Expert answer:The Strategic Management Cycle, management homewor
Answer & Explanation:The Strategic Management Cycle
Case Assignment
For your case assignment this session the organization you will be
reviewing is Dish. You will be considering how this organization
competes within a very competitive industry.
After reviewing the book section, presentation materials, and
additional readings, consider the organization’s mission/vision/values
and key stakeholders and discuss the organization’s position and niche
in the competitive environment.
Make sure you present the company’s mission, vision, and/or values
(whatever the company makes available to the public along these lines),
and discuss the company’s most important primary stakeholders. Indicate
whether you believe the company’s mission, vision, and/or value
statements are in alignment with stakeholder needs. That is, does the
organization treat key stakeholders in a fashion that is in alignment
with its posted mission/vision/values?
Also, is the organization’s mission/vision/values in alignment with the volatile environment in which it competes?
Assignment Expectations
Your case assignment should be a minimum of 4 pages in length.
You are required to use APA formatting and you are required to cite
and reference your sources. There should be a minimum of three
reputable sources cited and referenced in your paper.
Please make sure you review the assignment rubric prior to writing your assignment.
Module 1 – Background
The Strategic Management Cycle
Here is an e-text we will be using throughout the session that
provides a good overview of the strategic management cycle. Please read
the pages specified:
Subba, R. (2009). Strategic Management [Including Skill
Development]. Himalaya Publishing House. Retrieved as e-book from
Trident University’s online library. Pp. 20-51
Here are a few articles that provide more of an overview of strategic management:
Nag, R., Hambrick, D. C., & Chen, M. (2007). What is strategic
management, really? Inductive derivation of a consensus definition of
the field. Strategic Management Journal, 28(9), 935-955. Retrieved from
Trident University Library.
Harrington, R. J., & Ottenbacher, M. C. (2011). Strategic
management. International Journal of Contemporary Hospitality
Management, 23(4), 439-462. Retrieved from Trident University Library.
Here are a couple presentations that also provide an overview of strategic management:
Pearson Custom (2014), Strategic Management Process and Organizational Strategies. Retrieved from: http://www.pearsoncustom.com/mct-comprehensive/asset.php?isbn=1269879944&id=12166
Pearson Custom (2014), Strategic Management and Planning Techniques. Retrieved from: http://www.pearsoncustom.com/mct-comprehensive/asset.php?isbn=1269879944&id=12168
Please open the Trident University IBIS World
document and scroll to the bottom of the page. Click on the “Click
Here” hyperlink at the bottom of the page. This will take you to IBIS
World, an organization well known for conducting industry level
research. Run a search on “Cable” in the search window. You will then
see a list of links that will lead you to detailed industry specific
report. Please click on Cable Providers in the U.S.
Also take some time to look at what’s going on in related industries.
Here are some readings related to the competitive environment
surrounding the cable industry. Although many folks consider large
cable companies to have a near monopoly position in the marketplace, the
services provided by organizations such as Netflix, Dish, Amazon Prime,
Hulu, and others are causing a lot of individuals to ‘cut the cord’ due
to the high prices the cable companies charge for their services.
Gallaga, O. L. (2014, Jun 15). Rethink costs before cutting cable
cord. The Atlanta Journal – Constitution Retrieved from Trident
University Library.
Mann, E. (2014, Apr 08). Students cutting the cord to cable. University Wire Retrieved from Trident University Library.
Platt, G. (2014). Cable television industry consolidates. Global Finance, 28(3), 63. Retrieved from Trident University Library.
Schredder, S. (2014, Apr 29). Netflix goes cable. Benzinga Newswires Retrieved from Trident University Library.
Making friends; Netflix. (2013, Sep 14). The Economist, 408, 71. Retrieved from Trident University Library.
Schechner, S. (2014, Jan 28). Netflix gears up to expand in europe;
rival media companies race to grab subscribers, program rights. Wall
Street Journal (Online). Retrieved from Trident University Library.
Ramachandran, S. (2013, Oct 13). Netflix pursues cable-TV deals;
online video service would be available on set-top boxes. Wall Street
Journal (Online). Retrieved from Trident University Library.
Bensinger, G. (2012, Sep 26). Netflix CEO keeps focus on expansion,
price. Wall Street Journal (Online). Retrieved from Trident University
Library.
Ramachandran, S., & Ziobro, P. (2013, Jun 21). Dish may cast a
wider net. Wall Street Journal (Online). Retrieved from Trident
University Library.
Ramachandran, S., & Peers, M. (2013, Apr 15). Dish’s Ergen
doesn’t shy from a fight. Wall Street Journal (Online). Retrieved from
Trident University Library.
Chaudhuri, S. (2013, Feb 13). Amazon strikes content deal with CBS
for prime service. Wall Street Journal (Online). Retrieved from Trident
University Library.
Amazon adds streaming-video service for prime members. (2011, Feb
22). Wall Street Journal (Online). Retrieved from Trident University
Library.
Gottfried, M. (2012, Sep 05). Amazon deal takes fight to netflix.
Wall Street Journal (Online). Retrieved from Trident University
Library.
Sharma, A. (2014, Jan 21). Amazon considering online pay-TV service;
live TV channels would compete with cable, satellite. Wall Street
Journal (Online). Retrieved from Trident University Library.
51711b_satellite_tv_providers_in_the_us_industry_report.pdf
51711b_satellite_tv_providers_in_the_us_industry_report.pdf
Unformatted Attachment Preview
Satellite TV Providers in the US December 2015 1
WWW.IBISWORLD.COM
Competition streaming in: The rising popularity of
online entertainment will slow revenue growth
IBISWorld Industry Report 51711b
Satellite TV Providers in the US
December 2015
Nick Petrillo
2
About this Industry
17 International Trade
2
Industry Definition
18 Business Locations
2
Main Activities
2
Similar Industries
20 Competitive Landscape
33 Industry Data
3
Additional Resources
20 Market Share Concentration
33 Annual Change
20 Key Success Factors
33 Key Ratios
4
Industry at a Glance
5
Industry Performance
23 Barriers to Entry
5
Executive Summary
24 Industry Globalization
5
Key External Drivers
7
Current Performance
32 Industry Assistance
33 Key Statistics
20 Cost Structure Benchmarks
22 Basis of Competition
34 Jargon & Glossary
25 Major Companies
10 Industry Outlook
25 DirecTV Inc.
12 Industry Life Cycle
26 Dish Network LLC
14 Products & Markets
29 Operating Conditions
14 Supply Chains
29 Capital Intensity
14 Products & Services
30 Technology & Systems
15 Demand Determinants
30 Revenue Volatility
16 Major Markets
31 Regulation & Policy
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
Satellite TV Providers in the US December 2015 2
WWW.IBISWORLD.COM
About this Industry
Industry Definition
Companies in this industry distribute
television (TV) programs on a
subscription or fee basis through direct
broadcast satellites. The industry also
includes multipoint distribution system
operators that deliver wireless TV
Main Activities
The primary activities of this industry are
programming using ground stations.
These companies operate in rural areas
and have a negligible effect on industry
performance. This industry excludes
broadcast TV networks and other satellite
telecommunications providers.
Providing basic satellite TV programming
Providing premium and pay-per-view satellite TV programming
Leasing or retailing digital video recorders and set-top boxes
The major products and services in this industry are
Basic programming
DVR service
HD channels
Video on demand
Other
Similar Industries
51511 Radio Broadcasting in the US
This industry includes radio broadcasting stations, networks and syndicates that transmit audio
programming through AM, FM and satellite radio channels.
51512 Television Broadcasting in the US
This industry operates studios and facilities that program and deliver audiovisual content to the public via
over-the-air transmission.
51521 Cable Networks in the US
This industry includes companies that operate studios and facilities to distribute TV programs on a
subscription or fee basis through cable.
51741 Satellite Telecommunications Providers in the US
This industry provides telecommunications connections via satellite for broadcasters and other
telecommunications providers. This industry excludes direct-to-home satellite TV services.
51791b Radar & Satellite Operations in the US
The industry works with companies that provide satellite telecommunications services, telemetry and
tracking and control services. It also operates radar stations and satellite terminal stations.
51711a Cable Providers in the US
This industry delivers TV programming received from cable networks or local TV stations via cable systems
on a subscription basis.
Satellite TV Providers in the US December 2015 3
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About this Industry
Additional Resources
For additional information on this industry
www.fcc.gov
Federal Communications Commission
www.nielsen.com
Nielsen
www.sbca.com
Satellite Broadcasting & Communications Association
www.satbiznews.com
Satellite Business News
IBISWorld
writes over 700 US
industry reports, which are updated
up to four times a year. To see all
reports, go to www.ibisworld.com
WWW.IBISWORLD.COM
Satellite TV Providers in the US December 2015
4
Industry at a Glance
Satellite TV Providers in 2015
Key Statistics
Snapshot
Revenue
Annual Growth 10-15
Annual Growth 15-20
Profit
Wages
Businesses
$52.8bn
7.1%
$9.6bn
$2.9bn
Number of cable tv subscriptions
Revenue vs. employment growth
Dish Network LLC
29.4%
% change
DirecTV Inc.
53.3%
16
106
12
104
102
8
Millions
Market Share
4
0
-4
Year 07
4.0%
25
100
98
96
09
Revenue
11
13
15
17
19
21
94
Year 06
08
10
12
14
16
18
20
Employment
SOURCE: WWW.IBISWORLD.COM
p. 25
Products and services segmentation (2015)
2.3%
4.0%
Key External Drivers
DVR service
Number of cable
TV subscriptions
Other
22.1%
Per capita disposable
income
39.5%
HD channels
Basic programming
Number of mobile
internet connections
Number of households
Consumer
Confidence Index
32.1%
p. 5
Industry Structure
Video on demand
Life Cycle Stage
Revenue Volatility
SOURCE:
WWW.IBISWORLD.COM
SOURCE:
WWW.IBISWORLD.COM
Growth
Regulation Level
Heavy
Low
Technology Change
High
Capital Intensity
High
Barriers to Entry
High
Industry Assistance
None
Industry Globalization
Low
Concentration Level
High
Competition Level
High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 33
Satellite TV Providers in the US December 2015 5
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Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive
Summary
Satellite television (TV) providers
distribute TV programs on a
subscription or fee basis through direct
broadcast satellites. New networks,
more channels and bonus features have
strengthened the industry despite shaky
subscriber growth rates in recent years.
The introduction of high-definition TV
improved the quality of programming
and attracted subscribers to highermargin packages. IBISWorld expects
higher spending on industry services to
result in revenue growth of 7.1% over the
five years to 2015. However, in 2015,
revenue is expected to increase at a
slower 4.2% to $52.8 billion, as large
investments raise expenses and offset
the positive influence of increased prices
and subscriptions.
Companies in the industry fight in a
saturated market invaded by external
competition. With satellites already in
orbit, major players incur low costs per
additional subscriber, keeping profit
healthy. However, the cost of acquiring
and maintaining subscribers has
increased, and stiff competition prevents
providers from passing costs on to
customers. Progressive technologies have
advanced the quality and speed of
direct-broadcast satellite transmissions,
increasing the medium’s marketability.
New online services and mobile app
devices are mitigating losses stemming
from customers migrating to online
streaming. Nevertheless, the threat from
these external competitors is expected to
increase as internet streaming companies
acquire and produce original content,
shoving their way into the industry.
Telecommunication providers have
thrust themselves into the contest, with
AT&T acquiring DirecTV and expanding
the company’s services into a range of
telecommunications spheres.
The growing availability of online
content, along with an expanding
market for connected devices, internetconnected TVs and emerging mobile
technologies, will continue to pose a
threat to traditional TV. The ability of
the major players that survive the
competition and continue developing
ways to retain and attract subscribers
will determine industry revenue growth.
With a slower annual rise in demand
from subscribers, IBISWorld forecasts
revenue will increase at a slower
annualized 4.0% to $64.2 billion over
the five years to 2020.
Number of cable TV subscriptions
The cable industry, which competes
directly with satellite TV providers, has
been bundling TV services together with
internet, telephone and other home
services to generate higher demand and
average revenue per subscriber. As cable
attracts consumers, market potential for
satellite providers shrinks. The number
of cable TV subscriptions is expected to
decrease slowly in 2015.
Per capita disposable income
Satellite TV services are a discretionary
purchase for most consumers. As a result,
the industry is very sensitive to changes in
economic activity. Lower disposable
income during periods of economic decline
hurt the industry’s ability to hold onto
existing subscribers and attract new ones.
Per capita disposable income is expected to
increase during 2015, representing a
potential opportunity for the industry.
The
growing availability of online content will
continue posing a threat to traditional TV
Key External Drivers
Satellite TV Providers in the US December 2015 6
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Industry Performance
Number of mobile internet connections
Over the past five years, broadbandenabled mobile devices, such as
smartphones and tablets, have
proliferated throughout the United
States. As mobile broadband connections
have become more ubiquitous and
reliable, consumers are increasingly
using these devices to stream online
content, intensifying the external
competition satellite providers will face.
Mobile internet connections are expected
to increase during 2015, representing a
potential threat to the industry.
Number of households
The industry’s primary market is
residential households. Thus, household
formation provides a natural increase in
potential demand for satellite services.
However, competition in this market is
intense, as robust broadband connections
and faster wireless internet services are
increasingly bundled with cable TV
subscriptions. The number of households
is expected to increase during 2015.
Consumer Confidence Index
Changes in consumer sentiment directly
affect discretionary expenditure,
particularly on high-priced, value-added
services. These expenditures decline
when economic activity falters, as
consumers opt to pay down loans, build
their savings and conserve available
income for basic needs. The consumer
sentiment index is expected to increase
in 2015.
Per capita disposable income
Number of cable TV subscriptions
106
3
104
2
102
1
% change
Millions
Key External Drivers
continued
100
98
96
94
Year 06
0
-1
-2
08
10
12
14
16
18
20
-3
Year
08
10
12
14
16
18
20
SOURCE: WWW.IBISWORLD.COM
Satellite TV Providers in the US December 2015 7
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Industry Performance
The Satellite TV Providers industry
operates within the larger broadcast
distribution sector, offering TV programs
on a subscription or fee basis through
direct broadcast satellites. Industry
operators have competed favorably over
the past five years by offering leading
picture quality and customer service, as
well as the largest array of content. Prior
industry investments in secondary and
tertiary transmission systems, as well as
developments in data compression and
signal strength, allow the industry to
provide much higher quality services
than a decade ago. Over the five years to
2015, new networks, more channel
offerings, apps and bonus features are
expected to increase industry revenue at
an annualized rate of 7.1% to $52.8
billion. This growth will be hindered by
new and fierce competition emerging
from online streaming companies that
have been cutting into the number of
Industry revenue
12
10
% change
Current
Performance
8
6
4
2
Year 07
09
11
13
15
17
19
21
SOURCE: WWW.IBISWORLD.COM
satellite TV subscribers. In 2015, revenue
is expected to increase by a relatively
slim annualized 4.2% as consumer
preferences shift to cable-bundled
packages and online streaming
companies, but customers will pay more
for monthly services.
Companies in this industry face high
Profitability
fluctuates temporarily initial costs, but then experience low
costs per additional subscriber. Most
industry operators outsource in-home
product installation and setup services,
such as services for satellite dishes and
digital video recorders. DirecTV is also
investing in the construction of new
satellites. As a result, with all other costs
remaining equal, this industry earns a
higher proportion of profit from each
additional subscriber’s revenue than the
Cable Providers industry (IBISWorld
report 51711a). With subscriber growth
stalling in recent years, the Satellite TV
Providers industry’s average profit
margin has been inconsistent.
Despite a projected increase to 18.2%
of industry revenue in 2015, profit growth
was not steady in the years leading up to
2015. To capitalize on the wave of
consumers switching providers (analog
TV broadcasts have been entirely phased
out), many companies used
advertisements to highlight the extra
content provided by satellite versus cable.
Satellite TV providers have also
continued to leverage exclusive
programming, including DirecTV’s NFL
Sunday Ticket, to gain subscribers.
Satellite vs. cable
Satellite TV providers compete directly
with operators in the Cable Providers
industry. The competition between these
two industries is particularly intense, as
they offer similar TV programming to
consumers. In terms of availability, a
home must be prewired for cable TV, so
consumers in remote locations often lack
the option of subscribing to cable
services. To receive satellite TV,
Satellite TV Providers in the US December 2015 8
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Industry Performance
Satellite vs. cable
continued
homeowners must install a dish in a place
with an unobstructed view of the
southern sky.
Cable companies have increased their
competitiveness with the advent of
fiber-optic technology, which enables
companies, such as Verizon and Comcast,
to provide high-speed, digital-quality TV
subscriptions similar to traditional cable,
but with higher-quality feeds. However,
because satellite TV providers do not
have to wire multiple houses to provide
their services, they incur lower costs per
subscriber. As a result, the industry
typically outperforms the cable industry
in terms of price.
Operators in the Satellite TV Providers
industry have also taken steps to gain a
competitive edge in providing superior
customer service. In line with subscriber
Streaming becomes a
serious threat
As internet speeds increase and data
compression technologies become more
widespread, streaming video has become a
viable alternative to watching TV. With a
large increase in the number of consumers
with wired broadband connections and
broadband-enabled mobile devices, a
significant amount of video content has
become available through the internet.
Some examples of legitimate streaming
services that compete directly with
subscription TV include Netflix, Amazon,
YouTube and Hulu Plus. These services
offer ways to bring entertainment from
the computer onto the TV screen and
allow consumers to stream TV shows and
movies directly to their TVs, computers or
wireless devices.
Nonetheless, many of these services
do not yet offer enough content to fully
substitute a TV subscription. For
example, live sporting events are often
not available for streaming through
these channels. Additionally, the quality
and reliability of streaming services are
lower than that of satellite TV. Although
growth, the industry has hired more
employees to improve customer
relations. As a result, the number of
industry employees has increased at an
annualized rate of 4.3% to 30,088
workers over the five years to 2015.
Consequently, total industry wages are
expected to increase at an annualized rate
of 6.1% to $2.9 billion over the same
period. The number of establishments is
expected to increase 3.5% over the
five-year period, reaching 120 locations
in 2015, which has contributed to
employment increases. The number of
highly skilled engineers and technicians
has increased significantly as companies
attempt to offer new innovative products
and lower skilled employment increased
with companies focusing more on
customer service.
Online
streaming has
not yet hurt satellite TV
demand due to these
services’ limited content
the number of people streaming online
video has steadily increased over the
past five years, a majority of video is still
watched on a traditional TV set.
Although the threat from streaming
video was negligible for the industry in
the past five years, streaming video will
pose an inevitable threat to the industry
in the future, as wired and wireless
internet connections continue to
improve and consumers switch to
broadband-enabled mobile devices.
Additionally, Netflix, Amazon and Hulu
are each investing in original
programming that has received both
popular and critical appeal. These new
developments are expected to negatively
influence future revenue growth as
Satellite TV Providers in the US December 2015 9
WWW.IBISWORLD.COM
Industry Performance
Streaming becomes a
serious threat
continued
consumers migrate to other forms of
content distribution.
Although alternatives to cable and
satellite TV are limited in content
availability, operators have scrambled to
offer viable alternatives to the new
external competitors. In August 2013,
DirecTV launched its own Pivot TV
Everywhere app to allow subscribers to
watch the service live on computers,
smartphones and tablets. Dish followed
suit by offering Dish Anywhere, a
website that allows customers to
instantly watch TV shows and movies,
along with the Dish Anywhere App that
allows the content to be viewed on a
smartphone or tablet.
The balance of media services is
constantly being shifted and reevaluated
as cross-industry acquisitions and deals
create a more widespread fight for
consumers’ living rooms and mobile
devices. According to Nielsen, nearly half
of smartphone and tablet owners use
their devices as second screens while
watching TV every day. TV networks,
such as AMC Networks, are even
launching second-screen content. The
rise in mobile video watching has made
the market even more dynamic and
prompted a rush of all
telecommunications, cable and satellite
companies to be the first to reach
consumers’ pockets. AT&T acquired
DirecTV in 2015, marking a new
convergence of broadband internet and
video services. DirecTV has also made
strategic investments in LiveClips, a
technology company that develops and
delivers video content from live sporting
events for any internet-enabled device,
and i.TV, a social TV and second screen
platform that enables customers to watch
and engage with TV. Dish went one step
further, signing an accord with the Walt
Disney Company in 2014, allowing the
company to offer programming over the
web, a first for a US cable or satellite
provider, and a potential answer to the
Netflix threat.
Satellite TV Providers in the US December 2015 10
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Industry Performance
Industry
Outlook
Although new household formation and
increasing per capita disposable income
are expected to drive revenue growth
over the next five years, the number of
households that sign up for pay-TV
services is expected to decrease slowly.
Dish reported in its 2014 annual report
that the company had lost 79,000 net
pay-TV subscriptions in 2014. This news
comes a year after the company
announced a miniscule 1,000 net
additions in pay-TV subscribers in 2013.
This continued decline presents a
significant challenge to the industry, with
industry revenue forecast to increase at a
milder annualized rate of 4.0% to $64.2
billion over the five years to 2020.
Increasing competition from online
streaming companies over the next five
years is anticipated to stimulate spending
on marketing and new product
development, which will likely cut into
the extra revenue generated from new
subscriptions. Furthermore, amid this
competitive environment, industry
providers will likely be unable to pass
rising programming costs onto their
subscribers. With high programming
costs and mergers and acquisitions, profit
is forecast to decrease over the coming
five years. Satellite uplink costs (i.e.
transmitting between earth stations via
Increased
multiplatform
streaming
Multiplatform viewing will continue to be
a competitive external …
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