Strategic management and strategic analysis

Question: Require to conduct a strategic analysis of both the internal and external environment relating to either one of the following companies or a company of your choice. Manchester United FC Ocean Park Ebay Amazon Dyson Victoria Beckham Warner Bros Answer: Introduction: The largest worldwide-based entertainment company is Warner Bros. It is one of the leaders in this industry of entertainment in terms of marketing, licensing, distribution and marketing. Inspite of working as a subsidiary of the company, Time Warner it has come out as the renowned brand all over the world (Andrews et al. 2012). This report will deal in strategic analysis of the macro and micro aspects of environment within the segment of television and film entertainment. An in-depth study is made on the opportunities and the strategies that are opted in this segment. Further, the report also helps in identifying the suitability, acceptability and feasibility of the strategies adopted and executed. The process of comprehending the growth of the company Warner Bros will help in examining of the issues and the benefits that are faced by it. Corporate Objective: The operational and the official goals help in formulating the objective of a company. The goals help explaining the mission and the vision of the organization. The following are the vision and mission for the company Warner Bros: Vision: The Company wants to have a perpetual growth in the long run by offering more diversified products through its distribution and production (Warnerbros.com 2016). Mission: The following are the statement of mission for the company Warner Bros Implementing marketing and sales strategy to enhance the long-term profit and applying the creative effort so that strong sales are generated. Build brand for the consumers with the help of the retailers To work with the partners , licensee and retailers under the umbrella Time Warner Company Build an exclusive portfolio without any opportunities and brands The strategy that has been incorporated and helped in guiding the company investing is one of the major brands that lead in innovation, content, allocation and operation expanding their global presence of the company Time Warner. External Analysis: PESTEL Analysis: In order to analyze the external aspect of a company a study is made on the macro environment, which is based on the political, economic, socio cultural, technological, environmental and legal factors. The report that is analyzed by the Board of Directors is on the facets of the environment, which would be taken up by the senior management for making vital decision (Hamilton and Webster, 2012). Political Factors: There are political regulations imposed on the industry of entertainment and films as the production can be almost million from the markets that are emerging. There is increasing pressure on the industry by the industrial tycoons providing the path for entertainment. This is affecting both production of films and television, as there is a wish to acquire more than it is essential (Cook, 2016). Economic Factors: The operation of the company Warner Bros is quite expensive with a deficit in the trade faced. The company is also facing a rise in the cost of advertising. The inflation in the United States was 1.5% in the year 2013 while it was 1.6% in the year 2014. This was indeed a favorable option for the company to spread its range of products to the masses (Dess 2012). Socio Cultural factors: There are changes in the values of United States and more customers are seen to be influenced by the internet. The consumers prefer more of buying movies online rather than going out for watching movies in multiplexes. Importance is given to the balance of work and life so entertainment provided by the company Warner Bros would help people to rejuvenate their leisure hours. The film industry has to face the attitude of the changing preferences of the customers and so needs to adjust the quality of the movies, selection of comic books and licensing (Coulter, 2013). Technological Factors: Due to constant innovation in the field of technology, the consumers are demanding for movies with 3D and 4D based technologies. The DVD format of the films has gathered immense craze and is seen to be more popular. The film industry has been booming with its innovative platforms for the consumption of entertainment products. IT is seen to be very important factor that is applicable for the production of films so it is incorporated in every stage. Environmental Factors: The Company Warner Bros needs to cater to the development of the environment. The problems related to global warming and importance of eco tourism is affecting the production and the workshops of the company. The products that are produced by them needs to be sustainable (Ginter, Duncan and Swayne 2013). Legal Factors: Warner Bros face some issues related to licensing with other organizations. This has resulted in slowing down of the production of the company. Regulators like MPAA and FCC charges high rates of subscription to the customers based in United States, which has led the customers to move away to other entertainment products. The company Warner Bros has to face the changes in the rules and regulation in the United States affecting the entertainment and film industry (Hill and Jones 2012). Porters 5 Forces: Threat from the new entrants: There are limited threats from the new entrants as there is a huge cost for entry in the industry of entertainment and films. Due to the development in technology, the competitors are now entering the industry and provide entertainment at a much lower cost (Hulleman and Marijs 2012). Bargaining power of the buyers: There is immense bargaining by the buyers, as there is no cost of switching for the customers of Warner Bros. Threat from the availability of substitutes: There are many substitutes available for the products of Warner Bros like video games. Many companies are providing online games through the social media. Bargaining power of the suppliers: There is presence of greater bargaining power of suppliers in the industry. The renowned actors can be termed as suppliers and human resources at the same point of time (Warnerbros.com, 2016) Rivalry among competitors: In the film-industry, there is increasing competition in the industry. The competitors are Walt Disney Studios, Fox Filmed Industries and Paramount Pictures Corporation (Hitt, Ireland and Hoskisson 2013). Internal Analysis: SWOT Analysis: Strengths Weakness Solid position of finances There are many franchises of the commodities Maximization of profit An accordance of Netflix and Warner Bros Excess dependence on the home market Issues related to government debt Changes in the pattern of consumer spending Tarnishing of the image of the company due to infringement in copyright of Cat Meme Opportunity Threats Maximization of profit to franchises through the introduction of installments Increasing digital distribution capabilities Increase in the revenue through marketing of the products in the integrated structure (The-numbers.com, 2016) The environment is constantly challenged by the fall in the sales if the DVDs due to the challenges and piracy Piracy in the film industry has led to severe loss for Warner Bros The popularity of the television programs declined The company Warner Bros has to incur higher operational in order to incorporate the challenges. Analysis of Business function: The business function of the company Warner Bros implies the internal functions of the company that helps in carrying out the objective of the company. The external functions also come inside the domain of business function. The external things are those which are supplied by the company to the outside agency. The following is the business function of the company. Figure 1: Business Function Hierarchy of Warner Bros (Source: Shimizu 2012) The following are the business process, which the company is considering for the expansion for marketing and production. The main goal of Warner Bros is to continuously lead in the industry of broadcasting. The company is trying to utilize the changes in technology and incorporating new business models for providing developed landscape for television and wireless and broadband services in wide area of broadcast (Johnson et al. 2014). The company Warner Bros to increase its profits has established franchises in many countries. The company is intensely working on cable and television production, which they think would double by the next two to three years (Shimizu 2012). Competitive Strategy: Target Market: The distribution and the marketing of the company Warner Bros are spread across almost 30 countries. There are different types of age group that the company caters. The company is a global leader in this market and clearly justifies the non-ending market. The spread of the company either is in terms of collaboration with some renowned company or multiplexes. The production of movies of Warner Bros ranges from 18 to 22 a year that helps is satisfying the needs of the customers (Kannan 2013). Porters Generic Strategy Framework: The competitive analysis of the company is done through the Porters Generic Strategy Framework. The purpose for this type of analysis is to evaluate the cost efficient and product differentiation strategies that the company applies to a section of the consumers (Lasserre, 2012). The company Warner Bros will try to choose the strategy that helps in profit maximization and providing superior quality at least possible prices (Rothaermel 2013). The following figure represents the Porters Generic Strategies of Warner Bros: Figure 2: Porters Generic Strategy Framework for Warner Bros (Source: Raimbault and Barr 2012) There is no certain strategy that is followed by the company Warner Bros, as they are more into diversifying its quality of the product and delivery (Raimbault and Barr 2012). The quality of the animated products, entertainment and films is well narrated by the famous actors in the industry, which make it more attractive. The companys diversification is achieved through delivery of entertainment and media supported by digitalization. The high originality of the series of Warner Bros like Big Bang Theory, Vampire Diaries, Two and Half Man and Mentalist turned the attention of the critics. Strategic Choice The choices of the strategies can be explained in detail through the Ansoff Growth Matrix. There are four alternatives of growth highlighted for the firm to grow. The figure below will help in discussing on the products and the market of Warner Bros. Figure 3: Strategic Choice adopted by Warner Bros (Source: Lynch 2012) Since Warner Bros is associated with the film industry, so the growth strategy is also different for the company. The company follows the market penetration policy and development of the product during the nascent stage of any type of entertainment show. The company had achieved immense success during the period 2012-2013 as it followed this strategy (Lynch 2012). The strategy has helped Warner Bros to get about 30 percentages from the television broadcast in the United States. There is a continuous growth and as per the yearly report of the company Warner Bros, the company has acquired almost 55 percentages of the share of Shed Media PLC of the United Kingdom. Shed Media is a major competitor of Warner Bros. The company at present is focusing on the diversification of its portfolio in terms of their products and services as already provided in the strategic framework of Porters (Pitt and Koufopoulos 2012). Evaluation of Strategy: The company Warner Bros strategic evaluation depends on the strategy choice taken as per the Ansoff Matrix. The focus of the strategy of Warner Bros is diversification and development of the products. This is not an easy task as there are some risks involved in the following procedure. The risk can be evaluated by the studio executives through the changes in the technology as per the dimension of acceptability, feasibility and suitability: Suitability: As per this factor, the company Warner Bros will not be able to stand by for long as there is a constant change in the environment and technology is witnessing changes, which is enhancing over time. Feasibility: The Company Warner Bros success can be fluctuating due to the different type of demand patterns. There are customers who feel and wish to experience new technology. With the use of new technology, the company can reduce its cost of production (Olivas-Lujan and Bondarouk, 2013). Acceptability: If the feasibility factor suffers then the automatically there will be an effect on the feasibility. The film industry is successful when there is eye catching content available for the customers. The decline in the demand for the products of the company will affect the future growth of the company. Recommendation: The following are the recommendations that the company Warner Bros can use to apply effective strategies: The company can look into financing their production in order to be successful. This strategy will help the company to overcome the short-term situation. The strategy of partnership when enacted would be making the investors hesitant. The demand can only be met through collaboration and its development. There is a tendency of communication conflicts and clash of ego in partnerships but a proper partnership will help the company to flourish There is a need to consider the decision of the movies as per the process of selection related to age, rating, demographic and international needs. There is a need for many more genres in the movies so that the audiences can be satisfied. A proper blend of the tragedy, romance and cover action is required in the movies of Warner Bros. The company Warner Bros has to face risk when operating in the global market. This is the reason why the company has to incur huge cost for its operation. The company should adopt cost effective strategies as this will help Warner Bros to earn higher rate of profit and reduce its expenses. Conclusion: In this report, a strategic discussion is undertaken for the company Warner Bros based on the mission, vision, internal analysis, external analysis and strategies implemented for its operation. The analysis done through the Ansoff Matrix specifies that the strategies formulated are applicable for the short run rather than in the long-term scenario. The recommendation that has been provided will help the company Warner Bros to grow in the long-term perspective. The problem that is faced by the company is the presence of a large number of competitors in the market, which is making it difficult to expand. The environment should be made much more skillful so that operations of the company reach all around the world and attract newer audiences for their products. 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