The Assignment has 5 components:
1.Provide background to a Company and a Competitive Environment the company operates in (200 words)
2.Apply one concept/approach from Manual Section 6/Grant on your selected Company (200 words)
3.Apply one concept/approach from Manual Section 5/Grant on your selected Competitive Environment (200 words)
4.Apply a different Company concept/approach (to that selected in 2. above) to Unilever (Note: the whole of Unilever, not only Ice cream) – (200 words)
5.Apply a different Competitive Environment concept/approach (to that selected in 3. above) to Ice Cream in a country of your choice (200 words)
Section 1: Company and competitive environment
Overall financial performance
Table 1: Summary of the overall consolidated financial results for Time Warner Cable Inc. for the years 2014, 2013 and 2012 in millions
|Total costs and expenses||18,180||17,540||16, 941|
The quantification and trend of the company’s portfolio
Table 2: The quantification and trend of the portfolio of Time Warner Cable Inc. in millions
|Cash provided for operating activities||6350||5753||5525|
|Cash utilized for investment activities||4092||3476||3345|
|Cash and equivalents of financial activities at the end of each year||707||525||3304|
The primary challenges that Time Warner Cable Inc. faces are inclusive of the aspect that the organization faces intellectual property rights that might hinder it from taking advantage of the trends in the industry. These rights do not provide the company with the competitive advantages needed (19). Conversely, in relation to the aspect of tax measures, which is a consideration that has an effect on the company’s revenue, the firm faces legal challenges that include its status of tax parity (12). The organization focuses on the exploitation of the growth in its Business Services department. In this case, the company has a modest share that has led to the establishment of services in excess of $5 billion, which is the expected revenue by the year 2018.
Competitive environments background
Diagram 1: The definition of Time Warner’s competitive environment in terms of pre-buyout setting
Source: Short, 2015, np
Table 3: An outline of the data on competitors and customers
|Financial Highlights||Walt Disney||News Corp.||Time Warner|
|Revenue (2010), (in billions $)||39.04B||32.55B||27.25B|
|Quarterly Revenue Growth||10.00%||-6.00%||5.70%|
|Earnings Per Share ($)||2.27||1.12||2.22|
Challenges and opportunities in the competitive environment
Technological advancements as well as the changes in consumer behavior and expectations contribute to the intensified competition for discretionary audience spending and leisure time. The organization’s business faces several risks, most of which relate to the increment of consumer spending and leisure time. The technological advancements considered are inclusive of new video formats, streaming over the internet, and downloading programs through mobile devices, television and computers. The increment in the number of choices that the audience can access poses a challenge to the aspect of audience fragmentation (USSEC, 2009, p. 17).
Section 2: Approaches to select from Time Warner Inc
The company’s mission involves connecting individuals as well as organizations with each other, entertainment, and information in a simple and easy manner.
Becoming the premier service provider of television, internet and phone services
Value statement and objectives
The values of the firm include the aspect of creativity. The objectives include:
- Fulfilling consumer needs and interest
- Embracing change
- Seizing new opportunities
The analysis and development of the firm’s resources and capabilities: Ansoff Matrix
Time Warner relies on patenting, trademarks, copywriting and trade secret licenses and laws with consumers, suppliers and employees (USSEC, 2014, p. 19). The company needs to change its offerings or business practices, conversely limiting its ability to ensure an effective competition in the industry by obtaining licenses under reasonable terms. The institution is party to litigation since it provides several services that infringe the rights of other entities’ intellectual property (USSEC, 2009, p. 19).
Vrontis (2011, P. 8) indicates that there is a direct link between merging strategies and the Ansoff’s Matrix. In this case, the merger between Time Warner and EMI could assist in market penetration. The institutions can also benefit from the developing operations in other markets. Conversely, the merger could assist in new product developments and market diversification (Vrontis, 2011, p. 8).
Diagram 2: The Ansoff Matrix
Source: Vrontis, 2011
Section 3: Using Porters five forces approach to the selected competitive environment
Diagram 3: probable impact of a corporation’s effort on competitive considerations
Diagram 3: the 5 forces as applicable to the music industry
Source: Vrontis, 2011, p. 15
In terms of competition, it is essential for the company to maintain the consumer orientation as it is facing the issue emanating from further investments and developments. Assessing the competitive environment in terms of Porter’s five value chain analysis, it would be essential to consider the primary activities that relate to the firm’s operational systems, which focus on competition in terms of costs. The merger between EMI and Time Warner emphasizes on the reduction of manufacturing costs due to their economies of scale. In terms of advertisements, the two companies utilize the internet and the infrastructure available to support such activities.
The key drivers considered in the company’s external environment include the tremendous opportunities that have come about from the developments of the new media and the internet. In this case, the music industry is increasingly becoming globalized. Conversely, consumer preferences and tastes are constantly evolving. For this reason, Porters model illustrate that the competition in the industry is increasing since competitors are becoming more innovative and sophisticated. In this regard, the aspect of buyer power confirms that the price sensitivity is higher, which indicates that organizations in the industry should be more market oriented.
Section 4: The application of Porter’s approach to Unilever
Unilever is operating on a highly unpredictable and competitive environment. This consideration is primarily applicable to the economic situation in the market, which is making it difficult for the company to operate effectively. The fundamental considerations in relation to Porter’s five forces model include the aspect of buyer power. Unilever’s buyers are available internationally. Since the buyers are numerous, it means that they are not powerful to ensure that the company’s products are available cheaply (Hill & Jones, 2009, p. 59). In this case, this organization has little vigilance in making decisions over its products prices as well as ensuring that their customers remain contented.
The other factor affecting the company is related to the aspect of competitive rivalry. Unilever has a considerable number of opponents in products trade, who make attractive products that heighten the company’s competitive atmosphere (Hill & Jones, 2009, p. 60). The threat of substitution follows the idea that consumers usually try using new and better products from other producers, which poses as a threat to the substitution consideration of the organization. The power of the suppliers also affects the organization. In this case, the supplier power assists in the provision of breaking supplier authority, thereby making them weaker in relation to their bargaining power in the company’s terms.
Section 5: A competitive environment approach to ice cream in UAE
One of the most appropriate methods to consider in analyzing the competitive environment considered would be using the competitor analysis approach. According to Euromonitor International, the IFFCO Group was the leading organization in terms of value shares in 2014, totaling to 38% in the category of ice cream. The success is attached to the firm’s economy brand as well as the premium offerings derived from the name London Dairy (Euromonitor International, 2014, p. 2). This is an indication that factors affecting the competitive environment in consideration is dependent on market segmentation the campaigns that organizations embrace, and the domination of specific brands. In this case, Euromonitor International identifies premium brands that are becoming increasingly successful due to the consumer awareness. The other factor affecting competition in this market relates to the aspect of price sensitivity. This factor affects the segmentation of this market, through which IFFCO group has managed to get ahead of the competitors by selling the economy brand. For this reason, the possible assumption is that competition in this environment focuses on branding and market segmentation. The segmentation in consideration comes about from pricing strategies utilized, the income of the consumers, as well as the consumer awareness of the several brands available in the market.
Euromonitor International. (2014). Ice Cream in the United Arab Emirates.
Hill, C. W. L., & Jones, G. R. (2009). Essentials of strategic management. Mason, OH, South-Western/Cengage Learning.
Lasher, W. (2014). Practical financial management. Mason, OH, USA : South-Western Cengage Learning.
Short, K. (2015). This Is What The Comcast-Time Warner Merger Does To Cable TV (It’s Appalling). [online] The Huffington Post. Available at: http://www.huffingtonpost.com/2014/02/14/comcast-time-warner-deal_n_4789373.html?ir=India&adsSiteOverride=in [Accessed 28 Jun. 2015].
Vrontis, D. (2011). EMI and Time Warner – The analysis of the industry as a key factor to strategic formulation. International journal of management case studies, 5-18.