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SiriusXM Satellite Radio Case Study

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by

Sharon Rodriguez

on 11 April 2017

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Transcript of SiriusXM Satellite Radio Case Study

Analysis & Evaluation Continued
Case Study
Company Overview
Jazmin Azamar
Natalia Lara
Sharon Rodriguez
Maritza Torres
MAN 4900
SiriusXM Satellite Radio
Chapter 4
Group B
Launched in early 2000's
Sirius founded by Martine Rothblatt, David Margolese & Robert Briskman
Sirius and XM were borderline bankrupt, however, avoided this through loans and merging together to SiriusXM Satellite Radio
Subscription based business model
Company did not expect to cover start-up costs until 8-10 million subscribers
Raised subscription fee up to $12.95 in 2006 (which means they were short by two million subs)
SiriusXM Satellite Radio
XM Radio
Sirius Satellite Radio
Founded in Washington, DC
Petitioned FCC
$1.6 billion raised for satellite tech
Originally named Satellite CD Radio
Identification/Facts
High Competitive rivalry
High operations costs
Service de-activation
Tech advances
Financial distress- 2009
Trend in stock prices: dropped $0.05/ share
$3 billion in debts
Trend in sales
$3.4 billion in revenue, up 13% in 2012
Customer retention rate
23.9 million subs
Analysis & Evaluation
SWOT
Strengths
Monopoly power
Wide target market
Exclusive rights to radio hosts
Weaknesses
Few key products
High satellite costs
Debt level
Opportunities
Satellite video
Working with Hulu, Netflix (watching podcats live)
Threats
Terrestrial radio
HD radio
Internet radio
Rivalry Threat
Low threat in satellite radio industry
Mild threat in terrestrial radio
High threat in internet radio
Threat of Buyers
Low
SiriusXM benefits from being one of the only players in providing a radio differentiation service. Customers do not have much flexibility in choosing another service if they prefer differentiation in their radio service.
Threat of Substitutes
High
AM/FM radio
Pandora
iTunes Radio
IHeartRadio
Spotify
Threat of Suppliers
High
The music industry is dominated by a few firms that Sirius depends on
Threat of New Entrants
Low
High costs to enter market
Content/ infrastructure is expensive
Opportunities/ Alternatives

Offer different free channels for subscribers, and add another service that traditional radio is unable to provide as flights, traffic or weather conditions.
The senior management of SiriusXM should take more advantage of the merger maximizing the resources of both companies creating products and services to involve finding a niche market that will encouragement mass-market demand
Thank You!
Started as a petition
In 1992, AMSC established American Mobile Radio Corporation-XM Satllite Radio Holdings, Inc.
Raised $1.26 billion in 2000
General Motors, Honda, & Toyota
Porters 5 Forces
Full transcript