Dynamic simulation as a tool for strategic management of a newspaper/spl minus/evaluation of rapidly changing market conditions

Competition conditions in the newspaper industry force the management to use new tools for strategic planning. The rapidly changing market conditions are to be managed and the internal efficiency must be improved. This paper presents a method to combine an analysis of the complex causalities of revenues from the advertising and circulation market with the economic result of the newspaper. The principles of activity based management are used for cost calculation on macro level. Due to the special character of newspaper production, activity based costing is not accurate as a strategic planning tool on the micro level. Dynamic simulation as a tool to support strategic planning is presented using two models. The experiences with the dynamic model shed some light on the newspaper market conditions and macro level economical measurements. The simplified and aggregated functions limit the usage of activity based costing.<>