Analysis of the external environment Essay Sample
- Pages: 3
- Word count: 771
- Rewriting Possibility: 99% (excellent)
- Category: environment
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Introduction of TOPIC
This part will analyse the external environment of NBC, through the use of Porter’s Five Forces Model, which tends to balance opportunities and threats. The first factor to consider is the threat of the new market entrants, specifically new broadcasting company. It can be said that in terms of this kind of industry, the threats of new entrants are very low.
One of the reasons is because new broadcasting company will need for capital investments and financial resources to be able to pursue the business and also the new company should venture into new ventures to gain customers to compete in the existing industries like NBC. In addition, it is also low due to the strong brand identification of broadcasting companies worldwide. It can be said that NBC has such a strong viewer’s loyalty. However, there are some threats that the management should consider because of the existence of different high-end broadcasting networks.
The second force to be considered is the competitive rivalry among the existing competent broadcasting industry. There are various factors which keeps broadcasting company to be the most competitive companies in the market. One of these is due to the price competition. It can be said that most broadcasting companies do not compete in price byt they compete on features and credibility. Furthermore, the competition is also high because of the large number of clients and target audience.
The next to consider is supplier power which is very low in this industry. The present approach as well as situations of the broadcasting company like NBC, highly determined the extent in
which strong as well as efficient competition. The power of suppliers in this industry is very low
The next is the power of buyers which is considered as high. It can be said that the buying power of target audience in terms of immediate influences is very high. One of the reasons for this is due to the high consumer loyalty to braodcasting industries.
Furthermore, since there is strong service differentiation, the buyers or the target audiences have the power to select the broadcasting company that provides their needs. Furthermore, since there are many broadcasting industries available in the market consumers have more options to choose the service that they want. The last force to consider is the availability of the substitutes.
In line with e substitute products, the broadcasting companies like NBC are facing very high substitutes because of the existence of various companies and network. Hence, this macro-environment level is very relative and depends on the performance and services of differentbroadcasting companies like NBC. When the availability of substitute is taken into account, it is significant that total cost of ownership should be given consideration as well. This means that considering purchase price is not enough and broadcasting companies like NBC should also consider the operating costs.
Corporate-level strategy of NBC
Every firm needs a corporate-level strategy (Bowman & Helfat, 2001). Based in the case study, it can be said that NBC has been able to use a unique corporate-level strategy suits the needs of the company to compete in the market environment. With the current situation of the NBC, it can be said that the management has been able to consider this kind of strategy. Accordingly, effective implementation of any of this strategy typically needs total commitment and supporting organisational arrangements which are diluted if there is more than one primary segment.
Hence to be able to surpass the challenges, outgrow other companies NBC, must continue to make strong commitment with their application of such corporate-level strategies, which include cost-leadership and differentiation strategies, respectively. The management needs to pursue this kind of approach so as to make sure that they will be able to solve the issues that challenges their competitive position in the market place. The efficient utilisation and implementation of cost-leadership strategy within NBC has not only resulted the market share for the industry, but has also improved the entire demand for their market segment.
Bowman, E and Helfat, C, 2001), “Does Corporate Strategy Matter,” Strategic Management Journal 22: 1-23
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