Efren AriasEfren Arias Erika GarciaErika Garcia

Jacob HuitJacob Huit Ana MontezAna Montez

Eliza StapherEliza Stapher Denise ThomasDenise Thomas

The British Broadcasting The British Broadcasting CorporationCorporation

One of Britain’s most important cultural One of Britain’s most important cultural institutionsinstitutionsA dominant force in the BroadcastingA dominant force in the Broadcasting

industry (News entertainment and information)industry (News entertainment and information)Tries to differentiate itself with a wide variety of Tries to differentiate itself with a wide variety of high quality programs (Teletubbies and high quality programs (Teletubbies and Castaway)Castaway)Government-ownedGovernment-ownedService provided for a license feeService provided for a license fee

BBC’s General EnvironmentBBC’s General Environment The main strength is its growth potential and projection (TV, The main strength is its growth potential and projection (TV,

Radio, Internet) and the strong position in the UK compared to Radio, Internet) and the strong position in the UK compared to it’s competitors.it’s competitors.

SocialSocial: One of the most important institutions in the UK : One of the most important institutions in the UK

TechnologyTechnology: Holds a continuous commitment to improve their : Holds a continuous commitment to improve their technology and means of security (Increased use of fiber Optics, technology and means of security (Increased use of fiber Optics, and Digital systems)and Digital systems)

PoliticalPolitical: Deregulation in the telecommunication industry, and : Deregulation in the telecommunication industry, and presence of the government in decision-makingpresence of the government in decision-making

EconomyEconomy: Unification of the European Union, strong presence in : Unification of the European Union, strong presence in the UK (basically no strong competitors)the UK (basically no strong competitors)

The competitive environmentThe competitive environment

Number one provider in Radio and T.V. Number one provider in Radio and T.V.

Granada and Carlton Communications offer Granada and Carlton Communications offer competition, but do not represent a threatcompetition, but do not represent a threat

In the world news market, CNN and BBC compete In the world news market, CNN and BBC compete intensely for market shareintensely for market share

Strong local presence, less dominant globally Strong local presence, less dominant globally

BBC Import ProgramsBBC Import ProgramsTELETUBBIES THE WEAKEST LINK

WHO WANTS TO BE A MILLIONAIRE

ABSOLUTELY FABULOUS

Internal AnalysisInternal AnalysisManagement:Management: The BBC’s management has undergone changes The BBC’s management has undergone changes ranging from the Board of Governors to the Executive Committee.ranging from the Board of Governors to the Executive Committee.

Some of these changes include: Director-General: Greg Dyke Some of these changes include: Director-General: Greg Dyke Chairman: Gavyn DaviesChairman: Gavyn Davies

Marketing:Marketing: About 30% of listeners, 7 million more than a year ago, About 30% of listeners, 7 million more than a year ago, now access the BBC world service through the growing network of now access the BBC world service through the growing network of nearly 2,000 local broadcasting station partners around the world. nearly 2,000 local broadcasting station partners around the world. The BBC’s website earned exceptional growth, with usage rising The BBC’s website earned exceptional growth, with usage rising 92% to 75 million monthly page impressions by March 2002. 92% to 75 million monthly page impressions by March 2002.

Finance/Accounting:Finance/Accounting: From 2000 to 2001, the BBC improved its From 2000 to 2001, the BBC improved its efficiency and generated a positive net income in 2001. However, in efficiency and generated a positive net income in 2001. However, in 2002 the company incurred high operating expenses that were 2002 the company incurred high operating expenses that were greater than the revenues it generated.greater than the revenues it generated.

ConclusionsConclusions About The About The Internal Analysis (cont’d)Internal Analysis (cont’d)

Operations and Management Guidelines:Operations and Management Guidelines: Projects have to adhere Projects have to adhere to technological standards, such as analog and digital TV to technological standards, such as analog and digital TV transmittal, digital radio transmittal, and the matters of the law.transmittal, digital radio transmittal, and the matters of the law.

Research and Development:Research and Development: The BBC has introduced both new The BBC has introduced both new television and radio services in order to enhance its digital television and radio services in order to enhance its digital programs. (digital radio, phone/radio receivers, & handheld programs. (digital radio, phone/radio receivers, & handheld computers).computers).

Computer Information Systems:Computer Information Systems: CIS is an important tool that helps CIS is an important tool that helps the BBC to become more productive, efficient, and competitive. the BBC to become more productive, efficient, and competitive. (BNCS) (BNCS)

SWOT SWOT Strengths, Weaknesses, Opportunities, & ThreatsStrengths, Weaknesses, Opportunities, & Threats

S:S:1.1. Diversity of Mgmt TeamDiversity of Mgmt Team2.2. Focused and strong Focused and strong

objectives & goalsobjectives & goals

W:W:1.1. Complexity of CIS Complexity of CIS

technologytechnology2.2. Spending focus on Spending focus on

analog not digitalanalog not digital

O:O:1.1. Deregulation of Deregulation of

telecommunication telecommunication industryindustry

2.2. Government ownedGovernment owned

T:T:1.1. Merging of competitorsMerging of competitors2.2. Lack of advertisingLack of advertising

Strategy FormulationStrategy Formulation

TOWS MatrixTOWS MatrixThis matrix uses BBC’s This matrix uses BBC’s strengths, weaknesses, strengths, weaknesses, opportunities and threats to opportunities and threats to show the different possible show the different possible strategies and solutions strategies and solutions These strategies then can be These strategies then can be implemented to help the implemented to help the overall performance and overall performance and profitability of the profitability of the organization. organization.

SPACE MatrixSPACE MatrixThe BBC falls in the IV The BBC falls in the IV quadrant, which indicates that quadrant, which indicates that the company should pursue a the company should pursue a Competitive strategy. The firm Competitive strategy. The firm should consider the following should consider the following alternative courses of action: alternative courses of action: horizontal integration, market horizontal integration, market penetration and product penetration and product development. development.

Strategy FormulationStrategy Formulation

BCG MatrixBCG MatrixRadio: 52.6% market share, Radio: 52.6% market share, 47.4% growth rate; considered 47.4% growth rate; considered a “STAR”a “STAR”TV: 37.1% market share, TV: 37.1% market share, 62.9% growth rate; rated as 62.9% growth rate; rated as “CASH COW”“CASH COW”BBC Online: “QUESTION BBC Online: “QUESTION MARK” This is because it has MARK” This is because it has a very low market share, but a very low market share, but retains a high growth rate retains a high growth rate percentagepercentage..

IE MatrixIE MatrixUK: should pursue a hold and UK: should pursue a hold and maintain strategy including maintain strategy including market penetration and market penetration and product developmentproduct development

US/WORLD: harvest or divest US/WORLD: harvest or divest strategies should be strategies should be implemented. They will implemented. They will probably never harvest or probably never harvest or divest the world portion divest the world portion because this is used for because this is used for “political presence.”“political presence.”

Strategy FormulationStrategy Formulation

GRAND STRATEGY GRAND STRATEGY MATRIXMATRIXThe BBC lies in Quadrant I, The BBC lies in Quadrant I, which indicates it is part of a which indicates it is part of a rapid market growth industry rapid market growth industry while maintaining a strong while maintaining a strong competitive position. competitive position. Compared to its rivals in the Compared to its rivals in the UK, the BBC has more UK, the BBC has more financial strength giving it an financial strength giving it an advantage over competitors. advantage over competitors. Globally, the company can Globally, the company can make use of its make use of its resources/subsidiaries resources/subsidiaries allowing an increase in allowing an increase in customer base.customer base.

QSPM MATRIXQSPM MATRIXThe first matrix we formulated The first matrix we formulated focuses on Market focuses on Market Development, which is split up Development, which is split up into the geographic regions the into the geographic regions the BBC operates in. BBC operates in. The last two matrices examine The last two matrices examine Horizontal Integration and Horizontal Integration and Product Development which Product Development which are split up into product are split up into product divisions (TV, RADIO, BBC divisions (TV, RADIO, BBC ONLINE)ONLINE)

Alternative StrategiesAlternative Strategies

Market DevelopmentMarket Development

Partnership StrategyPartnership Strategy

Product DevelopmentProduct Development

Backward Integration/Concentric DiversificationBackward Integration/Concentric Diversification

Alternative StrategyAlternative StrategyMarket DevelopmentMarket Development

Expansion of digital radio in Africa and Asia Expansion of digital radio in Africa and Asia Take advantage of the high-growth rate of radio Take advantage of the high-growth rate of radio to increase customersto increase customersIncrease profitsIncrease profitsDisadvantage:Disadvantage: Limited access to digital radio (cultural, infrastructural, Limited access to digital radio (cultural, infrastructural,

and economical factors) and economical factors)

Alternative Strategy Alternative Strategy

Partnership Strategy/Market DevelopmentPartnership Strategy/Market Development

Joint Venture with YahooJoint Venture with YahooIncrease awareness of BBC’s current Increase awareness of BBC’s current products/services in new geographic areas products/services in new geographic areas Expected increase in salesExpected increase in salesDisadvantages:Disadvantages: Initially, low return on investment is possible Initially, low return on investment is possible Lack of appeal to American consumers Lack of appeal to American consumers

Product Development Product Development Develop innovative programs for T.V. Develop innovative programs for T.V. (based on a cost-benefit analysis)(based on a cost-benefit analysis)

Internal Production (BBC) vs. External Internal Production (BBC) vs. External ProductionProduction

Quality Quality CostCostStaff/personnel Staff/personnel Time of production (Reliability) Time of production (Reliability)

Based on the SPACE Matrix, Grand Strategy, and QSPM

ImplementationImplementationThe goal is to increase profits and market The goal is to increase profits and market share share

Stage 1: Focus on local market Stage 1: Focus on local market Marketing campaign/radio & web Marketing campaign/radio & web Financial resourcesFinancial resources

0.37

0.38

0.38

0.39

0.39

0.40

0.40

0.41

0.41

0.42

0.42

0.43

1 2 3

Total Debt ratio (TA-TE/TA)

-0.50%

-0.40%

-0.30%

-0.20%

-0.10%

0.00%

0.10%

0.20%

0.30%

1 2 3

Profit Margin

2002 2001 20002002 2001 2000

ImplementationImplementation

Stage 2: Export product to potential Stage 2: Export product to potential marketsmarkets Adapt to culture & market variationsAdapt to culture & market variations

LanguageLanguage

Tastes & preferencesTastes & preferences

http://www.bbc.co.uk/spanish/cps/sunday.shtmlhttp://www.bbc.co.uk/spanish/cps/sunday.shtml

Backward Integration/ConcentricBackward Integration/Concentric

Sell air time to other T.V. and radio stations Sell air time to other T.V. and radio stations (Travel Channel, People and Arts, Clear (Travel Channel, People and Arts, Clear Channel)Channel)

Leasing air time to interested parties (suppliers Leasing air time to interested parties (suppliers and competitors) and competitors)

Increase audience and target new markets Increase audience and target new markets (known brands)(known brands)

Increase sales/profits with minimal or no Increase sales/profits with minimal or no investment investment

Based on BCG and Grand Strategy MatrixBased on BCG and Grand Strategy Matrix

ImplementationImplementation

Identify potential customers Identify potential customers

Establish relationships with world class Establish relationships with world class supplierssuppliers

Develop contracts for air timeDevelop contracts for air time

Quality criteria must be met for a contract Quality criteria must be met for a contract to be acceptedto be accepted

EvaluationEvaluation

T.V. and radio ratings T.V. and radio ratings

Market share Market share

Cost/Benefit Analysis Cost/Benefit Analysis

Quarterly financial review (revenue/loss)Quarterly financial review (revenue/loss)

Consumer responseConsumer response

Effects of WarEffects of War Continuous war updatesContinuous war updates

More people are watching TV and More people are watching TV and listening to the radio, increasing ratingslistening to the radio, increasing ratings

Live action coverage and interviews Live action coverage and interviews with combatants is capturing audiencewith combatants is capturing audience

Increased expenses (staff/production) Increased expenses (staff/production)

Thank You!!!Thank You!!!