Introduction
Time warner Cable Company is a telecommunication company located at the Time Warner center in the United States in the city of New York. Time Warner company deals with the televisions networks, films and entertainment. It is the third largest telecommunications company in the world. The company was established in the year 1990. It was started by forming a merger between two companies in the United States of America. This companies comprised of Time Inc. and the Warner communications. The company mainly operates in film production and television. The company has a limited publishing operations in the United States economy. The company therefore, consist of various assets which include New Line cinema, cartoon network studios, CNN, Boomerang, Animations, DC comics and Castle Rock entertainment (Wigley, 2012). Time Warner Company has various divisions such as the Warner books, Time Inc., Warner music group and the Time Warner cables which also acts as independent companies since the 2014. Time Warner Telecommunications Company operates in 29 different states. The company faces stiff competition from other telecommunication firms such as the Sony, Comcast, CBS Corporation, The Walt Disney Company, 21st Century Fox and the Viacom Company.
Strategic direction
The strategy of the company enables the company to establish strong and healthy relationship with the distributors, suppliers and the consumers. The strategy ensures the products of the Warner Company are of good quality and are accepted in the market by the final consumers. The vision and the mission statements of the Warner Telecommunication Company helps set the direction that the company is set to follow. The strategy of the company has therefore, ensured the company ties down the vision and mission statements to the current position of the firm. The vision and mission statements of the Warner telecommunications company has helped to construct the strategic direction of the company. The mission of the company is provide the best telecommunications services and products both in the United States of America and across the entire world. The vision statement of the Warner telecommunications firm is to satisfy the market demand for the telecommunication products and services by ensuring creativity, customer focus, agility, teamwork, integrity, diversity and responsibility. Warner Telecommunications Company is currently ranked third in the world due to the successful implementation of the strategic plan. The Warner Company has ensured this by significantly following the vision and mission statements of the company. The company has promoted creativity by thriving on innovation, originality and by encouraging risk taking in the company. The mission and vison statement has also ensured the company maintains customer focus by putting the customer needs and interests at the core center of the company’s activities. Warner Company has advanced in technical know-how to boost the agility of the company. The company has ensured this by embracing flexibility to the market changes and constantly searching for new opportunities through extensive research activities in the company. The Warner telecommunications company has also ensured teamwork in the company by working together within the business and creating policies and norms that ensure respect is paramount in the firm. Integrity is key to the company as the company develops artistic expression that ensures the confidence of the all stakeholders. The company ensures diversity by employing more qualified individuals and creating activities that’ significantly develop the talents in the firm. The Warner Company therefore, has ensured responsibility by giving back to the community and serving the interests of the various stakeholders of the company. Warner Company uses the SMART technique to develop the strategic objective (Wigley, 2012).
SMART Strategic objective
SMART technique helps in setting company goals that are specific, measurable, and realistic and time related. The Warner telecommunications company uses this method to ensure the company achieves its key objectives easily and efficiently. The company specifically aims to improve the quality of the telecommunication products and services it produces. The production output of the company has improved significantly in the recent years. Warner Telecommunications Company is currently ranked third in the entire. The company has developed a strategic plan that primarily aims to ensure Warner Company becomes the largest telecommunication organization in the world in terms of service and product delivery and in terms of productivity. This strategic objective can help the company ensure it produces a lot of telecommunication programs across the world. The company can achieve this objective within a duration of ten years if all the stakeholders of the firm are committed to the strategic plan of the company. SMART technique is the best method to be used by the Warner Company in order to surplus companies like Comcast and the Walt Disney Company both in the United States of America and in the international market.
External Analysis
PESTEL Analysis
PESTEL is a technique employed by different companies to study the environment the company operates in or where the company aims to introduce a new product. PESTEL analysis gives priority to five different factors that are significantly analyzed by the company. These factors include political, economic, social, technological, legal and environmental factors. The technique analyses various economic factors that affect the operations of the company such as inflation rate, interest rate, economic growth rate, demand and supply forces and the exchange rate. The social factors such as cultural trends, demographic and population factors and the consumer’s high demand for holiday season are also analyzed by the PESTEL technique employed by the Warner telecommunications company. The company also uses the technique to analyze the political factors affecting the operations of the company. The technique also the analyses the legal factors such as the consumer laws, safety standards and labor laws that the firm must abide by in its operations. Environmental factors significantly affect the operations of the Warner Company (Rachet, 2014).
Economic Factors
Inflation rate in the United States and across the world affect the prices of the different products and services produced and distributed by the Warner telecommunications company. Arise in the inflation increases the prices of the different products in the market. The cost of production in the Warner Company rises. This results in the increase in the prices of the products and services produced by the Warner firm. The increase in inflation rate also reduces the purchasing power of the consumers. The consumers therefore, prefers more saving to consumption. This reduces the profitability of the Warner Company. Low inflation rate will mean an increase in the flow of cash in the economy. The income level of the consumers increase and they prefer more consumption to savings. The cost of production therefore reduces and the company produces more products and services and the prices are significantly lowered in the market. The PESTEL analysis has significantly helped Warner Telecommunication company analyze the economic factors as postulated enabling the company achieve its core objectives.
Political factors
Government plays a significant role in the successful operations of the Warner Company both in the United States and in the foreign countries. Government ensures all the operations of the company are protected by the government. The cost of production of the Warner Telecommunication company is significantly affected by the tax rate imposed by the government of the specific country of operation. High tax rate imposed by the government increases the cost of production of the Warner Company. The company produces less commodities in the market. The prices of the products increases and the sales output reduces. The tax policy put in place by the government significantly affects the productivity of the company. The government also sets various fiscal policies that are followed by the company. Warner Telecommunications Company is a multinational company operating in different foreign countries across the globe. The government of the foreign countries set various trade tariffs that affect the entry process of the Warner products in the specific market. This makes the operations of the company expensive and thus the prices charged in these countries significantly rises.
Environmental factors
Environment plays a significant role in the development of a company. The location of a company and the geographical location of the various customers in the markets is very important to the strategic plan of the organization. The global changes in the climatic conditions across the globe determines the operations of the company in the global market. The surrounding climate of the company is very important to the production and the distribution process of the company. The availability of adequate and conducive roads make the distribution process of the company’s products very easy. The availability of conducive environment around the company also enables the customers to access the company’s products effectively. This enables the company to ensure the production of surplus products (Rachet, 2014). The sale output of the products in the market increases as a result of the conducive environment around the firm. Warner Company has conducive environment in and around the company that facilitates adequate production of the telecommunication products and services in the company. This has enables the Warner Telecommunications company to compete well in the international market with other telecommunication organizations.
Five Force Analysis
The five force analysis is employed by the Warner Company to ensure the strength of the various factors affecting the operations of the company both in the United States of America and in the foreign markets. There are five forces that affect the efficiency of the strategic plan of the Warner Company. These forces include the threat of new entrant into the market, bargaining power of the buyers, bargaining power of the suppliers, the threat of the substitutes and the intensity of rivalry in the market. This factors are significantly analyzed by the management of the Time warner Telecommunication Company. Time Warner Cable Company is multinational telecommunication company operating in more than twenty nine different countries. The company faces competition from other different companies across the globe. The stiff competition has exerted a lot of pressure on the company. This forces has resulted in competitive pressure from the buyers in the in the international and local market. The buyers have formed different collaborations in the market that make the operation of firms difficult and the competition level very stiff (Yüksel, 2012). The company has thus ensured the development of different other policies that ensure the operations of the company achieve its core objectives in the market and that the firm maximizes the profits in the market.
Bargaining power of Buyers
Buyers bargaining power considerations
Buyers are very important stakeholders of the company. The productivity ratio of the Time Warner Company significantly depends on the buyer’s potential both in the United States of America and the foreign markets. Various factors affect the considerations made by the buyers in the market. These factors affect the operations and the decisions of the consumers in the market. The cost that the buyers incur by switching to different substitutes in the market significantly affects the bargaining power of the buyers. Unfavorable costs make the consumers bargain more for the products. This makes the selling process of the various commodities from the company difficult. The availability of various substitutes in the market make consumers to consider their decisions in the market. The difference in price of the various substitute goods make the consumers bargain more for the cheapest commodity available. The degree of differentiation of the various products of the company results to considerations from the consumers (Vaughan, 2012). The products from the Time Warner Company are strongly differentiated in the market. This makes the buyers in the market consider bargaining as a purchasing tool in the market. The number of sellers and the number of buyers in the market determines the bargaining power of the consumers in the market. The strength of the demand from the buyers for the company’s products leads to buyer bargaining power considerations in the market. Buyers bargain in the market depending on their knowledge about the company’s products, cost of operating in the market and the pricing policies of the company. This, therefore, significantly determines the buyer bargaining power considerations.
Factors affecting bargaining power of buyers
Bargain power of the buyers in the market greatly affects the operations of the company in the specific market. It significantly determines the output of sales that the company eventually registers in the market. The supply of products in the market is very significant to the buyer’s decision making process. The constant and effective supply of goods ensure the consumers are able to access the various products they demand conveniently. The customers are, therefore, able to register extensive bargaining in the market as they are sure the product will not be depleted in the market easily. Low supply of the products in the market results to inadequate goods in the market. The customers will, therefore, reduce their bargaining extent as they risk losing the few goods available in the market. The price of the products in the market affects the bargaining power of the buyers. The purchasing power of the consumers differ in the market depending on the income held by the respective buyer. Too high price affects the bargaining power of the various commodities in the market. The customers eventually bargain due to the high prices of the products. Too low prices reduces the bargaining power of the consumers as they realize a consumer surplus in the market (Vogel, 2014). The Time Warner Cable Company has ensured the prices they charge on the telecommunication products they offer both in the local and foreign market are moderate and easily accepted by the consumers. The fashion trends and technical changes in the market also affect the consumer’s decision. The positive changes ensure the bargaining power of the consumers is significantly controlled in the market. Bargaining power of the consumers is, therefore, a significant factor in the functioning of accompany and the Warner Cable Company has ensured it is significantly controlled by ensuring surplus production of the telecommunication products and services in the market.
Supplier bargaining power
Different factors affect the bargaining power considerations by the in the market by the suppliers. The cost of switching industry among the suppliers significantly affect the bargaining power of the suppliers. The level of differentiation of the different inputs in the market and among the industries affect the bargaining power considerations by the suppliers. The availability of the inputs in the surrounding environment affects the bargaining power of the suppliers. The geographical location of the inputs determines the costs incurred by the suppliers. This affects the bargaining power of the suppliers in the industries. The strength of the demand of the supplier products in the market affects the bargaining power considerations. The company must consider the bargaining power of the supplier if the product to be supplied is a subject to high profit levels in the market. The number and size of the suppliers in the market plays a significant role. Too many suppliers gives the company a chance to bargain from with the suppliers and eventually choose the cheapest supplier to reduce the cost of production in the market. The Time Warner Cable Company has ensured the development of a strong relation with the various suppliers of the company. This has ensured the company operate with same line of supply for a long duration of time. The relationship with the suppliers in the company is very strong. This has ensured a reduced supplier bargaining power in the market as the company has developed a specific way in which it operates with the suppliers.
Intensity of rivalry in the market.
Rivalry among different firms is a common phenomenon both in the local and foreign markets. The intensity of rivalry among the firms affects the operations of the firms in the market. Different factors influence the rivalry between the firms in the market. The number of firms available in the market determines the rivalry of the firms. Too many firms in the same market results in the competition of the available resources an demand in the market. This results to a higher degree of rivalry among the available firms (Vogel, 2014). The diversity of the firms in the market also affects the degree of rivalry in the market. The market growth rate is very important to the development program of a firm. This affects the level of rivalry among the companies in the market. The fixed costs and the switching costs in the market determines the rate of rivalry in the market. The level of differentiation of the products from an industry determines the sale of the products in the market and the consumer decisions. The nature of the exit barriers in the market determines the number of firms in the market. This is a common phenomenon in the international markets where different foreign firms operate. This significantly influences the nature of rivalry in the market.
Factors affecting the strength of rivalry
Rivalry of the firms in the market is strong when the demand for the buyers in the market is growing at a very slow rate. Low rate of demand in the market reduces the sale output of the different firms in the market. Every company in the market, thus, tries to do away with the other in order to maximize the profits in the market. This results to high level of rivalry between the firms. Low cost of switching among the buyers indicates a strong rivalry rate in the market. Weak differentiation of products and the high fixed costs of the products in the market indicate a strong extent of rivalry in the market. The increase in the number of competitors in the market increases the competition for the available resources in the market. This increases the rate of rivalry between the firms in the market.
Rivalry among the firms is weaker in the market when the demand for the products in the market by the buyers is rapidly increasing. This ensures that the purchasing power of the consumers has increased. The consumer are in need of purchasing plenty of products and thus there is need of surplus production in the market. The companies can, therefore, sell their products easily without experiencing rivalry from other firms in the market. High cost of switching by the buyer and strong differentiation of the company’s products results to reduced rivalry in the market. Low exit barriers ensure that any firm can quit the market anytime. Firms, therefore, are free to leave the market in case of too registering too much loses in the market (Vaughan, 2012). This reduces the level of rivalry among the firms in the market. The Time Warner Cable Company has ensured the operations of the company are efficient and profitable. This is because the every firm in the market works harder to register high profits without experiencing high level of rivalry. Every firm should, therefore, ensure proper analysis of the market conditions to ensure high profit levels in the market.
In conclusion, Time Warner wants to be the premier service provider in television, phone, and the internet by enhancing the overall customer satisfaction and experience as well as leading the market. Time Warner has relied a lot on its brand name. It does all it can to maintain its market position. There are heavy burdens and claims that the company has to carry and despite their powerful brand name they have been losing their market grip. The company website shows no explicit vision statement which can explain their lack of genuine innovation and direction from them. The above vision statement is intended and formed from their mission statement and annual report.
References
Rachet, B. (2014). PESTEL analysis and Porters Five Forces For Innocent Drinks Company. Docs. school Publications.
Vaughan, L., & Romero-Frías, E. (2012). Exploring Web keyword analysis as an alternative to link analysis: a multi-industry case. Scientometrics, 93(1), 217-232.
Vogel, H. L. (2014). Entertainment industry economics: A guide for financial analysis. Cambridge University Press.
Wigley, S., & Lewis, B. K. (2012). Rules of engagement: Practice what you tweet. Public Relations Review, 38(1), 165-167.
Yüksel, I. (2012). Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), 52.
