UNIVERSITY OF ZAMBIA AND ZIMBABWE OPEN UNIVERSITY POSTGRADUATE PROGRAMMES
NAME : CHISANGA NONDE
COMPUTER NUMBER : 716813812
MODE OF STUDY : DISTANCE
PROGRAMME : MASTER OF BUSINESS ADMINISTRATION
COURSE : MBAZ 516 – STRATEGIC MANAGEMENT
TUTOR : DR W PHIRI
ASSIGNMENT NUMBER : ONE (01)
DUE DATE : 31st DECEMBER 2017
PHONE NUMBER : +260 977 892 525
EMAIL ADDRESS : [email protected]
POSTAL ADDRESS : c/o Charles Nonde, P.O. Box 32905, Lusaka.
TOC o “1-3” h z u QUESTION ONE PAGEREF _Toc505275178 h 3Introduction PAGEREF _Toc505275179 h 3Mission and Vision statements and their roles in the an Organisation PAGEREF _Toc505275180 h 3The importance of organizational values PAGEREF _Toc505275181 h 6The importance of a pay-off line in strategy PAGEREF _Toc505275182 h 9Conclusion PAGEREF _Toc505275183 h 9References PAGEREF _Toc505275184 h 10QUESTION TWO PAGEREF _Toc505275185 h 12Introduction PAGEREF _Toc505275186 h 12Group Mapping Analysis of the TV station Industry in Zambia PAGEREF _Toc505275187 h 14Conclusion PAGEREF _Toc505275188 h 19References PAGEREF _Toc505275189 h 20
QUESTION ONEIntroductionMany organizations develop both a mission statement and a vision statement. Whereas the mission statement answers the question “What is our business?” the vision statement answers the question “What do we want to become?” Many organizations have both a mission and vision statement.
According to Kotler (2012), A mission statement is a statement of the organization’s purpose—what it wants to accomplish in the larger environment. A clear mission statement acts as an “invisible hand” that guides people in the organization.
Mission statements are “enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm’s operations in product and market terms.”(David, 2011)
Some companies define their missions myopically in product or technology terms (“We make and sell furniture” or “We are a chemical-processing firm”). But mission statements should be market oriented and defined in terms of satisfying basic customer needs. Products and technologies eventually become outdated, but basic market needs may last forever
A clear mission statement describes the values and priorities of an organization. Developing a mission statement compels strategists to think about the nature and scope of present operations and to assess the potential attractiveness of future markets and activities. A mission statement broadly charts the future direction of an organization. A mission statement is a constant reminder to its employees of why the organization exists and what the founders envisioned when they put their fame and fortune at risk to breathe life into their dreams.
Mission and Vision statements and their roles in the an OrganisationA Mission statement defines the present state or purpose of an organization. It answers three questions about why an organization exists; What it does, Who it does it for and How it does what it does. It is written succinctly in the form of a sentence or two, but for a shorter timeframe (one to three years) than a Vision statement. It is something that all employees should be able to articulate upon request.
Some businesses may refine their Mission statement based on changing economic realities or unexpected responses from consumers. For example, some companies are launched to provide specific products or services; yet, they may realize that changing WHAT they do, or WHO they do it for, or HOW they do what they do, will enable them to grow the business faster and more successfully. Understanding the Mission gives employees a better perspective on how their job contributes to achieving it, which can increase engagement, retention, and productivity.
Having a clearly defined Mission statement also helps employees better understand things like company-wide decisions, organizational changes, and resource allocation, thereby lessening resistance and workplace conflicts.
The Mission Statement concentrates on the present; it defines the customer(s), critical processes and it informs a firm about the desired level of performance. The mission statement guides the day-to-day operations and decision-making of the organization. It helps in tactical planning and “rallying the troops” around a common near- to medium-term goal. The mission statement helps members of the organization get on the same page on what they should do and how they should do it.
Mission statements should be meaningful and specific yet motivating. They should emphasize the company’s strengths in the marketplace. Too often, mission statements are written for public relations purposes and lack specific, workable guidelines (Kotler, 2012)
A company’s mission should not be stated as making more sales or profits; profits
are only a reward for creating value for customers. Instead, the mission should focus on
customers and the customer experience the company seeks to create.
A mission statement and a vision statement are typically more explicitly concerned with the purpose of an organisation in terms of its strategic direction. In practice the distinction between mission and vision statements can be hazy but they are intended to be different in the sense that a mission statement aims to provide employees and stakeholders with clarity about the overall purpose and raison d’être of the organisation. It is therefore to do with building understanding and confidence about how the strategy of the organisation relates to that purpose.
A vision statement is on the other hand is concerned with what the organisation aspires to be. Its purpose is to set out a view of the future so as to enthuse, gain commitment and stretch performance. (Johnson et al, 2008)
The vision goes beyond the mission statement clarifies the long-term direction of the company (where the company is going). It reflects management’s aspirations for the company. It outlines the worldview of the organization and why it exists. It attracts people — not just employees but also customers and vendors — who believe in the vision of the organization. The Vision Statement focuses on the future; it is a source of inspiration and motivation. Often it describes not just the future of the organization but the future of the industry or society in which the organization hopes to effect change.
A Vision Statement defines the optimal desired future state, the mental picture, of what an organization wants to achieve over time. It provides guidance and inspiration as to what an organization is focused on achieving in five, ten, or more years. It is what all employees understand their work every day ultimately contributes towards accomplishing over the long term. It is written succinctly in an inspirational manner that makes it easy for all employees to repeat it at any given time.
Although both mission and vision statements became widely adopted by the early 2000s, many critics regard them as bland and wide ranging. However, arguably if there is substantial disagreement within the organisation or with stakeholders as to its mission (or vision), it may well give rise to real problems in resolving the strategic direction of the organisation. So, given the political nature of strategic management, they can be a useful means of focusing debate on the fundamentals of the organization
Mission and Vision Statements are commonly used to:
Guide management’s thinking on strategic issues, especially during times of significant change
Help define performance standards
Inspire employees to work more productively by providing focus and common goals
Guide employee decision making
Help establish a framework for ethical behavior
Enlist external support
Create closer linkages and better communication with customers, suppliers and alliance partners
Serve as a public relations tool
To ensure unanimity of purpose within the organization
To provide a basis, or standard, for allocating organizational resources
To establish a general tone or organizational climate
To serve as a focal point for individuals to identify with the organization’s purpose and direction, and to deter those who cannot from participating further in the organization’s activities
To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization
To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled.
An organization that fails to develop a vision statement as well as a comprehensive and inspiring mission statement loses the opportunity to present itself favorably to existing and potential stakeholders (David, 2011). All organizations need customers, employees, and managers, and most firms need creditors, suppliers, and distributors. The vision and mission statements are effective vehicles for communicating with important internal and external stakeholders. The principal benefit of these statements as tools of strategic management is derived from their specification of the ultimate aims of a firm
The importance of organizational valuesEvery organization has a set of values, whether or not they are written down. The values guide the perspective of the organization as well as its actions (Norman, 2008). Writing down a set of commonly-held values can help an organization define its culture and beliefs. When members of the organization subscribe to a common set of values, the organization appears united when it deals with various issues.
Organisational values describe the core ethics or principles which a firm will abide by, no matter what. They inspire employees’ best efforts and also constrain their actions. Organisational values drive the way employees and stakeholders influence, how they interact with each other, and how they work together to achieve results. Organisational values are not descriptions of the work done or the strategies employed to accomplish an organisations mission, they are the unseen drivers of behaviour, based on deeply held beliefs that drive decision-making. The collective behaviours of all employees become the organisational culture – “the way we do things around here” – fulfilling the organisation’s promise to stakeholders.
According to Norman (2008), value statements list the principles and ethics to which an organization adheres. They form an ethical foundation for the organization. These principles and ethics then guide the behavior of organization members. They assist organizations in determining what is right and wrong. Members then act in certain ways, using the values as a guide.
When the values of the organisation are aligned with the personal values of employees, the result will be a high-performance environment with high levels of employee engagement and the pursuit of excellence for the benefit of the organisation.
Many organisations today focus on technical competencies when hiring people, overlooking the importance of cultural fit and the underlying behavioural competencies. While technical capability is a prerequisite for most roles, it is values alignment that will determine the candidate’s ability to contribute and make the organisation more resilient.
It has been established by several authors that organizational values influence organizational structure (Walsh et al. 1981, Kabanoff et al. 1995), organizational culture (Pettigrew, 1979), organizational identity (Ashforth ; Mael, 1989), organizational strategy (Bansal, 2003) thus shaping organizational goals and means to achieve those goals.
Value statements also serve as a reference point for community members outside the organization. They enable them to understand the beliefs and principles of the organization. They provide basic information about how the organization operates and about its perspectives on ethical problems.
Value statements’ ultimate purpose is to encourage behaviors from organization members that encourage the achievement of organizational goals and its mission. Leaders of an organization can encourage these behaviors from other members with a value framework that guides members’ behavior. Long-term, sustainable success is reliant on the leader’s ability to unite culture and minimise the impact of personal preferences. An organization mitigates the subjectivity of values by defining a set of behaviours for each of the values that can be practiced by all.
Successful organisations are led by empowered leaders who recognise the need to have everyone engaged and inspire engagement by modelling the organisations values (Norman, 2008). While good processes and systems are important, they do not provide sustainable competitive advantage. Now, more than ever, competitive advantage starts with an aligned culture driving the organisation’s purpose through a shared vision.
The importance of organizational values is even more stressed by Musek Lešnik (2006) when he says that organization is just like a human; it makes decisions, does what it thinks its right, has legal limitations on what it can do, has moral limitations, cerates and implements its own rules and beliefs, it advances on the basis of its decisions, creates myths, legends and habits and so on.
Well-drafted and current organisational values help to guide staff behaviour, as well as strategic and operational decisions. They provide a solid foundation for employment policies, and “fill the gaps” where policies are silent. Over time, they improve the organisation’s ethical character as expressed in its operations and culture. Organisational values demonstrate integrity and accountability to external stakeholders. They set the organisation apart from its competitors, reduce risk of inappropriate behavior and strengthen the employment value proposition
Employees often rate the company’s “vision, culture and values” as the most important factor in determining how they perceive their employer. Research also indicates that companies which demonstrate a coherent set of ethical principles are more likely to be profitable and stand the test of time.
Having clarity in your values will also help your organisation attract the right people (employees, customers, collaborators) and increase their loyalty, focus, trust and cooperation.
The importance of a pay-off line in strategyA pay-off line or tag-line is a clarifier – an institutional positioning line – that captures the essence of the brand. It expresses the brand’s meaning in a way that is easy to recognise and remember.
A pay-off line at its best is the very core of the brand’s proposition, the company’s essence and the consumer promise. It’s the enduring truth and religion. When it’s simply a “tag-line” it’s meaningless wallpaper that goes unnoticed. When it’s the fulcrum, it becomes the last stand between product parity and differentiated greatness (Abel, 2012)
ConclusionOrganizations summarize their goals and objectives in mission and vision statements. Both of these serve different purposes for a company but are often confused with each other. A mission statement describes what a company wants to do now. It defines the company’s business, its objectives and its approach to reach those objectives. A vision statement on the other hand outlines what a company wants to be in the future, the desired future position of the company. Elements of Mission and Vision Statements are often combined to provide a statement of the company’s purposes, goals and values. However, sometimes the two terms are used interchangeably.
Mission and Vision statements provide managers with a unity of direction that transcends individual, parochial, and transitory needs. They promote a sense of shared expectations among all levels and generations of employees. They consolidate values over time and across individuals and interest groups. They project a sense of worth and intent that can be identified and assimilated by company outsiders. Finally, they affirm the company’s commitment to responsible action, which is symbiotic with its need to preserve and protect the essential claims of insiders for sustained survival, growth, and profitability of the firm
There is evidence that leaders in organisations who consciously focus on their values are more resilient, more sustainable and more successful than their counterparts. The leaders of these organisations recognise the importance of modelling organisational values to inspire a culture that evolves and grows to fulfil the promise made to stakeholders.
ReferencesAshforth, B. E., ; Mael, F. (1989), Social identity theory and the organization, Academy of Management Review, (14) 20–39. 2.
Bansal, P. (2003). From Issues to Actions: The Importance of Individual Concerns and Organizational Values in Responding to Natural Environmental Issues. Organization Science, 14(5), 510–527.
David F.R. (2011)Strategic Management: Concepts and Cases, 13th Edition Prentice Hall, One Lake Street, Upper Saddle River, New Jersey 07458
Johnson G, Scholes K, Whittington R, (2008), Exploring Corporate Strategy, 8th Edition, Pearson Education Limited, Edinburgh Gate, Harlow, Essex, CM20 2JE, England
Kotler, P (1994). Marketing Management, Prentice-Hall. New Jersey.
Kotler, P and Armstrong, G (2012). Principles of marketing, 14th Edition, Prentice Hall, One Lake Street, Upper Saddle River, New Jersey 07458
Musek Lešnik, K. (2006b). Najpogostejša tveganja ob razmišljanju o poslanstvu, vrednotah, viziji. Retrieved from: http://www.ipsos.si/web-data/Templates/podjetjevrednote%26poslanstvo%26vizija-najpogostejsatveganjaobrazpravi.html.
Pettigrew, A. M. (1979), On studying organizational cultures. Administrative Science Quarterly, 24: 570–581.
Walsh, K. I., Hinings, C. R., Greenwood, R., ; Ranson, S. (1981), Power and advantage in organizations, Organization Studies 2, 131–152.
HYPERLINK “http://www.bain.com/publications/articles/management-tools-mission-and-vision-statements.aspx” http://www.bain.com/publications/articles/management-tools-mission-and-vision-statements.aspx Accessed 19/12/2017
https://www.diffen.com/difference/Mission_Statement_vs_Vision_Statement Accessed 20/12/2017
https://www.psychologytoday.com/blog/smartwork/201004/vision-and-mission Accessed 21/12/2017
http://www.towerstone-global.com/we-think/what-are-organisational-values-and-why-are-they-important/ Accessed 24/12/2017
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QUESTION TWOIntroductionThe resource-based view is a theory of competitive advantage among firms that emphasizes the characteristics of a firm’s resources and capabilities as the source of performance differences among firms (Barney, 1991). Resources are the stocks of available resources that are owned or controlled by firms (Amit & Schoemaker, 1993). Capabilities are firms’ capacity to deploy resources and are dependent upon the firm’s human capital for their development and exchange. When resources and capabilities are difficult to imitate, scarce, and valuable, they become strategic assets that give firms a competitive advantage (Amit & Schoemaker, 1993)
The resource-based view (RBV) is a model that sees resources as key to superior firm performance. If a resource exhibits VRIO attributes, the resource enables the firm to gain and sustain competitive advantage (Rothaermel, 2012).
In order to understand the sources of competitive advantage firms are using many tools to analyze their external (Porter’s 5 Forces, PEST analysis) and internal (Value Chain analysis, BCG Matrix) environments. One of such tools that analyze firm’s internal resources is VRIO analysis. The tool was originally developed by Barney, J. B. (1991) in his work ‘Firm Resources and Sustained Competitive Advantage’, where the author identified four attributes that firm’s resources must possess in order to become a source of sustained competitive advantage. According to him, the resources must be Valuable, Rare, imperfectly Imitable and Non-substitutable. His original framework was called VRIN. In 1995, in his later work ‘Looking Inside for Competitive Advantage’ Barney has introduced VRIO framework, which was the improvement of VRIN model. VRIO analysis stands for four questions that ask if a resource is: Valuable? Rare? Costly to Imitate? And is a firm Organized to capture the value of the resources? A resource or capability that meets all four requirements can bring sustained competitive advantage for the company.
The Resource-Based View (RBV) approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. Proponents of the RBV view contend that organizational performance will primarily be determined by internal resources that can be grouped into three all-encompassing categories: physical resources, human resources, and organizational resources (Barney, 1991). Physical resources include all plant and equipment, location, technology, raw materials, machines; human resources include all employees, training, experience, intelligence, knowledge, skills, abilities; and organizational resources include firm structure, planning processes, information systems, patents, trademarks, copyrights, databases, and so on. RBV theory asserts that resources are actually what help a firm exploit opportunities and neutralize threats. The basic premise of the RBV is that the mix, type, amount, and nature of a firm’s internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage. Managing strategically according to the RBV involves developing and exploiting a firm’s unique resources and capabilities, and continually maintaining and strengthening those resources. The theory asserts that it is advantageous for a firm to pursue a strategy that is not currently being implemented by any competing firm. When other firms are unable to duplicate a particular strategy, then the focal firm has a sustainable competitive advantage, according to RBV theorists. For a resource to be valuable, it must be either (1) rare, (2) hard to imitate, or (3) not easily substitutable. Often called empirical indicators, these three characteristics of resources enable a firm to implement strategies that improve its efficiency and effectiveness and lead to a sustainable competitive advantage. The more a resource(s) is rare, non imitable, and non substitutable, the stronger a firm’s competitive advantage will be and the longer it will last. Rare resources are resources that other competing firms do not possess. If many firms have the same resource, then those firms will likely implement similar strategies, thus giving no one firm a sustainable competitive advantage. This is not to say that resources that are common are not valuable; they do indeed aid the firm in its chance for economic prosperity. However, to sustain a competitive advantage, it is more advantageous if the resource(s) is also rare. It is also important that these same resources be difficult to imitate. If firms cannot easily gain the resources, say RBV theorists, then those resources will lead to a competitive advantage more so than resources easily imitable. Even if a firm employs resources that are rare, a sustainable competitive advantage may be achieved only if other firms cannot easily obtain these resources. The third empirical indicator that can make resources a source of competitive advantage is substitutability. Borrowing from Porter’s Five-Forces Model, to the degree that there are no viable substitutes, a firm will be able to sustain its competitive advantage. However, even if a competing firm cannot perfectly imitate a firm’s resource, it can still obtain a sustainable competitive advantage of its own by obtaining resource substitutes.
Group Mapping Analysis of the TV station Industry in ZambiaA strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies
Strategic group mapping is used for the purpose of displaying the competitive positions that rival firm occupy in an industry. In every industry there are some companies which enjoy a stronger market position than others. It therefore becomes important to analyze the industry’s competitive structure and identify the strategic group (cluster of industry rivals that have similar competitive approaches and market position). Each industry contains one or more than one strategic group depending on the strategies and market positions of industry members.
Strategic group maps serve a number of purposes. They provide a means of identification of close and distant rivals. This is important to know because close strategic groups have stronger cross group competitive rivalry. Group mapping also identifies the attractive and unattractive positions of the firms in industry. This attractiveness depends on upon the industry driving forces, prevailing competitive pressures and profit potentials of different strategic groups. Furthermore, strategic group mapping helps in identifying the strategic group a firm should consider entering. It helps in analyzing the type, number and level of entry barriers the firm will face.
Gotv, Muvi Tv, Prime TV, Diamond TV
Figure 1: Strategic Group Mapping of TV stations in Zambia
Constructing a strategic group map is a challenging task in which firms requires a clear and vivid analysis in order to gain effective outcomes (Johnson ; Scholes, 2009).
The television and broadcasting sector has been undergoing significant technological and structural changes, which have given consumers access to a great variety of communications and media services. Convergence is changing the way in which consumers use communication services and consume content, as it is available on new platforms and on various wireless portable devices. At the same time, technological change has impacted on regulation and conditions of competition. The penetration of new technologies and the dynamic effects of convergence are changing the way that consumers access and view audiovisual content. Nowadays, it can be provided via multiple platforms: analogue or digital terrestrial broadcasts, satellite, cable or Internet Protocol (IP) and Over-the-Top (OTT) television. A fundamental change affecting traditional broadcasting stems from the migration of networks to IP data transmission. Combined with significant broadband penetration, increases in bandwidth and the proliferation of digital devices, this has enabled different devices to use the same networks and has facilitated the ability of the communication industry to offer new and bundled services. This allows consumers to receive and decode video services across a variety of fixed and mobile devices. Technological developments affect the conditions of competition as they alter: the range and quality of services; the underlying costs; the extent of barriers to entry (new technologies provide new means by which the market is contested); the ability of customers to switch suppliers; and pricing mechanisms (technological developments allow for provision of pay per view services). Therefore, digitisation generally reduces barriers to entry.
Even though convergence and technological changes have lowered barriers to entry, there are still significant challenges that may restrict market access. The doctrine gives a non-exhaustive list of examples: governmental policy, the presence of dominant broadcasters, access to content, audience behaviour, consumer costs or capital requirements.
Governmental policy (e.g. regulation or administrative practices) may restrict market access. Regulatory protectionism takes various forms and may be based on economic, social, cultural or technical premises. An example of this would be the granting of a broadcasting license with a limited radius. Hence, the regulation of market access should be clear, transparent and non-discriminatory. Moreover, in many markets the state is directly involved in TV broadcasting through ownership or funding of TV stations. Such state-owned channels can significantly distort competition, erect barriers to entry or harm private operators. The presence of public operators can also provide incentives for regulators to discriminate against private parties to protect the interest of the former.
Access to transmission facilities can still pose a challenge. Although digitalisation has significantly reduced barriers in access to transmission facilities, competition concerns have not ceased to exist
Other strategies may include scope of activities, extent of product (or service) diversity and extent of geographical coverage, number of market segments served, distribution channels to be used. The extent (number) of branding, the marketing effort for instance advertising spread, size of sales force, extent of vertical integration, product or service quality and pricing policy.
Convergence has allowed new firms to enter previously protected markets, creating competition among a number of players in areas that formerly constituted separate markets, including: cable operators, providers of television services delivered via the internet (IPTV), telecom operators, and terrestrial broadcasters. Even if, overall, the broadcasting sector is becoming increasingly competitive, a number of issues relating to barriers to entry arise as a consequence of convergence, which, in turn, has implications for competition policy.
Barriers to entry (and exit) are important to the extent that only in their presence market power is likely to be sustainable over time. Therefore, to determine whether a given merger or behaviour of a dominant firm is anti-competitive, competition authorities are expected to carefully examine entry and exit conditions in a given market.
Depending on the definition, barriers to entry may refer to the established firm’s ability to earn supracompetitive profits (Bain, 1954) or to “a cost of producing (at some or every rate of output) that must be borne by a firm which seeks to enter the industry but is not borne by firms already in the industry” (Stigler, 1968). Entry barriers can arise from governmental policies, capital requirements, economies of scale or product differentiation. While they exist to varying degrees in all media industries, according to Picard (2002), it is often considered that the broadcasting industry is one of the most difficult to enter. According to Picard and Chon (2004), new entrants planning to enter into broadcasting markets typically face six critical barriers:
• Governmental policy: Barriers to entry of that type may be regulatory or administrative in nature. Competent authorities take into account economic as well as cultural and social factors when issuing broadcasting licenses. This may lead to distortions of competition. In some countries, TV licenses included conditions which allowed only for short broadcasting radius. This restriction was apparently justified by the need to ensure a community nature of the broadcasting operators. Generally, the governmental ability to control entry and affect the levels of competition in the market tends to be higher with respect to terrestrial rather than satellite television. Because the promotion of competition in the broadcasting sector requires that regulatory barriers be lowered as far as possible, rules governing market entry should be clear, transparent and non-discriminatory.
• The presence of existing dominant broadcasters: Such broadcasters usually have a long established relationship with the viewers and most likely also with advertisers, which has to be challenged by new entrants.
• Availability of suitable programming: Successful entry into television broadcasting markets requires access at reasonable prices to desirable programming. Access to such programming refers both to its production and/or acquisition from third parties. Acquisition of some of the content, which may turn out to be critical to attract viewers, is likely to constitute a significant cost to new market players.
• Audience behaviour: In the presence of established dominant broadcasters, new entrants have to come up with offers sufficiently attractive to convince viewers to alter their existing patterns of viewing and channel choice. Commercial broadcasters, whose operations are financed through advertising fees, need to establish within a rather short period of time an audience base that will attract a sufficient number of advertisers.
• Consumer costs: Most likely, new entrants will offer their television broadcasting services using cable, satellite or digital terrestrial technologies, all of which require viewers to incur hardwarerelated costs. Difficulties and costs that viewers may encounter when switching between different television broadcasters has the potential of discouraging them from altering their established patterns of viewing altogether. For example, consumers who switch from one satellite television operator to another generally have to incur costs related to the rental or purchase of adequate equipment, such as set-top boxes. However, where different platforms, i.e. satellite, cable, IPTV, are effectively competing against one another, one could expect the switching costs to be low as individual platforms would be likely to charge low or no fees at all for installation and necessary equipment in order to convince subscribers of the other platforms and/or television operators to switch.26
• Capital requirements: Where the level of capital required is prohibitively high, it may constitute a significant barrier to entry. However, broadcasters may resort to joint ventures and other agreements that would render capital requirements less strenuous.
Naturally, as the television broadcasting industry continues to evolve some of the above mentioned features may cease to constitute a barrier to entry. Moreover, some features may act like a barrier to entry in one country, but not in another. For example, in Singapore content fragmentation created a significant barrier to entry for new entrants as all the top multi-national channel-producing companies sold their channels exclusively to subscription TV licensees. In comparison, in some other countries, less than 15 per cent of top ten channel-producing companies sold their channels exclusively to pay-TV licensees.
ConclusionThe RBV has continued to grow in popularity and continues to seek a better understanding of the relationship between resources and sustained competitive advantage in strategic management. However, one cannot say with any degree of certainty that either external or internal factors will always or even consistently be more important in seeking competitive advantage. Understanding both external and internal factors, and more importantly, understanding the relationships among them, will be the key to effective strategy formulation. Because both external and internal factors continually change, strategists seek to identify and take advantage of positive changes and buffer against negative changes in a continuing effort to gain and sustain a firm’s competitive advantage. This is the essence and challenge of strategic management, and oftentimes survival of the firm hinges on this work.
Strategic Group Analysis is useful in several ways. It helps identify who the most direct competitors are and on what basis they compete. It raises the question of how likely or possible it is for another organization to move from one strategic group to another. Strategic Group mapping might also be used to identify opportunities and can help identify strategic problems.
Competition authorities are key to assessing the success of a TV station in a new market. Positioning is highly dependent on staying at par with the interval of assessment of the features of their respective national markets and potential for new entry.
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Rothaermel, F. T. (2012). Strategic Management: Concepts and Cases. McGraw-Hill/Irwin, p. 5
Stigler, G. J. (1968), The Organisation of Industry, Homewood, IL: Richard D. Irwin.
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