 6

every time due to the every issues that the printing magazine would produce, it can also
be an additional trash because some of the company doesn’t know how to recycle every
papers that they are using. Messages cannot be delivered as quickly as with other media.
Moreover, here are the advantages of print magazine: Encouraged public desire to gain
knowledge, ability to reach specialized audiences, audience receptivity, a long life span,
and visual quality, help the customer to concentrate more in reading, flexibility, No
Revenue Loss from Unsold Copies, Flashy images in magazines get the attention of many
magazine readers, Print media has a large loyal customer base that buys the publication
on a weekly or monthly, Print media advertising comes with many options. From features,
full-page ads to small ad listings it gives you the flexibility in selecting the type of ad to fit
your requirements and budget, Consumers of newspapers and magazines can range from
teens, young adults to senior citizens, enabling you to target a wide range of audience
easily. One of the best benefits of print media is that it has a higher frequency opportunity
of viewing than online ads. Since the newspaper or magazine may sit on a table or rack
at a business or home, repeated exposures are allowed.

PART 2: FIVE FORCES ANALYSIS

Porter’s Five Forces is a tool to judge the stronger areas of a business. It helps in
judging the strength of the business in terms of a competitive situation and the strength
of the position it intends to move into. This analysis helps in improving the weaknesses,
preventing wrong actions and highlights how to get the benefits from the strengths of the
business.

2.1 RIVALRY AMONG COMPETITORS

High rivalry among competitors when:

✓ If the competitor has been in the printing magazine in the Philippines for a long time
✓ if the competitor has a huge name in the printing magazine
✓ if the printing magazine companies had almost the same products and contents
✓ if the competitor is very flexible towards in writing and designing the contents in the
magazine
✓ if the competitor has a centralize goals, they want in the future of printing magazine
✓ if the competitors Knows how to handle the buyers of their printed magazines and
they know how to keep the investors
✓ if the competitors are producing a high Quality of products, which is the printed
magazines

Low rivalry of competitors when:

✓ If the competitor was a new entrant in the printing magazine field
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✓ if the competitor has an unattractive content in the printed magazine that they are
producing
✓ if the competitors don’t Know how to handle the buyers of their printed magazines
and they also do not know how to keep their investors
✓ if the competitors are producing a low quality of products, which is the printed
magazine
✓ If the competitor’s content is being biased

2.2 THREAT OF NEW ENTRANTS

High Threat of New Entrants When:

✓ Low brand loyalty in the current industry
✓ Current brand names are not well-known
✓ Access to suppliers and distribution channels is easy to obtain
✓ Products are undifferentiated
✓ Brand names are not well-known
✓ Initial capital investment is low
✓ Consumer switching costs are low
✓ Proprietary technology is not an issue
✓ Proprietary materials are not an issue
Low Threat of New Entrants When:
✓ High brand loyalty in the current industry
✓ Brand names are well-known
✓ High initial capital investment required
✓ Little no access to suppliers and distribution channels
✓ Strong government regulations
✓ Threat of retaliation from existing competitor’s Proprietary technology is required to
be successful
✓ Profitability requires economies of scale
✓ Products are differentiated
✓ Brand names are well-known
✓ Initial capital investment is high
✓ Consumer switching costs are high
✓ Accessing distribution channels is difficult
✓ Proprietary technology is an issue
✓ Proprietary materials are an issue
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2.3 THREAT OF SUBSTITUTES

High threats of substitutes when:

✓ If the substitutes are offering a best value for customer’s money rather than buying a
printed magazine
✓ If the printed magazine has some Shortage of raw materials and the substitutes are
available
✓ If the substitutes have a huge Brand Image that the customers would forget buying
the printed magazine rather, they focus on the new trends (Milk tea)
✓ If the Substitute products have better features rather than the printed ones
✓ If the substitutes are offering Special (electronic books) that a customer would forget
that the printed magazine is existed
✓ If the substitutes are a long-term usage (mobile gadgets) rather than a printed
magazine that you need to buy monthly just for an update
✓ If the substitutes are more needed (Food) rather than the printed magazine

Low threats of substitutes when:

✓ If the customer usually buys in the printed magazine
✓ If the customer is more into a book lover
✓ If the substitutes are more expensive rather than the printed magazine
✓ If the substitutes are new entrants

2.4 BARGAINING POWER OF BUYERS

High bargaining power of buyers when:

✓ There are fewer buyers relative to that of suppliers
✓ The switching costs of the buyer are low
✓ If the buyer can backward integrate
✓ The buyer purchases product in bulk (high volume)
✓ The buyer can get similar product/services from other suppliers
✓ The buyer purchases the majority of the seller’s products
✓ Several substitutes are available on the market
✓ Product is not differentiated

Low bargaining power of buyers when:

✓ There are a significant number of buyers relative to that of suppliers
✓ The switching costs of the buyer are high
✓ If the buyer is not able to backward integrate effectively
✓ The buyer is unable to get similar product/services from other suppliers
✓ Substitutes are not available on the market
✓ Product is heavily differentiated
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2.5 BARGAINING POWER OF SUPPLIERS

High bargaining power of suppliers when:

✓ Switching costs of buyers are high
✓ Threat of forward integration is high
✓ Small number of suppliers relative to buyers
✓ Low dependence of a supplier’s sale on a particular buyer
✓ Switching costs of suppliers are low
✓ Substitutes are unavailable
✓ Buyer relies heavily on sales from suppliers

Low bargaining power of suppliers when:

✓ Switching costs of buyers are low
✓ Threat of forward integration is low
✓ Large number of suppliers relative to buyers
✓ High dependence of a supplier’s sale on a buyer
✓ Switching costs of suppliers are high
✓ Substitutes are available
✓ Buyer does not rely heavily on sales from suppliers

2.6 CONCLUSION/OVERALL ANALYSIS

As we are doing the five forces, we realize that the industry of print magazine in the
Philippine is slowly falling into pieces, so here are ideas that we have brainstorm that can
help the furthermore.
First in the Rivalry among competitors, the level of competition is very high in the printing
magazine world. There is a huge network of companies that are working in the market.
The content and styles that printing magazine must use must bet be unique and creative
for them to have a competitive advantage towards the competitors. The rivalry among
competitors was like a tug of war, every printing magazine company really wants to win
and reach the bacon. Five forces were important because you can also learn the
competitors’ strengths and weaknesses. Especially in this era where printing magazine is
not that famous compared before. Even though the printing magazine companies are
slowly dying, the competition between other printing magazines was really on heat.
In the threat of new entrants, it is really not easy to make an entry; a heavy financial
investment is needed to make a secured start, A printing magazine has a chance to stay
on top because of some barriers in the new entrants; however, they must know that they
are not always on top. The existing companies must not underestimate the newbie’s
because they are not sure that the new entrants might be their greatest competitors. A
low threat of new entrants makes an industry attractive – there are high barriers to entry.
Therefore, existing companies can enjoy increased profit potential. A high threat of new
entrants makes an industry less attractive – there are low barriers to entry. Therefore,
Philippines Printing Magazine 10

new competitors can easily enter the industry, compete with existing firms, and take
market share. There is a reduced profit potential as more competitors are in the industry.
However, the threat of new entrants alone does not determine the overall attractiveness
of an industry.
In addition, Threat of Substitutes, new substitutes that every product in the market is the
printing magazine competitors. Instead on buying in the new updates on the printing
magazine, they would just be going to buy gadgets, clothes, food and essentials. The
threats of the new substitutes are the reason why the printing magazine in the Philippines
is slowly dying. The Filipinos are more into tech nowadays; they are saving money for
new clothes and gadgets rather than spending it for a new issue in a printed magazine .
When it comes to bargaining power, buyers’ power is still limited because there are
times it is low or weak. They can pressure a business to provide higher quality products,
better customer service and lower prices.

The bargaining power of customers (buyers)

Subscribers have some bargaining power vis-à-vis magazine publishers as great deal of
content is now located online for free. Because prices are low, and consumers still crave
a total, branded experience from certain magazines, it will be more important for
magazines to keep their core focus rather than becoming generalist providers of content

And lastly, If the supply is something which is limited, the supplier may have more
bargaining power to set a higher price for goods and services, Suppliers of raw materials,
components, labor, and services to their company can be a source of power over your
ability to compete., Identify substitute inputs, supplier concentrations, and employee
solidarity (labor unions), which can limit you or give you the advantage especially in this
Covid19 times.
Philippines Printing Magazine 11

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