Michael Porter wrote a famous book in 1980 on strategy called, befittingly, Competitive Strategy.  His doctoral work at Harvard had shown him that in an industrial market, you could map out the power a company has – and from that imply its future profitability.  Famous from this book was his "5 Forces" model in which companies could compare the relative strength of customers, suppliers, substitutes and potential entrants with traditional competitor rivalry to ascertain attractiveness.  An outcome of his late 1970s analysis was that if you are really strong, you can control the behavior of the other forces to dictate your profitability.  This was all pre-internet, pre-information economy.

Today (Sunday) my wife was fit to be tied (an old midwestern phrase) when she opened the Chicago Tribune and couldn't find a television schedule.  She's not much of a newspaper reader, primarily just the Sunday ads and the TV schedule.  When she couldn't find the TV schedule, she called the newspaper to ask for another copy.  But the automated response at the Trib said not to leave a message if you're calling about the TV schedule, because it was now being printed in the Saturday edition.   As you might guess, we don't take Saturday because we don't have time to read newspapers any more.  Her reaction was simple "I get most of these ads delivered in the mailbox now during the week.  If we don't get the TV schedule, we might as well cancel the paper altogether."

This, of course, is not the reaction Sam Zell and his management team at Tribune Corporation are expecting.  They think their last remaining competitor, Sun Times Corp., is most likely going to fold now that it's filed bankruptcy and seems drowned in red ink.  Following Porter's nearly 30 year old approach, they think they have little competition and no threat of new newspaper entrant – so they'll simply "force" readers to buy Saturday if they want the TV schedule.

But they are wrong, of course.  Just like every other action they've taken since Zell overleveraged the corporation in his buy-out, they continue to ignore that the internet exists.  As I pointed out to my wife, we can easily bookmark several locations to identify our local programming – including a nice layout at USAToday.com. 

In an industrial economy, many leaders came to believe that they could erect entry barriers which allowed them great power to run their business for high profits.  At newspapers, many felt that by being the only (or largest) local paper they had a "moat" around their business guaranteeing profits.  They felt comfortable they could raise rates on advertising, and classified ads for those looking to find new hires or sell a used car.  But of course they missed the fact that advertisers could go to the web to find customers.  And that it was a lot cheaper to use Monster.com, Vehix.com or Craig's List than a local classified ad.  So now Zell's team is trying to use his "relative strength" to push his subscribers into behavior they have avoided – buying a Saturday paper.  And, again, the team has forgotten that in an internet-connected world customers have lots of options, and given a push they'll go look for other solutions.

The folks at Tribune Corporation made a big mistake by over-leveraging their acquisition.  And they worsened that mistake by trying to use 1980s strategy post-2000.  I recently emailed books editor Julia Keller with a recommendation for promoting book reading more strongly in her Sunday "Lit Life" column.  She responded by upbraiding me for having the temerity to offer an idea to her – and concluded by challenging not only my intelligence but my own reading ability – then telling me to subscribe to the Saturday edition so I'd stop being such a luddite.  My son wrote to the Trib's Sunday auto reviewer Jim Mateja with some insights he had about hybrids as a 21 year old, and Mr. Mateja responded that since he was only 21 he wasn't old enough to have common sense, and certainly no insights a serious auto reviewer or auto executive should consider.  Bullying customers seems to have become commonplace around The Chicago Tribune.

When business conditions turn poorly it's very easy to focus on Defending & Extending what worked in the past.  It's natural to turn against those who complain, and seek out your most loyal customers for reinforcement that you're Success Formula need not change.  It's not uncommon to "write off" customers that walk away from you, saying they are no longer in your market target or niche.  It's likely you'll turn to management practices that might have worked 3 decades ago (think about GM as well as newspapers).  It's comfortable to turn to your "hedgehog concept" and try to do more of what you know how to do, primarily because you know how to do it and are good at it.

But you can't bully customers.  Today, more than ever, substitutes and new entrants are no further than a Google search.  Markets aren't as neatly and tightly defined as they were in 1980.  When you see results slip, you can't try to force them back up by bullying vendors either.  You have to align with market needs – with the direction markets are headed.  You have to look into the future to see what customers will value, and do the Google search yourself to identify alternative competitors you need to beat.  The Chicago Tribune could do a lot more to make its business valuable to people in Chicago and beyond.  A little White Space could go a long way.  Unfortunately, management appears intent on being the first major market newspaper to really fail – and folks in Chicago as well as L.A. (Tribune Corp. also owns The Los Angeles Times) may find themselves first on the curve to using web media exclusively.