Time Warner Cable Industry/Competitive Analysis

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Competitive and Industry Analysis on Time Warner Cable

Competitive and Industry Analysis on Time Warner Cable

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  • 1. David Green, Frankie Miamen, Tiffany Gray, Nick Foster, Tobi Coker
  • 2. PEST AnalysisFactor Threats or opportunity ImpactPolitical -Legal proceedings/ regulations 1.moderate -Due to our concentrated market political restriction 2. high are implemented. 3. low + Political AdvertisingEconomic + Economic Growth in Europe and Asia- Pacific. 1.low -Economic Recession. 2. highSocial + 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 +ConsumerismTechnological + 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. ETOPFactor Threat or OpportunityMarket 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 valueNumber of Rivals -AT&T and Verizon have upgraded their networks to carry two-way video and substantial bandwidth. -Intense competitionDifferentiation -Standardized services -Easy to duplicate new service innovations +Customer Loyalty programsSupply/Demand Conditions -Heavy reliance of suppliersPace 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 CostVertical Integration +Reduce programming costIndustry Trends + Growth of large media companies & Television. -Prices increase for programming -Discrete Consumerism. -+oint ventures/mergers and acquisitionsThreats 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%
  • 6. Market Share 9 17 DirecTV15 Comcast Time Warner Cable Dish Network 28
  • 7. Programming Costs 62.00% 50.00% 51.00% 35.10%Time Warner Cable Comcast Corp. DirecTV Dish Network
  • 8. Name of Company Package What Is It? CostTime Warner Cable Triple Play TV, Internet, phone $124.85 / monthComCast Triple Play TV, Internet, phone $99 / monthDirecTv 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
  • 9. Industry OutlookMarket Segment: Expected growth: Market Value: (2009-2014) (2014) in millionsUS 3% $147,212Europe 2.9% $110,837Asia Pacific 5.7% $96,472
  • 10. Force Strength Reason Rivalry Strong • New Service Introductions • Several Mergers & Acquisitions • Slow Market Growth in the U.S. • Price Competition & Increasingly Standardized ProductsPorter’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 PoliciesSummary • 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
  • 11. Overall Competitive Force &Attractiveness Overall Competitive Force-Moderate to Strong Unattractive New Entrants Attractive Current Industry Members
  • 12. Key Success Factors Customer Relations & Research Economies of Scale Location/Reach Clever Marketing New Service Innovations/Capabilities Programming
  • 13. Customer Relations & Research Importance weight .10 Customer Retention Loyalty Programs Customer Service Consumer Research Predicting Trends
  • 14. Economies of Scale Importance weight .17 Cost Reduction Operating Income/profits
  • 15. Location and Reach Importance weight .23 Subscribers Customer Service Centers States or Internationally
  • 16. Clever Marketing Importance weight .12 New revenue stream Advanced/Dynamic Advertising Differentiation
  • 17. New Service Innovations andCapabilitiesImportance weight .23 Diversification Differentiation
  • 18. Programming Importance weight .15 Programming Cost Content Networks Broadcast Stations
  • 19. CSAKey Success Time Warner Cable Inc. Comcast Corp. DirecTV Dish NetworkFactor/Strength Measure Importance Strength Score Strength Score Strength Score Strength Score Weight Rating Rating Rating RatingConsumer Relations 0.10 6.0 0.6 7.0 0.7 10.0 1.0 8.0 0.8Economies of Scale 0.17 8.0 1.4 10.0 1.7 9.0 1.5 3.0 0.5Location/Reach 0.23 6.0 1.4 9.0 2.1 8.0 1.8 5.0 1.2Clever Marketing 0.12 8.0 1.0 7.0 0.8 7.0 0.8 7.0 0.8New Service Innovation 0.23 6.0 1.4 9.0 2.1 7.0 1.6 7.0 1.6CapabilitiesProgramming 0.15 9.0 1.4 10.0 1.5 8.0 1.2 5.0 0.8 Sum of Importance 1.00WeightsWeighted Overall Strength 43.00 7.03 52.00 8.88 49.00 8.02 35.00 5.66Rating
  • 20. 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 rateMergers/acquisitions and joint ventures Piracy/alternative sources of video Cord Cutting