Time Warner Cable Industry/Competitive Analysis
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Transcript of Time Warner Cable Industry/Competitive Analysis
Time Warner Cable inc
David Green, Frankie Miamen, Tiffany Gray, Nick Foster, Tobi Coker
PEST AnalysisFactor Threats or opportunity Impact Political
-Legal proceedings/ regulations
-Due to our concentrated market political restriction are implemented.
+ Political Advertising
1.moderate
2. high
3. low
Economic + Economic Growth in Europe and Asia- Pacific.
-Economic Recession.
1.low
2. high
Social
(include demographic)
+ 80% of US households subscribe to paid TV services.
+ Increase growth in Latin America and Hispanic population.
+Consumerism
1.high
2.moderate
3.high
Technological + Technological advancements, such as VOD, new video format, and internet streaming and downloading are beneficial.
- Bundles have increased competition.
+ Advancement in the use of internet and mobile devices
+Fiber Optics
1.high
2.high
3.Moderate
4.Moderate
Factor Threat or Opportunity Market Size & Growth rate -European and Asia-Pacific markets are growing
rapidly. Their market reaches 95,875.2 million in 2009, the CAGR is forecasted to be 5.7% by 2014. +TV Advertising and broadcasting is the largest segment of broadcasting and cable accounting for 49% of total market value
Number of Rivals -AT&T and Verizon have upgraded their networks to carry two-way video and substantial bandwidth.-Intense competition
Differentiation -Standardized services -Easy to duplicate new service innovations+Customer Loyalty programs
Supply/Demand Conditions -Heavy reliance of suppliers
Pace of Technological Change -Increase cost of demand for triple play bundles.-Due to the advancement of technology more consumers are able to stream more content from the TV onto their mobile phone. +/-Rapid Technological changes +Fiber Optic Service ( FiOS)
ETOP
ETOP cont.Changes in Cost and Efficiency -Low profit margins
-Programming Cost
Vertical Integration +Reduce programming cost
Industry Trends + Growth of large media companies & Television.-Prices increase for programming-Discrete Consumerism. -+oint ventures/mergers and acquisitions
Threats of New Entrants +Very low due to our concentrated market and fragmented customers. -Restrictive government policies and well established viewing power.
Internet Expansion +Movie on demand and social media.-Customers can get content such as movies from the internet at no charge. -Piracy and Illegal activities
Revenue from U.S. and The Rest of the World
United States47.7%
Europe29.7%
Asia Pacific22.6%
Global Broadcasting and Cable TV
17
28
15
9
Market Share
DirecTVComcastTime Warner CableDish Network
Time Warner Cable Comcast Corp. DirecTV Dish Network
35.10%
50.00% 51.00%
62.00%
Programming Costs
Name of Company Package What Is It? Cost
Time Warner Cable Triple Play TV, Internet, phone $124.85 / month
ComCast Triple Play TV, Internet, phone $99 / month
DirecTv DirecTv Family Package TV, Internet, phone(optional: DVR and HD)
$75 / month+ $7 (optional DVR)+ $10 (optional HD)
Dish Network Dish Family Over 55 channels $20 / month
Industry OutlookMarket Segment: Expected growth:
(2009-2014)
US 3%
Europe 2.9%
Asia Pacific 5.7%
Market Value: (2014) in millions
$147,212
$110,837
$96,472
Porter’s 5ForcesSummary
Force Strength Reason
Rivalry Strong • New Service Introductions • Several Mergers & Acquisitions• Slow Market Growth in the U.S.• Price Competition & Increasingly Standardized Products• Marketing Tactics: Sales Promotions & Advertising
New Entrants Low • Industry is Characterized by Economies of Scale• Strong Customer Loyalty and Brand Preference• High Capital Requirements & Restrictive Government
Policies• Strong Top Competitors
Substitutes Moderate • Streamlined Content• Newspapers & Magazines• Libraries• Movie Theatres• Computers, Video Games, Radio• Wireless Devices & tablets.
Suppliers Moderate to Strong • Extremely High Switching Costs Between Suppliers• Heavy Reliance on a Limited Number of Programming
Vendors & Networks• Integrating Backwards is not Economically Viable for
Setup Boxes & Video Programming
Buyers Moderate • Low Switching Costs Between Firms• Buyers are Becoming more Informed• Lack of Effective Customer Loyalty and Retention
Overall Competitive Force & AttractivenessOverall Competitive Force-Moderate to
StrongUnattractive New EntrantsAttractive Current Industry Members
Key Success FactorsCustomer Relations & ResearchEconomies of ScaleLocation/ReachClever Marketing New Service Innovations/CapabilitiesProgramming
Customer Relations & ResearchImportance weight .10Customer RetentionLoyalty ProgramsCustomer ServiceConsumer ResearchPredicting Trends
Economies of ScaleImportance weight .17Cost ReductionOperating Income/profits
Location and ReachImportance weight .23SubscribersCustomer Service CentersStates or Internationally
Clever MarketingImportance weight .12New revenue streamAdvanced/Dynamic AdvertisingDifferentiation
New Service Innovations and CapabilitiesImportance weight .23Diversification Differentiation
ProgrammingImportance weight .15Programming CostContentNetworksBroadcast Stations
Key Success Factor/Strength Measure
Time Warner Cable Inc. Comcast Corp. DirecTV Dish Network
Importance Weight
Strength Rating
Score Strength Rating
Score Strength Rating
Score Strength Rating
Score
Consumer Relations 0.10 6.0 0.6 7.0 0.7 10.0 1.0 8.0 0.8
Economies of Scale 0.17 8.0 1.4 10.0 1.7 9.0 1.5 3.0 0.5
Location/Reach 0.23 6.0 1.4 9.0 2.1 8.0 1.8 5.0 1.2
Clever Marketing 0.12 8.0 1.0 7.0 0.8 7.0 0.8 7.0 0.8
New Service Innovation Capabilities
0.23 6.0 1.4 9.0 2.1 7.0 1.6 7.0 1.6
Programming 0.15 9.0 1.4 10.0 1.5 8.0 1.2 5.0 0.8
Sum of Importance Weights
1.00
Weighted Overall Strength Rating
43.00 7.03 52.00 8.88 49.00 8.02 35.00 5.66
CSA
Strengths:Brand name
Strong market positionProgramming Variety
Consistent revenue growthLowest programming cost
Social ResponsibilityDiversity
Weakness:Failure to innovate
ExpensiveSignificant debt
Legal investigationsHeavy dependence of suppliers
Requires Personal InformationCustomer Service
Opportunities:Online video contentInternational market
Fiber OpticsGrowth of HDTV/3D
Cloud ComputingRapid technological changes
Mergers/acquisitions and joint ventures
Threats:Stand alone servicesHeavy competition
Government regulationsLicensing Rights
Economic recessionSlow industry growth rate
Piracy/alternative sources of videoCord Cutting
SWOT