Porters Five Forces
Introduction
"A stock or supply of money, materials, staff and other assets that can be drawn on by a person or organisation in order to function effectively”
KEY STRATEGIC ISSUE: COMPETITION
- Pricing: Low Cost or Differentiate
- Low cost inputs = poor quality viewing
- Increase income instead of reducing cost
- Differentiation is expensive
- Rights Issue
- Sell Betting and Gaming Adjacent Business
First Digital
TV Provider
1998
- Threat of New Entrants: Low
- Threat of Substitute Products or Services : High
- Bargaining Power of Suppliers: High
- Bargaining Power of Buyers: High
KEY STRATEGIC ISSUE: COMPETITION
- Win Premier League Auction
- No Alternative
- Finance Needed to implement objective
2008
Released Sky
Mobile &
Broadband
2010
36% of
Households
& 10 Million
Customers
British Sky Broadcasting Group
Strategic Analysis
Key Success Factors
- Content - Diverse range, unique to Sky
- Technology - Research & Development
- Customers - No customers, no business
Competition:
- Premier League Auction - Battle with BT Sports
- Pricing - Perceived as expensive
- Technology - UPC Horizon
Financial Risk:
- Debt Management - Gross Gearing 84.05%
- Currency Operations - FEC, Multiple deposit accounts
Shareholder Wealth:
- Share Price - 896.00p
- Dividends - 30p, 18% growth
Reaction
To
Change
- Sky TV-Satellite Broadcasting Industry.
- Fifth largest industry in the world.
- TV Segment Revenue 2012- 43% subscriptions.
- Subscription growth has declined.
- 97% of households-Digital TV.
- Average person- 4 hours TV per day.
- Porters Five Forces.
Pricing
Customer
Service &
Interaction
- Audiovisual Media Services Directive
- The Office of Communications (Ofcom)
- Technological progress
- Post-crisis economy
- Strengths- Brand/Reputation, Customer Service, Rights to Content, Good Community Relations
- Weaknesses- Expensive, Satellite Dish
- Opportunities- Expansion, New Markets
- Threats- Digital Changeover, Internet