Competitive and Industry Analysis on Time Warner Cable

1. David Green, Frankie Miamen, Tiffany Gray, Nick Foster, Tobi Coker

2. PEST Analysis
Factor Threats or opportunity Impact
Political -Legal proceedings/ regulations 1.moderate
-Due to our concentrated market political restriction 2. high
are implemented.
3. low
+ Political Advertising
Economic + Economic Growth in Europe and Asia- Pacific. 1.low
-Economic Recession. 2. high
Social + 80% of US households subscribe to paid TV services. 1.high
(include demographic) + Increase growth in Latin America and Hispanic 2.moderate
population.
3.high
+Consumerism
Technological + Technological advancements, such as VOD, new 1.high
video format, and internet streaming and
2.high
downloading are beneficial.
3.Moderate
- Bundles have increased competition.
4.Moderate
+ Advancement in the use of internet and mobile
devices
+Fiber Optics

3. ETOP
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)

4. 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

5. Revenue from U.S. and The Rest of the World
Global Broadcasting and Cable TV
Europe
29.7%
United States Other
47.7% 51%
Asia Pacific
22.6%

7. Market Share
9
17
DirecTV
15 Comcast
Time Warner Cable
Dish Network
28

8. Programming Costs
62.00%
50.00% 51.00%
35.10%
Time Warner Cable Comcast Corp. DirecTV Dish Network

9. 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 $75 / month
(optional: DVR and HD) + $7 (optional DVR)
+ $10 (optional HD)
Dish Network Dish Family Over 55 channels $20 / month

10. Industry Outlook
Market Segment: Expected growth: Market Value:
(2009-2014) (2014) in millions
US 3% $147,212
Europe 2.9% $110,837
Asia Pacific 5.7% $96,472

11. Force Strength Reason
Rivalry Strong • New Service Introductions
• Several Mergers & Acquisitions
• Slow Market Growth in the U.S.
• Price Competition & Increasingly Standardized Products
Porter’s 5 • Marketing Tactics: Sales Promotions & Advertising
•
Forces New Entrants Low Industry is Characterized by Economies of Scale
• Strong Customer Loyalty and Brand Preference
• High Capital Requirements & Restrictive Government
Policies
Summary • 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

12. Overall Competitive Force &
Attractiveness
 Overall Competitive Force-Moderate to Strong
 Unattractive New Entrants
 Attractive Current Industry Members

13. Key Success Factors
 Customer Relations & Research
 Economies of Scale
 Location/Reach
 Clever Marketing
 New Service Innovations/Capabilities
 Programming

14. Customer Relations & Research
 Importance weight .10
 Customer Retention
 Loyalty Programs
 Customer Service
 Consumer Research
 Predicting Trends

15. Economies of Scale
 Importance weight .17
 Cost Reduction
 Operating Income/profits

16. Location and Reach
 Importance weight .23
 Subscribers
 Customer Service Centers
 States or Internationally

17. Clever Marketing
 Importance weight .12
 New revenue stream
 Advanced/Dynamic Advertising
 Differentiation

18. New Service Innovations and
Capabilities
Importance weight .23
 Diversification
 Differentiation

19. Programming
 Importance weight .15
 Programming Cost
 Content
 Networks
 Broadcast Stations

20. CSA
Key Success Time Warner Cable Inc. Comcast Corp. DirecTV Dish Network
Factor/Strength Measure
Importance Strength Score Strength Score Strength Score Strength Score
Weight Rating Rating Rating Rating
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 0.23 6.0 1.4 9.0 2.1 7.0 1.6 7.0 1.6
Capabilities
Programming 0.15 9.0 1.4 10.0 1.5 8.0 1.2 5.0 0.8
Sum of Importance 1.00
Weights
Weighted Overall Strength 43.00 7.03 52.00 8.88 49.00 8.02 35.00 5.66
Rating

21. SWOT
Strengths: Weakness:
Brand name Failure to innovate
Strong market position Expensive
Programming Variety Significant debt
Consistent revenue growth Legal investigations
Lowest programming cost Heavy dependence of suppliers
Social Responsibility Requires Personal Information
Diversity Customer Service
Opportunities: Threats:
Online video content Stand alone services
International market Heavy competition
Fiber Optics Government regulations
Growth of HDTV/3D Licensing Rights
Cloud Computing Economic recession
Rapid technological changes Slow industry growth rate
Mergers/acquisitions and joint ventures Piracy/alternative sources of video
Cord Cutting