AOL Time Warner Merger Case Study Strategic Analysis, performing a SWOT, discussing the Culture of both firm's using Henry Mintzberg's Model, and evaluating the strategy.
A detailed Analysis of the AOL Time Warner Merger and its failure with special focus on the environment, strategy, structure, cultural aspects and their fits. Includes a detailed section on how mergers could be made more successful to generate the synergies that elude most mergers.
This is an analysis on Apple's Financial condition in 2013 where there's an excess cash and recommendation on how to do financial decision based on the condition.
The New York Times Paywall is a case study based on the business transition from the traditional to digital shift of e-newspapers. The launch of digital devices favoured the growth of The Times as well as the advantages of accessibility had escalated its demands and the viewership. They adopted the Paywall strategy for additional revenue generation through subscription plans. However, the dilemma was for the long term sustenance of the latest The New York Times business model.
A detailed Analysis of the AOL Time Warner Merger and its failure with special focus on the environment, strategy, structure, cultural aspects and their fits. Includes a detailed section on how mergers could be made more successful to generate the synergies that elude most mergers.
This is an analysis on Apple's Financial condition in 2013 where there's an excess cash and recommendation on how to do financial decision based on the condition.
The New York Times Paywall is a case study based on the business transition from the traditional to digital shift of e-newspapers. The launch of digital devices favoured the growth of The Times as well as the advantages of accessibility had escalated its demands and the viewership. They adopted the Paywall strategy for additional revenue generation through subscription plans. However, the dilemma was for the long term sustenance of the latest The New York Times business model.
Zenith (HDTV) Case Study by Dhiraj AgarwalDhiraj Agarwal
This presentation aims at informing its viewers what Zenith Electronics was all about. What are the its environmental factors that affected its sustainability in the market, ie, its 4Ps, 4Cs, SWOT and so on.
The study also reveals the Pros and Cons of all the alternatives discussed by the executives of the company to overcome their problem.
Finally a recommendation, its plan of action, and a contingency plan is also added in this Powerpoint.
NOTE: This powerpoint was presented in the form of a role play cum presentation, wherein the members of the group enacted a Board meeting scene of the company back in late 1980s, discussing the future of the company.
House of Tata: Acquiring a Global FootprintAbhigyan Singh
The 134-year-old Tata Group with 95 operating companies (31 of them publicly traded) and 230,000 employees, it is India's largest private-sector employer, its biggest taxpayer, and its greatest foreign-exchange earner.
This is MBA project submitted for Strategic Diversification of Walt Disney. States the steps taken by Disney to diversify from just cartoons to more of established entertainment company.
Apple INC.: Managing a Global Supply ChainAyesha Majid
As part of her analysis of Apple’s stock, she wanted to look at the company’s supply chain to see if she could gain some insight into the pros and cons of Apple as a key holding in BXE’s fund. When. Apple Computer was founded on April 1, 1976, by Steve Jobs, Steve Wozniak and Mike Markkula to manufacture and distribute desktop computers.
Zenith (HDTV) Case Study by Dhiraj AgarwalDhiraj Agarwal
This presentation aims at informing its viewers what Zenith Electronics was all about. What are the its environmental factors that affected its sustainability in the market, ie, its 4Ps, 4Cs, SWOT and so on.
The study also reveals the Pros and Cons of all the alternatives discussed by the executives of the company to overcome their problem.
Finally a recommendation, its plan of action, and a contingency plan is also added in this Powerpoint.
NOTE: This powerpoint was presented in the form of a role play cum presentation, wherein the members of the group enacted a Board meeting scene of the company back in late 1980s, discussing the future of the company.
House of Tata: Acquiring a Global FootprintAbhigyan Singh
The 134-year-old Tata Group with 95 operating companies (31 of them publicly traded) and 230,000 employees, it is India's largest private-sector employer, its biggest taxpayer, and its greatest foreign-exchange earner.
This is MBA project submitted for Strategic Diversification of Walt Disney. States the steps taken by Disney to diversify from just cartoons to more of established entertainment company.
Apple INC.: Managing a Global Supply ChainAyesha Majid
As part of her analysis of Apple’s stock, she wanted to look at the company’s supply chain to see if she could gain some insight into the pros and cons of Apple as a key holding in BXE’s fund. When. Apple Computer was founded on April 1, 1976, by Steve Jobs, Steve Wozniak and Mike Markkula to manufacture and distribute desktop computers.
Time Warner are a global leader in media and entertainment with businesses in television networks and films and TV entertainment, uses its industry-leading operating scale and brands to create, package and deliver high quality content worldwide on a multi-platform basis.
O'Reilly eBook: Creating a Data-Driven Enterprise in Media | eubolrVasu S
An O'Reilly eBook about Creating a Data-Driven Enterprise in Media DataOps Insights from Comcast, Sling TV, and Turner Broadcasting.
https://www.qubole.com/resources/ebooks/ebook-creating-a-data-driven-enterprise-in-media
Challenges and Opportunities in the Internet for Media CompaniesJose Claudio Terra
Apresenta uma análise da contribuição e desafios enfrentados por empresas de mídia na elaboração, desenvolvimento e manutenção de portais corporativos. Alerta para a importância da estratégia de GC como forte aliada para o sucesso do empreendimento.
www.terraforum.com
Megacast is more than a digital marketing agency. It’s a digital content factory that creates, produces and distributes high-level marketing materials while connecting your brand with celebrities and global thought leaders. Megacast’s powerful leadership navigates your business through the 21st century’s Digital Media, Branding, and Distribution landscape.
Running head COMPETITIVE ANALYSIS & STRATEGY 1COMPETITIVE ANA.docxtodd271
Running head: COMPETITIVE ANALYSIS & STRATEGY 1
COMPETITIVE ANALYSIS & STRATEGY 13
Table of Content
Executive Summary 3
The Target Country 4
Competitors 5
America Movil 5
Amazon Prime 7
Netflix Strength & Weaknesses 8
Porter Generic Strategy 10
Recommended Competitive Strategy 10
Conclusion 11
Summary 11
Reference 12
Executive Summary
The Walt Disney Company has a generic strategy for competitive advantage that capitalizes on the uniqueness of products offered in the entertainment, mass media, and amusement park industries. The company grows through innovation and creativity, which enable the business to compete against large firms (Panmore). By pairing up with Netflix will make Disney one of the most powerful companies in Mexico. Disney has a popular and strong brand, which is among the most easily recognizable in the world. Through this strength, the company presents itself as a decent and family-oriented business suitable for all customers. This internal factor helps manage customers’ expectations, which tend to be positive relative to the reputation of the Walt Disney brand.
Walt Disney Company is expanding its company by going to new ideas that will keep them on the competitive edge with their competitors. New direct to consumer service where the company will stream Disney based movies and television programs. The Disney brand will be streaming services do to the high demand of video on demand services. In 1954, with Disneyland, an anthology series hosted by Walt Disney himself, it became the first movie studio to strike out for the wild west of television. Since then, Disney’s dominance has only grown.
Walt Disney and Netflix, a media provider based in California and a world’s major player of video streaming services industry. It is a multibillion dollar company with annual earnings of 15.79 billion dollars. It is also a global company with 137.1 million subscribers around the world. It offers TV series, movie series, features films and documentaries which subscribers can view in the internet. In the video streaming industry is a 124 billion dollar industry and it is expected to grow at an annual rate of 19.6 percent (Grandview Research 2019). The Rapid Growth Rate is attributed to extensive usage of online video. Netflix holds a significant portion of the global market segment. Netflix and Walt Disney will be merging and targeting Mexico to become the biggest streaming company in Mexico. The Walt Disney Company positions itself as one of the leading firms in the entertainment, mass media, and amusement park industries. This position is achieved through business strengths that address weaknesses, opportunities and threats (the SWOT factors) in the global market. The Walt Disney Company must possess the strengths to withstand the negative effects of weaknesses and threats in its industry environment.
The .
Data Con LA 2018 - How is Blockchain Changing Relationships in Entertainment ...Data Con LA
How is Blockchain Changing Big Data Relationships in Entertainment by Mariana Danilovic, CEO, Hollywood Portfolio
It could be a presentation or a panel about big data issues in Entertainment that are driving adoption of blockchain platforms.
Merger of top companies:
-ExxonMobil
-Sirius XM Satellite Radio
-Sears Kmart
-Sprint Corporation and Nextel Communications
-Mattel & Learning Co.
-DISNEY-PIXAR
-AOL Time warner
Corporate Restructuring- MBA-IIUC
Team Leader: MD.RABIUL HOSSAIN
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Skye Residences | Extended Stay Residences Near Toronto Airportmarketingjdass
Experience unparalleled EXTENDED STAY and comfort at Skye Residences located just minutes from Toronto Airport. Discover sophisticated accommodations tailored for discerning travelers.
Website Link :
https://skyeresidences.com/
https://skyeresidences.com/about-us/
https://skyeresidences.com/gallery/
https://skyeresidences.com/rooms/
https://skyeresidences.com/near-by-attractions/
https://skyeresidences.com/commute/
https://skyeresidences.com/contact/
https://skyeresidences.com/queen-suite-with-sofa-bed/
https://skyeresidences.com/queen-suite-with-sofa-bed-and-balcony/
https://skyeresidences.com/queen-suite-with-sofa-bed-accessible/
https://skyeresidences.com/2-bedroom-deluxe-queen-suite-with-sofa-bed/
https://skyeresidences.com/2-bedroom-deluxe-king-queen-suite-with-sofa-bed/
https://skyeresidences.com/2-bedroom-deluxe-queen-suite-with-sofa-bed-accessible/
#Skye Residences Etobicoke, #Skye Residences Near Toronto Airport, #Skye Residences Toronto, #Skye Hotel Toronto, #Skye Hotel Near Toronto Airport, #Hotel Near Toronto Airport, #Near Toronto Airport Accommodation, #Suites Near Toronto Airport, #Etobicoke Suites Near Airport, #Hotel Near Toronto Pearson International Airport, #Toronto Airport Suite Rentals, #Pearson Airport Hotel Suites
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
2. Introduction
America Online:
Brief History
Strategic Formulation
Strategic Implementation
Strategy Evaluation
Industry Analysis
Organizational Culture and Structure
Time Warner:
Brief History: Time Inc.
Brief History: Warner Bros.
Brief History: Time Warner
Strategic Formulation
Strategic Implementation
Strategy Evaluation
Industry Analysis
Organizational Culture & Structure
4. This case analyzes the merger between Time Warner and AOL.
The merger had been established in 2001.
The case presents how lack of synergy– if not handled properly - can produce
catastrophic effects on corporate success.
The case defines how Corporate Culture and Organizational Structure are assets as
important as Physical and Financial resources.
5. 1983: Steve Case worked for Control Video, an online gaming services firm.
1985: The company changed its name to Quantum Computer and launched an online
service named Q-Link.
1989: The company expanded upon Q-Link with a new nationwide service named
America Online.
1991: Finally, the company itself had been named America Online.
BriefHistory
6. 1992: The company’s Initial Public Offering.
1993: Steve Case became CEO.
1994: Number of subscribers reached 1 million.
1995: AOL Europe had been created.
1996: Number of subscribers reached 5 million.
BriefHistory
7. “ A brand company, committed to continuously
innovating, growing, and investing in brands
and experiences that inform, entertain, and
connect the world. ”
StrategicFormulation
8. Steve Case placed AOL as the online service for people unfamiliar with
computers.
Steve Case focused on Marketing as a competitive advantage compared to
his competitors.
AOL was a pioneer in creating GUI chat services, Interactive online gaming,
and the Chat room concept.
AOL adapted its services to multiple HW and SW platforms: Apple II, Apple
Macintosh, IBM PC, Commodore 64, DOS, Windows, Mac OS.
StrategicFormulation
9. Products: Online Portals, Web Browsers, Instant Messengers, Online
Gaming, Video Streaming.
Markets: Individuals and Firms.
Functions Served: Marketing, Advertising, Entertainment, Communications,
e-Commerce.
Revenue Generation Mechanism: Advertising, Subscriptions.
StrategicFormulation
10. On the Corporate Level, the company follows a Diversification Strategy, both
in related and non related businesses.
On the Business Unit Level, the company follows Broad Differentiation
strategies, to appeal to as much consumers as possible and to victor over
competitors.
StrategicFormulation
11. The company implemented its strategies from Within, by relying on its own
knowledge and resources, and from Outside, by relying on Mergers,
Acquisitions, and Mutual Agreements.
StrategicImplementation
12. The company’s strategy paid off well:
Stock value had grown 50,000 percent since the IPO.
The company bought its main competitor CompuServe in 1998.
The company at its peak had 30 million subscribers.
The company became the premier ISP in USA.
StrategyEvaluation
13. AOL had been operating in a High Technology market, still in the growth
phase.
Internet Technology had been young, with very fast growth and
development ahead.
Companies competed with Technological Innovation.
Highly successful firms had no physical assets that match their worth.
IndustryAnalysis
16. AOL is a Hi-technology driven company, with a culture of Risk Taking,
Innovation, and Flexibility.
The company had fast paced, highly-reactive management culture.
The company had an Adhocracy structure, where support staff are the
most powerful (e.g.: R&D), creating a Pull to Collaborate and tending to
differentiate their products.
Organizational Culture&Structure
17. 1922: Henry Luce and Briton Hadden created Time Inc., a publishing firm.
1923: The Company published its first magazine, Time.
1930-36: Launched Life and Fortune magazines, despite the great depression.
1954-74: Launched Sports Illustrated, Money, and People.
1970: The company entered the Cable Television market.
BriefHistory: TimeInc.
18. The company also founded Home Box Office (HBO), a premium cable service.
Today, the company publishes 130 magazines.
BriefHistory: TimeInc.
19. 1923: The Warner brothers founded Warner Brothers Pictures.
1926: Patented the vita phone process.
1928: Produced the first full length film with sound.
1929: Introduced Color films.
1930s: The company was producing 100 films a year.
BriefHistory: WarnerBros.
20. 1969: Was acquired by Steven Ross’ Kinney National Services.
The company became one of America’s largest music
producers and cable television operators.
BriefHistory: WarnerBros.
21. 1989: Time Inc. and Warner Communications merged.
The company was worth $14 billion ($138 billion in today’s money).
1996: The Company acquired Turner Broadcasting System.
This brought WTBS, CNN, and TNT into the Company’s portfolio.
The company became the 2nd biggest cable company in the United States.
BriefHistory: TimeWarner
23. Time Warner focused on Quality and Variety of Content as a competitive
advantage compared to its competitors.
On the Corporate Level, the company followed a Diversification Strategy,
both in related and non related businesses.
On the Business Unit Level, the company follows Broad Best Value
strategies, to appeal to as much consumers as possible and to victor over
competitors.
StrategicFormulation
24. Products: Books, Magazines, Cable TV Services, Music, Retail, Theme parks,
Film Production & Distribution.
Markets: Individuals and Firms.
Functions Served: Journalism, Publishing, Media Production, Advertising,
Entertainment, Cultural Services.
Revenue Generation Mechanism: Advertising, Sales, Subscriptions,
Ticketing.
StrategicFormulation
25. Time Warner had been operating in a Mature Technology market.
IndustryAnalysis
28. The company had genteel, buttoned-down culture.
Companies operating in mature industries are risk averse and have
conservative management systems.
As a multi-layered company, the company had a Divisionalized form
structure, with Middle Management personnel highly affecting the firm’s
operations, creating a Pull to Balkanize and Standardizing Output. This is
natural for a company that follows a Best Value approach.
Organizational Culture&Structure
29. 10 Jan, 2000: Steve Case and Gerald Levin announced the merger.
AOL would pay $183bn in Stock for Time Warner.
AOL would assume $17bn of Time Warner’s debt.
AOL would own 55% of Time Warner.
Stock combination value was $350bn.
TheMerge
30. AOL was the 1st Internet Service Provider in the US.
Time Warner was the 2nd Cable company in the US.
Combined revenue was over $30bn.
TheMerge
31. “ Create the world’s first global, fully integrated
media and communications company for the
internet century ”
StrategicFormulation: Vision
32. “ Delivering Branded Information, Entertainment, and
Communications across converging media platforms
and changing technologies ”
StrategicFormulation: Mission
“ Speeding growth of interactive medium to provide far
reaching benefits to the customers ”
“ Offering vast array of world class content to accelerate
availability of Broadband Interactive Services ”
33. Physical/Technological Resources:
Unparalleled assets and infrastructure.
The company owned the whole supply chain for Content Creation, Management, and Distribution.
Owns one of the most advanced Fiber Optics and Digital Technology networks.
Vast array of World-Class Media Content.
Technologically advanced Broadband Delivery Systems.
AOL now has a new Broadband Distribution Platform .
Added Value for AOL, attracting more users: Very Rich online content, discounts on movies,
magazines, and cable subscriptions for subscribers.
Warner Bros. retail stores will allow AOL to market its services widely.
AOL disks will be included in Time Warner’s product shipments.
AOL will accelerate Time Warner’s Digital Transformation.
Popular AOL products will be available for Time Warner’s Road Runner users.
SituationalAnalysis: Strengths
34. Human Resources:
Unparalleled resources of Creative and Journalistic talents.
Excellent Management expertise.
General Organizational:
Excellent Reputation: AOL was the 1st ISP and Time Warner the 2nd Cable Operator.
Huge Customer Base: 30 million AOL subscribers and 12.7 million Time Warner customers, also Time
Warner’s magazines had more than 268 million readers.
Alliances with leading brands and retailers, making advertising a huge source for revenue.
The combination of Time Warner’s content and cable with AOL’s Internet distribution capabilities
makes the merger so difficult to duplicate.
The merge will allow both companies to go global.
SituationalAnalysis: Strengths
35. Knowledge and Learning:
The company is on the edge of all new innovations and technologies.
Financial Resources:
Stock Combination valued at $350 bn.
Combined Revenues of more than $30 bn in the US.
Combined Revenues of more than €250 mn in Europe.
The ability to take in more debt if necessary.
The company’s Financial strength allows it to follow an aggressive acquisition strategy.
Online promotion will reduce money spent on newspaper and advertising media.
Cross-Marketing will reduce the marketing budget significantly.
The ability to cut divisional costs as direct mailing costs are cut in favor of online renewal services..
Warner Music can digitally distribute its content rather than manufacture millions of compact discs.
SituationalAnalysis: Strengths
36. Physical Resources:
AOL suffered for some time from Low Quality of Service.
AOL’s delivery infrastructure suffered from the Last Mile Problem.
Human Resources:
Top Managers in both companies had no information about the merge, and many of them had
concerns and reluctance.
Execution Risk: Huge difference in Culture due to difference in Technology phase can cause an effect of
Lack of Synergy if not addressed properly.
Too many big names in the executive management team, which can create problems in decision
making.
The new management team weighs heavily in favor of AOL, which can create problems.
SituationalAnalysis: Weaknesses
37. General Organizational Resources:
Neither AOL nor Time Warner had a major global position, AOL Time Warner conducted less than 20%
of its business abroad.
Time Warner had a bad reputation among internet investors as an Old, Traditional, Slow Growth
company.
The company structure was strange for investors and cannot be easily valued.
AOL’s business model needs time and significant capital investment.
Financial Resources:
Time Warner suffered from huge debts, from which AOL assumed $17bn.
Share prices were declining due to the prolonged approval process.
AOL Time Warner’s combined value was $205bn after approval of the deal.
Time Warner suffered from high depreciation and interest charges.
SituationalAnalysis: Weaknesses
38. Technological Factors:
The rapid Conversion between Media, Computing, and Communications Technologies.
The rapid growth of Internet Technologies and its Uses.
Socio-Cultural Factors:
The emergence of a new generation, eager to get the most out of the internet.
Economic Factors:
Huge investments in e-companies during that period.
SituationalAnalysis: Opportunities
39. Market Conditions - US:
AOL’s added value will secure it from local competition and raise the entry barriers.
The entry barrier is already high due to required investments.
The company can now raise prices, as it provides unique services to its customers.
The bargaining power of customers is high, as Entertainment services are not crucial for peoples’ lives.
The bargaining power of suppliers is low, as the company owns its own suppliers.
Competition was intense only in the Media and Cable markets (Disney), while in the ISP market AOL
had a huge gap ahead of its competitors.
SituationalAnalysis: Opportunities
40. Governmental/Legal Factors:
The merge needed approval from the FTC, which was a lengthy process.
The FTC was concerned about antitrust issues and cable access concerns about the merge.
The merge needed unexpected additional approval from the FCC.
Operations in Europe needed approval from the European Commission.
Time Warner had to drop its joint venture plan with EMI to move ahead with AOL merger.
AOL had to detach Bertelsmann AG to move ahead with Time Warner merger.
Socio-Cultural Factors:
A potential risk was a strike by screen actors and writers, which can have negative impacts on the
company.
A problem of protecting Intellectual Property Rights on the internet.
Customer unwillingness to pay add-on subscription fees.
SituationalAnalysis: Threats
41. Economic Factors:
Volatile stock prices resulted from the change in investor base.
The dot-com bubble was at AOL’s door, changing many firms from dot-coms to dot-gones due to
devaluation in technology stocks.
Investors were concerned about the merger, specially after the failure of Lycos-USA Networks merger
in 1999.
Inevitable withdrawal of short term investors’ money while the company awaited approval.
Economic Volatility: Completely uncontrollable and unpredictable economic factors.
Technological Factors:
Solving AOL’s last mile problem globally would be very expensive.
Interoperability among separate Instant Messaging brands was a major concern.
SituationalAnalysis: Threats
42. Market Conditions – US & Global:
Increased Uncertainty about the market at that time.
The Advertising Market – a major source for revenue – was softening.
Technology alternatives existed such as: Satellites, Fiber Optics, and DSL.
Intense competition from the following firms: Vivendi Universal, NewsCorp, Walt Disney, Bertelsmann
SituationalAnalysis: Threats
43. On the Corporate Level, the company is seeking Vertical Integration of the supply
chain, while at the same time keeping the company diversified in its business.
On the Business Unit Level, the company is seeking Broad Best Value approach.
StrategicFormulation -Revisited:
46. StrategyEvaluation:
Management did not take into account the importance of Organizational Culture and
Structure for ensuring survival.
The company failed to address Cultural Differences among its employees, although it had
unmatched physical, technological, and human resources.
The Structure of the management team caused huge conflicts among employees, specially
from Time Warner’s side.
The company had no specific structure as it had a mix between a Divisionalized firm and
an Adhocracy based firm. This created conflicts among personnel.
The company also suffered from AOL’s surprising devaluation because of the dot-com
bubble.
47. StrategyEvaluation:
“ The value of this merger lies not only in what it
is today but in what it will be in the future ”
Bob Pittman, AOL Time Warner COO - Jan 2000